[Federal Register Volume 70, Number 92 (Friday, May 13, 2005)]
[Notices]
[Pages 25545-25547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2390]


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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 Changed Circumstances Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is currently 
conducting a changed circumstances administrative review of the 
antidumping duty order on brake rotors from the People's Republic of 
China (``PRC''). We have preliminarily determined that Shanxi Fengkun 
Foundry Ltd., Co. (``Fengkun Foundry'') is not the successor-in-
interest to Shanxi Fengkun Metallurgical Ltd., Co. (``Fengkun 
Metallurgical'') for purposes of determining antidumping liability.
    Interested parties are invited to comment on these preliminary 
results. In accordance with 19 CFR 351.216(e), the Department will 
issue the final results of this antidumping duty changed circumstances 
review not later than July 11, 2005 (i.e., 270 days after the date on 
which this review was initiated).

EFFECTIVE DATE: May 13, 2005.

FOR FURTHER INFORMATION CONTACT: Steve Winkates or Brian Smith, 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-
1904 or (202) 482-1766, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 19, 2004, the Department initiated a changed 
circumstances review of Fengkun Foundry's claim that it is the 
successor-of-interest to Fengkun Metallurgical. See Brake Rotors from 
the People's Republic of China: Notice of Initiation of Changed 
Circumstances Review, 69 FR 61468 (October 19, 2004) (``Initiation 
Notice''). Since the publication of the Initiation Notice, the 
following events have occurred.
    On November 3, 2004, the petitioner submitted comments on Fengkun 
Foundry's response to the Department's separate rates questionnaire. On 
December 22, 2004, the petitioner submitted a request that the 
Department verify Fengkun Foundry in the context of the changed 
circumstances review.\1\
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    \1\ The petitioner also requested that the Department verify the 
company in the context of the Seventh Administrative/Eleventh New 
Shipper Review, of which Fengkun Foundry's predecessor, Fengkun 
Metallurgical, is a respondent.
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    On January 6, 2005, the Department issued a Supplemental 
Questionnaire to Fengkun Foundry. On January 31, 2005, Fengkun Foundry 
submitted its response to the Department's Supplemental Questionnaire. 
On February 15, 2005, the petitioner submitted comments on Fengkun 
Foundry's response to the Department's Supplemental Questionnaire. On 
March 16, 2005, the Department issued Fengkun Foundry a second 
Supplemental Questionnaire. On March 30, 2005, Fengkun Foundry 
submitted its response to the Department's second Supplemental 
Questionnaire.

Scope of the Order

    The products covered by the 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, 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 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 the order is dispositive.

Preliminary Results

    In its January 31, 2005, supplemental questionnaire response, 
Fengkun Metallurgical provided documentation to support further its 
claim that effective November 28, 2003, it received approval from the 
Shanxi Industrial and Commercial Administration Bureau (``SICAB'') to 
change its name to ``Shanxi Fengkun Foundry ltd., Co.'' The company 
stated that the idea to change the name came as a result of decisions 
made by Fengkun Metallurgical's original owners to reflect a change in 
the company's emphasis from metallurgical operations to foundry 
operations. Specifically, this documentation consisted of: (1) board 
meeting minutes detailing the company's reasoning for the name change; 
(2) the application to SICAB requesting approval for the name change; 
(3) a notice from SICAB granting Fengkun Metallurgical's proposed name 
change to Fengkun Foundry; and (4) Fengkun Foundry's business license 
issued by SICAB (see Exhibits 1 and 2 of the supplemental questionnaire 
response). Both the notice from SICAB granting the name change and 
Fengkun Foundry's business license indicate that Fengkun Metallurgical 
no longer exists as a legal entity in the PRC.
    In its responses to the Department's supplemental questionnaires, 
Fengkun Metallurgical also provided information in support of its 
statements that all personnel, operations, and facilities remain 
essentially unchanged as a result of changing the name of the company 
to Fengkun Foundry.
    In contrast, the petitioner contended in its February 15, 2005, 
submission that Fengkun Foundry has not sufficiently demonstrated that 
it is the successor-in-interest of Fengkun Metallurgical because 
Fengkun Metallurgical, unlike Fengkun Foundry,

[[Page 25546]]

is both an exporter and producer of the subject merchandise.
    In making such a successor-in-interest determination, the 
Department examines several factors including, but not limited to, 
changes in: (1) management; (2) production facilities; (3) supplier 
relationships; and (4) customer base. See, e.g., Brass Sheet and Strip 
from Canada: Final Results of Antidumping Duty Administrative Review, 
57 FR 20460 (May 13, 1992). While no single factor or combination of 
these factors will necessarily provide a dispositive indication of a 
successor-in-interest relationship, the Department will generally 
consider the new company to be the successor to the previous company if 
the new company's resulting operation is not materially dissimilar to 
that of its predecessor. See, e.g., Industrial Phosphoric Acid from 
Israel: Final Results of Changed Circumstances Review, 59 FR 6944 
(February 14, 1994); Canadian Brass, and Fresh and Chilled Atlantic 
Salmon from Norway: Initiation and Preliminary Results of Changed 
Circumstances Antidumping Duty Administrative Review, 63 FR 50880 
(September 23, 1998). Thus, if the 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 former company, the 
Department will accord the new company the same antidumping treatment 
as its predecessor.
    We preliminarily determine that Fengkun Foundry is not the 
successor-in-interest to Fengkun Metallurgical for the reasons 
mentioned below.
    Data placed on the record of this review indicates that Fengkun 
Foundry has the same management, production facilities, and supplier 
relationships as Fengkun Metallurgical. Fengkun Foundry's managers are 
the same individuals, the company occupies the same facilities, and its 
vendor listing is unchanged. However, Fengkun Foundry does not have the 
same customer base as Fengkun Metallurgical as a result of neither 
having made any sales since its name change nor obtaining the ability 
to export its product under its new name.
    Specifically, Fengkun Metallurgical has indicated that it has made 
no domestic or export sales since changing its name to Fengkun Foundry 
(see page one of the March 30, 2005, second supplemental questionnaire 
response). Although Fengkun Metallurgical also stated that it exported 
one shipment of subject merchandise to the U.S. market since its name 
change became effective on November 28, 2003, the date of that sales 
invoice preceded the effective date of its name change, and Fengkun 
Metallurgical's name was on the invoice (see Exhibit 1 of the March 30, 
2005, second supplemental questionnaire response).
    In addition, Fengkun Foundry has also stated that it does not have 
a Certificate of Approval for Enterprises with Foreign Trade Rights 
(see page 3 of the January 31, 2005, supplemental questionnaire 
response). Thus, according to PRC law, Fengkun Foundry cannot export to 
the United States. Therefore, whereas Fengkun Metallurgical was both an 
exporter and producer of the subject merchandise, evidence on the 
record demonstrates that Fengkun Foundry is only a producer of the 
subject merchandise. Given that only an exporter may receive a separate 
rate, we consider this kind of fundamental change to be dispositive in 
this case.
    As discussed above, we determine that the resulting operation of 
Fengkun Foundry is not materially the same as that of Fengkun 
Metallurgical in accordance with the Department's practice (see also 
Certain Stainless Steel Pipe from the Republic of Korea: Preliminary 
Results of Antidumping Duty Changed Circumstances Review, 63 FR 6153, 
6154 (February 6, 1998). Furthermore, as Fengkun Foundry has not 
sufficiently demonstrated that it is the successor-of-interest of 
Fengkun Metallurgical, we have not applied the Department's separate 
rates criteria for purposes of determining whether Fengkun Foundry is 
eligible for a separate rate in this review.
    Therefore, for the reasons stated above, we preliminarily determine 
that Fengkun Foundry should not receive the same antidumping duty 
treatment with respect to brake rotors as the former entity Fengkun 
Metallurgical because Fengkun Foundry, unlike Fengkun Metallurgical, 
has not demonstrated that it has the right to export the subject 
merchandise. Nevertheless, should Fengkun Foundry obtain a valid 
Certificate of Approval for Enterprises with Foreign Trade Rights 
(``Certificate of Approval'') and otherwise demonstrate that it is both 
an exporter and producer of the subject merchandise, we may revisit the 
issue and review the totality of information to determine if Fengkun 
Foundry should receive the same antidumping duty treatment with respect 
to brake rotors as the former Fengkun Metallurgical.\2\ The deadline 
for Fengkun Foundry to submit a Certificate of Approval is May 27, 
2005. If Fengkun Foundry submits this document by this deadline, 
interested parties may comment on the submission by June 3, 2005, and 
rebuttal comments may be submitted by June 8, 2005. No new information 
will be accepted in either comments or rebuttal comments.
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    \2\ Should Fengkun Foundry submit a Certificate of Approval, it 
must submit an explanation as to the license's effective date and 
that date's link to the effective date of the name change.
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    If these preliminary results are adopted in our final results of 
this changed circumstances review, we will instruct the U.S. Customs 
and Border Protection (``CBP'') to suspend liquidation of shipments of 
subject merchandise made by Fengkun Foundry at the PRC-wide rate (i.e., 
43.32 percent). In addition, because Fengkun Metallurgical has placed 
information on this record which indicates that it no longer exists as 
a legal entity in the PRC, we will also instruct CBP to suspend 
liquidation of shipments of subject merchandise made by Fengkun 
Metallurgical at the PRC-wide rate. The shipments of subject 
merchandise to be suspended are those which are entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this changed circumstances review.
    Any interested party may request a hearing within 10 days of 
publication of this notice. Any hearing, if requested, will be held no 
later than 30 days after the date of publication of this notice, or the 
first workday thereafter.
    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. Requests should 
contain: (1) the party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of issues to be discussed. See 
19 CFR 351.310(c).
    Issues raised in the hearing will be limited to those raised in 
case briefs and rebuttal briefs. Case briefs from interested parties 
may be submitted not later than June 3, 2005. Rebuttal briefs, limited 
to the issues raised in the case briefs, may be filed not later than 
June 10, 2005. 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. 
Persons interested in attending the hearing, if one is requested, 
should contact the Department for the date and time of the hearing.
    The Department will publish the final results of this changed 
circumstances review, including the results of its

[[Page 25547]]

analysis of issues raised in any written comments, not later than July 
11, 2005 (i.e., 270 days after the date on which this review was 
initiated).
    We are issuing and publishing this determination and notice in 
accordance with sections 751(b)(1) and 777(I)(1) of the Act and 19 CFR 
351.216.

    Dated: May 6, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-2390 Filed 5-12-05; 8:45 am]
BILLING CODE 3510-DS-S