[Federal Register Volume 75, Number 109 (Tuesday, June 8, 2010)]
[Notices]
[Pages 32376-32378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13759]





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DEPARTMENT OF COMMERCE



International Trade Administration



[A-570-912]




Certain New Pneumatic Off-the-Road Tires from the People's 

Republic of China: Preliminary Results of Changed Circumstances Review



AGENCY: Import Administration, International Trade Administration, 

Department of Commerce.

SUMMARY: On November 10, 2009, the Department of Commerce (``the 

Department'') published in the Federal Register a notice of initiation 

of a changed circumstances review of the antidumping duty order on 

certain new pneumatic off-the-road (``OTR'') tires from the People's 

Republic of China (``PRC'') in order to determine whether Mai Shandong 

Radial Tyre Co., Ltd. (``Mai Shandong'') is the successor-in-interest 

to Shandong Jinyu Tyre Co., Ltd. (``Shandong Jinyu'') for the purpose 

of determining antidumping duty liability. We have preliminarily 

determined that Mai Shandong is not the successor-in-interest to 

Shandong Jinyu for the purpose of determining antidumping duty 

liability. Interested parties are invited to comment on these 

preliminary results.



EFFECTIVE DATE: June 8, 2010.



FOR FURTHER INFORMATION CONTACT: Raquel Silva, AD/CVD Operations, 

Office 8, Import Administration, International Trade Administration, 

U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, 

DC 20230; telephone: 202-482-6475.



SUPPLEMENTARY INFORMATION:



Background



    On September 4, 2008, the Department published in the Federal 

Register an antidumping duty order on OTR tires from the PRC. See 

Certain New Pneumatic Off-the-Road Tires From the People's Republic of 

China: Notice of Amended Final Affirmative Determination of Sales at 

Less Than Fair Value and Antidumping Duty Order, 73 FR 51624 (September 

4, 2008) (``Order''). As part of the Order, Shandong Jinyu received the 

separate-rate respondent amended rate of 12.91 percent. Id. at 51627. 

On September 14, 2009, Mai Shandong filed a submission requesting that 

the Department conduct a changed circumstances review of the Order to 

confirm that it is the successor-in-interest to Shandong Jinyu.\1\ In 

its submission, Mai Shandong provided the Joint Venture Contract, 

Articles of Association and various other documents confirming: 1) an 

approximately 90-percent transfer of OTR tire assets from Shandong 

Jinyu to Maitech Fin S.r.l. (now known as Mai International); and 2) 

the resulting formation of the Mai Shandong joint venture. In addition, 

Mai Shandong provided narrative explanation and limited documentation 

relating to the management, production facilities and process, customer 

base, supplier relationships, distribution and marketing channels and 

product mix of both it and the company as it previously operated as 

Shandong Jinyu. As part of its September 14, 2009 submission, Mai 

Shandong requested that the Department conduct an expedited review.

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    \1\ See Letter from Mai Shandong to the Department regarding 

Certain New Pneumatic Off-The-Road Tires from the People's Republic 

of China, Request for Changed Circumstances Review (Case No. A-570-

912) (September 14, 2009).

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    In response to the request, the Department initiated a changed 

circumstances review of Mai Shandong on November 10, 2009. See Certain 

New Pneumatic Off-the-Road Tires from the People's Republic of China: 

Initiation of Changed Circumstances Review, 74 FR 57999 (November 10, 

2009). However, the Department found conclusive evidence lacking and, 

therefore, determined an expedited preliminary result was not 

appropriate. Id. at 58001. Subsequent to initiation, the Department 

issued, and Mai Shandong responded to, several supplemental 

questionnaires requesting additional information.



Scope of the Order



    The products covered by the order are new pneumatic tires designed 

for off-the-road and off-highway use, subject to exceptions identified 

below. Certain OTR tires are generally designed, manufactured and 

offered for sale for use on off-road or off-highway surfaces, including 

but not limited to, agricultural fields, forests, construction sites, 

factory and warehouse interiors, airport tarmacs, ports and harbors, 

mines, quarries, gravel yards, and steel mills. The vehicles and 

equipment for which certain OTR tires are designed for use include, but 

are not limited to: (1) agricultural and forestry vehicles and 

equipment, including agricultural tractors,\2\ combine harvesters,\3\ 

agricultural high clearance sprayers,\4\ industrial tractors,\5\ log-

skidders,\6\ agricultural implements, highway-towed implements, 

agricultural logging, and agricultural, industrial, skid-steers/mini-

loaders;\7\ (2) construction vehicles and equipment, including 

earthmover articulated dump products, rigid frame haul trucks,\8\ front 

end loaders,\9\ dozers,\10\ lift trucks, straddle carriers,\11\ 

graders,\12\ mobile cranes,\13\ compactors; and (3) industrial vehicles 

and equipment, including smooth floor, industrial, mining, 

counterbalanced lift trucks, industrial and mining vehicles other than 

smooth floor, skid-steers/mini-loaders, and smooth floor off-the-road 

counterbalanced lift trucks.\14\ The foregoing list of vehicles and 

equipment generally have in common that they are used for hauling, 

towing, lifting, and/or loading a wide variety of equipment and 

materials in agricultural, construction and industrial settings. Such 

vehicles and equipment, and the descriptions contained in the footnotes 

are illustrative of the types of vehicles and



[[Page 32377]]



equipment that use certain OTR tires, but are not necessarily all-

inclusive. While the physical characteristics of certain OTR tires will 

vary depending on the specific applications and conditions for which 

the tires are designed (e.g., tread pattern and depth), all of the 

tires within the scope have in common that they are designed for off-

road and off-highway use. Except as discussed below, OTR tires included 

in the scope of the order range in size (rim diameter) generally but 

not exclusively from 8 inches to 54 inches. The tires may be either 

tube-type\15\ or tubeless, radial or non-radial, and intended for sale 

either to original equipment manufacturers or the replacement market. 

The subject merchandise is currently classifiable under Harmonized 

Tariff Schedule of the United States (``HTSUS'') subheadings: 

4011.20.10.25, 4011.20.10.35, 4011.20.50.30, 4011.20.50.50, 

4011.61.00.00, 4011.62.00.00, 4011.63.00.00, 4011.69.00.00, 

4011.92.00.00, 4011.93.40.00, 4011.93.80.00, 4011.94.40.00, and 

4011.94.80.00. While HTSUS subheadings are provided for convenience and 

customs purposes, our written description of the scope is dispositive.

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    \2\ Agricultural tractors are dual-axle vehicles that typically 

are designed to pull farming equipment in the field and that may 

have front tires of a different size than the rear tires.

    \3\ Combine harvesters are used to harvest crops such as corn or 

wheat.

    \4\ Agricultural sprayers are used to irrigate agricultural 

fields

    \5\ Industrial tractors are dual-axle vehicles that typically 

are designed to pull industrial equipment and that may have front 

tires of a different size than the rear tires.

    \6\ A log-skidder has a grappling lift arm that is used to 

grasp, lift and move trees that have been cut down to a truck or 

trailer for transport to a mill or other destination.

    \7\ Skid-steer loaders are four-wheel drive vehicles with the 

left-side drive wheels independent of the right-side drive wheels 

and lift arms that lie alongside the driver with the major pivot 

points behind the driver's shoulders. Skid-steer loaders are used in 

agricultural, construction and industrial settings.

    \8\ Haul trucks, which may be either rigid frame or articulated 

(i.e., able to bend in the middle) are typically used in mines, 

quarries and construction sites to haul soil, aggregate, mined ore, 

or debris.

    \9\ Front loaders have lift arms in front of the vehicle. They 

can scrape material from one location to another, carry material in 

their buckets, or load material into a truck or trailer.

    \10\ A dozer is a large four-wheeled vehicle with a dozer blade 

that is used to push large quantities of soil, sand, rubble, etc., 

typically around construction sites. They can also be used to 

perform ``rough grading'' in road construction.

    \11\ A straddle carrier is a rigid frame, engine-powered machine 

that is used to load and offload containers from container vessels 

and load them onto (or off of) tractor trailers.

    \12\ A grader is a vehicle with a large blade used to create a 

flat surface. Graders are typically used to perform ``finish 

grading.'' Graders are commonly used in maintenance of unpaved roads 

and road construction to prepare the base course on to which asphalt 

or other paving material will be laid.

    \13\ I.e., ``on-site'' mobile cranes designed for off-highway 

use.

    \14\ A counterbalanced lift truck is a rigid framed, engine-

powered machine with lift arms that has additional weight 

incorporated into the back of the machine to offset or 

counterbalance the weight of loads that it lifts so as to prevent 

the vehicle from overturning. An example of a counterbalanced lift 

truck is a counterbalanced fork lift truck. Counterbalanced lift 

trucks may be designed for use on smooth floor surfaces, such as a 

factory or warehouse, or other surfaces, such as construction sites, 

mines, etc.

    \15\ While tube-type tires are subject to the scope of this 

proceeding, tubes and flaps are not subject merchandise and 

therefore are not covered by the scope of this proceeding, 

regardless of the manner in which they are sold (e.g., sold with or 

separately from subject merchandise).

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    Specifically excluded from the scope are new pneumatic tires 

designed, manufactured and offered for sale primarily for on-highway or 

on-road use, including passenger cars, race cars, station wagons, sport 

utility vehicles, minivans, mobile homes, motorcycles, bicycles, on-

road or on-highway trailers, light trucks, and trucks and buses. Such 

tires generally have in common that the symbol ``DOT'' must appear on 

the sidewall, certifying that the tire conforms to applicable motor 

vehicle safety standards. Such excluded tires may also have the 

following designations that are used by the Tire and Rim Association:



Prefix letter designations:



     P - Identifies a tire intended primarily for service on 

passenger cars;

     LT - Identifies a tire intended primarily for service on 

light trucks; and,

     ST - Identifies a special tire for trailers in highway 

service.



Suffix letter designations:



     TR - Identifies a tire for service on trucks, buses, and 

other vehicles with rims having specified rim diameter of nominal plus 

0.156 or plus 0.250;

     MH - Identifies tires for Mobile Homes;

     HC - Identifies a heavy duty tire designated for use on 

``HC'' 15 tapered rims used on trucks, buses, and other 

vehicles. This suffix is intended to differentiate among tires for 

light trucks, and other vehicles or other services, which use a similar 

designation.

     Example: 8R17.5 LT, 8R17.5 HC;

     LT - Identifies light truck tires for service on trucks, 

buses, trailers, and multipurpose passenger vehicles used in nominal 

highway service; and

     MC - Identifies tires and rims for motorcycles.

    The following types of tires are also excluded from the scope: 

pneumatic tires that are not new, including recycled or retreaded tires 

and used tires; non-pneumatic tires, including solid rubber tires; 

tires of a kind designed for use on aircraft, all-terrain vehicles, and 

vehicles for turf, lawn and garden, golf and trailer applications. Also 

excluded from the scope are radial and bias tires of a kind designed 

for use in mining and construction vehicles and equipment that have a 

rim diameter equal to or exceeding 39 inches. Such tires may be 

distinguished from other tires of similar size by the number of plies 

that the construction and mining tires contain (minimum of 16) and the 

weight of such tires (minimum 1500 pounds).



Preliminary Results of the Review



    In this changed circumstances review pursuant to section 751(b) of 

the Tariff Act of 1930, as amended (the ``Act''), the Department has 

conducted a successor-in-interest analysis. In making a successor-in-

interest determination, the Department examines several factors, 

including, but not limited to, changes in the following: (1) 

management; (2) production facilities; (3) supplier relationships; and 

(4) customer base. See, e.g., Notice of Final Results of Changed 

Circumstances Antidumping Duty Administrative Review: Polychloroprene 

Rubber From Japan, 67 FR 58 (January 2, 2002). While no single factor 

or combination of factors will necessarily provide a dispositive 

indication of a successor-in-interest relationship, generally, the 

Department will consider the new company to be the successor to the 

previous company if the new company's resulting operation is not 

materially dissimilar to that of its predecessor. See, e.g., Fresh and 

Chilled Atlantic Salmon From Norway; Final Results of Changed 

Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 

(March 1, 1999). Thus, if the record evidence demonstrates that, with 

respect to the production and sale of the subject merchandise, the new 

company operates as the same business entity as the predecessor 

company, the Department may assign the new company the cash deposit 

rate of its predecessor.

    In accordance with 19 CFR 351.221(c)(3)(i), we preliminarily 

determine that Mai Shandong, formed by an approximately 90-10 ownership 

joint venture of Mai International and Shandong Jinyu, respectively, is 

not the successor-in-interest to Shandong Jinyu. While the record 

evidence indicates that Mai Shandong retained identical production 

facilities, distribution channels and similar suppliers to Shandong 

Jinyu, it also indicates that Mai Shandong's ownership, management 

composition, corporate structure and sales/marketing operations changed 

significantly from that of Shandong Jinyu. The remaining business 

characteristics (e.g., production process) changed moderately, but not 

sufficiently to warrant elaboration.

    While Mai Shandong claims that the majority of its personnel 

transferred from Shandong Jinyu, none of Shandong Jinyu's executive-

level managers remain in Mai Shandong. Furthermore, Mai Shandong is now 

governed by a Board of Directors, in which Mai Shandong's new Italian 

parent company retains two-thirds control overall of Mai Shandong's 

major operational decisions.

    With respect to corporate and operational structure, the new entity 

no longer has its own independent human resources, raw material 

processing, corporate-level research and development or sales 

capabilities. Shandong Jinyu conducted those business functions for 

itself whereas Mai Shandong depends on its parent companies for each of 

those functions. For further information, please see Memorandum from 

Raquel Silva, Analyst, regarding ``Analysis Memo for Preliminary 

Results of Antidumping Duty Changed Circumstances Review of New 

Pneumatic Off-the-Road Tires from the People's Republic of China,'' 

dated concurrently with the signature date of this notice 

(``Preliminary Results Analysis Memo'').

    Finally, Mai Shandong's sales and marketing operations are now 

highly dependent upon its Italian parent. Mai Shandong retains an 

employee partially dedicated to sales activities; the employee plays a 

supportive, but not leading role. It also routes all sales



[[Page 32378]]



through Mai International, selling no product directly to customers as 

Shandong Jinyu had done. Additionally, Mai Shandong has not sold any 

product to any of Shandong Jinyu's former U.S. customers. The evidence 

on the record also shows a significant change in customer base. For 

further information, please see the Preliminary Results Analysis Memo.

    Therefore, we preliminarily find that the record evidence does not 

support Mai Shandong's claim that it is the successor-in-interest to 

Shandong Jinyu. Mai International's acquisition of approximately 90 

percent equity in Shandong Jinyu's OTR tires business resulted in a 

joint venture that is majority owned and operated by a new, foreign 

entity, with a new corporate structure, changed management, and 

significantly altered sales and marketing operations. Therefore, given 

the totality of the considered factors, the record evidence 

demonstrates that Mai Shandong is a new entity that operates in a 

significantly different manner from Shandong Jinyu. Consequently, we 

preliminarily determine that Mai Shandong should not be given the same 

antidumping duty treatment as Shandong Jinyu, i.e., the separate rate 

status previously afforded to Shandong Jinyu and the accompanying 12.91 

percent antidumping duty cash deposit rate. Instead, Mai Shandong, as a 

new entity, should continue to be treated as part of the PRC-entity 

until such time as it demonstrates that it meets the separate rates 

criteria established by the Department and assigned, as its cash 

deposit rate, the ``PRC-wide entity'' rate, which in this proceeding is 

210.48 percent.

    The cash deposit determination from this changed circumstances 

review will apply to all entries of the subject merchandise entered or 

withdrawn from warehouse, for consumption on or after the date of 

publication of the final results of this changed circumstances review. 

See Granular Polytetrafluoroethylene Resin from Italy: Final Results of 

Changed Circumstances Review, 68 FR 25327 (May 12, 2003). This deposit 

rate shall remain in effect until further notice.



Public Comment



    Any interested party may request a hearing within 10 days of 

publication of this notice in accordance with 19 CFR 351.310(c). 

Interested parties may submit case briefs no later than 14 days after 

the date of publication of this notice, in accordance with 19 CFR 

351.309(c)(1)(ii). Rebuttal briefs, limited to issues raised in the 

case briefs, may be filed no later than five days after the case 

briefs, in accordance with 19 CFR 351.309(d)(1). Hearing requests 

should contain the following information: (1) the party's name, 

address, and telephone number; (2) the number of participants; and (3) 

a list of the issues to be discussed. Oral presentations will be 

limited to issues raised in the briefs. If a request for a hearing is 

made, parties will be notified of the time and date for the hearing to 

be held at the U.S. Department of Commerce, 14th Street and 

Constitution Avenue, NW, Washington, DC 20230. See 19 CFR 351.310(d). 

The Department will issue its final results of review within 270 days 

after the date on which the changed circumstances review was initiated, 

in accordance with 19 CFR 351.216(e), and will publish these results in 

the Federal Register.

    This notice is published in accordance with sections 751(b)(1) and 

777(i) of the Act and 19 CFR 351.216 of the Department's regulations.



    Dated: June 1, 2010.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

[FR Doc. 2010-13759 Filed 6-7-10; 8:45 am]

BILLING CODE 3510-DS-S