[Federal Register Volume 70, Number 131 (Monday, July 11, 2005)]
[Notices]
[Pages 39744-39756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13503]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, From the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review and Notice of Intent to Rescind 
in Part

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

SUMMARY: The Department of Commerce (``the Department'') is conducting 
the seventeenth administrative review of the antidumping duty order on 
tapered

[[Page 39745]]

roller bearings and parts thereof, finished or unfinished, (``TRBs'') 
from the People's Republic of China (``PRC'') covering the period June 
1, 2003, through May 31, 2004. We have preliminarily determined that 
sales have been made below normal value. Further, we have preliminarily 
determined to apply an adverse facts available (``AFA'') rate to all 
sales and entries of the Yantai Timken Company's (``Yantai Timken's'') 
subject merchandise during the period of review (``POR''). If these 
preliminary results are adopted in our final results of this review, we 
will instruct U.S. Customs and Border Protection (``CBP'') to assess 
antidumping duties on entries of subject merchandise during the 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: July 11, 2005.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Eugene Degnan, AD/
CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4243 and (202) 482-0414, respectively.

Background

    On June 1, 2004, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
TRBs from the PRC for the period June 1, 2003, through May 31, 2004. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation: Opportunity to Request Administrative Review, 69 FR 
30873. On June 30, 2004, The Timken Company (``the Petitioner'') 
requested that the Department conduct an administrative review of the 
antidumping duty order covering TRBs from the PRC for entries of 
subject merchandise produced and exported by China National Machinery 
Import & Export Corporation (``CMC''), Chin Jun Industrial Ltd. (``Chin 
Jun''), Luoyang Bearing Corporation (Group) (``LYC''), Peer Bearing 
Company--Changshan (``CPZ''), Shanghai United Bearing Co., Ltd. 
(``Shanghai United''), Weihai Machinery Holding (Group) Company, Ltd. 
(``Weihai Machinery''), Zhejiang Changshan Bearing (Group) Co., Ltd. 
(``Changshan Bearing''), Zhejiang Changshan Change Bearing Co. 
(``ZCCBC''), and Zhejiang Machinery Import & Export Corp (``ZMC''). 
Also on June 30, 2004, Yantai Timken requested an administrative review 
of entries of subject merchandise produced by Yantai Timken. On July 
28, 2004, the Department published in the Federal Register a notice of 
the initiation of the antidumping duty administrative review of TRBs 
from the PRC for the period June 1, 2003, through May 31, 2004. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 69 FR 45010 (``Initiation 
Notice''). On August 5, 2004, the Department issued antidumping duty 
questionnaires to all of the above respondents.
    On September 8, 2004, CPZ submitted its Section A response. On 
September 28, 2004, CPZ submitted its Sections C and D responses. On 
October 22, 2004, the Petitioner withdrew its request for an 
administrative review of sales and entries of subject merchandise 
produced and exported by CPZ. On January 28, 2005, the Department 
published a notice of partial rescission, which rescinded the 
administrative review for CPZ. See Tapered Roller Bearings and Parts 
Thereof, Finished or Unfinished from the People's Republic of China: 
Notification of Partial Rescission of the Antidumping Duty 
Administrative Review, 70 FR 5966 (January 28, 2005). On February 4, 
2005, the Department published a notice in the Federal Register 
extending the time limit for the preliminary results of review until 
May 1, 2005. See Extension of Time Limit for the Preliminary Results of 
the Antidumping Duty Administrative Review: Tapered Roller Bearings and 
Parts Thereof, Finished or Unfinished from the People's Republic of 
China, 70 FR 5967 (February 4, 2005). Additionally, on April 5, 2005, 
the Department published a notice in the Federal Register further 
extending the time limit for the preliminary results of review until 
June 30, 2005. See Extension of Time Limit for Preliminary Results of 
the Antidumping Duty Administrative Review: Tapered Roller Bearings and 
Parts Thereof, Finished or Unfinished from the People's Republic of 
China, 70 FR 17233 (April 5, 2005).

Yantai Timken

    On August 5, 2004, the Department issued its antidumping 
questionnaire to Yantai Timken. Yantai Timken submitted its Section A 
questionnaire response on August 26, 2004, and its Sections C and D 
responses on October 4, 2004. The Department issued a Section A-D 
supplemental questionnaire to Yantai Timken on December 22, 2004, to 
which Yantai Timken responded on January 12, 2005. The Department 
issued a second supplemental questionnaire to Yantai Timken on February 
15, 2005, to which Yantai Timken responded on March 15, 2005. We issued 
a third supplemental questionnaire on April 6, 2005. Yantai Timken 
responded on April 13, 2005. On April 18, 2005, Yantai Timken provided 
revised proprietary versions of its August 26, 2004, October 4, 2004, 
January 12, 2005, March 1, 2005 and March 4, 2005 submissions in 
response to the Department's third supplemental questionnaire response. 
On April 15, 2005, the Department issued its fourth supplemental 
questionnaire. Yantai Timken provided its fourth supplemental 
questionnaire response on April 20, 2005. The Department issued its 
fifth supplemental questionnaire on April 21, 2005 concerning the 
quantity and value of sales during the past three years as a result of 
Yantai Timken's request for revocation. Yantai Timken responded on 
April 25, 2005. On April 21, 2005, the Department also issued its sixth 
supplemental questionnaire to Yantai Timken. Yantai Timken provided its 
sixth supplemental questionnaire response on May 5, 2005.

LYC

    On August 5, 2004, the Department issued its antidumping 
questionnaire to LYC. LYC submitted its Section A questionnaire 
response on September 8, 2004, and its Sections C and D responses on 
October 4, 2004. The Department issued a Section A-D supplemental 
questionnaire to LYC on December 22, 2004, to which LYC responded on 
January 12, 2005. The Department issued a second supplemental 
questionnaire to LYC on February 7, 2005, to which LYC responded on 
March 7, 2005. On March 11, 2005, LYC submitted sales and factors of 
production (``FOP'') reconciliations. We issued a third supplemental 
questionnaire on May 4, 2005. LYC responded on May 16, 2005. On June 8, 
2005, the Department issued its fourth supplemental questionnaire. LYC 
submitted its fourth supplemental questionnaire response on June 15, 
2005. On June 15, 2005, we issued a fifth supplemental questionnaire to 
LYC. LYC provided its fifth supplemental questionnaire response on June 
21, 2005.

CMC

    On August 5, 2004, the Department issued its antidumping 
questionnaire to CMC. CMC submitted its Section A questionnaire 
response on September 1, 2004, and its Sections C and D responses on 
October 4, 2004. The Department issued a Section A supplemental 
questionnaire to CMC on

[[Page 39746]]

October 18, 2004, to which CMC responded on November 1, 2004. The 
Department issued a Section A through D supplemental questionnaire to 
CMC on December 17, 2004. CMC provided its response on January 10, 
2005. We issued a second supplemental questionnaire on February 1, 
2005. CMC responded on February 22, 2005. On May 24, 2005, the 
Department issued its third supplemental questionnaire. CMC provided 
its third supplemental questionnaire response on June 6, 2005.

Other Respondents

    On August 5, 2004, the Department issued an antidumping duty 
questionnaire to Chin Jun, Shanghai United, Weihai Machinery, Changshan 
Bearing, ZCCBC, and ZMC. On September 9, 2004, ZMC submitted a letter 
stating that it had no U.S. sales of subject merchandise nor shipments 
of subject merchandise to the United States during the POR. On October 
15, 2004, and December 3, 2004, respectively, Weihai Machinery and Chin 
Jun submitted letters stating that they had no U.S. sales of subject 
merchandise nor shipments of subject merchandise to the United States 
during the POR.
    On September 24, 2004, we contacted counsel for ZCCBC to determine 
whether ZCCBC received Department's questionnaire. See memorandum to 
the file from Jim Nunno, Senior Analyst, Telephone Conversation with 
Counsel for Respondent, Zhejiang Changshan Change Bearing Co., 
(``ZCCBC'') (``ZCCBC Memorandum''), dated September 29, 2004. Counsel 
explained that it forwarded the Department's questionnaire to ZCCBC, 
but did not receive a confirmation that the company had received the 
questionnaire. See ZCCBC Memorandum. On October 5, 2004, the Department 
issued a second letter and questionnaire to the government of the PRC, 
requesting its assistance in transmitting our questionnaire to Chin 
Jun, Shanghai United, Weihai Machinery, Changshan Bearing, and ZCCBC. 
See letter to Mr. Liu Danyang, Director of the Bureau of Fair Trade for 
Imports and Exports, dated October 5, 2004. On October 6, 2004, in 
response to our question whether ZCCBC received our questionnaire, 
counsel for ZCCBC explained that it no longer represents ZCCBC in this 
administrative review, and did not confirm whether ZCCBC received the 
Department's questionnaire. See Telephone Conversation with Counsel for 
Respondent, Zhejiang Changshan Change Bearing Co., (``ZCCBC'') 
(``Second ZCCBC Memorandum''). On October 25, 2004, Federal Express 
reported that it was unable to deliver our October 5, 2004 
questionnaire. See memorandum to the file from Katharine Huang, Case 
Analyst, Package to the Chinese Ministry of Commerce Was Returned, 
Seventeenth Administrative Review of Tapered Roller Bearings From the 
People's Republic of China, dated December 20, 2004. Thus, Shanghai 
United, Changshan Bearing, and ZCCBC did not respond to our August 5, 
2004 questionnaire, October 5, 2004 follow-up questionnaire or our 
other attempts to determine whether they received the August 5, 2004 
questionnaire.

Notice of Intent To Rescind Review in Part

    Pursuant to 19 CFR 351.213(d)(3), the Department may rescind an 
administrative review, in whole or with respect to a particular 
exporter or producer, if the Secretary concludes that, during the 
period covered by the review, there were no entries, exports, or sales 
of the subject merchandise. The Department explains this practice in 
the preamble to the Department's regulations. See Antidumping Duties; 
Countervailing Duties, 62 FR 27296, 27317 (May 19, 1997) 
(``Preamble''); see also Stainless Steel Plate in Coils From Taiwan: 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review, 67 FR 5789, 5790 (February 7, 2002) and 
Stainless Steel Plate in Coils from Taiwan: Final Rescission of 
Antidumping Duty Administrative Review, 66 FR 18610 (April 10, 2001). 
To confirm ZMC's, Weihai Machinery's, and Chin Jun's respective claims 
that each had no U.S. sales of subject merchandise nor shipments of 
subject merchandise to the United States during the POR, the Department 
conducted a Customs inquiry. See memorandum to the file from Laurel 
LaCivita, Tapered Roller Bearings and Parts, Thereof from the People's 
Republic of China, No Shipment Inquiry for Chin Jun Industrial Ltd., 
Weihai Machinery Holding (Group) Company, Ltd., and Zhejiang Machinery 
Import & Export Corporation, dated June 29, 2005. We have received no 
evidence that Chin Jun, Weihai Machinery or ZMC had any shipments to 
the U.S. of subject merchandise during the period of review. Therefore, 
pursuant to 19 CFR 351.213(d)(3), the Department preliminarily intends 
to rescind this review as to ZMC, Weihai Machinery, and Chin Jun. The 
Department may take additional steps to confirm that these companies 
had no sales, shipments or entries of subject merchandise to the United 
States during the POR.
    Therefore, for this administrative review, the Department will 
review only those sales of subject merchandise to the United States 
made by Yantai Timken, LYC, and CMC.

Period of Review

    The POR is June 1, 2003 through May 31, 2004.

Scope of Order

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

Verification of Responses

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(``the Act''), we verified information provided by Yantai Timken. We 
used standard verification procedures, including on-site inspection of 
the manufacturers' and exporters' facilities, and examination of 
relevant sales and financial records. The Department conducted the 
sales and FOP verification at Yantai Timken's facilities in Yantai, 
Shandong Province from April 25, 2005, to April 29, 2005. Our 
verification results are outlined in the verification report for Yantai 
Timken. For further details, see Verification of Sales and Factors of 
Production Reported by the Yantai Timken Company in the Antidumping 
Duty Administrative Review of Tapered Roller Bearings and Parts, 
Thereof from the People's Republic of China, dated June 30, 2005 
(``Yantai Timken Verification Report''). In addition, the Department 
conducted a constructed export price (``CEP'') sales verification at 
the facilities of Yantai Timken's parent company, Timken, in Canton, 
Ohio from May 16, 2005 through May 19, 2005. See Verification of the 
Constructed Export Sales Reported by The Timken Company in the 
Antidumping Duty Administrative Review of Tapered Roller Bearings and 
Parts, Thereof from the People's Republic of China, dated

[[Page 39747]]

June 30, 2005 (``Timken CEP Verification Report'').

Surrogate Value Information

    On November 17, 2004, the Petitioner submitted comments on the 
appropriate surrogate values (``SV'') to be applied to the FOPs in this 
review. On November 17, 2004, Yantai Timken also submitted surrogate 
value data and comments with respect to one of its proprietary inputs 
into the production process of TRBs. On December 8, 2004, the 
Department requested interested parties to submit comments on surrogate 
country selection or comments on significant production in potential 
surrogate countries. On December 29, 2004, Yantai Timken provided 
comments on the surrogate country selection.
    On April 8, 2005, the Department issued a surrogate value 
questionnaire establishing April 15, 2005, as the final date by which 
parties may provide comments on surrogate values for consideration in 
the Department's preliminary results of review. Yantai Timken and 
Timken provided comments on April 15, 2005. No other party to the 
proceeding provided comments on surrogate values during the course of 
this review.

Nonmarket-Economy-Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with 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 Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From the People's Republic of 
China: Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003). None of the 
parties to this proceeding has contested such treatment. Accordingly, 
we calculated normal value (``NV'') in accordance with section 773(c) 
of the Act, which applies to NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV on the NME 
producer's FOPs, valued in a surrogate market-economy country or 
countries considered to be appropriate by the Department. In accordance 
with section 773(c)(4) of the Act, in valuing the FOPs, the Department 
shall utilize, to the extent possible, the prices or costs of FOPs in 
one or more market-economy countries that are: (1) At a level of 
economic development comparable to that of the NME country; and (2) 
significant producers of comparable merchandise. The sources of the 
surrogate factor values are discussed under the ``Normal Value'' 
section below and in the memorandum to the file from Eugene Degnan, 
Case Analyst, through Wendy Frankel and Robert Bolling, Preliminary 
Results of Review of Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Factors 
of Production Valuation Memorandum for the Preliminary Results of 
Review, dated June 30, 2005 (``Factor Valuation Memorandum'').
    The Department has determined that India, Indonesia, Sri Lanka, the 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See Memorandum from Ron Lorentzen to Laurie 
Parkhill: Administrative Review of Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, (``TRBs'') from the People's Republic 
of China (PRC): Request for a List of Surrogate Countries (``Policy 
Memo''), dated November 22, 2004. Customarily, we select an appropriate 
surrogate country from the Policy Memo based on the availability and 
reliability of data from the countries that are significant producers 
of comparable merchandise. In this case, we have found that India is a 
significant producer of comparable merchandise. See Memorandum from 
Salim Bhabhrawala through Robert Bolling to Wendy Frankel: Antidumping 
Administrative Review of Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Selection 
of a Surrogate Country, dated March 29, 2005 (``Surrogate Country 
Memorandum'').
    The Department used India as the primary surrogate country, and, 
accordingly, has calculated NV using Indian prices to value the PRC 
producers' factors of production, when available and appropriate. See 
Surrogate Country Memorandum and Factor Valuation Memorandum. We have 
obtained and relied upon publicly available information wherever 
possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review, interested parties may submit 
publicly available information to value factors of production within 20 
days after the date of publication of the preliminary results of 
review.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and, thus, should be assigned a single 
antidumping duty deposit rate. It is the Department's policy to assign 
all exporters of merchandise subject to administrative review in an NME 
country this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate.
    We have considered whether each reviewed company based in the PRC 
is eligible for a separate rate. The Department's separate-rate test to 
determine whether the exporters are independent from government control 
does not consider, in general, macroeconomic/border-type controls, 
e.g., export licenses, quotas, and minimum export prices, particularly 
if these controls are imposed to prevent dumping. The test focuses, 
rather, on controls over the investment, pricing, and output decision-
making process at the individual firm level. See Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 62 FR 61276, 61279 (November 17, 1997), and Preliminary 
Determination of Sales at Less than Fair Value: Honey from the People's 
Republic of China, 60 FR 14725 (March 20, 1995).
    To establish whether a firm is sufficiently independent from 
government-control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588, (May 6, 1991), as modified by 
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. See Silicon Carbide and Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544 (May 8, 1995).
    LYC and CMC each provided company-specific separate-rates 
information and stated that each met the standards for the assignment 
of separate

[[Page 39748]]

rates. ZMC, Weihai Machinery and Chin Jun did not submit any 
information to establish their entitlement to a separate rate. 
Consequently, the Department analyzed whether LYC and CMC should 
receive a separate rate.
    However, for Yantai Timken, we have preliminarily determined to 
apply AFA, and thus find that Yantai Timken did not demonstrate its 
eligibility for a separate rate, and have preliminarily determined that 
it is part of the PRC-wide entity. As noted below, as AFA, and as the 
PRC-wide rate, the Department is assigning the rate of 60.95 percent, 
the highest rate determined in any previous segment of this proceeding.
A. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; or (3) any other formal 
measures by the government decentralizing control of companies. See 
Final Determination of Sales at Less Than Fair Value: Sparklers From 
the People's Republic of China, 56 FR 20588 (May 6, 1991).
B. Absence of 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 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998). Therefore, the Department has preliminarily determined that 
an analysis of de facto control is critical in determining whether 
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 each 
respondent is subject to de facto government control of its export 
functions: (1) Whether the exporter sets its own export prices 
independent of the government and without 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 its management; and (4) whether the respondent retains the 
proceeds of its export sales and makes independent decisions regarding 
disposition of profits or financing of losses. See Final Determination 
of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's 
Republic of China, 60 FR 22544 (May 8, 1995).

LYC

    LYC placed on the record statements and documents to demonstrate 
absence of de jure control. In its questionnaire responses, LYC 
reported that it does not have any relationship with the central, 
provincial, or local governments with respect to ownership, internal 
management, and daily business operations. See LYC's September 8, 2004 
Section A questionnaire response (``LY AQR'') at 2. LYC submitted a 
copy of its business license and stated it is renewed annually as long 
as the company submits its annual financial statements and profit/loss 
statements to the appropriate State Administration of Industry and 
Commerce office and no activities prohibited by Article 30 of the 
Administrative Regulations have occurred. LYC reported that the subject 
merchandise did not appear on any government list regarding export 
provisions or export licensing, and the subject merchandise is not 
subject to export quotas or export control licenses imposed by the PRC 
government. See LY AQR at 5. LYC reported that it may engage in 
business activities within the scope of its business license. LYC 
explained that the license imposes no other limitations on LYC, nor 
grants any entitlements to the company by its license. Furthermore, LYC 
stated that the China Chamber of Commerce of Machinery and Electronic 
Exporters (the ``Chamber''), a non-governmental association, does not 
interfere with LYC's export activities. See LY AQR at 6-7. LYC 
submitted a copy of the Trade Law of the People's Republic of China to 
demonstrate that there is no centralized control over its export 
activities. Through the questionnaire responses, we examined each of 
the related laws and LYC's business license and preliminarily determine 
that they demonstrate the absence of de jure control over the export 
activities and evidence in favor of the absence of government control 
associated with LYC's business license.
    In support of an absence of de facto control, LYC reported the 
following: (1) During the POR, LYC explained that it sold the subject 
merchandise in the United States either directly to its unaffiliated 
U.S. customers or through its affiliated company, LYC America. The 
prices are not subject to review by, or guidance from, any other 
entity, including any governmental organization; (2) LYC explained that 
its sales transactions are not subject to the review or approval of any 
organization outside the company; (3) LYC explained that its Board of 
Directors appoints the general manager and deputy general managers. LYC 
reported that the general manager is responsible for selecting other 
management personnel, and that it is not required to notify any 
government authorities of the identities of its management personnel; 
and (4) LYC's profits can be used for any lawful purpose. See LY AQR at 
8. LYC explained that its decisions regarding profit distribution are 
made by LYC's management. Additionally, LYC stated that it is not 
required to sell any of its foreign currency earnings to the government 
and is allowed to freely convert all foreign currency earnings on sales 
of the merchandise under review to the United States into renminbi for 
domestic use in China at the prevailing market rates of any bank. See 
LY AQR at 9.
    The evidence placed on the record of this administrative review by 
LYC demonstrates an absence of government control, both in law and in 
fact, with respect to LYC's exports of the merchandise under review. As 
a result, for the purposes of these preliminary results, the Department 
is granting a separate, company-specific rate to LYC, the exporter 
which shipped the subject merchandise to the United States during the 
POR.

CMC

    CMC placed on the record statements and documents to demonstrate 
absence of de jure control. In its questionnaire responses, CMC 
reported that it is not administratively subject to any national, 
provincial or local government agencies. See CMC's September 1, 2004 
Section A response (``CMC AQR'') at A-2. CMC submitted a copy of its 
business license and stated it must be renewed annually with the 
Administration of Industry and Commerce. See CMC AQR at A-4 and exhibit 
A-3. CMC reported that the subject merchandise did not appear on any 
government list regarding export provisions or export licensing in 
effect during the POR. CMC reported that its business license provides 
for a broad range of business activities and does not constrain or 
limit its activities with respect to the sale of the subject 
merchandise. Furthermore, CMC stated that The China Chamber of Commerce 
of Machinery and Electronic Exporters does not coordinate or interfere 
with CMC's export activities. CMC submitted a copy of the Foreign Trade 
Law of the PRC and excerpts from the ``PRC

[[Page 39749]]

Regulations for Transformation of Operational Mechanism of State-Owned 
Industrial Enterprises (1992),'' to demonstrate that there is no 
centralized control over its export activities. See CMC AQR at A-2 and 
exhibit A-2. Through questionnaire responses, we examined each of the 
related laws and CMC's business license and preliminarily determine 
that they demonstrate the absence of de jure control over the export 
activities and evidence in favor of the absence of government control 
associated with CMC's business license.
    In support of an absence of de facto control, CMC reported the 
following: (1) CMC sets the prices of the subject merchandise exported 
to the United States by direct arm's-length negotiations with its 
customers, and the prices are not subject to review by or guidance from 
any governmental organization; (2) CMC's sales transactions are not 
subject to the review or approval of any organization outside the 
company; (3) CMC is not required to notify any government authorities 
of its management selection; and (4) CMC is free to spend its export 
revenues and its profit can be used for any lawful purpose. See CMC AQR 
at A-7.
    The evidence placed on the record of this administrative review by 
CMC demonstrates an absence of government control, both in law and in 
fact, with respect to CMC's exports of the merchandise under review. As 
a result, for the purposes of these preliminary results, the Department 
is granting a separate, company-specific rate to CMC, the exporter 
which shipped the subject merchandise to the United States during the 
POR.

Adverse Facts Available

    Section 776(a)(1) and (2) of the Act provides that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person (A) withholds information that has been requested, (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782, (C) significantly impedes a proceeding, or (D) 
provides information that cannot be verified as provided by section 
782(i) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information if it can do so 
without undue difficulties.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Section 776(b) of the 
Act also authorizes the Department to use as AFA, information derived 
from the petition, the final determination, a previous administrative 
review, or other information placed on the record.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is defined as 
``[i]nformation derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See Statement of Administrative Action (``SAA'') 
accompanying the URAA, H. Doc. No. 316, 103d Cong., 2d Session at 870 
(1994). Corroborate means that the Department will satisfy itself that 
the secondary information to be used has probative value. See SAA at 
870. To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. The SAA emphasizes, however, that the 
Department need not prove that the selected facts available are the 
best alternative information. See SAA at 869.

Yantai Timken

    The Department finds that the information necessary to calculate an 
accurate and otherwise reliable margin is not available on the record 
with respect to Yantai Timken. As the Department finds that Yantai 
Timken withheld information, failed to provide information requested by 
the Department in a timely manner and in the form required, 
significantly impeded the proceeding, and provided unverifiable 
information, pursuant to sections 776(a)(2)(A), (B), (C) and (D) of the 
Act, the Department is resorting to the facts otherwise available.
    During the CEP verification, Timken failed to substantiate the 
preponderance of its reported adjustments to U.S. price. Specifically, 
Timken did not provide sub-ledgers and other source documents to tie 
reported expenses such as marine insurance, warehousing expenses, 
commissions, rebates or SG&A expenses to its audited financial 
statements. See Timken CEP Verification Report at 6, 7, 14, 16, 18, 20, 
and 22. Further, Timken could not demonstrate at verification that the 
expenses it reported in its Section C response for warehousing, SG&A, 
marine insurance, international freight commissions and certain rebates 
represent the total value of these expenses applicable to the subject 
merchandise during the POR. See Timken CEP Verification Report at 2, 
14, 25, 20, and 22. In addition, Timken, despite providing six 
supplemental questionnaire responses during the course of this 
proceeding, further stated at verification that it based its 
distributor warehousing expenses, U.S. inland freight, commissions and 
certain rebates reported in the Section C response on either 
preliminary or hypothetical data. See Timken CEP Verification Report at 
2, 3, 20, and 21. For example, at verification, Timken claimed that it 
reported certain rebates based on the maximum amount that a customer 
could earn, rather than on the actual rebated earned, and then could 
not substantiate the an actual rebate amount at verification. At no 
time prior to verification, did Timken identify the preliminary or 
hypothetical nature of this data. See Timken CEP Verification Report at 
17, 18, and 20.
    Additionally, at the FOP verification in China we determined that 
Yantai Timken misreported its factor consumption rates for electricity 
and gas, provided erroneous translations of its primary source 
documents for those items, and failed to provide the distance from the 
supplier to the factory for its packing materials. See Yantai Timken

[[Page 39750]]

Verification Report at 2, 17-10 and 20-22.
    The Department, in accordance with its standard practice, provided 
its verification outlines to Yantai Timken and to Timken seven days 
prior to the commencement of each verification. See the verification 
outlines of April 18, 2005 and May 6, 2005. In addition, at the 
beginning of the Yantai Timken verification on April 25, 2005, we 
informed Yantai Timken that we would trace the same pre-selected and 
surprise sales at the CEP verification. See the Timken CEP Verification 
Report at 1. Thus, Timken had 20 days advance notice concerning the 
specific sales to be examined at verification. Consequently, Yantai 
Timken and Timken each had sufficient time to prepare their documents 
for a complete verification by the Department.
    The purpose of providing a verification outline to respondents is 
to give them sufficient notice about the types of source documents that 
the Department seeks to examine during verification, and to afford them 
sufficient time to compile source documents and prepare them as 
verification exhibits. At no time prior to verification did Timken or 
Yantai Timken contact the Department with questions concerning 
verification procedures, documents required for verification, or the 
verification outline. Further, they did not indicate at any time prior 
to verification that they were experiencing difficulties in supplying 
information requested in the verification outline. Thus, subsections 
782(c)(1) and (2) of the Act do not apply in this instance.
    Section 782(d) stipulates that if the Department determines that a 
response to a request for information does not comply with that 
request, it ``shall promptly inform the person submitting the response 
of the nature of the deficiency and shall, to the extent practicable, 
provide that person with an opportunity to remedy or explain the 
deficiency in light of the time limits established for the completion 
of investigations or reviews under this title.'' Because Timken did not 
advise the Department of the preliminary nature of the information with 
respect to commissions, rebates, distributor warehousing and U.S. 
inland freight provided in its questionnaire response and six 
supplemental questionnaire responses, the Department did not have 
sufficient information to determine that a deficiency existed before 
verification. As such, section 782(d) is not applicable in this 
instance. Moreover, by providing preliminary rather then actual data, 
Timken did not provide essential information within the established 
deadlines or in a manner requested by the Department. This, in turn, 
inhibited the Department from asking meaningful questions concerning 
the information, significantly impeding the proceeding.
    In addition, as stated above, Timken failed to provide sub-ledgers 
or other supporting documents to substantiate its reported values for 
ocean freight, marine insurance, warehousing expenses, commissions, 
rebates and SG&A expenses, despite clear statements in each of the 
verification outlines that such documents were required. Due to 
Timken's failure to provide the requisite requested documents that 
would tie Yantai Timken's reported data to its audited financial 
statements, the Department was not able to verify the accuracy of the 
information submitted in Yantai Timken's questionnaire responses or 
rely on the reported information to calculate accurate margins.
    Further, Timken could not demonstrate the completeness and accuracy 
of its reported indirect selling expenses and U.S. warehousing 
expenses. It failed to demonstrate that the reported marine insurance 
and ocean freight expenses represent the total value of expenses 
applicable to the subject merchandise during the POR and could not 
trace commissions and rebates to the audited financial statements. 
Further, the documents presented during the FOP verification 
contradicted the information on the record concerning Yantai Timken's 
reported electricity and gas consumption. Therefore, the Department was 
unable to verify a significant portion of the selling expenses reported 
in the United States and some of the FOPs reported in China against 
Timken's and Yantai Timken's normal books and records.
    As a result, of the items discussed above, we preliminarily 
determine that Timken withheld information requested by the Department, 
failed to provide such information by the deadlines for submission and 
in a form or manner requested by the Department significantly impeded 
the proceeding, and provided information that could not be verified. 
Thus, we preliminarily determine that the use of facts otherwise 
available is warranted pursuant to sections 776(a)(2)(A), (B), (C) and 
(D) of the Act.
    The Department also finds that Yantai Timken failed to act to the 
best of its ability in supplying the Department with the requested 
information. As the United States Court of Appeals for the Federal 
Circuit (``Federal Circuit'') has stated,

while the standard does not require perfection and recognizes that 
mistakes sometimes occur, it does not condone inattentiveness, 
carelessness, or inadequate record keeping. It assumes that 
importers are familiar with the rules and regulations that apply to 
the import activities undertaken and requires the importers, to 
avoid a risk of an adverse inference determination in responding to 
Commerce's inquiries: (a) Take reasonable steps to keep and maintain 
full and complete records documenting the information that a 
reasonable importer should anticipate being called upon to produce; 
(b) have familiarity with all of the records it maintains in its 
possession, custody, or control; and (c) conduct prompt, careful, 
and comprehensive investigations of all relevant records that refer 
or relate to the imports in question to the full extent of the 
importers' ability to do so.

Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 
2003). This is the third time that the Department has reviewed Yantai 
Timken's sales of subject merchandise in the United States, and the 
second time that it verified Yantai Timken's FOPs in the PRC and its 
U.S. sales at Timken's U.S. offices. Therefore, Timken is fully aware 
of the rules and regulations that apply to the import activities it has 
undertaken.
    Yantai Timken failed to cooperate by not acting to the best of its 
ability to comply with a request for information by submitting its 
questionnaire response and six supplemental questionnaire responses 
based on preliminary data for distributor warehousing expenses, U.S. 
inland freight to the customer, and potential commissions and rebate 
amounts. Timken, throughout the proceeding, did not examine thoroughly 
investigate its own records to ensure that it was providing the 
Department with complete and accurate data. Additionally, Timken failed 
to cooperate to the best of its ability when it failed to provide 
documentation at verification such as, subsidiary ledgers for sales, 
accounts receivable, accounts payable or any other documentation that 
would substantiate its reported expenses such as ocean freight, marine 
insurance, warehousing expenses, commissions, rebates or SG&A expenses 
and tie these figures to its audited financial statements. Timken did 
not take steps to keep and maintain adequate books and records 
documenting information that a reasonable respondent should anticipate 
being called upon to produce. Therefore, based on Timken's and Yantai 
Timken's lack of cooperation in the preparation of their questionnaire 
responses and verification documents, we preliminarily determine that 
Yantai Timken and Timken failed to cooperate

[[Page 39751]]

to the best of their ability with the Department's request for 
information.
    As a result of Timken's failure to substantiate the preponderance 
of its reported adjustments to U.S. price, and to tie its reported 
expenses to the audited financial statements, the unverified 
information remains so inaccurate and so pervasive that we are not able 
to use Yantai Timken's questionnaire responses to calculate an accurate 
antidumping duty margin in this review. Therefore, we preliminarily 
determine that the application of total AFA is warranted for Yantai 
Timken, pursuant to Section 776(a) and (b) of the Act.

Shanghai United, Changshan Bearing, and ZCCBC

    Shanghai United, Changshan Bearing, and ZCCBC did not respond to 
our August 5, 2004, questionnaire. In addition, Shanghai United, 
Changshan Bearing, and ZCCBC did not respond to the Department's 
October 5, 2004 follow-up questionnaire, nor did they respond to any of 
our other attempts to determine whether they received the questionnaire 
through their attorneys. See ZCCBC Memorandum and Second ZCCBC 
Memorandum. In the Initiation Notice, the Department stated that if one 
of the companies that we initiated a review for does not qualify for a 
separate rate, all other exporters of tapered roller bearings from the 
PRC who have not qualified for a separate rate are deemed to be covered 
by this review as part of the single PRC entity of which the named 
exporter is a part. See Initiation Notice, at fn. 3. Shanghai United, 
Changshan Bearing, and ZCCBC did not submit any information to 
establish their eligibility for a separate rate, See Separate Rates 
section above, we find they are deemed to be part of the PRC-Wide 
entity. Therefore, we determine that it is necessary to review the 
single PRC entity, including Shanghai United, Changshan Bearing, and 
ZCCBC, in this proceeding.

PRC-Wide Entity

    The PRC entity did not fully comply with the Department's request 
for information. Pursuant to section 776(a)(1) of the Act, as necessary 
information is not available on the record of this proceeding, the 
Department must resort to the facts otherwise available.
    According to section 776(b) of the Act, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of the 
party as facts otherwise available. Adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See SAA at 870. 
Furthermore, ``an affirmative finding of bad faith on the part of the 
respondent is not required before the Department may make an adverse 
inference.'' Antidumping Duties; Countervailing Duties: Final Rule, 62 
FR 27296, 27340 (May 19, 1997)
    As stated above, the PRC-wide entity did not respond to our 
requests for information, therefore, pursuant to section 776(b) of the 
Act, we find that the PRC-wide entity failed to cooperate by not acting 
to the best of its ability to comply with a request for information. 
Therefore, we will, in selecting from among the facts otherwise 
available, use adverse inferences.

Selection of the Adverse Facts Available Rate

    In deciding which facts to use as AFA section 776(b) of the Act and 
19 CFR 351.308(c)(1) authorize the Department to rely on information 
derived from (1) the petition, (2) a final determination in the 
investigation, (3) any previous review or determination, or (4) any 
information placed on the record. It is the Department's practice to 
select, as AFA, the higher of (a) the highest margin alleged in the 
petition, or (b) the highest calculated rate of any respondent in the 
investigation. See Final Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-
Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon 
Steel Plate From Belgium, 58 FR 37083 (July 9, 1992).
    The Court of International Trade (``CIT'') and the Federal Circuit 
have consistently upheld the Department's practice. See Rhone Poulenc, 
Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Circ. 1990) (``Rhone 
Poulenc''); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 (Ct. 
Int'l Trade 2004)(upholding a 73.55% total AFA rate, the highest 
available dumping margin from a different respondent in an LTFV 
investigation); See also Kompass Food Trading Int'l v. United States, 
24 CIT 678, 689 (2000) (upholding a 51.16% total AFA rate, the highest 
available dumping margin from a different, fully cooperative 
respondent); and Shanghai Taoen International Trading Co., Ltd. v. 
United States, 2005 Ct. Int'l. Trade 23 *23; Slip Op. 05-22 (February 
17, 2005) (upholding a 223.01% total AFA rate, the highest available 
dumping margin from a different respondent in a previous administrative 
review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). 
The Department's practice also ensures ``that the party does not obtain 
a more favorable result by failing to cooperate than if it had 
cooperated fully.'' See SAA at 890. See also Final Determination of 
Sales at Less than Fair Value: Certain Frozen and Canned Warmwater 
Shrimp from Brazil, 69 FR 76910 (December 23, 2004); See also D&L 
Supply Co. v. United States, 113 F. 3d 1220, 1223 (Fed. Cir. 1997). In 
choosing the appropriate balance between providing respondents with an 
incentive to respond accurately and imposing a rate that is reasonably 
related to the respondent's prior commercial activity, selecting the 
highest prior margin ``reflects a common sense inference that the 
highest prior margin is the most probative evidence of current margins, 
because, if it were not so, the importer, knowing of the rule, would 
have produced current information showing the margin to be less.'' 
Rhone Poulenc, 899 F. 2d at 1190.
    Consistent with the Department's practice and the purposes of 
section 776(b) of the Act, as AFA, we are assigning to exports of the 
subject merchandise produced by Yantai Timken the PRC-wide entity the 
rate of 60.95% which is the highest rate calculated in any segment of 
the proceeding. This rate was calculated for Premier Bearing and 
Equipment Ltd. (``Premier'') in the final results of redetermination on 
remand from the CIT for the seventh administrative review of TRBs 
covering the POR of June 1, 1993, to May 31, 1994. Peer Bearing Co. v. 
United States, Slip op. 02-53 (CIT 2002); as upheld by the Federal 
Circuit in 78 Fed. Appx. 718 (Fed. Cir. 2003); See also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished from the PRC: 
Amended Final Results of Antidumping Duty Administrative Review, 67 
Fed. Reg. 79902, (Dec. 31, 2002) (``TRBs Amended Final''), and Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from the 
PRC: Amended Final Results of Antidumping Duty Administrative Review, 
69 FR 10423

[[Page 39752]]

(March 5, 2004) (``TRBs Amended Final 2''). The Department 
preliminarily determines that this information is the most appropriate, 
from the available sources, to effectuate the purposes of AFA. The 
Department's reliance on secondary information to determine an AFA rate 
is subject to the requirement to corroborate. See section 776(c) of the 
Act and the ``Corroboration of Secondary Information'' section below.

Corroboration of Secondary Information

    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``[i]nformation derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. The Department has determined that to have 
probative value information must be reliable and relevant. Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished from Japan, 
and Tapered Roller Bearings Four Inches or Less in Outside Diameter, 
and Components Thereof, from Japan: Preliminary Results of Antidumping 
Duty Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 Fed. Reg. 57391, 57392 (Nov. 6, 1996). The SAA also states 
that independent sources used to corroborate such evidence may include, 
for example, published price lists, official import statistics and 
customs data, and information obtained from interested parties during 
the particular investigation. See Preliminary Determination of Sales at 
Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post 
Insulators from Japan, 68 FR 35627 (June 16, 2003); and, Final 
Determination of Sales at Less Than Fair Value: Live Swine From Canada, 
70 FR 12181 (March 11, 2005).
    The reliability of the AFA rate was determined by the calculation 
of the margin for Premier, pursuant the final results of 
redetermination on remand from the CIT, for the seventh administrative 
review of TRBs (covering the period June 1, 1993 to May 31, 1994). See 
TRBs Amended Final and TRBs Amended Final 2. The Department has 
received no information to date that warrants revisiting the issue of 
the reliability of the rate calculation itself. See e.g., Certain 
Preserved Mushrooms from the People's Republic of China: Final Results 
and Partial Rescission of the New Shipper Review and Final Results and 
Partial Rescission of the Third Antidumping Duty Administrative Review, 
68 FR 41304, 41307-41308 (July 11, 2003). No information has been 
presented in the current review that calls into question the 
reliability of this information. Thus, the Department finds that the 
information contained in the 1993-1994 review is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) which ruled that the Department will not use a margin 
that has been judicially invalidated.
    To assess the relevancy of the rate used, the Department compared 
the margin calculations of LYC and CMC in this administrative review 
with Premier's margins from the 1993-1994 review. The Department found 
that the margin of 60.95 percent was within the range of the highest 
margins calculated on the record of this administrative review. See 
memorandum to the file from Laurel LaCivita, Senior Case Analyst, 
through Robert Bolling, Program Manager and Wendy Frankel, Office 
Director, AD/CVD Enforcement NME/Office 8, 17th Antidumping Duty 
Administrative Review of Tapered Roller Bearings and Parts Thereof, 
Finished or Unfinished (``TRBs'') from the People's Republic of China 
(``PRC''): Corroboration of the PRC-Wide Adverse Facts-Available Rate, 
dated June 30, 2005. Because the record of this administrative review 
contains margins within the range of 60.95 percent, we determine that 
the rate from the 1993-1994 review continues to be relevant for use in 
this administrative review.
    As the 1993-1994 margin is both reliable and relevant, we determine 
that it has probative value. As a result, the Department determines 
that the 1993-1994 margin is corroborated for the purposes of this 
administrative review and may reasonably be applied to the PRC-wide 
entity including Shanghai United, Changshan Bearing, Yantai Timken, and 
ZCCBC, as AFA. Accordingly, we determine that the highest rate from any 
segment of this administrative proceeding, 60.95 percent, meets the 
corroboration criteria established in section 776(c) that secondary 
information have probative value.
    Because this is a preliminary results of review, the Department 
will consider all margins on the record at the time of the final 
results of review for the purpose of determining the most appropriate 
final margin for the PRC-wide entity. See Preliminary Determination of 
Sales at Less Than Fair Value: Solid Fertilizer Grade Ammonium Nitrate 
From the Russian Federation, 65 FR 1139 (January 7, 2000).

Partial Adverse Facts Available

    We have preliminarily determined that the use of a partial facts 
available with adverse inferences is warranted for LYC's steel 
consumption rate for certain control numbers for the purpose of 
determining normal value. LYC did not report factor values for steel 
consumption for certain control numbers produced in China and sold to 
the United States during the POR, despite the Department's repeated 
requests for this information in its February 7, 2005 second 
supplemental questionnaire and its May 4, 2005 third supplemental 
questionnaire. Because LYC did not submit the required factor values 
for its steel consumption rate on the record, pursuant to section 
776(a)(1) of the Act, we must resort to the facts otherwise available 
to determine the value of the steel inputs for these sales. The 
Department also finds that, pursuant to section 776(b) of the Act, LYC 
did not act to the best of its ability when it did not provide any 
information for the consumption rate of the steel inputs used to 
produce these control numbers, thus, an adverse inference is warranted. 
As AFA for these control numbers, we applied the highest factor usage 
rate for steel inputs for similar subject merchandise reported by LYC 
in its FOP database. See the proprietary discussion of this issue in 
the memorandum from Eugene Degnan, Case Analyst, through Robert 
Bolling, Program Manager, to the file, Preliminary Results of Review of

[[Page 39753]]

Tapered Roller Bearings and Parts Thereof from the People's Republic of 
China: Program Analysis for the Preliminary Results of Review: LYC 
Bearing Corporation (Group) (``LYC''), dated June 30, 2005, (``LYC 
Prelim Analysis Memorandum'').
    Additionally, we have determined to apply partial AFA with regard 
to LYC's inventory carrying costs in the United States. Because LYC 
failed to report the actual time in inventory for certain CEP sales, we 
calculated LYC's inventory carrying costs using the time between the 
first day of the POR and the date of sale as the time in inventory. See 
LYC Prelim Analysis Memorandum.

Date of Sale

    19 CFR 351.401 (i) states that ``in identifying the date of sale of 
the subject merchandise or foreign like product, the Secretary normally 
will use the date of invoice, as recorded in the exporter or producer's 
records kept in the normal course of business. However, the Secretary 
may use a date other than the date of invoice if the Secretary is 
satisfied that a different date better reflects the date on which the 
exporter or producer establishes the material terms of sale.'' 19 CFR 
351.401 (i); See also Allied Tube and Conduit Corp. v. United States, 
132 F. Supp. 2d 1087, 1090-1093 (CIT 2001).

CMC

    After examining the questionnaire responses and the sales 
documentation that CMC placed on the record, we preliminarily determine 
that invoice date is the most appropriate date of sale for CMC. We made 
this determination based on record evidence which demonstrates that 
CMC's invoices establish the material terms of sale to the extent 
required by our regulations. Thus, the record evidence does not rebut 
the presumption that invoice date is the proper date of sale. See 
Preliminary Determination of Sales at Less Than Fair Value: Saccharin 
From the People's Republic of China, 67 FR 79054 (December 27, 2002).

LYC

    After examining the sales documentation placed on the record by 
LYC, we preliminarily determine that shipment date is the most 
appropriate date of sale for LYC's export price (``EP'') sales. We made 
this determination based on statements on the record that LYC's 
shipment date, which is subsequent to the invoice date, establishes the 
material terms of sale to the extent required by our regulations. For 
LYC's CEP sales, LYC established that the terms of sale do not change 
after the issuance of the invoice. Thus, we preliminarily determine 
that invoice date is the most appropriate date of sale. See Preliminary 
Determination of Sales at Less Than Fair Value: Saccharin From the 
People's Republic of China, 67 FR 79054 (December 27, 2002).

Normal Value Comparisons

    To determine whether sales of TRBs to the United States by LYC and 
CMC were made at less than NV, we compared EP or CEP to NV, as 
described in the ``Export Price,'' ``Constructed Export Price'' and 
``Normal Value'' sections of this notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we used EP for 
certain of LYC's and CMC's U.S. sales because the subject merchandise 
was sold directly to the unaffiliated customers in the United States 
prior to importation and because CEP was not otherwise indicated.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772(c) and 
(d). In accordance with section 772(b) of the Act, we used CEP for 
certain of LYC's and CMC's sales because they sold subject merchandise 
to their affiliated company in the United States, which in turn sold 
subject merchandise to unaffiliated U.S. customers.
    We compared NV to individual EP and CEP transactions, in accordance 
with section 777A(d)(2) of the Act.

LYC

    For LYC's EP sales, we based the EP on delivered prices to 
unaffiliated purchasers in the United States. In accordance with 
section 772(c)(2)(A) of the Act, we made deductions from the starting 
price for movement expenses. Movement expenses included expenses for 
foreign inland freight from the plant to the port of exportation, 
domestic brokerage and handling, international freight and marine 
insurance. See LYC Prelim Analysis Memorandum.
    For LYC's CEP sales, we based the CEP on delivered prices to 
unaffiliated purchasers in the United States. In accordance with 
section 772(d)(1) of the Act, we made deductions from the starting 
price for movement expenses. Movement expenses included expenses for 
foreign inland freight from the plant to the port of exportation, 
domestic brokerage and handling, international freight, marine 
insurance, U.S. brokerage and handling, U.S. duty, and inland freight 
from the warehouse to the unaffiliated U.S. customer. In accordance 
with section 772(d)(1) of the Act, the Department additionally deducted 
credit expenses, inventory carrying costs and indirect selling expenses 
from the U.S. price, all of which relate to commercial activity in the 
United States. In accordance with section 773(a) of the Act, we 
calculated LYC's credit expenses and inventory carrying costs based on 
the Federal Reserve short-term rate. Finally, we deducted CEP profit in 
accordance with sections 772(d)(3) and 772(f) of the Act. See LYC 
Prelim Analysis Memorandum.

CMC

    We calculated EP for CMC based on delivered prices to unaffiliated 
purchasers in the United States. We made deductions from the U.S. sale 
price for movement expenses in accordance with section 772(c)(2)(A) of 
the Act. These included foreign inland freight from the plant to the 
port of exportation, and where applicable ocean freight and marine 
insurance. No other adjustments to EP were reported or claimed.
    We calculated CEP for CMC based on delivered prices to unaffiliated 
purchasers in the United States. We made deductions from the U.S. sale 
price for movement expenses in accordance with section 772(c)(2)(A) of 
the Act. These included foreign inland freight from the plant to the 
port of exportation, ocean freight, marine insurance, U.S. Customs 
duty, where applicable U.S. inland freight from port to the warehouse 
and U.S. inland freight from the warehouse to the customer. In 
accordance with section 772(d)(1) of the Act, the Department deducted 
credit expenses, inventory carrying costs and indirect selling expenses 
from the U.S. price, all of which relate to commercial activity in the 
United States. In accordance with section 773(a) of the Act, we 
calculated CMC's credit expenses and inventory carrying costs based on 
the Federal Reserve short-term

[[Page 39754]]

rate. Finally, we deducted CEP profit, in accordance with sections 
772(d)(3) and 772(f) of the Act. See memorandum from Hua Lu, Case 
Analyst, through Robert Bolling, Program Manager, to the file, 
Preliminary Results of Review of the Order on Tapered Roller Bearings 
and Parts Thereof from the People's Republic of China: Program Analysis 
for the Preliminary Results of Review, dated June 30, 2005.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using an FOP methodology if: (1) The merchandise is 
exported from a non-market economy country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act. 
The Department will base NV on FOPs because the presence of government 
controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under our 
normal methodologies.
    FOPs include: (1) Hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs. We used the FOPs reported by 
respondents for materials, energy, labor, by-products, and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value FOPs, but when a 
producer sources an input from a market economy and pays for it in 
market-economy currency, the Department will normally value the factor 
using the actual price paid for the input. See 19 CFR 351.408(c)(1); 
See also Lasko Metal Products v. United States, 43 F. 3d 1442, 1445-
1446 (Fed. Cir. 1994). LYC and CMC each reported that a significant 
portion of at least one of their raw material inputs were sourced from 
market-economy countries and paid for in market-economy currencies. See 
LYC's October 4, 2004 Section D response at page D-35 and CMC's October 
4, 2004 Section D response at page D-5. See Factor Valuation Memorandum 
for a listing of these raw material inputs. Pursuant to 19 CFR 
351.408(c)(1), we used the actual price paid by respondents for inputs 
purchased from a market-economy supplier and paid for in a market-
economy currency, except when prices may have been distorted by 
subsidies.
    With regard to both the Indian import-based surrogate values and 
the market-economy input values, we have disregarded prices that we 
have reason to believe or suspect may be subsidized. We have reason to 
believe or suspect that prices of inputs from India, Indonesia, South 
Korea, and Thailand may have been subsidized. We have found in other 
proceedings that these countries maintain broadly available, non-
industry-specific export subsidies and, therefore, it is reasonable to 
infer that all exports to all markets from these countries are 
subsidized. See Certain Helical Spring Lock Washers from the People's 
Republic of China; Final Results of Administrative Review, 61 FR 66255 
(December 17, 1996), at Comment 1; Automotive Replacement Glass 
Windshields From the People's Republic of China: Final Results of 
Administrative Review, 69 FR 61790 (October 21, 2004); and, China 
National Machinery Import & Export Corporation v. United States, 293 F. 
Supp. 2d 1334 (CIT 2003), as affirmed by the Federal Circuit, 104 Fed. 
Appx. 183 (Fed. Cir. 2004). We are also guided by the legislative 
history not to conduct a formal investigation to ensure that such 
prices are not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, 
the Department was instructed by Congress to base its decision on 
information that is available to it at the time it is making its 
determination. Therefore, we have not used prices from these countries 
either in calculating the Indian import-based surrogate values or in 
calculating market-economy input values. In instances where a market-
economy input was obtained solely from suppliers located in these 
countries, we used Indian import-based surrogate values to value the 
input.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOPs reported by respondents for the POR. To calculate NV, the 
reported per-unit factor quantities were multiplied by publicly 
available Indian surrogate values (except as noted below). In selecting 
the surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
by including freight costs to make them delivered prices. Specifically, 
we added to Indian import surrogate values a surrogate freight cost 
using the shorter of the reported distance from the domestic supplier 
to the factory or the distance from the nearest seaport to the factory 
where appropriate (i.e., where the sales terms for the market-economy 
inputs were not delivered to the factory). This adjustment is in 
accordance with the decision of the Federal Circuit in Sigma Corp. v. 
United States, 117 F. 3d 1401 (Fed. Cir. 1997). For a detailed 
description of all surrogate values used for respondents, See Factor 
Valuation Memorandum.
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the World Trade 
Atlas[supreg] online (``Indian Import Statistics''), which were 
published by the Directorate General of Commercial Intelligence and 
Statistics (``DGCI&S''), Ministry of Commerce of India, which were 
reported in rupees and are contemporaneous with the POR. See Factor 
Valuation Memorandum. Where we could not obtain publicly available 
information contemporaneous with the POR with which to value factors, 
we adjusted the surrogate values using the Indian Wholesale Price Index 
(``WPI'') as published in the International Financial Statistics of the 
International Monetary Fund.
    To value electricity, we used values from the International Energy 
Agency (``IEA'') to calculate a surrogate value in India for 2000, 
adjusted for inflation. The Petitioner was the only interested party to 
submit information or comments regarding surrogate values for 
electricity on the record. However, the submitted value was less 
contemporaneous than the 2000 value reported by the IEA, which has been 
used in previous cases. See Automotive Replacement Glass Windshields 
From the People's Republic of China: Preliminary Results of Antidumping 
Duty Administrative Review, 70 FR 24373, 24381 (May 9, 2005); and, 
Amended Final Determination of Sales at Less Than Fair Value: Magnesium 
Metal from the People's Republic of China, 70 FR 15838 (March 29, 
2005). Further, the Department was unable to find a more 
contemporaneous surrogate value than the 2000 value reported by the 
IEA. Therefore, we used the International Energy Agency 2000 Indian 
price for electricity to the POR, as adjusted for inflation.
    For direct labor, indirect labor, SG&A labor, crate building labor 
and packing labor, consistent with 19 CFR 351.408(c)(3), we used the 
PRC regression-based wage rate as reported on Import Administration's 
home page, Import Library, Expected Wages of Selected NME Countries, 
revised in November 2004, http://ia.ita.doc.gov/wages/02wages/02wages.html. The source of these wage rate data on the Import 
Administration's Web site is the Yearbook of Labour Statistics 2002, 
ILO, (Geneva: 2002), Chapter 5B: Wages in Manufacturing. The years of 
the reported wage rates range from 1996 to 2002. Because this 
regression-based

[[Page 39755]]

wage rate does not separate the labor rates into different skill levels 
or types of labor, we have applied the same wage rate to all skill 
levels and types of labor reported by each respondent.
    To value factory overhead, depreciation, SG&A, interest expenses 
and profit, we used the 2003 audited financial statements for two 
Indian producers of tapered roller bearings, SKF Bearings India Ltd., 
and Timken India Limited. See Factor Valuation Memorandum for a full 
discussion of the calculation of these ratios from the Indian 
Companies' financial statements.

LYC

    In order to demonstrate that prices paid to market-economy sellers 
for some portion of a given input are representative of prices paid 
overall for that input, the amounts purchased from the market-economy 
supplier must be meaningful. See Antidumping Duties; Countervailing 
Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997). Where the 
quantity of the input purchased from market-economy suppliers is 
insignificant, the Department will not rely on the price paid by an NME 
producer to a market-economy supplier because it cannot have confidence 
that a company could fulfill all its needs at that price. LYC's 
reported information demonstrates that the quantity of steel purchased 
from a market economy source used to produce cups and cones is 
significant. See LYC's October 4, 2004 Section D response at page D-9. 
Therefore, we used the actual price LYC paid for this steel in our 
calculations.
    LYC reported that it sourced the steel that it used to produce 
cages from recovered scrap generated in the production of non-subject 
merchandise. Therefore, we used Indian Import Statistics for the POR to 
value this input. LYC reported that it also recovered scrap steel from 
the production of cups, cones, rollers and cages for resale. We offset 
LYC's cost of production by the amount of scrap that LYC reported that 
it sold. We were unable to find a surrogate value for steel scrap for 
cups, cones and rollers contemporaneous with the POR. Therefore, we 
used the Indian Import Statistics for scrap from a previous period to 
the POR for our calculations, adjusted for inflation, and converted it 
to U.S. dollars on the date of the U.S. sale. See Factor Valuation 
Memorandum for a complete discussion of scrap valuation.
    To value water, we used the Revised Maharashtra Industrial 
Development Corporation (``MIDC.'') water rates for June 1, 2003, 
available at http://www.midcindia.com/water_supply. See Factor 
Valuation Memorandum.
    For the input that LYC described as phosphate acid, we used the 
Indian Import Statistics for phosphoric acid, since LYC did not provide 
any chemical specifications for this input, and phosphate acid does not 
correspond to a known chemical. We were unable to find a 
contemporaneous surrogate value for this input. Therefore, we adjusted 
the Indian Import Statistics adjusted for inflation and converted it to 
U.S. dollars. See Factor Valuation Memorandum.
    For nylon cages, rubber seals and purchased distance rings, we used 
Indian Import Statistics contemporaneous with the POR for other ball 
bearing/roller bearing parts as the best information available because 
we were unable to find more accurate sources of public information 
concerning these inputs and none of the interested parties to the 
proceeding placed any surrogate value information for these inputs on 
the record of this review. See Factor Valuation Memorandum.
    Finally, we used Indian Import Statistics to value material inputs 
for packing which, for LYC, are inner cartons, outer cartons, wooden 
pallets and steel strips. We used Indian Import Statistics data for the 
POR for wooden pallets and steel strips. See Factor Valuation 
Memorandum. We valued inner cartons and outer cartons using the Indian 
Import Statistics for corrugated paper during the POR as provided by 
the Petitioner in this review, because LYC did not provide any 
technical specifications for these inputs. See Factor Valuation 
Memorandum.

CMC

    In order to demonstrate that prices paid to market-economy sellers 
for some portion of a given input are representative of prices paid 
overall for that input, the amounts purchased from the market-economy 
supplier must be meaningful. See Antidumping Duties; Countervailing 
Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997). Where the 
quantity of the input purchased from market-economy suppliers is 
insignificant, the Department will not rely on the price paid by an NME 
producer to a market-economy supplier because it cannot have confidence 
that a company could fulfill all its needs at that price. CMC's 
reported information demonstrates that the quantity of steel purchased 
from market economy suppliers and used to produce cups and cones is 
significant. See CMC's October 4, 2004 Section D response at page D-9. 
Therefore, we used the actual price paid that CMC paid for the steel 
used to produce cups and cones in our calculations.
    CMC reported that it sourced the steel that it used to produce 
cages and rollers within the PRC. Therefore, we used Indian Import 
Statistics to value each of these inputs. CMC reported that it 
recovered scrap steel from the production of cups, cones, rollers and 
cages for resale. We offset CMC's normal value by the amount of scrap 
that CMC reported that sold. We were unable to find a surrogate value 
for steel scrap for cups, cones and rollers contemporaneous with the 
POR. Therefore, we used the Indian Import Statistics for scrap from a 
previous period adjusted for inflation in our calculations. See Factor 
Valuation Memorandum for a complete discussion of scrap valuation.
    Finally, we used Indian Import Statistics to value material inputs 
for packing which, for CMC, are plastic film, plastic bags, plastic 
sleeves, large plastic bags, cardboard box, paper pallets, and steel 
strips. We used Indian Import Statistics data for the POR for packing 
materials. See Factor Valuation Memorandum. The surrogate values for 
labor, electricity, water, overhead, SG&A, and profit were applied in 
the same manner as explained above for LYC.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Weighted-Average Dumping Margins

    The weighted-average dumping margins are as follows:

                            TRBs From the PRC
------------------------------------------------------------------------
                                                              Weighted-
                   Manufacturer/exporter                       average
                                                                margin
------------------------------------------------------------------------
LYC........................................................         0.20
CMC........................................................         1.42
The PRC-wide Entity**......................................       60.95
------------------------------------------------------------------------
**Including Shanghai United, Changshan Bearing, Yantai Timken, and
  ZCCBC.

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results.

[[Page 39756]]

See 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days 
after the date of publication of this notice. See 19 CFR 351.310(d). 
Interested parties may submit case briefs and/or written comments no 
later than 30 days after the date of publication of these preliminary 
results of review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in such briefs 
or comments, may be filed no later than 35 days after the date of 
publication. See 19 CFR 351.309(d). The Department requests that 
parties submitting written comments also provide the Department with an 
additional copy of those comments on diskette. The Department will 
issue the final results of this administrative review, which will 
include the results of its analysis of issues raised in any such 
comments, within 120 days of publication of these preliminary results, 
pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department will issue appropriate assessment instructions directly 
to CBP upon completion of this review. If these preliminary results are 
adopted in our final results of review, we will direct CBP to assess 
the resulting rate against the entered customs value for the subject 
merchandise on each importer's/customer's entries during the POR. 
Additionally, the Department will instruct CBP to assess antidumping 
duties for these rescinded companies (i.e., ZMC, Weihai Machinery, and 
Chin Jun) at rates equal to the cash deposit of estimated antidumping 
duties required at the time of entry, or withdrawal from warehouse, for 
consumption, in accordance with 19 CFR 351.212(c)(1)(i).

Cash-Deposit Requirements

    The following cash-deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit 
rate for each of the reviewed companies will be the rate listed in the 
final results of review (except where the rate for a particular company 
is de minimis, i.e., less than 0.5 percent, no cash deposit will be 
required for that company); (2) for previously investigated companies 
not listed above, the cash deposit rate will continue to be the 
company-specific rate published for the most recent period; (3) if the 
exporter is not a firm covered in this review, a prior review, or the 
original less than fair value investigation, but the manufacturer is, 
the cash deposit rate will be the rate established for the most recent 
period for the manufacturer of the merchandise; and (4) the cash 
deposit rate for all other manufacturers or exporters will continue to 
be the ``PRC-wide'' rate of 60.95 percent.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these preliminary results of review 
in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act, and 
19 CFR 351.221(b).

    Dated: June 30, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-13503 Filed 7-8-05; 8:45 am]
BILLING CODE 3510-DS-P