[Federal Register Volume 72, Number 185 (Tuesday, September 25, 2007)]
[Notices]
[Pages 54430-54436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18842]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


Brake Rotors From the People's Republic of China: Preliminary 
Results of the 2006 Semiannual New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (``the Department'') is 
conducting a semiannual new shipper review of the antidumping duty 
order on brake rotors from the People's Republic of China (``PRC'') in 
response to a request from Longkou Qizheng Auto Parts Co., Ltd. 
(``Qizheng''). The period of review (``POR'') is April 1 through 
October 31, 2006. We have preliminarily determined that Qizheng's sale 
is a bona fide transaction. In addition, we have preliminarily 
determined that Qizheng made its sale during the POR above normal 
value. 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 the appropriate entry of 
subject merchandise during the POR if the assessment rate is above de 
minimis. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: September 25, 2007.

FOR FURTHER INFORMATION CONTACT: Jennifer Moats or Blanche Ziv, 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-
5047 or (202) 482-4207, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register the antidumping 
duty order on brake rotors from the PRC on April 17, 1997. See Notice 
of Antidumping Duty Order: Brake Rotors from the People's Republic of 
China, 62 FR 18740 (April 17, 1997) (``Order''). On October 31, 2006, 
the Department received a timely request from Qizheng, in accordance 
with 19 CFR 351.214(c), to conduct a semiannual new shipper review of 
the antidumping duty order on brake rotors from the PRC. This request 
was rejected by the Department on November 6, 2006. Qizheng resubmitted 
its request for review on November 6, 2006. On November 30, 2006, the 
Department found that the request for review with respect to Qizheng 
met all of the regulatory requirements set forth in 19 CFR 351.214(b) 
and initiated a semiannual new shipper review of the antidumping duty 
order on brake rotors from the PRC for the April 1 through September 
30, 2006, period. See Brake Rotors from the People's Republic of China: 
Initiation of New Shipper Review, 71 FR 69203 (November 30, 2006). On 
November 30, 2006, the Department issued the initial questionnaire to 
Qizheng. On December 1, 2006, the Department issued a memorandum 
identifying five countries as being at a level of economic development 
comparable to that of the PRC for the specified period of review: 
India, Sri Lanka, Egypt, Indonesia, and the Philippines. See Attachment 
I of the Memorandum from Ron Lorentzen, Director, Office of Policy, to 
Wendy Frankel, Director, China/NME Group, Office 8, regarding, ``2006 
Semi-Annual Antidumping Duty New Shipper Review of Brake Rotors from 
the People's Republic of China: Request for a List of Surrogate 
Countries,'' (``Surrogate Country Memo''). On December 8, 2006, we 
invited interested parties to provide information on surrogate values 
for the factors of production used in the production of brake rotors. 
On January 19, 2007, the petitioner submitted publicly available

[[Page 54431]]

surrogate value information.\1\ On March 8, 2007, the Department 
expanded the POR for this semiannual new shipper review through October 
31, 2006, to capture the entry corresponding to Qizheng's sale to the 
United States. See Memorandum to Wendy J. Frankel, Office Director, 
through Blanche Ziv, Program Manager, from Jennifer Moats, Analyst, 
regarding, ``Expansion of the Period of Review,'' dated March 8, 2007. 
Therefore, the POR for the semiannual new shipper review of Qizheng is 
April 1 through October 31, 2006. On March 13, 2007, the Department 
selected India as the most appropriate surrogate country for the 
purposes of this review. See Memorandum to the file through Wendy J. 
Frankel, Office Director, and Blanche Ziv, Program Manager, from 
Jennifer Moats, Analyst, regarding, ``Surrogate Country Selection,'' 
dated March 13, 2007 (``Surrogate Country Selection Memo''). On March 
21 and April 26, 2007, the Department issued supplemental 
questionnaires to Qizheng. On May 11, 2007, the Department published a 
notice extending the deadline for the preliminary results to September 
18, 2007. See Brake Rotors from the People's Republic of China: Notice 
of Extension of the Preliminary Results of Antidumping Duty New Shipper 
Review, 72 FR 26781 (May 11, 2007).
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    \1\ The petitioner in this proceeding is the Coalition for the 
Preservation of American Brake Drum and Rotor Aftermarket 
Manufacturers.
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Scope of the Order

    The products covered by this order are brake rotors made of gray 
cast iron, whether finished, semifinished, or unfinished, ranging in 
diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight 
from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters 
(weight and dimension) of the brake rotors limit their use to the 
following types of motor vehicles: automobiles, all-terrain vehicles, 
vans and recreational vehicles under ``one ton and a half,'' and light 
trucks designated as ``one ton and a half.''
    Finished brake rotors are those that are ready for sale and 
installation without any further operations. Semi-finished rotors are 
those on which the surface is not entirely smooth, and have undergone 
some drilling. Unfinished rotors are those which have undergone some 
grinding or turning.
    These brake rotors are for motor vehicles, and do not contain in 
the casting a logo of an original equipment manufacturer (``OEM'') 
which produces vehicles sold in the United States. (e.g., General 
Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in 
this order are not certified by OEM producers of vehicles sold in the 
United States. The scope also includes composite brake rotors that are 
made of gray cast iron, which contain a steel plate, but otherwise meet 
the above criteria. Excluded from the scope of this order are brake 
rotors made of gray cast iron, whether finished, semifinished, or 
unfinished, with a diameter less than 8 inches or greater than 16 
inches (less than 20.32 centimeters or greater than 40.64 centimeters) 
and a weight less than 8 pounds or greater than 45 pounds (less than 
3.63 kilograms or greater than 20.41 kilograms).\2\
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    \2\ On January 17, 2007, the Department determined the brake 
rotors produced by Federal-Mogul and certified by the Ford Motor 
Company to be excluded from the scope of the order. [bbshill] 
Memorandum from Blanche Ziv, Program Manager, AD/CVD Operations, 
Office 8, through Wendy J. Frankel, Office Director, AD/CVD 
Operations, Office 8, to Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration, entitled, ``Scope Ruling of the 
Antidumping Duty Order on Brake Rotors from the People's Republic of 
China; Federal-Mogul Corporation,'' dated January 17, 2007.
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    Brake rotors are currently classifiable under subheading 
8708.39.50.30 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'').\3\ Although the HTSUS subheading is provided for 
convenience and customs purposes, the written description of the scope 
of this order is dispositive.
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    \3\ As of January 1, 2005, the HTSUS classification for brake 
rotors (discs) changed from 8708.39.50.10 to 8708.39.50.30. As of 
January 1, 2007, the HTSUS classification for brake rotors (discs) 
changed from 8708.39.50.30 to 8708.30.50.30. See HTSUS (2005), 
available at http://www.usitc.gov.
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Verification

    As provided in section 782(i)(3) of the Tariff Act of 1930, as 
amended (the ``Act''), and 19 CFR 351.307(b)(iv), the Department 
conducted verification of Qizheng's questionnaire responses at the 
company's facilities in Longkou, Shandong, PRC, from June 6 through 8, 
2007. We used standard verification procedures, including on-site 
inspection of the production facility and examination of the relevant 
sale and financial records. Our verification results are outlined in 
the verification report, the public version of which is on file in the 
Central Records Unit (``CRU'') located in room B-099 of the Main 
Commerce Building. See Memorandum to the File through Wendy Frankel, 
Office Director and Blanche Ziv, Program Manager from Jennifer Moats, 
Senior International Trade Analyst, regarding, ``Verification of the 
Sales and Factors Response of Longkou Qizheng Auto Part Co., Ltd. in 
the 2006 Semiannual Antidumping Duty New Shipper Review on Brake Rotors 
from the People's Republic of China,'' dated August 22, 2007 (``Qizheng 
Verification Report'').

Bona Fide Sale Analysis

    For the reasons stated below, we preliminarily find that Qizheng's 
reported U.S. sale during the POR appears to be bona fide based on the 
totality of the facts on the record. In evaluating whether or not a 
single sale in a new shipper review is commercially reasonable, and 
therefore bona fide, the Department considers, inter alia, such factors 
as: (1) The timing of the sale; (2) the price and quantity; (3) the 
expenses arising from the transaction; (4) whether the goods were 
resold at a profit; and (5) whether the transaction was made on an 
arm's-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. 
United States, 366 F. Supp. 2d 1246, 1250 (CIT 2005), citing Am. 
Silicon Techs. v. United States, 110 F. Supp. 2d 992, 995 (CIT 2000). 
Accordingly, the Department considers a number of factors in its bona 
fides analysis, ``all of which may speak to the commercial realities 
surrounding an alleged sale of subject merchandise.'' See Hebei New 
Donghua Amino Acid Co., Ltd. v. United States, 374 F. Supp. 2d 1333, 
1342 (CIT 2005), citing Fresh Garlic from the PRC: Final Results of 
Administrative Review and Rescission of New Shipper Review, 67 FR 11283 
(March 13, 2002), and accompanying Issues and Decision Memorandum: New 
Shipper Review of Clipper Manufacturing Ltd.
    We preliminarily find that Qizheng's reported U.S. sale during the 
POR appears to be bona fide based on the totality of the circumstances 
on the record. Specifically, we find that: (1) The price of Qizheng's 
sale was within the range of the prices of other entries of subject 
merchandise from the PRC into the United States during the POR; (2) the 
quantity of Qizheng's sale was within the range of quantities of other 
entries of subject merchandise from the PRC into the United States 
during the POR; (3) the expenses arising from the transaction were not 
unusual; and (4) Qizheng's sale was made between unaffiliated parties 
at arm's length. See Memorandum to Wendy Frankel, Office Director, 
through Blanche Ziv, Program Manager, from Jennifer Moats, Senior 
International Trade Analyst, regarding, ``Semiannual Antidumping Duty 
New Shipper Review of the Antidumping Duty Order on Brake Rotors from 
the People's Republic of China: Bona Fide Analysis of Longkou Qizheng 
Auto Parts Co., Ltd.,'' dated September 10, 2007 (``Bona Fides Memo'').

[[Page 54432]]

    As discussed above, we found no evidence that the sale in question 
for Qizheng was not a bona fide sale. See Bona Fides Memo. Based on our 
examination into the bona fide nature of the sale, the questionnaire 
responses submitted by Qizheng, and our verification thereof, we 
preliminarily determine that Qizheng has met the requirements to 
qualify as a new shipper during the POR. We have determined that 
Qizheng made its first sale and shipment of subject merchandise to the 
United States during the POR, and that it was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States during the POR. Therefore, for purposes of these 
preliminary results of review, pursuant to 19 CFR 351.214(b)(2), we are 
treating Qizheng's sale of brake rotors to the United States as an 
appropriate transaction for a new shipper review.

Non-Market Economy Country

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an non-market economy (``NME'') country. 
Pursuant to section 771(18)(C)(i) of the Act, any determination that a 
foreign country is a NME country shall remain in effect until revoked 
by the administering authority. See, e.g., Freshwater Crawfish Tail 
Meat from the People's Republic of China: Notice of Final Results of 
Antidumping Duty Administrative Review, 71 FR 7013 (February 10, 1006). 
None of the parties in this review have 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

    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production (``FOP''), to the extent possible, 
in one or more market economy countries that: (1) Are at a level of 
economic development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. The Department has 
determined that India, the Philippines, Indonesia, Egypt, and Sri Lanka 
are countries comparable to the PRC in terms of economic development. 
See Surrogate Country Selection Memo. Customarily, we select an 
appropriate surrogate country from the Surrogate Country Memo based on 
the availability and reliability of the data from countries that are 
significant producers of comparable merchandise. In this case, based on 
publicly available information placed on the record (e.g., world 
production data), we found that India is a significant producer of 
brake rotors. See Surrogate Country Selection Memo. Accordingly, we 
selected India as the primary surrogate country for purposes of valuing 
the factors of production in the calculation of NV because it meets the 
Department's criteria for surrogate-country selection. See Surrogate 
Country Selection Memo. We relied on public information whenever 
possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in a new shipper review, interested parties may submit publicly 
available information to value the FOP within 20 days after the date of 
publication of these preliminary results.

Separate Rate

    In proceedings involving NME countries (see section 771(18) of the 
Act), 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 rate unless an 
exporter can affirmatively demonstrate an absence of government 
control, both in law (``de jure'') and in fact (``de facto''), with 
respect to its export activities. For this new shipper review, Qizheng 
submitted information in support of its claim for a company-specific 
rate. Moreover, we examined Qizheng's claims for a separate rate at 
verification.
    Accordingly, we have considered whether Qizheng is independent from 
government control, and therefore eligible for a separate rate. To 
establish whether a firm is sufficiently independent from government 
control over its export activities to be entitled to a separate rate, 
the Department analyzes each entity exporting the subject merchandise 
under a test arising from the Notice of Final Determination of Sales at 
Less Than Fair Value: Sparklers from the People's Republic of China, 56 
FR 20588, 20589 (Comment 1) (May 6, 1991) (``Sparklers''), as amplified 
by Notice of Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585, 
22586-7 (May 2, 1994) (``Silicon Carbide''). In accordance with the 
separate-rate 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. Qizheng 
provided complete separate-rate information in its responses to our 
original questionnaire, supplemental questionnaires, and as examined at 
verification as discussed below.

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; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589 (Comment 1).
    Qizheng placed a number of documents on the record to demonstrate 
absence of de jure control, including the ``Company Law of the People's 
Republic of China'' (October 27, 2005), the ``Foreign Trade Law of the 
People's Republic of China'' (May 12, 1994), and ``Administrative 
Regulations of the People's Republic of China Governing the 
Registration of Legal Corporations'' (July 1991). See Exhibits A-4, A-
5, and A-6 of Qizheng's, Section A submission, dated January 16, 2007, 
(``Section A response''). Qizheng also submitted a copy of its business 
license in Exhibit A-7 of its Section A response that was issued by the 
local office of the State Administration of Industry and Commerce 
(``SAIC'') in Longkou City, Shandong Province, China. Qizheng stated 
that its business license is to authorize the enterprise identified on 
the license to engage in the activities listed on the license. The 
enterprise is identified on the license by the enumeration of: (1) Its 
legal name; (2) its legal address; (3) the name of its legal 
representative; (4) its registered capital; (5) the nature of the 
enterprise; and (6) the scope of the enterprise's business. Qizheng 
also stated that its business license allows an enterprise to enter 
into contracts and conduct business activities in accordance with its 
terms and no other company can use the business license that it uses. 
According to Qizheng, there are no other limitations or entitlements 
posed by the business license. We examined these statements and found 
no discrepancies at verification. See Qizheng Verification Report at 
pages 5 - 9.
    We have reviewed Article 11 of Chapter II of the Foreign Trade Law, 
which states, ``foreign trade dealers shall enjoy full autonomy in 
their business operation and be responsible for their own profits and 
losses in accordance with the law.'' As in prior cases, we have 
analyzed such PRC laws and found that they establish an absence of de 
jure control. See, e.g., Pure Magnesium from the People's Republic

[[Page 54433]]

of China: Final Results of Antidumping Duty New Shipper Review, 63 FR 
3085, 3086 (January 21, 1998), and Preliminary Results of Antidumping 
Duty New Shipper Review: Certain Preserved Mushrooms From the People's 
Republic of China, 66 FR 30695, 30696 (June 7, 2001), unchanged in 
Final Results of New Shipper Review: Certain Preserved Mushrooms From 
the People's Republic of China, 66 FR 45006 (August 27, 2001). 
Therefore, we preliminarily determine that there is an absence of de 
jure control over the export activities of Qizheng.

Absence of De Facto Control

    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto government control of its 
export functions: (1) Whether the export prices are set by, or subject 
to, the approval of a government authority; (2) whether the respondent 
has authority to negotiate and sign contracts, and other agreements; 
(3) whether the respondent has autonomy from the government in making 
decisions regarding the selection of 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 Silicon Carbide, 59 FR at 22586-87. Therefore, the 
Department has determined that an analysis of de facto control is 
critical in determining whether a respondent is, in fact, subject to a 
degree of government control that would preclude the Department from 
assigning it a separate rate.
    The respondent has asserted the following: (1) It is a privately 
owned sino-foreign joint venture company; (2) there is no government 
participation in its setting of export prices; (3) its general manager 
has the authority to sign export contracts; (4) the board of directors 
appointed the general manager, who selected the other managers, and 
Qizheng informs SAIC of the changes to update its business license; (5) 
there are no restrictions on the use of its export revenue; and (6) the 
shareholders decide how profits will be used. See Section A response at 
pages A-2 through A-9; see also Qizheng Verification Report at pages 5 
- 9. We have examined the documentation provided and find that it 
demonstrates that Qizheng's pricing is not subject to de facto control. 
Therefore, we preliminarily determine that there is an absence of de 
facto control over the export activities of Qizheng.
    Consequently, because evidence on the record indicates an absence 
of government control, both in law and in fact, over Qizheng's export 
activities, we preliminarily determine that Qizheng has met the 
criteria for the application of a separate rate.

Fair Value Comparisons

    To determine whether Qizheng's sale of brake rotors to the United 
States was made at a price below NV, we compared its U.S. price to NV, 
as described in the ``Export Price'' and ``Normal Value'' sections of 
this notice, pursuant to section 773 of the Act.

Export Price

    For Qizheng, we based U.S. price on export price (``EP'') in 
accordance with section 772(a) of the Act, because the first sale to an 
unaffiliated purchaser was made prior to importation, and constructed 
export price (``CEP'') was not otherwise warranted by the facts on the 
record. We calculated EP based on the packed price from Qizheng to the 
first unaffiliated customer in the United States. We deducted foreign 
inland freight, foreign brokerage and handling expenses, international 
freight, and marine insurance from the starting price (``gross unit 
price''), in accordance with section 772(c) of the Act.
    Because foreign inland freight and foreign brokerage and handling 
expenses were provided by PRC service providers or paid for in 
renminbi, we valued these services using Indian surrogate values (see 
``Factor Valuations'' section below for further discussion). For 
expenses provided by a market economy provider and paid for in market 
economy currency (i.e., international freight and marine insurance), we 
used the actual price paid for the input, pursuant to 19 CFR 
351.408(c)(1). See also Lasko Metal Products v.(roman) United States, 
43 F3d 1442, 1445-46 (Fed. Cir. 1994).

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME country and 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 
the FOPs because the presence of government controls on various aspects 
of these economies renders price comparisons and the calculation of 
production costs invalid under its normal methodologies.

Factor Valuations

    In accordance with section 773(c)(1) of the Act, we calculated NV 
based on the FOPs reported by Qizheng. FOPs include, but are not 
limited to: (1) Hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs, including depreciation. See 
section 773(c)(3) of the Act. We used FOPs reported by Qizheng for 
materials, energy, labor, and packing. To calculate NV, we multiplied 
the reported unit factor quantities by publicly available Indian 
values.
    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data, in accordance with our 
standard practice. See, e.g., Fresh Garlic from the People's Republic 
of China: Final Results of Antidumping Duty New Shipper Review, 67 FR 
72139 (December 4, 2002), and accompanying Issues and Decision 
Memorandum at Comment 6; and Certain Preserved Mushrooms from China 
Final Results of First New Shipper Review and First Antidumping Duty 
Administrative Review: Certain Preserved Mushrooms From the People's 
Republic of China, 66 FR 31204 (June 11, 2001), and accompanying Issues 
and Decision Memorandum at Comment 5.
    When we used publicly available import data from the Ministry of 
Commerce of India (``Indian Import Statistics'') for April through 
October 2006 to value inputs sourced domestically by PRC suppliers, we 
added to the Indian surrogate values a surrogate freight cost 
calculated using the shorter of the reported distance from the domestic 
supplier to the factory or the distance from the nearest port of export 
to the factory. See Sigma Corp. v. United States, 117 F. 3d 1401, 1408 
(Fed. Cir. 1997) (``Sigma''). In instances where we relied on Indian 
import data to value inputs, in accordance with the Department's 
practice, we excluded imports from NME countries and countries that we 
have reason to believe or suspect may be subsidized (i.e., Indonesia, 
South Korea, and Thailand). We have found in other proceedings that 
these countries maintain broadly available, non-industry-specific 
subsidies and therefore, there is reason to believe or suspect all 
exports to all export markets from these countries may be subsidized. 
See e.g., Certain Helical Spring Lock Washers From The People's 
Republic of China; Final Results of Antidumping Administrative Review, 
61 FR 66255, 66256 (Comment 1) (December 17, 1996). Finally, we 
excluded imports that were labeled as originating from an 
``unspecified'' country from the average value, because we could not be 
certain that they were not from either an NME or a country with general 
export subsidies.

[[Page 54434]]

    For a complete discussion of the import data that we excluded from 
our calculation of surrogate values, see ``Memorandum to the File: 2006 
Semiannual New Shipper Review of Brake Rotors from the PRC: Factor 
Valuation for the Preliminary Results,'' dated concurrently with this 
notice (``Factor Valuation Memo''). This memorandum is on file in the 
CRU.
    Where we could not obtain publicly available information 
contemporaneous with the POR to value FOPs, we adjusted the surrogate 
values using the Indian Wholesale Price Index (``WPI'') as published in 
the International Financial Statistics of the International Monetary 
Fund available at http://ifs.apdi.net/imf, for those surrogate values 
in Indian rupees. See Factor Valuation Memo at Exhibit 2. We made 
currency conversions, where necessary, pursuant to 19 CFR 351.415, to 
U.S. dollars using the daily exchange rate corresponding to the 
reported date of the sale. We relied on the daily exchanges rates 
posted on the Import Administration Web site (http://ia.ita.doc.gov). 
See Factor Valuation Memo.
    We valued pig iron, steel scrap, ferrosilicon, ferromanganese, 
limestone, lubricating oil, coke, and firewood with the weighted 
average of the import volume and value from the Indian Import 
Statistics. See id. at Attachment 3.
    We valued electricity using the 2000 electricity price in India 
reported by the International Energy Agency statistics for Energy 
Prices & Taxes, Third Quarter 2003. We inflated the value for 
electricity using the POR average WPI for India. See id. at Attachment 
5.
    We valued packing materials including plastic bags, plastic wrap, 
cartons, tape, plywood, nails, steel strap, and buckles with the 
weighted average of the import volume and value from the Indian Import 
Statistics. See id. at Attachment 4. In addition, with respect to 
plastic wrap, we valued this input using ``partial facts available.'' 
For further information on the valuation of plastic wrap, see the 
``Facts Available'' section of this notice.
    Petitioner submitted financial information for two Indian producers 
of identical and comparable merchandise: Bosch Chassis Systems India 
Ltd. (``Bosch'') and Rico Auto Industries Limited (``Rico'') for the 
year ending March 31, 2006. See Petitioner's submission dated January 
19, 2007. We preliminarily determine that both Bosch's and Rico's 
financial statements are the best available information with which to 
calculate financial ratios because they appear to be complete, are 
publicly available, and are contemporaneous with the POR. See Final 
Determination of Sales at Less Than Fair Value and Final Partial 
Affirmative Determination of Critical Circumstances: Diamond Sawblades 
and Parts Thereof from the People's Republic of China, 71 FR 29303 (May 
22, 2006), and the accompanying Issues and Decision Memorandum at 
Comment 1 (where the Department stated that it is the Department's 
policy to use data from market economy surrogate companies based on the 
``specificity, contemporaneity, and quality of the data.'') From these 
financial statements we were able to determine factory overhead as a 
percentage of the total raw materials, labor, and energy (``MLE'') 
costs; selling, general and administrative expenses (``SG&A'') as a 
percentage of MLE plus overhead (i.e., cost of manufacture); and the 
profit rate as a percentage of the cost of manufacture plus SG&A. See 
Factors Valuation Memo for a full discussion of the calculation of 
these ratios. Where appropriate, we did not include in the surrogate 
overhead and SG&A calculations the excise duty amount listed in the 
financial reports.
    The Department valued truck freight using Indian freight rates 
published by Indian Freight Exchange available at http://www.infreight.com. See Factor Valuation Memo at Exhibit 8. This source 
provided daily rates from six major points of origins to six 
destinations in India for the period April through October 2005. We 
averaged the monthly rates for each rate observation to obtain the 
surrogate value. Because these values were not contemporaneous with the 
POR of this new shipper review, we adjusted the surrogate value for 
inflation using the WPI for India.
    In calculating the freight rate for truck shipments, we used the 
shorter of the reported distance from the domestic supplier to the 
factory or the distance from the nearest seaport to the factory, in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma, 117 F.3d at 1408. To derive the freight cost for each 
material input, the Department multiplied the surrogate freight value 
per kilogram by the Sigma freight. The Department added the freight 
expense to the cost of the material input to determine gross material 
costs. Where there were multiple suppliers of an input, we calculated a 
weighted-average distance. See Id. at 9.
    The data we used for brokerage and handling expenses are not 
specific to the subject merchandise; however, there is no information 
on brokerage and handling expenses specific to brake rotors on the 
record of this review. Therefore, the Department used two sources to 
calculate a surrogate value for domestic brokerage expenses: (1) Data 
from the January 9, 2006, Section C questionnaire response public 
version from Kejriwal Paper Ltd.\4\ (``Kejriwal''); and (2) data from 
Agro Dutch Industries Ltd. for the period of review February 1, 2004, 
through January 31, 2005 (see Certain Preserved Mushrooms From India: 
Final Results of Antidumping Duty Administrative Review, 70 FR 37757 
(June 30, 2005) (unchanged from Certain Preserved Mushrooms from India: 
Preliminary Results of Antidumping Duty Administrative Review, 70 FR 
10597 (March 4, 2005)). See Factor Valuation Memo at page 6 and Exhibit 
7. Because these values were not contemporaneous with the POR of this 
new shipper review, we adjusted these rates for inflation using the WPI 
for India as published in the International Monetary Fund's 
International Financial Statistics, and then calculated a simple 
average of the two companies' brokerage expense data. See id. at page 6 
and Exhibit 7.
---------------------------------------------------------------------------

    \4\ Kejriwal was a respondent in the certain lined paper 
products from India investigation for which the period of 
investigation was July 1, 2004, to June 30, 2005. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value, 
Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances in Part: Certain Lined Paper 
Products From India, 71 FR 19706 (April 17, 2006) (unchanged in 
Notice of Final Determination of Sales at Less Than Fair Value, and 
Negative Determination of Critical Circumstances: Certain Lined 
Paper Products from India, 71 FR 45012 (August 8, 2006).
---------------------------------------------------------------------------

    Section 351.408(c)(3) of the Department's regulations requires the 
use of a regression-based wage rate. Therefore, to value the labor 
input, the Department used the regression-based wage rate for the PRC 
published by Import Administration on our website. The source of the 
wage rate data is the Yearbook of Labour Statistics 2004, published by 
the International Labour Office (``ILO'') (Geneva: 2004), Chapter 5B: 
Wages in Manufacturing. See the Expected Wages of Selected NME 
Countries (revised January 2007) available at: http://ia.ita.doc.gov/wages. Because the regression-based wage rate does not separate the 
labor rates into different skill levels or types of labor, we applied 
the same wage rate to all skill levels and types of labor reported by 
each respondent.

Application of Facts Available

    Section 776(a)(1) of the Act provides that if ``necessary 
information is not available on the record,'' the Department shall, 
subject to subsection

[[Page 54435]]

782(d) of the Act, ``use the facts otherwise available'' in reaching 
the applicable determination. Further, section 782(e) of the Act states 
that the Department shall not decline to consider information deemed 
``deficient'' under section 782(d) if: (1) The information is submitted 
by the established deadline; (2) the information can be verified; (3) 
the information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties. For these 
preliminary results, in accordance with sections 776(a)(1) and 782(e) 
of the Act, we have determined that the use of partial facts available 
is appropriate for applying a surrogate value to Qizheng's reported 
plastic wrap usage for the reasons discussed below.

Plastic Wrap

    In its original Section D questionnaire response dated January 16, 
2007 (``Section D response''), Qizheng reported the total volume of 
``plastic wrap'' used by the company as one FOP. At verification, the 
Department found that Qizheng used two types of plastic wrap (i.e., 
thin plastic wrap and thick plastic wrap) to pack the brake rotors that 
it shipped to the United States, and that both types of plastic wrap 
were included in the single variable reported by Qizheng. See Qizheng 
Verification Report at page 23. Company officials stated, and the 
Department verified, that both types of plastic wrap are accounted for 
in the one FOP that it reported. The Department normally would use a 
different surrogate value for thick plastic wrap versus thin plastic 
wrap. However, because both types of plastic wrap are combined in a 
single reported FOP, it is not possible at this point to determine the 
volume of thin versus thick plastic wrap used by the respondent. As a 
result, it will be necessary to use ``facts available'' in applying the 
surrogate value for plastic wrap.
    We determine that non-adverse partial facts available should be 
applied in this case for the following reasons: the respondent reported 
the total volume of plastic wrap (thick and thin); there is no 
indication that the respondent misrepresented the type of wrap 
reported; rather, it simply reported its total use of ``plastic 
wrap; the Department is satisfied with the accuracy of 
Quizheng's FOP data with respect to all other FOPs; the difference in 
the application of the surrogate value for thin plastic wrap versus 
thick plastic wrap has an insignificant impact on the FOP calculations.
    It is the Department's practice to calculate the dumping margin 
based on the surrogate value that most accurately represents the 
materials used. See section 773(c)(2) of the Act. Thus, as partial 
facts available, the Department has calculated a simple average of the 
two available surrogate values from the Indian Import Statistics for 
thick and thin plastic wrap, and has applied the resulting average to 
Qizheng's reported combined usage of thin and thick plastic wrap used 
to pack the subject merchandise sold to the United States during the 
POR. See Factor Valuation Memo at 4 and Exhibit 4.

Preliminary Results of Review

    We preliminarily determine that the following antidumping duty 
margin exists:

------------------------------------------------------------------------
                      Exporter                              Margin
------------------------------------------------------------------------
Longkou Qizheng Auto Parts Co., Ltd.................                0.0%
------------------------------------------------------------------------

    For details on the calculation of the antidumping duty weighted-
average margin for Qizheng, see Memorandum to The File through Blanche 
Ziv, Program Manager, from Jennifer Moats, Senior International Trade 
Analyst, regarding the ``Analysis for the Preliminary Results of the 
2006 Semiannual New Shipper Review of the Antidumping Duty Order on 
Brake Rotors from the People's Republic of China: Longkou Qizheng Auto 
Parts Co., Ltd.,'' dated concurrently with this notice. A public 
version of this memorandum is on file in the CRU.

Schedule for the Final Results of Review

    Unless otherwise notified by the Department, interested parties may 
submit case briefs within 30 days of the date of publication of this 
notice in accordance with 19 CFR 351.309(c)(ii). As part of the case 
brief, parties are encouraged to provide a summary of the arguments not 
to exceed five pages and a table of statutes, regulations, and cases 
cited. Rebuttal briefs, which must be limited to issues raised in the 
case briefs, must be filed within five days after the case brief is 
filed. See 19 CFR 351.309(d).
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). Any 
hearing would normally be held 37 days after the publication of this 
notice, or the first workday thereafter, at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230. Individuals who wish to request a hearing must submit a written 
request within 30 days of the publication of this notice in the Federal 
Register to the Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Room 1870, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230. Requests for a public hearing should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) to the extent practicable, an 
identification of the arguments to be raised at the hearing. If a 
hearing is held, an interested party must limit its presentation only 
to arguments raised in its briefs. Parties should confirm by telephone 
the time, date, and place of the hearing 48 hours before the scheduled 
time.
    The Department will issue the final results of this new shipper 
review, which will include the results of its analysis of issues raised 
in the briefs, within 90 days from the publication date of the 
preliminary results, unless the time limit is extended.

Assessment Rate

    Pursuant to 19 CFR 351.212(b), the Department will determine, and 
CBP shall assess, antidumping duties on all appropriate entries. The 
Department intends to issue assessment instructions directly to CBP 15 
days after the date of publication of the final results of this new 
shipper review. For assessment purposes, we will calculate an importer-
specific assessment rate for brake rotors from the PRC on a per-unit 
basis. Specifically, we will divide the total dumping margin 
(calculated as the difference between normal value and the export 
price) for the importer by the total quantity of subject merchandise 
sold to that importer during the POR to calculate a per-unit assessment 
amount. We will direct CBP to assess antidumping duties based on the 
resulting per-unit (i.e., per-piece) rate by the weight in kilograms of 
the entry of the subject merchandise during the POR, if any importer-
specific assessment rate calculated in the final results of review is 
above de minimis.

Cash Deposit

    The following cash-deposit requirements will be effective upon 
publication of these final results for shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results, as provided by section 
751(a)(2)(C) of the Act: (1) For subject merchandise produced and 
exported by Qizheng, the

[[Page 54436]]

cash deposit rate will be zero percent; (2) for subject merchandise 
exported by Qizheng but not produced by Qizheng, the cash deposit rate 
will be the PRC-wide rate; (3) the cash deposit rate for PRC exporters 
who received a separate rate in a prior segment of the proceeding will 
continue to be the rate assigned in that segment of the proceeding; (4) 
for all other PRC exporters of subject merchandise which have not been 
found to be entitled to a separate rate, the cash-deposit rate will be 
the PRC-wide rate of 43.32 percent; and (5) for all non-PRC exporters 
of subject merchandise, the cash-deposit rate will be the rate 
applicable to the PRC supplier of that exporter. These deposit 
requirements shall remain in effect until further notice.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to the importer 
of its responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entry during this review period. Failure to comply with 
this requirement could result in the Secretary's presumption that 
reimbursement of the antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This new shipper review and this notice are published in accordance 
with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: September 18, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-18842 Filed 9-24-07; 8:45 am]
BILLING CODE 3510-DS-S