[Federal Register Volume 69, Number 105 (Tuesday, June 1, 2004)]
[Notices]
[Pages 30875-30878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12298]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-846)


Brake Rotors From the People's Republic of China: Preliminary 
Results of the Tenth New Shipper Review

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

ACTION: Notice of preliminary results the tenth new shipper review.

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SUMMARY: The Department of Commerce (``the Department'') is currently 
conducting the tenth new shipper review of the antidumping duty order 
on brake rotors from the People's Republic of China (``PRC'') covering 
the period April 1, 2003, through September 30, 2003. This review 
covers one exporter.
    We have preliminarily determined that sales have been made at not 
less than normal value (``NV'') with respect to the exporter who 
participated fully in this review. If the preliminary results are 
adopted in our final results of this review, we will instruct Customs 
and Border Protection (``CBP'') not to assess antidumping duties on 
entries of merchandise subject to this review.
    Interested parties are invited to comment on the preliminary 
results. We will issue the final results no later than 90 days from the 
date of publication of this notice.

EFFECTIVE DATE: June 1, 2004.

FOR FURTHER INFORMATION CONTACT: Brian Smith and Terre Keaton 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 and (202) 482-1280, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 31, 2003, the Department received a timely request from 
Shenyang Yinghao Machinery Co., Ltd. (``Shenyang Yinghao'') for a new 
shipper review of this antidumping duty order in accordance with 19 CFR 
351.214(c). In its request for a new shipper review and in accordance 
with 19 CFR 351.214(b)(2)(i) and (iii)(A), Shenyang Yinghao certified 
that it did not export the subject merchandise to the United States 
during the period covered by the original less-than-fair-value 
(``LTFV'') investigation and that it is not affiliated with any company 
which exported the subject merchandise to the United States during the 
period of investigation (``POI''). Shenyang Yinghao also certified that 
its export activities are not controlled by the central government of 
the People's Republic of China (``PRC''). Pursuant to 19 CFR 
351.214(b)(2)(iv), Shenyang Yinghao submitted documentation 
establishing the date on which the merchandise was first shipped for 
export to the United States, the volume of that first shipment, and the 
date of the first sale to an unaffiliated customer in the United 
States.
    On November 25, 2003, the Department initiated a new shipper review 
of Shenyang Yinghao (see Brake Rotors from the People's Republic of 
China: Initiation of the Tenth New Shipper Antidumping Duty Review, 68 
FR 67402 (December 2, 2003)).
    On December 8, 2003, we issued the antidumping duty questionnaire 
to Shenyang Yinghao.
    On January 15, 2004, Shenyang Yinghao submitted its questionnaire 
response. On January 16, 2004, the Department provided the parties an 
opportunity to submit publicly available information for consideration 
in the preliminary results. Also on January 16, 2004, the Department 
requested from CBP copies of all customs documents pertaining to the 
entry of brake rotors from the PRC produced/exported by Shenyang 
Yinghao during period of April 1, 2003, through September 30, 2003 (see 
January 16, 2002, memorandum to Michael S. Craig of CBP). On February 
12, 2004, we issued a supplemental questionnaire.
    On March 2, 2004, the petitioner \1\ submitted a letter requesting 
that the Department conduct a verification of the responses submitted 
by Shenyang Yinghao. On March 12, 2004, we received documentation from 
CBP regarding our January 16, 2004, request for information. On March 
15, 2004, we issued Shenyang Yinghao a supplemental questionnaire 
regarding the documentation we received from CBP. On March 16, 2004, we 
placed on the record the documentation we obtained from CBP (see March 
16, 2004, memorandum to the file from Terre Keaton, International Trade 
Compliance Specialist). On March 17, 2004, we notified Shenyang Yinghao 
of our intent to conduct verification of its responses and provided it 
with a verification outline for purposes of familiarizing the company 
with the verification process. On March 18, 2004, the petitioner 
submitted publicly available information to be used in the

[[Page 30876]]

calculation of normal value. On March 22 and 24, 2004, Shenyang Yinghao 
and its U.S. importer submitted their responses to our March 15, 2004, 
supplemental questionnaire. Also on March 24, 2004, the petitioner 
submitted comments on the verification outline. From March 29 to April 
1, 2004, the Department conducted verification of the information 
submitted by Shenyang Yinghao in accordance with 19 CFR 351.307.
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    \1\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
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    On April 1, 2004, Shenyang Yinghao submitted the minor corrections 
to its responses it presented to the Department's verifiers at the 
start of verification. On April 14, 2004, we issued the verification 
report.

Scope of the Order

    The products covered by this order are brake rotors made of gray 
cast iron, whether finished, semifinished, or unfinished, ranging in 
diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight 
from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters 
(weight and dimension) of the brake rotors limit their use to the 
following types of motor vehicles: automobiles, all-terrain vehicles, 
vans and recreational vehicles under ``one ton and a half,'' and light 
trucks designated as ``one ton and a half.''
    Finished brake rotors are those that are ready for sale and 
installation without any further operations. Semi-finished rotors are 
those on which the surface is not entirely smooth, and have undergone 
some drilling. Unfinished rotors are those which have undergone some 
grinding or turning.
    These brake rotors are for motor vehicles, and do not contain in 
the casting a logo of an original equipment manufacturer (``OEM'') 
which produces vehicles sold in the United States. (e.g., General 
Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in 
this order are not certified by OEM producers of vehicles sold in the 
United States. The scope also includes composite brake rotors that are 
made of gray cast iron, which contain a steel plate, but otherwise meet 
the above criteria. Excluded from the scope of this order are brake 
rotors made of gray cast iron, whether finished, semifinished, or 
unfinished, with a diameter less than 8 inches or greater than 16 
inches (less than 20.32 centimeters or greater than 40.64 centimeters) 
and a weight less than 8 pounds or greater than 45 pounds (less than 
3.63 kilograms or greater than 20.41 kilograms).
    Brake rotors are 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 period of review (``POR'') covers April 1, 2003, through 
September 30, 2003.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Shenyang Yinghao. We used standard verification procedures, 
including on-site inspection of Shenyang Yinghao's facility and 
examination of relevant sales and financial records. Our verification 
results are outlined in the verification report (see April 14, 2004, 
verification report for further discussion).

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).
    As stated in Shenyang Yinghao's questionnaire responses and as 
verified by the Department, Shenyang Yinghao is wholly foreign-owned 
(see Shenyang Yinghao's October 2003 and January 2004 responses, and 
the verification report). Thus, because we have no evidence indicating 
that it is under the control of the PRC government, a separate rates 
analysis is not necessary to determine whether it is 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, 61 FR 19026 (April 30, 
1996)(``Bicycles'')).

Normal Value Comparisons

    To determine whether sales of the subject merchandise by Shenyang 
Yinghao to the United States were made at prices below normal value 
(``NV''), we compared its export prices to NV, as described in the 
``Export Price'' and ``Normal Value'' sections of this notice, below.

Export Price

    We used export price (``EP'') 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 (``CEP'') was not otherwise indicated.
    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. Based on our 
verification findings, we revised the inland freight distance Shenyang 
Yinghao reported from its factory to the port of exportation. 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 October 1999- September 2000 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).

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

[[Page 30877]]

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 January 14, 2004). 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 Shenyang Yinghao 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, we revised the following data 
in Shenyang Yinghao's response: (1) the consumption factor for 
lubrication oil; (2) the distance from the factory to the seaport; (3) 
the direct labor allocation ratio; and (4) the distances reported for 
the lubrication oil and ferrosilicon suppliers (see pages 3, 8, 11 and 
14 of the 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 May 24, 2004, for a detailed explanation of the 
methodology used to calculate surrogate values.)
    To value pig iron, steel scrap, ferrosilicon, ferromanganese and 
lubrication oil, we used April 2003- September 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 Shenyang Yinghao 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.
    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 2002-2003 financial data of 
Kalyani Brakes Limited (``Kalyani'') and Mando Brake Systems India 
Limited (``Mando''). Where appropriate, we removed from the surrogate 
factory overhead and SG&A calculations the excise duty amount listed in 
the financial reports. In addition, we made certain changes to our 
calculation methodology used in prior brake rotor reviews for 
determining the surrogate SG&A percentage (which also affected the 
surrogate profit percentage) (see preliminary results factors valuation 
memorandum for further details.)
    To value pallet wood, tape, plastic bags and plastic sheets, we 
used April 2003-September 2003 average import values from WTA. To value 
corrugated paper cartons, nails, and steel strip, we used October 2002-
March 2003 average import values from WTA because we were unable to 
obtain POR price data from the WTA for these packing materials.
    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 margin exists during 
the period April 1, 2003, through September 30, 2003:

------------------------------------------------------------------------
                                                                 Margin
                Manufacturer/producer/exporter                   Percent
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Shenyang Yinghao Machinery 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 
June 30, 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 June 21, 2004. Rebuttal briefs, limited 
to issues raised in the case briefs, will be due no later than June 28, 
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 the review, 
including the results of its analysis of issues raised in any such 
written briefs or at the hearing, if held, not later than 90 days after 
the date of issuance of the preliminary results.

[[Page 30878]]

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 company 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- 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. We will 
instruct CBP to assess antidumping duties on all appropriate entries 
covered by this review if any importer-specific assessment rate 
calculated in the final results of this review is above de minimis.

Cash Deposit Requirements

    Upon completion of this review, 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 Shenyang Yinghao that are entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of the new shipper review. The following cash deposit 
requirements will be effective upon publication of the final results of 
this review for all shipments of subject merchandise from Shenyang 
Yinghao entered, or withdrawn from warehouse, for consumption on or 
after the publication date: (1) for subject merchandise manufactured 
and exported by Shenyang Yinghao, 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 Shenyang Yinghao 
but not manufactured by Shenyang Yinghao, the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 43.32 percent).
    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.
    This new shipper review and notice are in accordance with sections 
751(a)(1) of the Act and 19 CFR 351.214.

    Dated: May 24, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-12298 Filed 5-28-04; 8:45 am]
BILLING CODE 3510-DS-S