[Federal Register Volume 69, Number 44 (Friday, March 5, 2004)]
[Notices]
[Pages 10402-10409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5005]


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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 Partial Rescission of the Sixth Administrative Review and 
Preliminary Results and Final Partial Rescission of the Ninth New 
Shipper Review

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

ACTION: Notice of preliminary results and partial rescission of the 
sixth administrative review and preliminary results and final partial 
rescission of the ninth new shipper review.

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SUMMARY: SUMMARY:The Department of Commerce (``the Department'') is 
currently conducting the sixth administrative review and ninth new 
shipper review of the antidumping duty order on brake rotors from the 
People's Republic of China (``PRC'') covering the period April 1, 2002, 
through March 31, 2003. The administrative review examines 20 
exporters, five of which are exporters included in five exporter/
producer combinations. The new shipper review covers two exporters.\1\
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    \1\ The new shipper review originally covered three exporters 
but the Department rescinded the review with respect to one of these 
exporters on July 8, 2003, based upon its timely withdrawal from the 
review.
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    We have preliminarily determined that no sales have been made below 
normal value (``NV'') with respect to the exporters who participated 
fully in these reviews. If these preliminary results are adopted in our 
final results of these reviews, we will instruct Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the period of review (``POR'') for which the 
importer-specific assessment rates are above de minimis.
    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: March 5, 2004.

FOR FURTHER INFORMATION CONTACT: Brian Smith, Terre Keaton and 
Margarita Panayi Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-1766, (202) 482-1280 and (202) 482-0049, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department received timely requests from Laizhou City Luqi 
Machinery Co., Ltd (``Luqi'') on April 29, 2003, and from Qingdao Rotec 
Auto Parts Co., Ltd. (``Rotec'') and Anda Industries Co., Ltd. 
(``Anda'') on April 30, 2003, for new shipper reviews of this 
antidumping duty order in accordance with 19 CFR 351.214(c).
    On April 30, 2003, the petitioner\2\ requested an administrative 
review pursuant to 19 CFR 351.213(b) for 20 exporters,\3\ five of which 
are included in five exporter/producer combinations\4\ 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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    \2\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
    \3\ 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. (``Longkou 
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''); (10) Zibo Luzhou 
Automobile Parts Co., Ltd. (``ZLAP''); (11) Longkou TLC Machinery 
Co., Ltd (``LKTLC''); (12) Zibo Golden Harvest Machinery Limited 
Company (``Golden Harvest''); (13) Shanxi Fengkun Metallurgical 
Limited Company (``Shanxi Fengkun''); (14) Xianghe Xumingyuan Auto 
Parts Co. (``Xumingyuan''); (15) Xiangfen Hengtai Brake System Co., 
Ltd. (``Hengtai''); (16) China National Machinery and Equipment 
Import & Export (Xianjiang) Corporation (``Xianjiang''); (17) China 
National Automotive Industry Import & Export Corporation 
(``CAIEC''); (18) Laizhou CAPCO Machinery Co., Ltd. (``Laizhou 
CAPCO''); (19) Laizhou Luyuan Automobile Fittings Co. (``Laizhou 
Luyuan''); and (20) Shenyang Honbase Machinery Co., Ltd. 
(``Shenyang'').
    \4\ The excluded exporter/producer combinations are: (1) 
Xianjiang/Zibo Botai Manufacturing Co., Ltd.; (2) CAIEC/Laizhou 
CAPCO; (3) Laizhou CAPCO/Laizhou CAPCO; (4) Laizhou Luyuan Luyuan or 
Shenyang; or (5) Shenyang/Laizhou Luyuan or Shenyang.
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    On May 16, 2003, Luqi, Rotec and Anda 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 21, 2003, the Department initiated an administrative review 
covering the companies listed in the petitioner's April 30, 2003, 
request (see Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 68 FR 27781 
(May 21, 2003)).
    On May 30, 2003, the Department initiated a new shipper review of 
Anda, Luqi and Rotec (see Brake Rotors from the People's Republic of 
China: Initiation of the Ninth New Shipper Antidumping Duty Review, 68 
FR 33675 (June 5, 2003)).
    On June 5, 2003, the Department issued a questionnaire to each 
company listed in the above-referenced initiation notices.
    On June 17, 2003, the Department provided the parties an 
opportunity to submit publicly available information for consideration 
in these preliminary results. Also on June 17, 2003, Anda timely 
withdrew its request for a new shipper review. Accordingly, we 
rescinded the new shipper review with respect to Anda on July 8, 2003 
(see Brake Rotors from the People's Republic of China: Notice of 
Partial Rescission of

[[Page 10403]]

the Ninth New Shipper Antidumping Duty Review, 68 FR 41555 (July 14, 
2003)), and sent appropriate instructions to CBP on July 31, 2003, 
terminating the bonding option on shipments of subject merchandise 
exported and produced by Anda and requiring a cash deposit on such 
shipments at the PRC-wide rate.
    In July 2003, each of the exporters that received a zero rate in 
the LTFV investigation stated that during the 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. Also in July 
2003, we received responses to the Department's questionnaires from the 
remaining companies. Of these companies, Shanxi Fengkun, Hengtai, 
Golden Harvest and Xumingyuan each stated that it had no sales or 
shipments of subject merchandise to the United States during the POR.
    On August 8, 2003, the petitioner submitted comments to the 
respondents' questionnaire responses. On August 15, 2003, the 
Department issued a supplemental questionnaire to each company which 
submitted a questionnaire response.
    On August 25, 2003, the Department conducted a data query on brake 
rotor entries made during the POR from all exporters named in the 
excluded exporter/producer combinations and from the four exporters 
named above (i.e., Shanxi Fengkun, Hengtai, Golden Harvest and 
Xumingyuan) 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 CBP confirm the actual 
manufacturer for 11 specific entries associated with the excluded 
exporter/producer combinations (see the September 29, 2003, memorandum 
from Irene Darzenta Tzafolias, Program Manager, to Michael S. Craig of 
the CBP (``September 29, 2003, memorandum'')). Also on August 25, 2003, 
the petitioner and respondents submitted publicly available 
information.
    In August and September 2003, the companies submitted their 
responses to the Department's supplemental questionnaires. In September 
2003, the petitioner submitted comments on the supplemental 
questionnaire responses of several companies. On October 2, 2003, the 
Department issued a second supplemental questionnaire to 10 companies, 
and these companies submitted their second supplemental responses in 
October and November 2003. The petitioner submitted comments on the 
second supplemental responses in October 2003. The Department issued 
GREN and Meita a third supplemental questionnaire in October 2003, to 
which responses were submitted in November 2003.
    On October 8, 2003, the Department extended the time limit for 
completion of the preliminary results until February 2, 2004 (see Brake 
Rotors from the People's Republic of China: Notice of Extension of Time 
Limit for Preliminary Results in Antidumping Duty Administrative and 
New Shipper Reviews, 68 FR 59583 (October 16, 2003)).
    On October 27, 2003, we notified Longkou Haimeng, LABEC, Luqi and 
Rotec of our intent to conduct verification of their responses to the 
antidumping duty questionnaire, and provided each respondent with a 
verification outline for purposes of familiarizing it with the 
verification process. The petitioner submitted comments on these 
verification outlines in October and November 2003.
    On October 31, 2003, LABEC submitted corrections to its U.S. sales 
listing and factors of production listing. On November 3, 2003, Huanri 
General, Meita, Hongfa, Longkou Haimeng each submitted corrections to 
its factors of production listing. On November 6, 2003, the petitioner 
filed an objection to Huanri General's, Meita's and Hongfa's November 
3, 2003, submissions.
    On November 12, 2003, Rotec notified the Department that it was no 
longer able to participate in the new shipper review and subsequently 
withdrew its new shipper review request. From November 5 to November 
21, 2003, the Department conducted verification of the information 
submitted by Longkou Haimeng, Luqi and LABEC in accordance with 19 CFR 
351.307. On November 10, 14 and 21, 2003, respectively, these companies 
submitted the minor corrections to their responses that they presented 
to the Department verifiers at the start of verification. On November 
17 and 25, 2003, the petitioner filed comments on the minor corrections 
submitted by Longkou Haimeng and LABEC, respectively, at verification. 
On December 10, 2003, we returned the revised U.S. sales listing 
submitted by LABEC on November 21, 2003, because we neither requested 
nor accepted this revised listing at verification. On December 15, 
2003, LABEC resubmitted its minor corrections with the U.S. sales 
listing omitted. (See the Department's memo re: Issues Related to 
Preliminary Results, dated March 1, 2004.)
    On December 12, 2003, the petitioner submitted comments on the 
Department's September 29, 2003, memorandum. On December 19, 2003, the 
Department issued a memorandum to the file in response to the 
petitioner's December 12, 2003, submission.\5\
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    \5\ Also in the December 19, 2003, memorandum to the file, we 
informed the petitioner that we would consider for the preliminary 
results any comments submitted on the verification reports if such 
comments were submitted by January 20, 2004 (see December 19, 2003, 
memorandum to the file).
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    On December 17 and 22, 2003, we issued verification reports for 
Longkou Haimeng, LABEC and Luqi. (See December 17 and 22, 2003, 
verification reports for Longkou Haimeng and LABEC, respectively, in 
the Sixth Antidumping Duty Administrative Review, and December 22, 
2003, verification report for Luqi in the Ninth Antidumping Duty New 
Shipper Review.)
    On December 22, 2003, the Department issued a memorandum to the 
file notifying parties of our intent to issue a final rescission 
decision with respect to Rotec in the context of these preliminary 
results and invited interested parties to comment on our intent to 
rescind the new shipper review with respect to Rotec (see December 22, 
2003, memorandum to the file). No comments were filed.
    On January 14, 2004, the petitioner submitted comments on the 
verification reports of Longkou Haimeng, LABEC and Luqi.
    On January 30, 2004, the Department extended the time limit for 
completion of the preliminary results until March 3, 2004 (see Brake 
Rotors from the People's Republic of China: Notice of Extension of Time 
Limit for Preliminary Results in Antidumping Duty Administrative and 
New Shipper Reviews, 69 FR 6253 (February 10, 2004)).
    On February 3, 2004, we requested additional clarification of 
LKTLC's responses. LKTLC submitted its response on February 13, 2004.

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

[[Page 10404]]

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 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 April 1, 2002, through March 31, 2003.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Longkou Haimeng, LABEC and Luqi. We used standard 
verification procedures, including on-site inspection of their 
facilities and examination of relevant sales and financial records. Our 
verification results are outlined in the verification report for each 
company (see December 17, 2003, verification report for Longkou Haimeng 
and December 22, 2003, verification reports for LABEC and Luqi 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 five exporter/producer 
combinations which received zero rates in the LTFV investigation and 
the four exporters that made no shipment claims did not make shipments 
of subject merchandise to the United States during the POR. 
Specifically, (1) Xinjiang did not export brake rotors to the United 
States that were manufactured by producers other than Zibo Botai; (2) 
CAIEC did not export brake rotors to the United States that were 
manufactured by producers other than Laizhou CAPCO; (3) Laizhou CAPCO 
did not export brake rotors to the United States that were manufactured 
by producers other than Laizhou CAPCO; (4) Laizhou Luyuan did not 
export brake rotors to the United States that were manufactured by 
producers other than Shenyang or Laizhou Luyuan; (5) Shenyang did not 
export brake rotors to the United States that were manufactured by 
producers other than Laizhou Luyuan or Shenyang; and (6) Shanxi 
Fengkun, Hengtai, Golden Harvest or Xumingyuan made no shipments of 
subject merchandise to the United States during the POR.
    In order to make this determination, we first examined PRC brake 
rotor shipment data maintained by CBP. We then selected certain entries 
associated with the exporter/producer combinations identified above and 
requested CBP to provide documentation which would enable the 
Department to determine who manufactured the brake rotors included in 
those entries. Based on the information obtained from CBP, we found no 
instances where the exporters included in the five exporter-producer 
combinations shipped brake rotors from the PRC to the U.S. market 
outside of their excluded export/producer combinations during the POR. 
(See March 1, 2004, memorandum to the file, Results of Request for 
Assistance from Customs and Border Protection to Further Examine U.S. 
Entries Made by Exporter/Producer Combinations - Preliminary Results.) 
With respect to Shanxi Fengkun, Hengtai, Golden Harvest and Xumingyuan, 
the results of the CBP data query indicated that there were no 
shipments of subject merchandise made by these companies during the POR 
(see March 1, 2004, memorandum to the file, Review of Customs and 
Border Protection Data on Brake Rotor Entries from Zibo Golden Harvest 
Machinery Limited Company, Shanxi Fengkun Metallurgical Limited 
Company, Xianghe Xumingyuan Auto Parts Co., and Xiangfen Hengtai Brake 
System Co., Ltd.).
    Therefore, based on the results of our query, in accordance with 19 
CFR 351.213(d)(3), we are preliminarily rescinding the administrative 
review with respect to all of the above-mentioned companies because we 
found no evidence that these companies made shipments of the subject 
merchandise during the POR.

Final Partial Rescission of New Shipper Review

    The Department's regulations at 19 CFR 351.214(f)(1) provide that 
the Department may rescind a new shipper review ''... if a party that 
requested a review withdraws its request no later than 60 days after 
the date of publication of notice of initiation of the requested 
review.'' Rotec withdrew its request for new shipper review on November 
12, 2003. Although Rotec's withdrawal is more than 60 days from the 
date of initiation, consistent with the Department's past practice in 
the context of administrative reviews conducted under section 751(a) of 
the Act, the Department has discretion to extend the time period for 
withdrawal on a case-by-case basis. (See e.g. Iron Construction 
Castings from Canada: Notice of Rescission of Antidumping Duty 
Administrative Review, 63 FR 45797 (August 27, 1998).) In this case, 
the Department has determined to grant the request to rescind this new 
shipper review with respect to Rotec because rescission of this review 
would not prejudice any party in this proceeding, as Rotec would 
continue to be included in the PRC-wide rate to which it was subject at 
the time of its request for a new shipper review. (See Silicon Metal 
from the People's Republic of China: Notice of Rescission of New 
Shipper Review, 64 FR 40831 (July 28, 1999).)

Separate Rates

    In proceedings involving non-market-economy (``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 participating in these reviews, 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

[[Page 10405]]

Fair Value: Bicycles From the People's Republic of China, 61 FR 19026 
(April 30, 1996)(````'')).
    The remaining nine respondents (i.e., Longkou Haimeng, CNIM, LABEC, 
LKTLC, Luqi, GREN, Hongda, Huanri General and ZLAP) 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 
over export activities (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

    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.
    Longkou Haimeng, CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri 
General and ZLAP have each placed on the administrative record 
documents to demonstrate absence of de jure control (e.g., the 
``Regulations of the PRC for Controlling the Registration of 
Enterprises as Legal Persons,'' promulgated on June 3, 1988; the 1990 
``The Regulations Governing the Rural Collective Owned Enterprises of 
the 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 joint 
ventures between the PRC and foreign companies, collectively-owned 
enterprises and limited liability companies in the PRC. See, e.g., 
Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol 
from the People's Republic of China, 60 FR 22544 (May 8, 1995) 
(``Furfuryl Alcohol''), 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 Longkou Haimeng, 
CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri General or 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).
    Longkou Haimeng, CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri 
General 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 four 
respondents for verification, namely Longkou Haimeng, LABEC, Luqi and 
Rotec.\6\ The Department did not select the other nine respondents 
(i.e., CNIM, LKTLC, GREN, Hongda, Huanri General, Winhere, Hongfa, 
Meita and ZLAP) for verification.
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    \6\ Prior to its scheduled verification, Rotec notified the 
Department that it would no longer be participating in the new 
shipper review and subsequently withdrew its new shipper review 
request. Therefore, Rotec was not verified.
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    For Longkou Haimeng, LABEC and Luqi, the Department found no 
evidence at verification of government involvement in their business 
operations. Specifically, Department officials examined sales documents 
that showed that each of these respondents negotiated its contracts and 
set its own sales prices with its customers. In addition, the 
Department reviewed sales documentation, bank statements and accounting 
documentation that demonstrated that each of these 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 examined internal company memoranda such as 
appointment notices, which demonstrated that each of these companies 
selected its own management. See pages 7 and 8 of the Department's 
verification report for Longkou Haimeng, pages 6 and 7 of the 
Department's verification report for LABEC and pages 4 through 7 of the 
Department's verification report for Luqi. 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, LKTLC, GREN, Hongda, Huanri General 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) of the Department's 
regulations. Based on documentation contained in each company's 
responses, the Department also finds that each of these six 
respondents: (1) negotiated its own contracts; (2) set its own sales 
prices with its customers; (3) retained its profits and, where 
applicable, arranged its own financing; and (4) selected its own 
management (see each respondent's section A questionnaire responses 
submitted in July 2003).
    Consequently, we have determined that Longkou Haimeng, CNIM, LABEC, 
LKTLC, Luqi, GREN, Hongda, Huanri

[[Page 10406]]

General 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, 
GREN, Longkou Haimeng, Huanri General, Hongda, Hongfa, LABEC, Meita, 
Winhere, LKTLC, Luqi and ZLAP to the United States were made at prices 
below normal value (``NV''), we compared each company's export prices 
(``EPs'') to NV, as described in the ``Export Price,'' ``Constructed 
Export Price,'' and ``Normal Value'' sections of this notice, below.

Export Price

    For each respondent, we used EP methodology in accordance with 
section 772(a) of the Act for sales in which 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 (``CEP'') was not otherwise indicated.

1. Hongfa, Luqi, LKTLC, Meita, 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 
PRC service providers or paid for in renminbi, we based those charges 
on surrogate rates from India (see ``Surrogate Country'' section below 
for further discussion of our surrogate-country selection). To value 
foreign inland trucking charges, we used truck freight rates published 
in Indian Chemical Weekly and distance information obtained from the 
following websites: http://www.infreight.com, http://www.sitaindia.com/Packages/CityDistance.php, http://www.abcindia.com, http://www.eindiatourism.com, and http://www.mapsofindia.com. To value foreign 
brokerage and handling expenses, we relied on 10/99-9/00 information 
reported in the public U.S. sales listing submitted by Essar Steel Ltd. 
in the antidumping investigation of Certain Hot-Rolled Carbon Steel 
Flat Products from India: Final Determination of Sales at Less Than 
Fair Value, 67 FR 50406 (October 3, 2001).
2. CNIM, GREN, Longkou Haimeng, Hongda, Huanri General and LABEC
    We calculated EP based on packed, CIF, CFR, C&F or FOB foreign port 
prices to the first unaffiliated purchaser in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for foreign inland freight, foreign brokerage and handling 
charges in the PRC, marine insurance, U.S. import duties and fees 
(including harbor maintenance fees, merchandise processing fees, and 
brokerage and handling) 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 PRC service providers or 
paid for in renminbi, we valued these services using the Indian 
surrogate values discussed above. For all six respondents (except 
Longkou Haimeng\7\), we valued marine insurance based on a publicly 
available price quote from a marine insurance provider obtained from 
http://www.rjgconsultants.com/insurance.html, as used in the 
antidumping duty investigation of Certain Malleable Iron Pipe Fittings 
from the People's Republic of China: Final Results of Antidumping Duty 
Investigation, 68 FR 61395 (October 28, 2003) . 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 
expenses because each of these six 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)).
---------------------------------------------------------------------------

    \7\ At Longkou Haimeng's verification, we found that its 
reported international freight cost is inclusive of marine insurance 
(see page 14 of the Department's verification report for Longkou 
Haimeng).
---------------------------------------------------------------------------

    For U.S. import duties incurred on GREN's sales, we revised the 
reported expenses because the per-unit amounts reported in GREN's U.S. 
sales database did not comport with the corresponding calculation 
worksheets in exhibit 17 of its July 21, 2003, response. To recalculate 
the U.S. import duties, we multiplied the U.S. duty percentage 
applicable to brake rotors (inclusive of harbor maintenance and 
merchandise processing fees) against the gross unit price (net of 
movement expenses as appropriate).
    Based on our verification findings, we made the following revisions 
to the U.S. sales data reported by LABEC: (1) we included one sale not 
previously reported and excluded two sales incorrectly reported; (2) we 
adjusted the gross unit price for one model number/sale; (3) we 
adjusted the international freight expense for certain sales; and (4) 
we excluded sales determined to be made to third-country markets. (See 
pages 4, 5, 9, 11 and 12 of LABEC's verification report and the 
Department's memo re: Issues Related to Preliminary Results, dated 
March 1, 2004.)

Constructed Export Price

    For GREN, we also calculated CEP in accordance with section 772(b) 
of the Act. We found that some of GREN's sales during the POR were CEP 
sales because the sales were made for the account of GREN by its 
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. import duties, 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 PRC service providers or paid for 
in renminbi, we valued these services using the Indian surrogate values 
discussed above. For international freight (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.
    As mentioned above, we revised the U.S. import duties calculation. 
In addition, we revised the U.S. inland freight expense applicable to 
those sales with ``delivered'' sales terms (i.e., freight from the 
warehouse to the customer) because the data in the U.S. sales database 
did not reflect the data reported in the corresponding calculation 
worksheet in exhibit 16 of the July 21, 2003, response. For the 
remaining sales in the U.S. sales database with ``pick-up'' sales 
terms,

[[Page 10407]]

we set this expense to zero as it was not applicable.
    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.

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 NV 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 was among the 
countries comparable to the PRC in terms of overall economic 
development (see Memorandum from the Office of Policy to Irene Darzenta 
Tzafolias, dated June 16, 2003). In addition, based on publicly 
available information placed on the record (e.g., Indian producer 
financial statements), India is a significant producer of the subject 
merchandise. Accordingly, we considered India the surrogate country for 
purposes of valuing the factors of production because it meets the 
Department's criteria for surrogate-country selection.
C. Factors of Production
    In accordance with section 773(c) of the Act, we calculated NV 
based on the factors of production which included, but were not limited 
to: (A) hours of labor required; (B) quantities of raw materials 
employed; (C) amounts of energy and other utilities consumed; and (D) 
representative capital costs, including depreciation. We used the 
factors reported by 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 values.
    Based on our verification findings at Longkou Haimeng, we revised 
the following data in its response: (1) the reported weights for 
plastic bags and plastic sheets; and (2) the reported method of 
delivery of firewood to Longkou Haimeng's facility (see pages 4, 18 and 
20 of Longkou Haimeng's verification report).
    Based on our verification findings at LABEC, we revised the 
reported per-unit weight for plastic bags for all models (see pages 4, 
17 and 18 of LABEC's verification report). In addition, on October 31, 
2003, LABEC revised its U.S. sales listing to include two invoices that 
were inadvertently omitted. One of these invoices related to a brake 
rotor model, the factors of production of which were not reported in 
LABEC's factors of production database. As a result, the Department 
applied the formulas in exhibit 14 of the July 16, 2003, response and 
exhibit 3 of the October 21, 2003, response to derive the model-
specific consumption factors, with the exception of packing materials 
factors. For packing materials, we used the packing material 
consumption factors for the only brake rotor model with the same 
diameter, width and weight as the model excluded from the factors of 
production database.
    Based on our verification findings at Luqi, we revised the 
following data in its response: (1) the reported per-unit weight for 
plastic sheet reported for five models; and (2) the reported per-unit 
consumption amounts for limestone for all models (see pages 3, 11, 12, 
13 and 15 of Luqi's 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 
by including freight costs to make them delivered prices. We added to 
Indian surrogate values surrogate freight costs using the shorter of 
the reported distance from the domestic supplier to the factory or the 
distance from the nearest seaport to the factory. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corporation v. United States, 117 F. 3d 1401, 1407-08 (Fed. 
Cir. 1997). For those values not contemporaneous with the POR and 
quoted in a foreign currency, we adjusted for inflation using wholesale 
price indices published in the International Monetary Fund's 
International Financial Statistics. (See Preliminary Results Valuation 
Memorandum, dated March 1, 2004, for a detailed explanation of the 
methodology used to calculate surrogate values.)
    To value pig iron, steel scrap, ferrosilicon, ferromanganese, 
limestone, lug nuts, ball bearing cups, lubrication oil, coking coal, 
and firewood, we used April 2002-March 2003 average import values 
downloaded from the World Trade Atlas Trade Information System 
(Internet Version 4.3e) (WTA). We relied on the factor specification 
data submitted by the respondents for the above-mentioned inputs in 
their questionnaire and supplemental questionnaire responses, as 
verified by the Department, where applicable, for purposes of selecting 
surrogate values from WTA. Certain respondents (i.e., Luqi, Longkou 
Haimeng, Huanri General, LABEC, CNIM, LKTLC and ZLAP) stated in their 
responses that they did not incur an expense for ball bearing cups and 
lug nuts 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, each of these respondents provided customer 
correspondence. We also examined inventory and accounting records 
relevant to these items during the verification of the questionnaire 
responses of Longkou Haimeng, LABEC and Luqi. Therefore, for the 
preliminary results, we have not valued these items for those 
respondents. (See the Department's memo re: Issues Related to 
Preliminary Results, dated March 1, 2004.)
    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 2001 data from the 
International Energy Agency's (``IEA'') report, ``Electricity Prices 
for Industry,'' contained in the 2002 Key World Energy Statistics from 
the IEA.
    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

[[Page 10408]]

Auto Industries Limited (``Rico''), and the 2001-2002 financial data of 
Mando Brake Systems India Limited (``Mando''). Where appropriate, we 
removed from the surrogate overhead and SG&A calculations the excise 
duty amount listed in the financial reports.
    To value corrugated paper cartons, nails, plastic bags, plastic 
sheets/covers, paper sheet, steel strip and straps/buckles, tape and 
pallet wood, we used April 2002-March 2003 average import values from 
WTA. Because there was no Indian import data available for tin clamps/
buckles during the period April 2002-March 2003, we used April 2001-
March 2002 import values from WTA to value this input, and we adjusted 
the average value calculated for inflation. All respondents (with the 
exception of LKTLC) included the weight of the straps/buckles in their 
reported steel strip weights since the material of both inputs was the 
same. Therefore, we valued these factors using the combined weight 
reported by the respondents.
    All inputs were shipped by truck. Therefore, to value PRC inland 
freight, we used freight rates published in Indian Chemical Weekly and 
distance information obtained from the following websites: http://www.infreight.com, http://www.sitaindia.com/Packages/CityDistance.php, 
http://www.abcindia.com, http://eindiatourism.com, and http://www.mapsofindia.com.

Preliminary Results of the Review

    We preliminarily determine that the following margins exist during 
the period April 1, 2002, through March 31, 2003:

------------------------------------------------------------------------
            Manufacturer/producer/exporter               Margin percent
------------------------------------------------------------------------
China National Industrial Machinery Import & Export    0.09 (de minimis)
 Corporation.........................................
Hongfa Machinery (Dalian) Co., Ltd...................               0.00
Laizhou Automobile Brake Equipment Company, Ltd......  0.18 (de minimis)
Laizhou City Luqi Machinery Co., Ltd.................               0.00
Laizhou Hongda Auto Replacement Parts Co., Ltd.......               0.00
Longkou Haimeng Machinery Co., Ltd...................               0.00
Longkou TLC Machinery Co., Ltd.......................               0.00
Qingdao Gren (Group) Co..............................  0.03 (de minimis)
Qingdao Meita Automotive Industry Company, Ltd.......  0.11 (de minimis)
Shandong Huanri (Group) General Company..............               0.00
Yantai Winhere Auto-Part Manufacturing Co., Ltd......  0.01 (de minimis)
Zibo Luzhou Automobile Parts Co., Ltd................               0.00
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to 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 
May 24, 2004.
    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 no later than May 10, 2004. Rebuttal briefs, limited 
to issues raised in the case briefs, will be due no later than May 17, 
2004. 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 these reviews, 
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 issuance of these preliminary results.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate appraisement instructions for the companies subject to this 
review directly to CBP within 15 days of publication of the final 
results of this review. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer- or customer-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. Where the respondent did not report actual entered value, 
we will calculate individual importer- or customer-specific assessment 
rates by aggregating the dumping margins calculated for all of the U.S. 
sales examined and dividing that amount by the total quantity of the 
sales examined. To determine whether the per-unit duty assessment rates 
are de minimis (i.e., less than 0.50 percent), in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we have calculated 
importer- or customer-specific ad valorem ratios based on export 
prices. We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer or customer-
specific assessment rate calculated in the final results of this review 
is above de minimis.

Cash Deposit Requirements

    Upon completion of these reviews, for entries from CNIM, Hongfa, 
LABEC, Luqi, Hongda, Longkou Haimeng, LKTLC, GREN, Meita, Huanri 
General, Winhere and ZLAP, we will require cash deposits at the rate 
established in the final results as further described below.
    Bonding will no longer be permitted to fulfill security 
requirements for shipments of brake rotors from the PRC produced and 
exported by Luqi that are entered, or withdrawn from warehouse, for 
consumption on or after the publication date of the final result of the 
new shipper review. The following cash deposit requirements will be 
effective upon publication of the final results of the new shipper 
review for all shipments of subject merchandise from Luqi entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date: (1) for subject merchandise manufactured and exported by Luqi, no 
cash deposit will be required if the cash deposit rate calculated in 
the final results is zero or de minimis; and (2) for subject 
merchandise exported by Luqi but not manufactured by Luqi, the cash 
deposit rate will continue to be the PRC countrywide rate (i.e., 43.32 
percent).
    The following deposit requirements will be effective upon 
publication of the final results of the administrative review for all 
shipments of brake rotors from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(1) of the Act: (1) the cash deposit rates 
for CNIM, Hongfa, LABEC, Hongda, Longkou Haimeng, LKTLC, GREN, Meita, 
Huanri General, Winhere, and ZLAP will be the rates determined in the 
final results of review (except that if a rate is de minimis, i.e., 
less than 0.50 percent, no cash deposit will be

[[Page 10409]]

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 Rotec) 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 exporter that supplied that exporter.
    With respect to Rotec, bonding will no longer be permitted to 
fulfill security requirements for shipments of brake rotors from the 
PRC produced and exported by Rotec that are entered, or withdrawn from 
warehouse, for consumption in the United States on or after the 
publication of this partial final rescission determination in the 
Federal Register.
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative and new shipper reviews and notice are in 
accordance with sections 751(a)(1) of the Act and 19 CFR 351.214.

    Dated: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5005 Filed 3-4-04; 8:45 am]
BILLING CODE 3510-DS-S