[Federal Register Volume 80, Number 227 (Wednesday, November 25, 2015)]
[Notices]
[Pages 73716-73722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29985]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-856, A-570-032]


Certain Iron Mechanical Transfer Drive Components from Canada and 
The People's Republic of China: Initiation of Less-Than-Fair-Value 
Investigations

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

DATES: Effective Date: November 17, 2015.

FOR FURTHER INFORMATION CONTACT: Stephen Bailey at (202) 482-0193 
(Canada) and Maisha Cryor at (202) 482-5831 (the People's Republic of 
China (PRC)), AD/CVD Operations, Enforcement and Compliance, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION: 

The Petitions

    On October 28, 2015, the Department of Commerce (the Department) 
received antidumping duty (AD) petitions concerning imports of certain 
iron mechanical transfer drive components (iron transfer drive 
components) from Canada and the PRC, filed in proper form on behalf of 
TB Wood's Incorporated (TB Woods) (Petitioner).\1\ The AD petitions 
were accompanied by one countervailing duty (CVD) petition for the 
PRC.\2\ Petitioner is a domestic producer of iron transfer drive 
components.\3\
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    \1\ See the Petitions for the Imposition of Antidumping Duties 
on Imports of Certain Iron Mechanical Transfer Drive Components from 
Canada and the PRC, dated October 28, 2015 (the Petitions).
    \2\ See the Petition for the Imposition of Countervailing Duties 
on Imports of Certain Iron Mechanical Transfer Drive Components the 
PRC, dated October 28, 2015.
    \3\ See Volume I of the Petitions, at 2.
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    On November 3, 2015, the Department requested additional 
information and clarification of certain areas of the Petitions.\4\ 
Petitioner filed responses to these requests on November 5, 6 and 10, 
2015.\5\
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    \4\ See Letters from the Department to Petitioner entitled ``Re: 
Petition for the Imposition of Antidumping and Countervailing Duties 
on Imports of Certain Iron Mechanical Transfer Drive Components from 
Canada: Supplemental Questions'' dated November 3, 2015; ``Re: 
Petition for the Imposition of Antidumping and Countervailing Duties 
on Imports of Certain Iron Mechanical Transfer Drive Components from 
the People's Republic of China: Supplemental Questions'' dated 
November 3, 2015; and ``Re: Petitions for the Imposition of 
Antidumping and Countervailing Duties on Imports of Certain Iron 
Mechanical Transfer Drive Components from the People's Republic of 
China and Antidumping Duties on Imports from Canada: Supplemental 
Questions'' dated November 3, 2015 (General Issues Supplemental 
Questionnaire).
    \5\ See ``Re: Response to the Department's November 3, 2015 
Questionnaire Regarding Volume I of the Petition for the Imposition 
of Antidumping and Countervailing Duties,'' dated November 6, 2015 
(General Issues Supplement); ``Re: Certain Iron Mechanical Transfer 
Drive Components from Canada and the People's Republic of China: 
Response to the Department's November 3, 2015 Supplemental Questions 
Regarding Volume II of the Petition for the Imposition of 
Antidumping Duties,'' dated November 6, 2015 (Canada Supplemental 
Response); and ``Re: Certain Iron Mechanical Transfer Drive 
Components from Canada and the People's Republic of China: Response 
to the Department's November 3, 2015 Supplemental Questions 
Regarding Volume III of the Petition for the Imposition of 
Antidumping Duties,'' dated November 6, 2015 (Canada Supplemental 
Response); and ``Re: Certain Iron Mechanical Transfer Drive 
Components from the People's Republic of China: Response to the 
Department's November 6, 2015 Supplemental Questions Regarding 
Volume I of the Petition for the Imposition of Antidumping and 
Countervailing Duties'' (PRC Supplemental Response) dated November 
10, 2015.
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    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), Petitioner alleges that imports of iron transfer 
drive components from Canada and the PRC are being, or are likely to 
be, sold in the United States at less-than-fair value within the 
meaning of section 731 of the Act, and that such imports are materially 
injuring, or threatening material injury to, an industry in the United 
States. Also, consistent with section 732(b)(1) of the Act, the 
Petitions are accompanied by information reasonably available to 
Petitioner supporting its allegations.
    The Department finds that Petitioner filed these Petitions on 
behalf of the domestic industry because Petitioner is an interested 
party as defined in section 771(9)(C) of the Act. The Department also 
finds that Petitioner demonstrated sufficient industry support with 
respect to the initiation of the AD investigations that Petitioner is 
requesting.\6\
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    \6\ See the ``Determination of Industry Support for the 
Petitions'' section below.
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Periods of Investigation

    Because the Petitions were filed on October 28, 2015, the period of 
investigation (POI) is, pursuant to 19 CFR 351.204(b)(1), October 1, 
2014, through September 30, 2015, for Canada and April 1, 2015, through 
September 30, 2015, for the PRC.

Scope of the Investigations

    The product covered by these investigations is iron transfer drive 
components from Canada and the PRC. For a full description of the scope 
of these investigations, see the ``Scope of the Investigations,'' in 
Appendix I of this notice.

Comments on Scope of the Investigations

    During our review of the Petitions, the Department issued questions 
to, and received responses from, Petitioner pertaining to the proposed 
scope to ensure that the scope language in the Petitions would be an 
accurate reflection of the products for which the domestic industry is 
seeking relief.\7\
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    \7\ See General Issues Supplemental Questionnaire and General 
Issues Supplement.
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    As discussed in the preamble to the Department's regulations,\8\ we 
are setting aside a period for interested parties to raise issues 
regarding product coverage (scope). The Department will consider all 
comments received from parties and, if necessary, will consult with 
parties prior to the issuance of the preliminary determination. If 
scope comments include factual information (see 19 CFR 351.102(b)(21)), 
all such factual information should be limited to public information. 
In order to facilitate preparation of its questionnaires, the 
Department requests all interested parties to submit such comments by 
5:00 p.m. Eastern Time (ET) on Monday, December 7, 2015, which is 20 
calendar

[[Page 73717]]

days from the signature date of this notice. Any rebuttal comments, 
which may include factual information, must be filed by 5:00 p.m. ET on 
Thursday, December 17, 2015, which is 10 calendar days after the 
initial comments deadline.
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    \8\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997).
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    The Department requests that any factual information the parties 
consider relevant to the scope of the investigations be submitted 
during this time period. However, if a party subsequently finds that 
additional factual information pertaining to the scope of the 
investigations may be relevant, the party may contact the Department 
and request permission to submit the additional information. All such 
comments must be filed on the records of each of the concurrent AD and 
CVD investigations.

Filing Requirements

    All submissions to the Department must be filed electronically 
using Enforcement and Compliance's Antidumping and Countervailing Duty 
Centralized Electronic Service System (ACCESS).\9\ An electronically 
filed document must be received successfully in its entirety by the 
time and date when it is due. Documents excepted from the electronic 
submission requirements must be filed manually (i.e., in paper form) 
with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230, and stamped with the date and time of receipt by 
the applicable deadlines.
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    \9\ See Antidumping and Countervailing Duty Proceedings: 
Electronic Filing Procedures; Administrative Protective Order 
Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and 
Compliance; Change of Electronic Filing System Name, 79 FR 69046 
(November 20, 2014) for details of the Department's electronic 
filing requirements, which went into effect on August 5, 2011. 
Information on help using ACCESS can be found at https://access.trade.gov/help.aspx and a handbook can be found at https://access.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Comments on Product Characteristics for AD Questionnaires

    The Department requests comments from interested parties regarding 
the appropriate physical characteristics of iron transfer drive 
components to be reported in response to the Department's AD 
questionnaires. This information will be used to identify the key 
physical characteristics of the subject merchandise in order to report 
the relevant factors and costs of production accurately as well as to 
develop appropriate product-comparison criteria.
    Interested parties may provide any information or comments that 
they feel are relevant to the development of an accurate list of 
physical characteristics. Specifically, they may provide comments as to 
which characteristics are appropriate to use as: (1) General product 
characteristics and (2) product-comparison criteria. We note that it is 
not always appropriate to use all product characteristics as product-
comparison criteria. We base product-comparison criteria on meaningful 
commercial differences among products. In other words, although there 
may be some physical product characteristics utilized by manufacturers 
to describe iron transfer drive components, it may be that only a 
select few product characteristics take into account commercially 
meaningful physical characteristics. In addition, interested parties 
may comment on the order in which the physical characteristics should 
be used in matching products. Generally, the Department attempts to 
list the most important physical characteristics first and the least 
important characteristics last.
    In order to consider the suggestions of interested parties in 
developing and issuing the AD questionnaires, all comments must be 
filed by 5:00 p.m. EDT on December 7, 2015, which is twenty calendar 
days from the signature date of this notice. Any rebuttal comments must 
be filed by 5:00 p.m. EDT on December 14, 2015. All comments and 
submissions to the Department must be filed electronically using 
ACCESS, as explained above, on the records of both the Canada and the 
PRC less-than-fair-value investigations.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method to poll the ``industry.''
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product,\10\ they do so for different purposes and pursuant to a 
separate and distinct authority. In addition, the Department's 
determination is subject to limitations of time and information. 
Although this may result in different definitions of the like product, 
such differences do not render the decision of either agency contrary 
to law.\11\
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    \10\ See section 771(10) of the Act.
    \11\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. 
Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
Petitions).
    With regard to the domestic like product, Petitioner does not offer 
a definition of the domestic like product distinct from the scope of 
the investigations. Based on our analysis of the information submitted 
on the record, we have determined that iron transfer drive components 
constitute a single domestic like product and we have analyzed industry 
support in terms of that domestic like product.\12\
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    \12\ For a discussion of the domestic like product analysis in 
this case, see Antidumping Duty Investigation Initiation Checklist: 
Certain Iron Mechanical Transfer Drive Components from Canada 
(Canada AD Checklist), at Attachment II, Analysis of Industry 
Support for the Antidumping and Countervailing Duty Petitions 
Covering Certain Iron Mechanical Transfer Drive Components from 
Canada and the People's Republic of China (Attachment II); 
Antidumping Duty Investigation Initiation Checklist: Certain Iron 
Mechanical Transfer Drive Components from the People's Republic of 
China (PRC AD Initiation Checklist), at Attachment II. These 
checklists are dated concurrently with this notice and on file 
electronically via ACCESS. Access to documents filed via ACCESS is 
also available in the Central Records Unit, Room B8024 of the main 
Department of Commerce building.

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[[Page 73718]]

    In determining whether Petitioner has standing under section 
732(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petitions with reference to the domestic like product 
as defined in the ``Scope of the Investigations,'' in Appendix I of 
this notice. To establish industry support, Petitioner provided its 
production of the domestic like product in 2014, as well as estimated 
total production of the domestic like product for the entire domestic 
industry.\13\ We relied on data Petitioner provided for purposes of 
measuring industry support.\14\
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    \13\ See Volume I of the Petitions, at 3-4 and Exhibits I-4 
through I-7.
    \14\ Id. For further discussion, see Canada AD Initiation 
Checklist and PRC AD Initiation Checklist, at Attachment II.
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    On November 12, 2015, we received comments on industry support from 
Baldor Electric Company (Baldor) \15\ and Caterpillar, Inc. 
(Caterpillar).\16\ Baldor also indicated that it opposes the 
Petitions.\17\ Petitioner responded to the letters from Baldor and 
Caterpillar on November 16, 2015.\18\ Baldor filed two additional 
submissions regarding industry support on November 16, 2015.\19\ 
Petitioner provided additional responses to Baldor's arguments on 
November 17, 2015.\20\ For further discussion of these comments, see 
the Canada AD Initiation Checklist and PRC AD Initiation Checklist, at 
Attachment II.
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    \15\ See Letter from Baldor Electric Company, dated November 12, 
2015.
    \16\ See Letter from Caterpillar, Inc., filed on November 12, 
2015. We note that this letter is dated November 11, 2015, but was 
received by the Department on November 12, 2015.
    \17\ See Letter from Baldor Electric Company, dated November 12, 
2015, at 15.
    \18\ See Letter from Petitioner, dated November 16, 2015.
    \19\ See Letters from Baldor Electric Company, dated November 
16, 2015.
    \20\ See Letter from Petitioner, dated November 17, 2015.
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    Our review of the data provided in the Petitions; General Issues 
Supplement; letters from Baldor, Caterpillar, and Petitioner; and other 
information readily available to the Department indicates that 
Petitioner has established industry support.\21\ First, the Petitions 
established support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling).\22\ 
Second, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 732(c)(4)(A)(i) of the Act 
because the domestic producers (or workers) who support the Petitions 
account for at least 25 percent of the total production of the domestic 
like product.\23\ Finally, the domestic producers (or workers) have met 
the statutory criteria for industry support under section 
732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) 
who support the Petitions account for more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the Petitions.\24\ 
Accordingly, the Department determines that the Petitions were filed on 
behalf of the domestic industry within the meaning of section 732(b)(1) 
of the Act.
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    \21\ See Canada AD Initiation Checklist and PRC AD Initiation 
Checklist, at Attachment II.
    \22\ See section 732(c)(4)(D) of the Act; see also Canada AD 
Initiation Checklist and PRC AD Initiation Checklist, at Attachment 
II.
    \23\ See Canada AD Initiation Checklist and PRC AD Initiation 
Checklist, at Attachment II.
    \24\ Id.
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    The Department finds that Petitioner filed the Petitions on behalf 
of the domestic industry because it is an interested party as defined 
in section 771(9)(C) of the Act and it has demonstrated sufficient 
industry support with respect to the AD investigations that it is 
requesting the Department initiate.\25\
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    \25\ Id.
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Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than normal value (NV). In addition, Petitioner alleges 
that subject imports exceed the negligibility threshold provided for 
under section 771(24)(A) of the Act.\26\
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    \26\ See General Issues Supplement, at 12-13 and Exhibit I-S3.
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    Petitioner contends that the industry's injured condition is 
illustrated by eroded domestic output and shipments; underselling and 
price suppression or depression; declining financial performance; 
negative impacts to employment; and lost sales and revenues.\27\ We 
have assessed the allegations and supporting evidence regarding 
material injury, threat of material injury, and causation, and we have 
determined that these allegations are properly supported by adequate 
evidence and meet the statutory requirements for initiation.\28\
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    \27\ See Volume I of the Petitions, at 16-17, 22-44 and Exhibits 
I-4, I-10 through I-13, and I-15 through I-23; see also General 
Issues Supplement, at 12-13 and Exhibit I-S3.
    \28\ See Canada AD Initiation Checklist and PRC AD Initiation 
Checklist, at Attachment III, Analysis of Allegations and Evidence 
of Material Injury and Causation for the Antidumping and 
Countervailing Duty Petitions Covering Certain Iron Mechanical 
Transfer Drive Components from Canada and the People's Republic of 
China.
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Allegations of Sales at Less-Than-Fair Value

    The following is a description of the allegations of sales at less-
than-fair value upon which the Department based its decision to 
initiate investigations of imports of iron transfer drive components 
from Canada and the PRC. The sources of data for the deductions and 
adjustments relating to U.S. price and NV are discussed in greater 
detail in the country-specific initiation checklists.

Export Price

    For Canada, Petitioner based U.S. prices on price quotes to 
customers in the United States for iron transfer drive components 
produced in, and exported from, Canada.\29\ Where applicable, 
Petitioner made deductions from U.S. price for movement expenses 
consistent with the delivery terms.\30\ Petitioner also deducted from 
U.S. price brokerage and handling expenses.\31\
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    \29\ See Canada AD Initiation Checklist; see also Canada 
Supplemental Response at Exhibit II-S1.
    \30\ Id.
    \31\ Id.
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    For the PRC, Petitioner based U.S. prices on purchases of iron 
transfer drive components produced in and exported from the PRC by two 
different producers and sold or offered for sale to customers in the 
United States. Petitioner made deductions from U.S. price for movement 
expenses consistent with the delivery terms.

Normal Value

    For Canada, Petitioner provided home market price information based 
on price quotes for iron transfer drive components produced in and 
offered for sale in Canada.\32\ Petitioner made deductions for inland 
freight charges (where applicable) and local taxes from the price 
quotes.\33\
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    \32\ Id.
    \33\ See Canada AD Initiation Checklist. Note that home market 
prices were not used as the basis for NV for Canada, but for 
calculation of net price for comparison to COP.
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    Petitioner provided information that sales of iron transfer drive 
components in Canada were made at prices below the cost of production 
(COP) and calculated NV based on constructed

[[Page 73719]]

value (CV).\34\ For further discussion of COP and NV based on CV, see 
below.\35\
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    \34\ See Canada AD Initiation Checklist.
    \35\ In accordance with section 505(a) of the Trade Preferences 
Extension Act of 2015, amending section 773(b)(2) of the Act, for 
the Canada investigation, the Department will request information 
necessary to calculate the CV and COP to determine whether there are 
reasonable grounds to believe or suspect that sales of the foreign 
like product have been made at prices that represent less than the 
COP of the product. The Department no longer requires a COP 
allegation to conduct this analysis.
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    With respect to the PRC, Petitioner stated that the Department has 
found the PRC to be a non-market economy (NME) country in every 
administrative proceeding in which the PRC has been involved.\36\ In 
accordance with section 771(18)(C)(i) of the Act, the presumption of 
NME status remains in effect until revoked by the Department. The 
presumption of NME status for the PRC has not been revoked by the 
Department and, therefore, remains in effect for purposes of the 
initiation of this investigation. Accordingly, the NV of the product is 
appropriately based on factors of production (FOPs) valued in a 
surrogate market economy country, in accordance with section 773(c) of 
the Act. In the course of this investigation, all parties, and the 
public, will have the opportunity to provide relevant information 
related to the issues of the PRC's NME status and the granting of 
separate rates to individual exporters.
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    \36\ See Volume III of the Petitions, at 9.
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    Petitioner claims that Thailand is an appropriate surrogate country 
because it is a market economy that is at a level of economic 
development comparable to that of the PRC and it is a significant 
producer of the merchandise under consideration.\37\
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    \37\ Id. at 9.
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    Based on the information provided by Petitioner, we believe it is 
appropriate to use Thailand as a surrogate country for initiation 
purposes. Interested parties will have the opportunity to submit 
comments regarding surrogate country selection and, pursuant to 19 CFR 
351.301(c)(3)(i), will be provided an opportunity to submit publicly 
available information to value FOPs within 30 days before the scheduled 
date of the preliminary determination.

Factors of Production

    Petitioner based the FOPs for materials, labor, and energy on U.S. 
producers consumption rates for producing iron transfer drive 
components as it did not have access to the consumption rates of PRC 
producers of the subject merchandise.\38\ Petitioner notes that the 
selected U.S. producers were chosen because the facilities are similar 
to and representative of facilities operated by companies manufacturing 
iron transfer drive components in the PRC.\39\ Petitioner valued the 
estimated factors of production using surrogate values from 
Thailand.\40\
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    \38\ See Volume III of the Petitions, at 11 and Exhibit III-13.
    \39\ Id., at Exhibit III-13.
    \40\ Id., at 15 and Exhibits III-15 and III-16.
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Valuation of Raw Materials

    Petitioner valued the FOPs for raw materials (e.g., pig iron, 
carbon, acid, etc.) using reasonably available, public import data for 
Thailand from the Global Trade Atlas (GTA) for the period of 
investigation.\41\ Petitioner excluded all import values from countries 
previously determined by the Department to maintain broadly available, 
non-industry-specific export subsidies and from countries previously 
determined by the Department to be NME countries. In addition, in 
accordance with the Department's practice, the average import value 
excludes imports that were labeled as originating from an unidentified 
country. The Department determines that the surrogate values used by 
Petitioner are reasonably available and, thus, are acceptable for 
purposes of initiation.
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    \41\ Id., at Exhibit III-16 and III-17.
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Valuation of Labor

    Petitioner valued labor using quarterly Thai labor data published 
by Thailand's National Statistics Office (NSO).\42\ Specifically, 
Petitioner relied on data pertaining to wages and benefits earned by 
Thai workers engaged in the manufacturing sector of the Thai 
economy.\43\
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    \42\ Id., at 16 and Exhibit III-21.
    \43\ Id.
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    Petitioner converted the wage rates to hourly and converted to U.S. 
Dollars using the average exchange rate during the POI.\44\
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    \44\ Id., at Exhibit III-16.
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Valuation of Packing Materials

    Petitioner valued the packing materials used by PRC producers based 
on Thai import data for the POI obtained from GTA.\45\
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    \45\ See Volume III of the Petition, at Exhibits III-15 and 16.
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Valuation of Energy

    Petitioner used public information, as compiled by the Thai Board 
of Investment (TBI) to value electricity.\46\ This TBI price 
information was reported in U.S. Dollars/kilowatt hours and multiplied 
by the U.S. producer factor usage rates.\47\ The cost of natural gas in 
Thailand was calculated from the average unit value of imports of 
liquefied natural gas into Thailand, as reported by GTA.\48\
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    \46\ Id., at Exhibit III-18.
    \47\ Id., at Exhibits III-16 and III-18.
    \48\ Id., at 15 and Exhibit III-19.
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Valuation of Factory Overhead, Selling, General and Administrative 
Expenses (SG&A), and Profit

    Petitioner calculated surrogate financial ratios (i.e., factory 
overhead, SG&A expenses, and profit) using the 2014 audited financial 
statement of Tyrolit Thai Diamond Company Limited, a Thai producer of 
comparable merchandise (i.e., industrial equipment including metal 
sawblades).\49\
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    \49\ Id., at Exhibits III-22 and III-23.
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Normal Value Based on Constructed Value

    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM); SG&A expenses; financial expenses; and packing 
expenses. Petitioner calculated COM based on a U.S. producer's 
experience adjusted for known differences between the industry in the 
United States and the industry in Canada during the proposed POI.\50\ 
Using publicly available data to account for price differences, 
Petitioner multiplied the U.S. producer's usage quantities by the 
submitted value of the inputs used to manufacture iron transfer drive 
components in Canada.\51\ Labor and energy rates were derived from 
publicly available sources multiplied by the product-specific usage 
rates.\52\ We made adjustments for mathematical and transcription 
errors that were identified in Petitioner's materials, labor, and 
energy cost calculations. To determine fixed overhead, SG&A, and 
financial expense rates, Petitioner relied on the financial statements 
of Essar Algoma Steel (Algoma), a producer of comparable merchandise 
(finished steel mill goods including steel coil, steel sheet, and steel 
plate) operating in Canada, although we made adjustments to 
Petitioner's calculations of these rates.\53\
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    \50\ See Canada AD Initiation Checklist; see also Canada 
Supplemental Response at Exhibit II-S8.
    \51\ Id.
    \52\ Id.
    \53\ See Canada AD Initiation Checklist.
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    Because certain home market prices fell below COP, pursuant to 
sections 773(a)(4), 773(b), and 773(e) of the Act, as noted above, 
Petitioner calculated NVs based on CV.\54\ Pursuant to section

[[Page 73720]]

773(e) of the Act, CV consists of the COM, SG&A, financial expenses, 
packing expenses, and profit. Petitioner calculated CV using the same 
average COM, SG&A, and financial expenses, used to calculate COP.\55\ 
Petitioner included an amount for packing material expenses using 
Canadian import statistics to value the material inputs used in packing 
iron transfer drive components. Algoma reported a net loss on their 
financial statements in 2014; therefore, Petitioner did not include an 
amount for profit.\56\ We continued to apply the same adjustments to 
Petitioner's calculations of the factory overhead, SG&A, and financial 
expense rates as we made for the calculation of COP.\57\
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    \54\ Id.; see also Canada Supplemental Response at Exhibit II-
S10.
    \55\ Id. at Exhibit II-S8.
    \56\ Id.
    \57\ See Canada AD Initiation Checklist.
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Fair Value Comparisons

    Based on the data provided by Petitioner, there is reason to 
believe that imports of iron transfer drive components from Canada and 
the PRC are being, or are likely to be, sold in the United States at 
less-than-fair value. Based on comparisons of export price (EP) to NV 
in accordance with sections 772 and 773 of the Act, the estimated 
dumping margin(s) for iron transfer drive components for Canada ranges 
from 9.60 to 191.34 percent.\58\
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    \58\ See Canada AD Initiation Checklist.
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    Based on comparisons of EP to NV, in accordance with section 773(c) 
of the Act, the estimated dumping margin for iron transfer drive 
components from the PRC range from 67.82 to 401.68 percent.\59\
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    \59\ See PRC AD Initiation Checklist.
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Initiation of Less-Than-Fair-Value Investigations

    Based upon the examination of the AD Petitions on iron transfer 
drive components from Canada and the PRC, we find that the Petitions 
meet the requirements of section 732 of the Act. Therefore, we are 
initiating AD investigations to determine whether imports of iron 
transfer drive components from Canada and the PRC are being, or are 
likely to be, sold in the United States at less-than-fair value. In 
accordance with section 733(b)(1)(A) of the Act and 19 CFR 
351.205(b)(1), unless postponed, we will make our preliminary 
determinations no later than 140 days after the date of this 
initiation.
    On June 29, 2015, the President of the United States signed into 
law the Trade Preferences Extension Act of 2015, which made numerous 
amendments to the AD and CVD law.\60\ The 2015 law does not specify 
dates of application for those amendments. On August 6, 2015, the 
Department published an interpretative rule, in which it announced the 
applicability dates for each amendment to the Act, except for 
amendments contained in section 771(7) of the Act, which relate to 
determinations of material injury by the ITC.\61\ The amendments to 
sections 771(15), 773, 776, and 782 of the Act are applicable to all 
determinations made on or after August 6, 2015, and, therefore, apply 
to these AD investigations.\62\
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    \60\ See Trade Preferences Extension Act of 2015, Public Law 
114-27, 129 Stat. 362 (2015).
    \61\ See Dates of Application of Amendments to the Antidumping 
and Countervailing Duty Laws Made by the Trade Preferences Extension 
Act of 2015, 80 FR 46793 (August 6, 2015) (Applicability Notice).
    \62\ Id. at 46794-95. The 2015 amendments may be found at 
https://www.congress.gov/bill/114th-congress/house-bill/1295/text/pl.
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Respondent Selection

    Petitioner named eight companies from Canada \63\ as producers/
exporters of iron transfer drive components. Following standard 
practice in AD investigations involving market economy countries, the 
Department would normally select respondents based on U.S. Customs and 
Border Protection (CBP) data for U.S. imports under the appropriate 
HTSUS numbers listed in the scope in Appendix I, below. However, CBP 
data have been reported in mixed units of quantity and, thus, it is 
problematic for the Department use this data for respondent selection 
purposes. Accordingly, we intend to issue quantity and value (Q&V) 
questionnaires to each potential respondent and base respondent 
selection on the responses received. In addition, the Department will 
post the Q&V questionnaire along with filing instructions on the 
Enforcement and Compliance Web site at http://www.trade.gov/enforcement/news.asp.
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    \63\ See Volume I of the Petitions, at Exhibit I-7.
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    With respect to the PRC, Petitioner named 36 companies as 
producers/exporters of iron transfer drive components.\64\ In 
accordance with our standard practice for respondent selection in cases 
involving NME countries, we intend to issue Q&V questionnaires to each 
potential respondent and base respondent selection on the responses 
received. In addition, the Department will post the Q&V questionnaire 
along with filing instructions on the Enforcement and Compliance Web 
site at http://www.trade.gov/enforcement/news.asp.
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    \64\ Id.
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    Exporters/producers of iron transfer drive components from Canada 
and the PRC that do not receive Q&V questionnaires by mail may still 
submit a response to the Q&V questionnaire and can obtain a copy from 
the Enforcement and Compliance Web site. The Q&V response must be 
submitted by all Canada and PRC exporters/producers no later than 
December 1, 2015, which is two weeks from the signature date of this 
notice. All Q&V responses must be filed electronically via ACCESS.

Separate Rates

    In order to obtain separate-rate status in an NME investigation, 
exporters and producers must submit a separate-rate application.\65\ 
The specific requirements for submitting a separate-rate application in 
the PRC investigation are outlined in detail in the application itself, 
which is available on the Department's Web site at http://enforcement.trade.gov/nme/nme-sep-rate.html. The separate-rate 
application will be due 30 days after publication of this initiation 
notice.\66\ Exporters and producers who submit a separate-rate 
application and have been selected as mandatory respondents will be 
eligible for consideration for separate-rate status only if they 
respond to all parts of the Department's AD questionnaire as mandatory 
respondents. The Department requires that respondents from the PRC 
submit a response to both the Q&V questionnaire and the separate-rate 
application by their respective deadlines in order to receive 
consideration for separate-rate status.
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    \65\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigation 
involving Non-Market Economy Countries (April 5, 2005), available at 
http://enforcement.trade.gov/policy/bull05-1.pdf (Policy Bulletin 
05.1).
    \66\ Although in past investigations this deadline was 60 days, 
consistent with 19 CFR 351.301(a), which states that ``the Secretary 
may request any person to submit factual information at any time 
during a proceeding,'' this deadline is now 30 days.
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Use of Combination Rates

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in an NME 
investigation. The Separate Rates and Combination Rates Bulletin 
states:

{w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME Investigation will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the

[[Page 73721]]

period of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.\67\
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    \67\ See Policy Bulletin 05.1 at 6 (emphasis added).
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Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the Petitions have been 
provided to the governments of Canada and the PRC via ACCESS. To the 
extent practicable, we will attempt to provide a copy of the public 
version of the Petitions to each exporter named in the Petitions, as 
provided under 19 CFR 351.203(c)(2).

ITC Notification

    We will notify the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which the Petitions were filed, whether there is a reasonable 
indication that imports of iron transfer drive components from Canada 
and the PRC are materially injuring or threatening material injury to a 
U.S. industry.\68\ A negative ITC determination for any country will 
result in the investigation being terminated with respect to that 
country; \69\ otherwise, these investigations will proceed according to 
statutory and regulatory time limits.
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    \68\ See section 733(a) of the Act.
    \69\ Id.
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Submission of Factual Information

    Factual information is defined in 19 CFR 351.102(b)(21) as: (i) 
Evidence submitted in response to questionnaires; (ii) evidence 
submitted in support of allegations; (iii) publicly available 
information to value factors under 19 CFR 351.408(c) or to measure the 
adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence 
placed on the record by the Department; and (v) evidence other than 
factual information described in (i)-(iv). Any party, when submitting 
factual information, must specify under which subsection of 19 CFR 
351.102(b)(21) the information is being submitted \70\ and, if the 
information is submitted to rebut, clarify, or correct factual 
information already on the record, to provide an explanation 
identifying the information already on the record that the factual 
information seeks to rebut, clarify, or correct.\71\ Time limits for 
the submission of factual information are addressed in 19 CFR 351.301, 
which provides specific time limits based on the type of factual 
information being submitted. Please review the regulations prior to 
submitting factual information in these investigations.
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    \70\ See 19 CFR 351.301(b).
    \71\ See 19 CFR 351.301(b)(2).
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Extensions of Time Limits

    Parties may request an extension of time limits before the 
expiration of a time limit established under 19 CFR 351, or as 
otherwise specified by the Secretary. In general, an extension request 
will be considered untimely if it is filed after the expiration of the 
time limit established under 19 CFR 351 expires. For submissions that 
are due from multiple parties simultaneously, an extension request will 
be considered untimely if it is filed after 10:00 a.m. ET on the due 
date. Under certain circumstances, we may elect to specify a different 
time limit by which extension requests will be considered untimely for 
submissions which are due from multiple parties simultaneously. In such 
a case, we will inform parties in the letter or memorandum setting 
forth the deadline (including a specified time) by which extension 
requests must be filed to be considered timely. An extension request 
must be made in a separate, stand-alone submission; under limited 
circumstances we will grant untimely-filed requests for the extension 
of time limits. Review Extension of Time Limits; Final Rule, 78 FR 
57790 (September 20, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting factual 
information in these investigations.

Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information.\72\ 
Parties are hereby reminded that revised certification requirements are 
in effect for company/government officials, as well as their 
representatives. Investigations initiated on the basis of petitions 
filed on or after August 16, 2013, and other segments of any AD or CVD 
proceedings initiated on or after August 16, 2013, should use the 
formats for the revised certifications provided at the end of the Final 
Rule.\73\ The Department intends to reject factual submissions if the 
submitting party does not comply with applicable revised certification 
requirements.
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    \72\ See section 782(b) of the Act.
    \73\ See Certification of Factual Information to Import 
Administration during Antidumping and Countervailing Duty 
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also 
frequently asked questions regarding the Final Rule, available at 
http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
administrative protective order (APO) in accordance with 19 CFR 
351.305. On January 22, 2008, the Department published Antidumping and 
Countervailing Duty Proceedings: Documents Submission Procedures; APO 
Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to 
participate in these investigations should ensure that they meet the 
requirements of these procedures (e.g., the filing of letters of 
appearance as discussed in 19 CFR 351.103(d)).
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: November 17, 2015.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigations

    The products covered by these investigations are iron mechanical 
transfer drive components, whether finished or unfinished (i.e., 
blanks or castings). Subject iron mechanical transfer drive 
components are in the form of wheels or cylinders with a center bore 
hole that may have one or more grooves or teeth in their outer 
circumference that guide or mesh with a flat or ribbed belt or like 
device and are often referred to as sheaves, pulleys, flywheels, 
flat pulleys, idlers, conveyer pulleys, synchronous sheaves, and 
timing pulleys. The products covered by these investigations also 
include bushings, which are iron mechanical transfer drive 
components in the form of a cylinder and which fit into the bore 
holes of other mechanical transfer drive components to lock them 
into drive shafts by means of elements such as teeth, bolts, or 
screws.
    Iron mechanical transfer drive components subject to these 
investigations are those not less than 4.00 inches (101 mm) in the 
maximum nominal outer diameter.
    Unfinished iron mechanical transfer drive components (i.e., 
blanks or castings) possess the approximate shape of the finished 
iron mechanical transfer drive component and have not yet been 
machined to final specification after the initial casting, forging 
or like operations. These machining processes may include cutting, 
punching, notching, boring, threading, mitering, or chamfering.

[[Page 73722]]

    Subject merchandise includes iron mechanical transfer drive 
components as defined above that have been finished or machined in a 
third country, including but not limited to finishing/machining 
processes such as cutting, punching, notching, boring, threading, 
mitering, or chamfering, or any other processing that would not 
otherwise remove the merchandise from the scope of the 
investigations if performed in the country of manufacture of the 
iron mechanical transfer drive components.
    Subject iron mechanical transfer drive components are covered by 
the scope of the investigations regardless of width, design, or iron 
type (e.g., gray, white, or ductile iron). Subject iron mechanical 
transfer drive components are covered by the scope of the 
investigations regardless of whether they have non-iron attachments 
or parts and regardless of whether they are entered with other 
mechanical transfer drive components or as part of a mechanical 
transfer drive assembly (which typically includes one or more of the 
iron mechanical transfer drive components identified above, and 
which may also include other parts such as a belt, coupling and/or 
shaft). When entered as a mechanical transfer drive assembly, only 
the iron components that meet the physical description of covered 
merchandise are covered merchandise, not the other components in the 
mechanical transfer drive assembly (e.g., belt, coupling, shaft).
    For purposes of these investigations, a covered product is of 
``iron'' where the article has a carbon content of 1.7 percent by 
weight or above, regardless of the presence and amount of additional 
alloying elements.
    The merchandise covered by these investigations is currently 
classifiable under Harmonized Tariff Schedule of the United States 
(``HTSUS'') subheadings 8483.30.8090, 8483.50.6000, 8483.50.9040, 
8483.50.9080, 8483.90.3000, 8483.90.8080. Covered merchandise may 
also enter under the following HTSUS subheadings: 7325.10.0080, 
7325.99.1000, 7326.19.0010, 7326.19.0080, 8431.31.0040, 
8431.31.0060, 8431.39.0010, 8431.39.0050, 8431.39.0070, 
8431.39.0080, and 8483.50.4000. These HTSUS subheadings are provided 
for convenience and customs purposes. The written description of the 
scope of the investigations is dispositive.

[FR Doc. 2015-29985 Filed 11-24-15; 8:45 am]
BILLING CODE 3510-DS-P