[Federal Register Volume 69, Number 242 (Friday, December 17, 2004)]
[Notices]
[Pages 75508-75510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3710]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

A-570-846


Brake Rotors from the People's Republic of China: Notice of 
Initiation of Changed Circumstances Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce has received information sufficient 
to warrant initiation of a changed circumstances review of the 
antidumping order on brake rotors from the People's Republic of China 
(``PRC''). The review will be conducted to determine whether Shandong 
Huanri Group Co., Ltd. (``Huanri Group'') is the successor-in-interest 
to Shandong Huanri Group General Company (``Huanri Group General'').

EFFECTIVE DATE: December 17, 2004.

FOR FURTHER INFORMATION CONTACT: Amber Musser, AD/CVD Operations, 
Office 9, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-1777.

SUPPLEMENTARY INFORMATION:

Background

    On April 17, 1997, the Department published in the Federal Register 
the antidumping duty order on brake rotors from the PRC (62 FR 18740). 
On October 28, 2004, Huanri Group submitted information and 
documentation in support of its claim that it is the successor-in-
interest to Huanri Group

[[Page 75509]]

General and requested that the Department conduct a changed-
circumstances review to determine whether Huanri Group is the 
successor-in-interest to Huanri Group General and whether it should 
receive the same antidumping duty treatment as is accorded to Huanri 
Group General with respect to the subject merchandise. Huanri Group 
provided its response to the Department's separate rates questionnaire 
in this submission.
    On November 5, 2004, the petitioner requested that the Department 
publish a separate notice of initiation and refrain from simultaneously 
issuing a preliminary finding because it claimed that Huanri Group did 
not give the Department sufficient information to conduct an expedited 
review; for example, the petitioner stated that it raised concerns 
regarding the ownership of Huanri Group on the public record of the 
seventh administrative review, and that these concerns were not 
addressed in Huanri Group's request for a changed circumstances review.
    On November 18, 2004, the Department issued a letter to Huanri 
Group requesting that they provide additional information and 
documentation addressing the company's management structure, production 
facilities, supplier relations, and customer base. On November 26, 
2004, Huanri Group provided a response to the Department's November 18, 
2004, request for information.

Scope of Review

    The products covered by this review 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, 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 rotors which have undergone some drilling and on which the 
surface is not entirely smooth. 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, and Volvo). Brake rotors covered in this 
review are not certified by OEM producers of vehicles sold in the 
United States. The scope also includes composite brake rotors that are 
made of gray cast iron which contain a steel plate but otherwise meet 
the above criteria. Excluded from the scope of the review 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 
review is dispositive.

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. To establish whether a 
firm is sufficiently independent from government control, and therefore 
entitled to a separate rate, the Department analyzes each exporting 
entity under a test arising out of 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 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 government control over export 
activities.

1. De Jure Control

    Huanri Group has placed on the administrative record documentation 
to demonstrate absence of de jure government control, including the 
1994 ``Foreign Trade Law of the People's Republic of China,'' and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations,'' promulgated on June 
3, 1988.
    As in prior cases, we have analyzed these laws and have found them 
to establish sufficiently an absence of de jure control of stock 
companies including limited liability companies. 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 Huanri Group.

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 government control which would preclude the Department from 
assigning separate rates.
    The Department typically considers four factors in evaluating 
whether a respondent is subject to de facto government control of its 
export functions: (1) Whether the export prices are set by, or subject 
to the approval of, a government 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.
    Huanri Group asserted the following: (1) It establishes its own 
export prices; (2) it negotiates contracts without guidance from any 
government 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, statements contained in 
Huanri Group's October 28, 2004, submission indicate that the company 
does not coordinate its prices with other exporters. This information 
supports a initial finding that there is de facto absence of government 
control of the export

[[Page 75510]]

functions of Huanri Group. See Pure Magnesium from the People's 
Republic of China: Preliminary Results of Antidumping Duty New Shipper 
Administrative Review, 62 FR 55215 (October 23, 1997). Consequently, 
for purposes of initiating its request for a changed circumstances 
review, we find that there is a sufficient basis to determine that 
Huanri Group has met the criteria for the application of a separate 
rate.

Initiation of Antidumping Duty Changed Circumstances Review.

    Pursuant to section 751(b)(1) of the Act, the Department will 
conduct a changed circumstances review upon receipt of information 
concerning, or a request from an interested party for a review of, an 
antidumping duty order which shows changed circumstances sufficient to 
warrant a review of the order. In its October 28, 2004, submission and 
its November 26, 2004, supplemental submission, Huanri Group notified 
the Department that it had changed its name on June 9, 2004, following 
a change in ownership. In its submissions, Huanri Group also stated 
that it has (1) retained the same management, (2) used the same 
production facilities, (3) retained the same suppliers, and (4) 
maintained the same customers. The information submitted by Huanri 
Group that addresses the four aforementioned criteria, is sufficient to 
warrant a changed circumstance review. See 19 CFR 351.216(c).
    In antidumping duty changed circumstances reviews involving a 
successor-in-interest determination, the Department typically examines 
several factors including, but not limited to, changes in: (1) 
Management; (2) production facilities; (3) supplier relationships; and 
(4) customer base. See Brass Sheet and Strip from Canada: Notice of 
Final Results of Antidumping Administrative Review, 57 FR 20460, 20462 
(May 13, 1992) (``Brass Sheet''). While no single factor or combination 
of factors will necessarily be dispositive, the Department generally 
will consider the new company to be the successor to the predecessor 
company if the resulting operations are essentially the same as those 
of the predecessor company. See, e.g., Industrial Phosphorus Acid from 
Israel: Final Results of Changed Circumstances Review, 59 FR 6944, 6945 
(February 14, 1994), and Brass Sheet. Thus, if the record evidence 
demonstrates that, with respect to the production and sale of the 
subject merchandise, the new company operates as the same business 
entity as the predecessor company, the Department may assign the new 
company the cash deposit rate of its predecessor. See, e.g., Fresh and 
Chilled Atlantic Salmon from Norway: Final Results of Changed 
Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 
(March 1, 1999).
    Based on data contained in its October 28, 2004, submission and its 
November 26, 2004, supplemental submission, Huanri Group has provided 
sufficient evidence to warrant a review to determine if it is the 
successor-in-interest to Huanri Group General based on the successor-
in-interest criteria enunciated in Brass Sheet and the Department's 
separate rates criteria articulated in Sparklers and amplified in 
Silicon Carbide. However, we consider it inappropriate to expedite this 
review by combining the preliminary results of review with this notice 
of initiation, as permitted under 19 CFR 351.221(c)(3)(ii), because 
Huanri Group's request for this changed circumstances review did not 
address Huanri Group General's ownership, the reasons for the change in 
ownership, or the change in legal classification. In addition, we have 
not had sufficient time to analyze the data contained in Huanri Group's 
November 26, 2004, supplemental submission. Therefore, the Department 
is not issuing the preliminary results of its antidumping duty changed 
circumstances review at this time.
    The Department will publish in the Federal Register a notice of 
preliminary results of antidumping duty changed circumstances review, 
in accordance with 19 CFR 351.221(b)(4) and 19 CFR 351.221(c)(3)(I). 
This notice will set forth the factual and legal conclusions upon which 
our preliminary results are based and a description of any action 
proposed based on those results. Pursuant to 19 CFR 351.221(b)(4)(ii), 
interested parties will have an opportunity to comment on the 
preliminary results of review. In accordance with 19 CFR 351.216(e), 
the Department will issue the final results of its antidumping duty 
changed circumstances review not later than 270 days after the date on 
which the review is initiated.
    During the course of this antidumping duty changed circumstances 
review, we will not change the cash deposit requirements for the 
merchandise subject to review. The cash deposit will only be altered, 
if warranted, pursuant to the final results of this review.
    This notice of initiation is in accordance with section 751(b)(1) 
of the Act and 19 CFR 351.216 and 351.222.

    Dated: December 13, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-3710 Filed 12-16-04; 8:45 am]
BILLING CODE 3510-DS-S