[Federal Register Volume 75, Number 135 (Thursday, July 15, 2010)]
[Notices]
[Pages 41148-41157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17302]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-601]
Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, From the People's Republic of China: Preliminary Results of
the 2008-2009 Administrative Review of the Antidumping Duty Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from interested parties, the
Department of Commerce (``Department'') is currently conducting the
2008-2009 administrative review of the antidumping duty order on
tapered roller bearings and parts thereof, finished or unfinished
(``TRBs''), from the People's Republic of China (``PRC''), covering the
period June 1, 2008, through May 31, 2009. We have preliminarily
determined that sales have been made below normal value (``NV'') by
certain companies subject to this review. If these preliminary results
are adopted in our final results of this review, we will instruct U.S.
Customs and Border Protection (``CBP'') to assess antidumping duties on
entries of subject merchandise during the period of review (``POR'')
for which the importer-specific assessment rates are above de minimis.
Interested parties are invited to comment on these preliminary
results. We will issue final results no later than 120 days from the
date of publication of this notice.
DATES: Effective Date: July 15, 2010.
FOR FURTHER INFORMATION CONTACT: Brendan Quinn or Trisha Tran, 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-
5848 or (202) 482-4852, respectively.
Background
On June 15, 1987, the Department published in the Federal Register
the antidumping duty order on TRBs from the PRC.\1\ On June 1, 2009,
the Department published a notice of opportunity to request an
administrative review of the antidumping duty order on TRBs from the
PRC.\2\ On June 30, 2009, the sole respondent in the prior review, the
majority Spungen family-owned joint-venture Peer Bearing Company Ltd.--
Changshan (``PBCD/CPZ'') and its wholly Spungen-family-owned U.S. sales
affiliate, Peer Bearing Company (``PBCD/Peer'') (collectively
``PBCD''), requested that the Department conduct an administrative
review of its sales of subject merchandise prior to the acquisition of
both companies by AB SKF during the POR. On June 30, 2009, the wholly
AB SKF-owned Changshan Peer Bearing Company, Ltd. (``SKF/CPZ'') and its
wholly AB SKF-owned U.S. sales affiliate, Peer Bearing Company (``SKF/
Peer'') (collectively ``SKF''), requested that the Department conduct
an administrative review of its sales of subject merchandise subsequent
to the acquisition of the PBCD companies during the POR.\3\ On June 30,
2009, the Timken Company, of Canton, Ohio (``Petitioner'') requested
that the Department conduct an administrative review of all entries of
subject merchandise produced and/or exported by CPZ, regardless of its
ownership during the POR.
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\1\ See Notice of Antidumping Duty Order: Tapered Roller
Bearings and Parts Thereof, Finished or Unfinished, From the
People's Republic of China, 52 FR 22667 (June 15, 1987).
\2\ See Antidumping or Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity To Request Administrative
Review, 74 FR 26202 (June 1, 2009).
\3\ Without consideration of ownership, the Changshan-based TRB
production facility is referred to as ``CPZ'' and the Illinois-based
U.S. sales affiliate is referred to as ``Peer.''
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On June 30, 2009, Hubei New Torch Science & Technology Company Co.,
Ltd. (``New Torch''), a producer and exporter of subject merchandise,
also requested that the Department conduct an administrative review of
its sales of subject merchandise. On July 29, 2009, the Department
initiated the administrative review of the antidumping duty order on
TRBs from the PRC for the period June 1, 2008, through May 31, 2009.\4\
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\4\ See Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Deferral of Administrative Review, 74 FR
37690 (July 29, 2009).
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On August 26, 2009, the Department issued its antidumping duty
questionnaire to PBCD, SKF, and New Torch. Between October 14, 2009,
and June 18, 2010, PBCD, SKF, and New Torch responded to the
Department's original and supplemental questionnaires. On October 1,
2009, we invited all interested parties to submit publicly available
information to value factors of production (``FOPs'') for consideration
in the Department's preliminary results of review. On December 7, 2009,
SKF submitted publicly available information to value FOPs for the
preliminary results. On December 17, 2009, and June 16, 2010, PBCD
submitted surrogate value
[[Page 41149]]
information for the Department's consideration. From December 17, 2009,
through June 18, 2010, Petitioner submitted comments and publicly
available information to value FOPs for the preliminary results. On May
5, 2010, in its supplemental response to the Department's
questionnaire, New Torch submitted publicly available information
regarding the valuation of certain inputs.\5\
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\5\ On June 22, 2010, Petitioner submitted comments regarding
PBCD and SKF for the upcoming preliminary results. SKF submitted
rebuttal comments on June 30, 2010. Petitioner then submitted
further rebuttal comments on July 6, 2010; however, due to the
proximity to the deadline, the Department was unable to consider
these submissions for purposes of the preliminary results.
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On March 2, 2010, the Department published a notice in the Federal
Register extending the time limit for the preliminary results of review
by the full 120 days allowed under section 751(a)(3)(A) of the Tariff
Act of 1930, as amended (``the Act''), to July 7, 2010.\6\
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\6\ See Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, from the People's Republic of China: Extension of Time
Limit for the Preliminary Results of the 2008-2009 Administrative
Review of the Antidumping Duty Order, 75 FR 9391 (March 2, 2010).
See also Memorandum to the Record from Ronald Lorentzen, DAS for
Import Administration, regarding ``Tolling of Administrative
Deadlines As a Result of the Government Closure During the Recent
Snowstorm,'' dated February 12, 2010, wherein all deadlines in this
segment of the proceeding have been extended by seven days as a
result of the closure of the Federal Government from February 5,
2010 through February 12, 2010.
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Period of Review
The POR is June 1, 2008, through May 31, 2009.
Scope of the Order
Imports covered by this order are shipments of tapered roller
bearings and parts thereof, finished and unfinished, from the PRC;
flange, take up cartridge, and hanger units incorporating tapered
roller bearings; and tapered roller housings (except pillow blocks)
incorporating tapered rollers, with or without spindles, whether or not
for automotive use. These products are currently classifiable under
Harmonized Tariff Schedule of the United States (``HTSUS'') item
numbers 8482.20.00, 8482.91.00.50, 8482.99.15, 8482.99.45, 8483.20.40,
8483.20.80, 8483.30.80, 8483.90.20, 8483.90.30, 8483.90.80,
8708.99.80.15 \7\ and 8708.99.80.80.\8\ Although the HTSUS item numbers
are provided for convenience and customs purposes, the written
description of the scope of the order is dispositive.
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\7\ Effective January 1, 2007, the HTSUS subheading 8708.99.8015
is renumbered as 8708.99.8115. See United States International Trade
Commission (``USITC'') publication entitled, ``Modifications to the
Harmonized Tariff Schedule of the United States Under Section 1206
of the Omnibus Trade and Competitiveness Act of 1988,'' USITC
Publication 3898 (December 2006) found at http://www.usitc.gov.
\8\ Effective January 1, 2007, the USHTS subheading 8708.99.8080
is renumbered as 8708.99.8180; see Id.
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Initiation of Scope Determination of New Torch's Wheel Hub Assemblies
From October 30, 2009, through May 5, 2010, in various supplemental
questionnaires, New Torch stated that it produced and sold wheel hub
assemblies to the United States during the POR, which it asserted were
not subject to the scope of the order on TRBs. On June 15, 2010, the
Department initiated two scope inquiries on wheel hub assemblies
produced by PRC producers that are unrelated to the respondents in the
instant administrative review. Subsequently, on June 17, 2010, New
Torch requested that the Department accept a revised U.S. sales and FOP
database, which would include sales and FOP information regarding New
Torch's wheel hub assemblies sold to the United States during the POR.
On July 6, 2010, the Department requested revised FOP and U.S. sales
databases containing information with respect to New Torch's wheel hub
assemblies sold to the United States during the POR.
For the purposes of these preliminary results, because the
Department has not yet determined whether wheel hub assemblies are
covered by the scope of the order on TRBs, the Department will continue
to base its antidumping margin calculation on New Torch's original U.S.
sales database, which does not include wheel hub assemblies. However,
the Department will determine whether New Torch's wheel hub assemblies
are covered by the scope of the order on TRBs for the final results. In
addition, pursuant to the outcome of the Department's determination of
whether New Torch's wheel hub assemblies are within the scope of the
order on TRBs, the Department intends to use the appropriate databases
to determine New Torch's antidumping margin calculation for the final
results.
Non-Market Economy Country Status
Pursuant to section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the administering authority. In every case conducted by the
Department involving the PRC, the PRC has been treated as a NME
country.\9\ None of the parties to this review has contested such
treatment. Accordingly, we calculated normal value in accordance with
section 773(c) of the Act, which applies to NME countries.
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\9\ See, e.g., Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, From the People's Republic of China:
Preliminary Results of 2001-2002 Administrative Review and Partial
Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
from the People's Republic of China: Final Results of 2001-2002
Administrative Review and Partial Rescission of Review, 68 FR 70488
(December 18, 2003).
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Surrogate Country
Section 773(c)(1) of the Act directs the Department to base NV on
the NME producer's FOPs, valued in a surrogate market-economy (``ME'')
country or countries considered to be appropriate by the Department. In
accordance with section 773(c)(4) of the Act, in valuing the FOPs, the
Department shall use, to the extent possible, the prices or costs of
the FOPs in one or more market economy countries that are: (1) At a
level of economic development comparable to that of the NME country;
and (2) significant producers of comparable merchandise. The sources of
the surrogate factor values are discussed under the ``Factor
Valuations'' section below.\10\
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\10\ See also the Department's memorandum entitled,
``Preliminary Results of the 2008-2009 Administrative Review of the
Antidumping Duty Order on Tapered Roller Bearings and Parts Thereof,
Finished or Unfinished, from the People's Republic of China:
Surrogate Value Memorandum,'' dated concurrently with this notice
(``Surrogate Value Memorandum'').
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The Department's practice with respect to determining economic
comparability is explained in Policy Bulletin 04.1,\11\ which states
that ``OP {Office of Policy{time} determines per capita economic
comparability on the basis of per capita gross national income, as
reported in the most current annual issue of the World Development
Report (The World Bank).''
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\11\ See the Department's Policy Bulletin No. 04.1, regarding,
``Non-Market Economy Surrogate Country Selection Process,'' (March
1, 2004) (``Policy Bulletin 04.1''), available on the Department's
Web site at http://ia.ita.doc.gov/policy/bull04-1.html.
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On September 23, 2009, the Department identified six countries as
being at a level of economic development comparable to the PRC for the
specified POR: India, the
[[Page 41150]]
Philippines, Indonesia, Colombia, Thailand, and Peru.12 13
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\12\ See the Department's Memorandum from Kelly Parkhill, Acting
Director, Office of Policy, to Wendy Frankel, Office Director, AD/
CVD Operations, Office 8, regarding, ``Request for a List of
Surrogate Countries for an Administrative Review of the Antidumping
Duty Order on Tapered Roller Bearings (``TRB'') from the People's
Republic of China (``PRC''),'' dated September 23, 2009 (``Surrogate
Countries Memorandum'').
\13\ See Policy Bulletin 04.1 at 2.
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On October 1, 2009, the Department invited all interested parties
to submit comments on the surrogate country selection.\14\ On November
23, 2009, Petitioner, SKF, and PBCD submitted comments regarding the
Department's selection of a surrogate country for the preliminary
results. Petitioner submitted rebuttal surrogate country comments on
December 3, 2009. In their comments, both Petitioner and SKF requested
that India be selected as the primary surrogate country, whereas PBCD
requested the Department also consider Indonesia and Thailand as
potential surrogates. New Torch did not submit comments regarding
surrogate country selection.
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\14\ See the Department's letter regarding, ``2008-2009
Administrative Review of the Antidumping Duty Order on Tapered
Roller Bearings from the People's Republic of China'' requesting all
interested parties to provide comments on surrogate-country
selection and provide surrogate FOP values from the potential
surrogate countries (i.e., India, Indonesia, the Philippines,
Thailand, Colombia, and Peru), dated October 1, 2009.
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Policy Bulletin 04.1 provides some guidance on identifying
comparable merchandise and selecting a producer of comparable
merchandise. Based on an analysis of export data obtained from Global
Trade Atlas, published by Global Trade Information Services, Inc.
(``GTA'') for harmonized tariff schedule (``HTS'') subheadings 8482.20,
8482.20.00, 8482.91, 8482.91.00, 8482.99, 8482.99.00, 8483.20,
8483.20.00, 8483.30, 8483.30.90, 8708.99,\15\ the Department finds that
India, the Philippines, Indonesia, Colombia, Thailand, and Peru are all
producers of comparable merchandise. Finally, we have reliable data
from India on the record that we can use to value the FOPs. While PBCD
and SKF submitted Indonesian and Thai data on the record to value
limited FOP inputs, Petitioner, SKF and New Torch each submitted
surrogate values for the majority of the inputs using Indian sources,
suggesting greater availability of appropriate surrogate value data in
India. Additionally, Petitioner and SKF placed the financial statements
of various Indian producers on the record, further demonstrating the
greater availability of appropriate surrogate value data in India.
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\15\ Export information could not be found for all HTS
subheadings specified in the scope of the order. As such, the
Department utilized GTA data for all available HTS categories. GTA
export statistics for India, the Philippines, Indonesia, Colombia,
Thailand, and Peru only offer a basket category for all categories
other than 8482.20.00 ``Tapered roller bearings, including cone and
tapered roller assemblies.'' In the case of the categories beginning
with the four digit 8482 and 8483 heading, similar `NESOI' or
`Other' subheadings were used in the alternative, though typically
not as specific as that of the HTSUS category. However, in the case
of the categories beginning with the four digit 8708 heading, GTA
export statistics for each of the potential surrogate country
candidates could only be found to the broadly defined 8708.99
subheading.
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Therefore, the Department is preliminarily selecting India as the
surrogate country on the basis that: (1) It is at a similar level of
economic development to the PRC, pursuant to 773(c)(4) of the Act; (2)
it is a significant producer of comparable merchandise; and (3) we have
reliable data from India that we can use to value the FOPs.
Accordingly, we have calculated NV using Indian prices when available
and appropriate to value each respondent's FOPs.\16\ In accordance with
19 CFR 351.301(c)(3)(ii), for the final results of an administrative
review, interested parties may submit publicly available information to
value the FOPs within 20 days after the date of publication of these
preliminary results.\17\
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\16\ See Surrogate Value Memorandum; see also ``Factor
Valuations'' section, below.
\17\ In accordance with 19 CFR 351.301(c)(1), for the final
results of this administrative review, interested parties may submit
factual information to rebut, clarify, or correct factual
information submitted by an interested party less than ten days
before, on, or after, the applicable deadline for submission of such
factual information. However, the Department notes that 19 CFR
351.301(c)(1) permits new information only insofar as it rebuts,
clarifies, or corrects information recently placed on the record.
The Department generally will not accept the submission of
additional, previously absent-from-the-record alternative surrogate
value information pursuant to 19 CFR 351.301(c)(1). See Glycine from
the People's Republic of China: Final Results of Antidumping Duty
Administrative Review and Final Rescission, in Part, 72 FR 58809
(October 17, 2007), and accompanying Issues and Decision Memorandum
(``IDM'') at Comment 2.
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Separate Rates
In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the country are
subject to government control and thus should be assigned a single
antidumping duty rate. It is the Department's policy to assign all
exporters of merchandise subject to review in an NME country this
single rate unless an exporter can demonstrate that it is sufficiently
independent so as to be entitled to a separate rate. Exporters can
demonstrate this independence through the absence of both de jure and
de facto government control over export activities. The Department
analyzes each entity exporting the subject merchandise under a test
arising from the Final Determination of Sales at Less Than Fair Value:
Sparklers from the People's Republic of China, 56 FR 20588 (May 6,
1991) (``Sparklers''), as further developed in the Final Determination
of Sales at Less Than Fair Value: Silicon Carbide from the People's
Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide'').
However, if the Department determines that a company is wholly foreign-
owned or located in a market economy, then a separate-rate analysis is
not necessary to determine whether it is independent from government
control.
PBCD has demonstrated that the pre-acquisition CPZ was a China-
Foreign joint venture, owned by two shareholders, a PRC based company
and a U.S. company wholly-owned by the Spungen family. New Torch has
stated that it is a joint stock limited, partially foreign invested
enterprise. Therefore, the Department must analyze whether PBCD/CPZ and
New Torch have demonstrated the absence of both de jure and de facto
government control over export activities, and are therefore entitled
to a separate rate. SKF submitted information indicating that SKF/CPZ
is a wholly foreign-owned limited liability company. Therefore, for the
purposes of these preliminary results, the Department finds that it is
not necessary to perform a separate-rate analysis for SKF/CPZ.
a. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies.\18\
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\18\ See Sparklers, 56 FR at 20589.
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The evidence provided by PBCD and New Torch supports a preliminary
finding of de jure absence of government control based on the
following: (1) An absence of restrictive stipulations associated with
the individual exporter's business and export licenses; (2) there are
applicable legislative enactments decentralizing control of the
companies; and (3) there are formal measures by the government
[[Page 41151]]
decentralizing control of the companies.\19\
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\19\ See PBCD/SKF's Joint Section A Questionnaire Response,
dated October 14, 2009, and New Torch's Section A Questionnaire
Response, dated November 2, 2009.
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b. Absence of De facto Control
Typically the Department considers four factors in evaluating
whether each respondent is subject to de facto government control of
its export functions: (1) Whether the export prices are set by or are
subject to the approval of a government agency; (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 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.\20\
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\20\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of
Final Determination of Sales at Less Than Fair Value: Furfuryl
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May
8, 1995).
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The Department has determined that an analysis of de facto control
is critical in determining whether respondents are, in fact, subject to
a degree of government control over export activities which would
preclude the Department from assigning separate rates. For PBCD and New
Torch, we determine that the evidence on the record supports a
preliminary finding of de facto absence of government control based on
record statements and supporting documentation showing the following:
(1) Each respondent sets its own export prices independent of the
government and without the approval of a government authority; (2) each
respondent retains the proceeds from its sales and makes independent
decisions regarding disposition of profits or financing of losses; (3)
each respondent has the authority to negotiate and sign contracts and
other agreements; and (4) each respondent has autonomy from the
government regarding the selection of management.\21\
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\21\ See PBCD/SKF's Joint Section A Questionnaire Response,
dated October 14, 2009, and New Torch's Section A Questionnaire
Response, dated November 2, 2009.
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The evidence placed on the record of this review by each respondent
demonstrates an absence of de jure and de facto government control with
respect to its exports of the merchandise under review, in accordance
with the criteria identified in Sparklers and Silicon Carbide.
Therefore, we are preliminarily granting PBCD and New Torch a separate
rate.
Affiliation--SKF/CPZ and Company A \22\
In its questionnaire responses, SKF/CPZ indicated that it was
affiliated with Company A. For purposes of the preliminary results, the
Department has determined not to conduct a collapsing analysis with
respect to SKF/CPZ and Company A due to insufficient information on the
record. However, we intend to solicit additional information with
respect to this issue, and will address it subsequent to the
preliminary results.
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\22\ The identity of ``Company A'' is proprietary. See the
Department's memorandum entitled, ``2008-2009 Administrative Review
of the Antidumping Duty Order on Tapered Roller Bearings and Parts
Thereof, Finished or Unfinished, from the People's Republic of
China: Analysis of the Preliminary Determination Margin Calculation
for SKF-Owned Peer Bearing Company--Changshan,'' dated concurrently
with this notice (``SKF Program Analysis Memorandum'') for further
discussion.
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Bona Fide Sale Analysis--New Torch
New Torch reported a single sale of subject merchandise to the
United States during the POR.\23\ In evaluating whether or not a sale
subject to 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 arms-length basis.\24\ The
Department examines the bona fide nature of a sale on a case-by-case
basis, and the analysis may vary with the facts surrounding each
sale.\25\ In TTPC, the court affirmed the Department's practice of
considering that ``any factor which indicates that the sale under
consideration is not likely to be typical of those which the producer
will make in the future is relevant,'' \26\ and that ``the weight given
to each factor investigated will depend on the circumstances
surrounding the sale.'' \27\ In New Donghua, the Court stated that the
Department's practice makes clear that the Department ``is highly
likely to examine objective, verifiable factors to ensure that a sale
is not being made to circumvent an antidumping duty order.'' \28\
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\23\ See New Torch's November 12, 2009, Section C and D
questionnaire response at C-8.
\24\ See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United
States, 366 F. Supp. 2d 1246, 1250 S (``TTPC'') (CIT 2005), citing
Am. Silicon Techs. v. United States, F. Supp. 2d 992, 995 (CIT
2000).
\25\ See Hebei New Donghua Amino Acid Co., Ltd. v. United
States, 374 F. Supp. 2d 1333, 1338 (CIT 2005), (``New Donghua'')
quoting Fresh Garlic from the PRC: Final Results of Administrative
Review and Rescission of New Shipper Review, 67 FR 11283 (March 13,
2002), and accompanying IDM.
\26\ See TTPC, 366 F. Supp. 2d at 1250, citing Windmill Int'l
Pte., Ltd. v. United States, F. Supp. 2d 1303, 1307 (CIT 2002).
\27\ See TTPC, 366 F. Supp. 2d at 1263.
\28\ See New Donghua, 374 F. Supp. 2d at 1339.
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For the reasons stated below, we preliminarily find New Torch's
reported U.S. sales during the POR to be bona fide based on the facts
on the record. First, the sales were made to an unaffiliated customer
with the terms set by negotiation and payment received in a timely
manner, indicating that the sales were made at arm's-length. Second,
there does not seem to be anything unusual in the timing of New Torch's
sales. Third, New Torch's sales prices and quantities are similar to
the prices and quantities examined during the POR. Fourth, there were
no unusual expenses arising from these sales. Fifth, there is no record
evidence that the merchandise was not resold at a profit. Therefore,
based on the totality of the circumstances, the Department
preliminarily finds that New Torch's sales are bona fide.\29\
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\29\ See Memorandum to Wendy Frankel, Director, AD/CVD
Operations, Office 8, Import Administration, through Erin Begnal,
Program Manager, AD/CVD Operations, Office 8, from Trisha Tran,
International Trade Analyst, AD/CVD Operations, Office 8, regarding
Administrative Review of the Antidumping Duty Order Covering Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From the
People's Republic of China (6/1/2008-5/31/2009): Bona Fide Nature of
the Sales Under Review for Hubei New Torch Science & Technology Co.,
Ltd. (``New Torch'') (July 7, 2010).
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Successor in Interest--SKF/CPZ
On September 11, 2008, approximately three and a half months into
the POR, PBCD/CPZ and its Illinois-based U.S. sales affiliate, PBCD/
Peer, were each acquired by AB SKF, a Swedish conglomerate, and
henceforth known as SKF/CPZ and SKF/Peer. In addition, on August 28,
2009, SKF submitted a request for a changed circumstance review
(``CCR'') to determine that SKF/CPZ is not the successor-in-interest to
PBCD/CPZ. On September 30, 2009, the Department informed parties that
the information provided in SKF's August 28, 2009, submission was
sufficient to warrant a successor-in-interest analysis regarding SKF's
acquisition of CPZ, and that this determination would be performed
within the context of the instant administrative review.
In determining whether one company is the successor to another for
purposes of applying the antidumping duty law, the Department examines
a number of factors including, but not limited to, changes in: (1)
Management, (2)
[[Page 41152]]
production facilities, (3) supplier relationships, and (4) customer
base.\30\ Although no single or even several of these factors will
necessarily provide a dispositive indication of succession, generally
the Department will consider one company to be a successor to another
company if its resulting operation is not materially dissimilar to that
of its predecessor.\31\ Thus, if the ``totality of circumstances''
demonstrates that, with respect to the production and sale of the
subject merchandise, the new company operates as the same business
entity as the prior company, the Department will assign the new company
the cash-deposit rate of its predecessor.\32\
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\30\ See, e.g., Ball Bearings and Parts Thereof from France:
Final Results of Changed-Circumstances Review, 75 FR 34688 (June 18,
2010), and IDM at Comment 1.
\31\ See, e.g., Fresh and Chilled Atlantic Salmon From Norway;
Final Results of Changed Circumstances Antidumping Duty
Administrative Review, 64 FR 9979 (March 1, 1999).
\32\ See Id at 9980; see also Brass Sheet and Strip from Canada:
Final Result of Administrative Review, 57 FR 20461 (May 13, 1992),
and IDM at Comment 1.
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In its initial CCR request and subsequent responses to the
Department's supplemental questionnaires, SKF provided documentation
demonstrating that SKF/CPZ instituted a significant change to upper
management that starkly contrasts with the management structure of
PBCD/CPZ, including the appointment of a new board of directors and a
new General Manager. Additionally, SKF expanded its production
capabilities by acquiring two co-located affiliated business entities
and integrated the production capabilities into one newly consolidated
company.
The Department finds that the totality of the circumstances
demonstrate that SKF/CPZ is not the successor-in-interest to PBCD/CPZ.
First, the Department finds that, because SKF/CPZ has replaced and
restructured the company's top management, SKF/CPZ has demonstrated
that the company's operations and production decisions are distinct
from the management and operations of PBCD/CPZ. Additionally, we find
that changes in SKF/CPZ's integration and expansion of its production
facilities and structure, along with SKF/CPZ's complete management
restructure, demonstrate that SKF/CPZ is a distinct entity from that of
the pre-acquisition company. As such, we preliminarily determine that
SKF/CPZ is not the successor-in-interest to the pre-acquisition PBCD/
CPZ.\33\
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\33\ See Memorandum to Wendy Frankel, Director, AD/CVD
Operations, Office 8, Import Administration, through Erin Begnal,
Program Manager, AD/CVD Operations, Office 8, from Brendan Quinn,
International Trade Analyst, AD/CVD Operations, Office 8, entitled
``Tapered Roller Bearings from the People's Republic of China:
Preliminary Successor-In-Interest Determination,'' dated July 7,
2010.
---------------------------------------------------------------------------
Fair Value Comparisons
To determine whether sales of TRBs to the United States by
respondents were made at less than fair value (``LTFV''), we compared
constructed export price (``CEP'') and export price (``EP'') to NV, as
described in the ``U.S. Price'' and ``Normal Value'' sections of this
notice, below, and pursuant to section 771(35) of the Act.
U.S. Price
Constructed Export Price
In accordance with section 772(b) of the Act, CEP is the price at
which the subject merchandise is first sold (or agreed to be sold) in
the United States before or after the date of importation by or for the
account of the producer or exporter of such merchandise or by a seller
affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted under sections 772(c) and
(d) of the Act. In accordance with section 772(b) of the Act, we used
CEP for PBCD/CPZ and SKF/CPZ's sales where the exporter first sold
subject merchandise to its affiliated company in the United States,
PBCD/Peer and SKF/Peer, respectively, which in turn sold subject
merchandise to unaffiliated U.S. customers. We calculated CEP based on
delivered prices to unaffiliated purchasers in the United States. We
made deductions from the U.S. sales price for movement expenses in
accordance with section 772(c)(2)(A) of the Act. These included foreign
inland freight from the plant to the port of exportation, international
freight, brokerage and handling, marine insurance, other U.S.
transportation, U.S. customs duty, U.S. warehousing expenses, where
applicable, U.S. inland freight from port to the warehouse, and U.S.
inland freight from the warehouse to the customer. Where foreign inland
freight, foreign brokerage and handling fees, or international freight
were provided by PRC service providers or paid for in renminbi, we
based those charges on surrogate rates from India. See ``Factor
Valuations'' section below for further discussion of surrogate rates.
In accordance with section 772(d)(1) of the Act, the Department
deducted credit expenses, inventory carrying costs and indirect selling
expenses from the U.S. price, all of which relate to commercial
activity in the United States. Finally, we deducted CEP profit, in
accordance with sections 772(d)(3) and 772(f) of the Act.\34\
---------------------------------------------------------------------------
\34\ See the Department's memorandum entitled, ``2008-2009
Administrative Review of the Antidumping Duty Order on Tapered
Roller Bearings and Parts Thereof, Finished or Unfinished, from the
People's Republic of China: Analysis of the Preliminary
Determination Margin Calculation for Spungen-Owned Peer Bearing
Company--Changshan,'' dated concurrently with this notice (``PBCD
Program Analysis Memorandum''); see also the Department's memorandum
entitled, ``2008-2009 Administrative Review of the Antidumping Duty
Order on Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, from the People's Republic of China: Analysis of the
Preliminary Determination Margin Calculation for SKF-Owned Peer
Bearing Company--Changshan,'' dated concurrently with this notice
(``SKF Program Analysis Memorandum'').
---------------------------------------------------------------------------
Consistent with our determination in the 2006-2007 review,\35\ we
have preliminarily determined to use PRODCOD as a basis for comparing
NV to CEP for PBCD and SKF's sales of subject merchandise.
---------------------------------------------------------------------------
\35\ See Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People's Republic of China: Final Results of
the Administrative Review, 74 FR 3987 (January 22, 2009), and
accompanying IDM at Comment 3.
---------------------------------------------------------------------------
SKF/CPZ Existing Inventory
On September 11, 2008, AB SKF acquired various Spungen family-owned
companies, including PBCD/CPZ and PBCD/Peer. Through a share transfer
agreement, AB SKF acquired PBCD/CPZ and PBCD/Peer, including PBCD/CPZ's
assets and liabilities. Among these assets were existing unsold
inventory held by PBCD/Peer, which was produced by PBCD/CPZ prior to
the acquisition.
SKF has argued that the acquisition of PBCD/Peer's unsold inventory
constituted a CEP sale of all remaining inventory to SKF/Peer as the
first unaffiliated customer, and requested that the Department treat
the transfer as a CEP sale for the purposes of this review. However,
PBCD disagreed that the inventory transfer constituted a CEP sale,
arguing, that no asset transfer or sale of inventory was specified by
the acquisition documents.\36\
---------------------------------------------------------------------------
\36\ For a complete analysis of the arguments forwarded by
parties on this issue, see SKF Program Analysis Memorandum.
---------------------------------------------------------------------------
For these preliminary results, the Department finds that SKF's
acquisition of PBCD/CPZ and PBCD/Peer, pursuant to the Master Purchase
Agreement (``MPA''), should not be treated as the first sale to an
unaffiliated customer of the inventory held by PBCD/Peer for the
purpose of calculating the margin of dumping in this administrative
review. The MPA specifies the details of the share transfer between
ownership parties upon finalization of the acquisition agreement, which
resulted in the transfer of ownership of various
[[Page 41153]]
Spungen-owned companies, including PBCD/Peer and PBCD/CPZ, to various
AB SKF-owned affiliates. Therefore, as explained by SKF, there was no
sale value specifically associated with just the TRB inventory as part
of the MPA. Instead, SKF reported sales prices for the inventory based
on an accounting value it obtained from a third party accounting firm
for financial reporting purposes subsequent to the acquisition. Thus,
the value reported by SKF is not reflective of negotiated sales prices
for this merchandise. Therefore, the Department finds that the fact the
SKF acquired the inventory of PBCD/Peer simply reflects the fact the
inventory in question would remain with SKF/Peer and was not being
retained by the former owner of PBCD/Peer. Accordingly, we are
examining the sales of this merchandise from SKF to its first
unaffiliated downstream customer, and have relied on the U.S. sales
prices of SKF/Peer's downstream sales for purposes of calculating SKF/
Peer's dumping margin.\37\
---------------------------------------------------------------------------
\37\ See Id. for further discussion of this issue.
---------------------------------------------------------------------------
Export Price
Because New Torch sold subject merchandise to unaffiliated
purchasers in the United States prior to importation into the United
States, we used EP for these transactions in accordance with section
772(a) of the Act. We calculated EP based on the delivery method
reported to the first unaffiliated purchaser in the United States. New
Torch's sales required no deductions included in section 772(c) of the
Act.\38\
---------------------------------------------------------------------------
\38\ See the Department's memorandum entitled, ``2008-2009
Administrative Review of the Antidumping Duty Order on Tapered
Roller Bearings and Parts Thereof, Finished or Unfinished, from the
People's Republic of China: Analysis of the Preliminary
Determination Margin Calculation for Hubei New Torch Science &
Technology Co., Ltd.,'' dated concurrently with this notice (``New
Torch Program Analysis Memorandum'').
---------------------------------------------------------------------------
Normal Value
We compared NV to individual EP and CEP transactions in accordance
with section 777A(d)(2) of the Act, as appropriate. Section 773(c)(1)
of the Act provides that the Department shall determine NV using an FOP
methodology if: (1) The merchandise is exported from an NME country;
and (2) the information does not permit the calculation of NV using
home market prices, third country prices, or constructed value under
section 773(a) of the Act. When determining NV in an NME context, the
Department will base NV on FOPs because the presence of government
controls on various aspects of these economies renders price
comparisons and the calculation of production costs invalid under our
normal methodologies. Under section 773(c)(3) of the Act, 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. The Department used
FOPs reported by the respondents for materials, energy, labor and
packing.
In past cases, it has been the Department's practice to value
various FOPs using import statistics of the primary selected surrogate
country from World Trade Atlas (``WTA''), as published by Global Trade
Information Services (``GTIS'').\39\ However, in October 2009, the
Department learned that Indian import data obtained from the WTA, as
published by GTIS, began identifying the original reporting currency
for India as the U.S. Dollar. The Department then contacted GTIS about
the change in the original reporting currency for India from the Indian
Rupee to the U.S. Dollar. Officials at GTIS explained that while GTIS
obtains data on imports into India directly from the Ministry of
Commerce, Government of India, as denominated and published in Indian
Rupees, the WTA software is limited with regard to the number of
significant digits it can manage. Therefore, GTIS made a decision to
change the original reporting currency for Indian data from the Indian
Rupee to the U.S. Dollar in order to reduce the loss of significant
digits when obtaining data through the WTA software. GTIS explained
that it converts the Indian Rupee to the U.S. Dollar using the monthly
Federal Reserve exchange rate applicable to the relevant month of the
data being downloaded and converted.\40\
---------------------------------------------------------------------------
\39\ See Certain Preserved Mushrooms from the People's Republic
of China: Preliminary Results of Antidumping Duty New Shipper
Review, 74 FR 50946, 50950 (October 2, 2009).
\40\ See Certain Oil Country Tubular Goods from the People's
Republic of China: Final Determination of Sales at Less Than Fair
Value, Affirmative Final Determination of Critical Circumstances,
and Final Determination of Targeted Dumping, 75 FR 20335 (April 19,
2010) and accompanying IDM at Comment 4.
---------------------------------------------------------------------------
Because of the conversion and rounding problems in the data
reported by WTA, the Department will now obtain import statistics from
Global Trade Atlas (``GTA''), as published by GTIS, for valuing various
FOPs. The data reported in the GTA software reports import statistics,
such as from India, in the original reporting currency and thus this
data corresponds to the original currency value reported by each
country. Additionally, the data reported in the GTA software is
reported to the nearest digit and thus there is not a loss of data by
rounding, as there is with the data reported by the WTA software.
Consequently the import statistics we obtain from GTA are in the
original reporting currency of the country from which the data are
obtained and have the same level of accuracy as the original data
released.
In the instant review, PBCD and SKF reported sales that were
further manufactured or assembled in a third country. Consistent with
the TRBs 2007-2008, the Department has determined that the finishing
operations in the third country do not constitute substantial
transformation and, hence, do not confer a new country of origin for
antidumping purposes.\41\ As such, we have determined NV for such sales
based on the country of origin (i.e., the PRC), pursuant to section
773(a)(3)(A) of the Act, because PBCD and SKF knew at the time of the
sale of merchandise that it was destined for export. The Department
also included the further manufacturing and assembly costs incurred in
the third country in the NV calculation, as well as the expense of
transporting the merchandise from the factory in the PRC to the further
manufacturing plant in the third country.\42\
---------------------------------------------------------------------------
\41\ See Tapered Roller Bearings and Parts Thereof, Finished or
Unfinished, from the People's Republic of China: Final Results of
2007-2008 Administrative Review of the Antidumping Duty Order, 75 FR
844 (January 6, 2010) (``TRBs 2007-2008''), and accompanying IDM at
Comment 1.
\42\ See PBCD and SKF Program Analysis Memoranda.
---------------------------------------------------------------------------
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on FOPs reported by respondents for the POR. In accordance with
19 CFR 351.408(c)(1), the Department will normally use publicly
available information to find an appropriate surrogate value (``SV'')
to value FOPs, but when a producer sources an input from a market
economy and pays for it in market economy currency, the Department
normally will value the factor using the actual price paid for the
input.\43\ To calculate NV, we multiplied the reported per-unit factor-
consumption rates by publicly available surrogate values (except as
discussed below). In selecting the surrogate values, we considered the
quality, specificity, and contemporaneity of the data.\44\ As
[[Page 41154]]
appropriate, we adjusted input prices by including freight costs to
make them delivered prices. Specifically, we added to import surrogate
values a surrogate freight cost using the shorter of the reported
distance from the domestic supplier to the factory or the distance from
the nearest seaport to the factory where appropriate. This adjustment
is in accordance with the Court of Appeals for the Federal Circuit's
decision in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed.
Cir. 1997). A detailed description of all surrogate values used for
PBCD/CPZ, SKF/CPZ, and New Torch can be found in the Surrogate Value
Memorandum.
---------------------------------------------------------------------------
\43\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly
Components Div of Ill Tool Works v. United States, 268 F. 3d 1376,
1382-1383 (Fed. Cir. 2001) (affirming the Department's use of
market-based prices to value certain FOPs).
\44\ 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 IDM at Comment 6; and
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 IDM
at Comment 5.
---------------------------------------------------------------------------
For the preliminary results, in accordance with the Department's
practice, except where noted below, we used data from the Indian import
Statistics in the GTA and other publicly available Indian sources in
order to calculate surrogate values for PBCD/CPZ, SKF/CPZ, and New
Torch's FOPs (i.e. direct materials, energy, and packing materials) and
certain movement expenses. In selecting the best available information
for valuing FOPs in accordance with section 773(c)(1) of the Act, the
Department's practice is to select, to the extent practicable,
surrogate values which are non-export average values, most
contemporaneous with the POR, product-specific, and tax-exclusive.\45\
The record shows that data in the Indian Import Statistics, as well as
those from the other Indian sources, are contemporaneous with the POI,
product-specific, and tax-exclusive.\46\ In those instances where we
could not obtain publicly available information contemporaneous to the
POI with which to value factors, we adjusted the surrogate values
using, where appropriate, the Indian Wholesale Price Index (``WPI'') as
published in the IMF's International Financial Statistics.\47\
---------------------------------------------------------------------------
\45\ See, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value, Negative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain
Frozen and Canned Warmwater Shrimp From the Socialist Republic of
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69
FR 71005 (December 8, 2004).
\46\ See Surrogate Value Memorandum.
\47\ See, e.g., Certain Kitchen Appliance Shelving and Racks
From the People's Republic of China: Preliminary Determination of
Sales at Less Than Fair Value and Postponement of Final
Determination, 74 FR 9600 (March 5, 2009), unchanged in Certain
Kitchen Appliance Shelving and Racks From the People's Republic of
China: Final Determination of Sales at Less than Fair Value, 74 FR
36656 (July 24, 2009).
---------------------------------------------------------------------------
In accordance with the OTCA 1988 legislative history, the
Department continues to apply its long-standing practice of
disregarding surrogate values if it has a reason to believe or suspect
the source data may be subsidized.\48\ In this regard, the Department
has previously found that it is appropriate to disregard such prices
from India, Indonesia, South Korea and Thailand because we have
determined that these countries maintain broadly available, non-
industry specific export subsidies.\49\ Based on the existence of these
subsidy programs that were generally available to all exporters and
producers in these countries at the time of the POR, the Department
finds that it is reasonable to infer that all exporters from India,
Indonesia, South Korea and Thailand may have benefitted from these
subsidies. Additionally, we disregarded prices from NME countries.\50\
Finally, imports that were labeled as originating from an
``unspecified'' country were excluded from the average value, because
the Department could not be certain that they were not from either an
NME country or a country with generally available export subsidies.\51\
---------------------------------------------------------------------------
\48\ Omnibus Trade and Competitiveness Act of 1988, Conf. Report
to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess.
(1988) (``OTCA 1988'') at 590.
\49\ See e.g., Expedited Sunset Review of the Countervailing
Duty Order on Carbazole Violet Pigment 23 from India, 75 FR 13257
(March 19, 2010) and accompanying Issues and Decision Memorandum at
pages 4-5; Expedited Sunset Review of the Countervailing Duty Order
on Certain Cut-to-Length Carbon Quality Steel Plate from Indonesia,
70 FR 45692 (August 8, 2005) and accompanying Issues and Decision
Memorandum at page 4; See Corrosion-Resistant Carbon Steel Flat
Products from the Republic of Korea: Final Results of Countervailing
Duty Administrative Review, 74 FR 2512 (January 15, 2009) and
accompanying Issues and Decision Memorandum at pages 17, 19-20; See
Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Final
Results of Countervailing Duty Determination, 66 FR 50410 (October
3, 2001) and accompanying Issues and Decision Memorandum at page 23.
\50\ See Id.
\51\ See Id.
---------------------------------------------------------------------------
PBCD and SKF claim that certain of their reported raw material
inputs were sourced from an ME country and paid for in ME currencies.
When a respondent sources inputs from an ME supplier in meaningful
quantities, we use the actual price paid by respondent for those
inputs, except when prices may have been distorted by dumping or
subsidies.\52\ Where we found ME purchases to be of significant
quantities (i.e., 33 percent or more), in accordance with our statement
of policy as outlined in Antidumping Methodologies: Market Economy
Inputs,\53\ we used the actual purchases of these inputs to value the
inputs.
---------------------------------------------------------------------------
\52\ See Antidumping Duties; Countervailing Duties; Final Rule,
62 FR 27296, 27366 (May 19, 1997).
\53\ See Antidumping Methodologies: Market Economy Inputs,
Expected Non-Market Economy Wages, Duty Drawback; and Request for
Comments, 71 FR 61716, 61717 (October 19, 2006) (``Antidumping
Methodologies: Market Economy Inputs'').
---------------------------------------------------------------------------
Accordingly, we valued certain of respondents' inputs using the ME
prices paid for in ME currencies for the inputs where the total volume
of the input purchased from all ME sources during the POR exceeds or is
equal to 33 percent of the total volume of the input purchased from all
sources during the period. Where the quantity of the reported input
purchased from ME suppliers was below 33 percent of the total volume of
the input purchased from all sources during the POR, and were otherwise
valid, we weight-averaged the ME input's purchase price with the
appropriate surrogate value for the input according to their respective
shares of the reported total volume of purchases.\54\ Where
appropriate, we added freight to the ME prices of inputs. For a
detailed description of the actual values used for the ME inputs
reported, see the Department's analysis memoranda dated concurrently
with this notice.
---------------------------------------------------------------------------
\54\ See Antidumping Methodologies: Market Economy Inputs, 71 FR
at 61718.
---------------------------------------------------------------------------
Among the FOPs for which the Department calculated SVs using Indian
import statistics are bearing-quality steel bar, cage steel, steel by-
product, cone spacer, coal, anti-rust oil, and all packing materials.
In their June 16, 2010, surrogate value submission, PBCD expressed
concerns regarding the quality of certain SV information from the
primary surrogate country, India, specifically in regard to the
valuation of bearing quality steel bar and wire rod inputs. In these
comments, PBCD argues that the Indian import data for HTS 7228.30.29
(Other bars and rods of other alloy steel; angles, shapes and sections,
of other alloy steel; hollow drill bars and rods, of alloy or non-alloy
steel; Other bars and rods, not further worked than hot-rolled, hot-
drawn or extruded; Bright Bars; Other), submitted by Petitioner and SKF
as a surrogate to value bearing quality steel bar, are aberrational due
to the relatively high value when benchmarked against similar bearing
and roller quality steel HTS categories in the U.S. and potential
surrogate countries. Furthermore, PBCD reiterates the position
previously
[[Page 41155]]
forwarded by SKF in its December 7, 2009, surrogate value submission
that, consistent with the analysis of potential wire rod SVs performed
in the prior review, certain data considerations compel the Department
to reject Indian import information for HTS 7228.50.90 (Other bars and
rods of other alloy steel; angles, shapes and sections, of other alloy
steel; hollow drill bars and rods, of alloy or non-alloy steel; Other
bars and rods, not further worked than cold-formed or cold-finished:
Other) in favor of Thai import data for HTS 7228.50.90 (Other bars and
rods of other alloy steel; angles, shapes and sections, of other alloy
steel; hollow drill bars and rods, of alloy or non-alloy steel; Other
bars and rods, not further worked than cold-formed or cold-finished:
Other) to value wire rod inputs in the instant review. Petitioner
addressed the steel bar and wire rod surrogate issues in its June 18,
2010, surrogate value comments, as well as additional comments
submitted on June 21, 2010. While Petitioner maintains that the
Department should value all FOPs, including wire rod and steel bar,
using surrogate data from the primary surrogate country (i.e. India),
it adds that, should the Department determine that Thai data is
preferable to Indian data for the valuation of wire rod inputs, as was
determined in the prior review, Thai import data for HTS 7228.50.10
\55\ are a more appropriate surrogate to value wire rod than the Thai
import data for HTS 7228.50.90 suggested by PBCD and SKF.
---------------------------------------------------------------------------
\55\ Other bars and rods of other alloy steel; angles, shapes
and sections, of other alloy steel; hollow drill bars and rods, of
alloy or non-alloy steel; Other bars and rods, not further worked
than cold-formed or cold-finished: Of circular cross-section.
---------------------------------------------------------------------------
For the preliminary results, we have determined to use
contemporaneous Thai import data from HTS category 7228.50.10 and
contemporaneous Indian import data from HTS category 7228.30.29 to
calculate a SV for roller quality steel wire rod and bearing quality
steel bar, respectively. As in TRBs 2007-2008, the Indian import
statistics for HTS category 7228.50.90 show wide variations in the
average unit values (``AUVs'') between the individual countries listed
as exporters in the data. Thai import statistics under Thai HTS
categories 7228.50.10 and 7228.50.90 do not exhibit the wide level of
AUV variance between imports from individual countries that is seen in
the Indian data. Thus, we have determined to use Thai data to value
steel wire rod. We have used Thai HTS category 7228.50.10 to value wire
rod, as it is more specific to the input than Thai HTS category
7228.50.90 because the wire rod in this category are circular, as are
the respondents' inputs. Using the same method of analysis, Indian
import statistics for steel bar under Indian HTS category 7228.30.29
appear to be reasonably consistent and do not have wide fluctuations
between the AUVs from individual countries. As it is our preference to
use SVs from within the primary surrogate country, and because we do
not find that the Indian import data under Indian HTS category
7228.30.29 are aberrational, we preliminarily determine to value steel
bar from Indian HTS category 7228.30.29.\56\
---------------------------------------------------------------------------
\56\ See Surrogate Value Memorandum for further analysis.
---------------------------------------------------------------------------
We valued truck freight expenses using a per-unit average rate
calculated from data on the infobanc Web site: http://www.infobanc.com/logistics/logtruck.htm. The logistics section of this Web site contains
inland freight truck rates between many large Indian cities.\57\
---------------------------------------------------------------------------
\57\ See Id.
---------------------------------------------------------------------------
We valued inland water freight using price data for barge freight
reported in a March 19, 2007, article published in The Hindu Business
Line.\58\ Since the inland water transportation rates are not
contemporaneous with the POR, we inflated the rates using the Indian
WPI inflator.
---------------------------------------------------------------------------
\58\ See Id.
---------------------------------------------------------------------------
We valued brokerage and handling using a price list of export
procedures necessary to export a standardized cargo of goods in India.
The price list is compiled based on a survey case study of the
procedural requirements for trading a standard shipment of goods by
ocean transport in India that is published in Doing Business 2010:
India, published by the World Bank.\59\ Since brokerage and handling
rates are not contemporaneous with the POR, we inflated the rates using
the Indian WPI inflator.
---------------------------------------------------------------------------
\59\ See Id.
---------------------------------------------------------------------------
We valued electricity using the updated electricity price data for
small, medium, and large industries, as published by the Central
Electricity Authority, an administrative body of the Government of
India, in its publication titled ``Electricity Tariff & Duty and
Average Rates of Electricity Supply in India,'' dated March 2008. These
electricity rates represent actual country-wide, publicly-available
information on tax-exclusive electricity rates charged to small,
medium, and large industries in India.\60\ Because the rates listed in
this source became effective on a variety of different dates, we are
not adjusting the average value for inflation. In other words, the
Department did not inflate this value to the POR because the utility
rates represent current rates, as indicated by the effective date
listed for each of the rates provided.\61\
---------------------------------------------------------------------------
\60\ See Id.
\61\ See, e.g., Wire Decking from the People's Republic of
China: Final Determination of Sales at Less Than Fair Value, 75 FR
32905 (June 10, 2010), and accompanying IDM at Comment 3.
---------------------------------------------------------------------------
We valued international air freight using rates based on the market
economy air freight purchases of SKF and PBCD.\62\
---------------------------------------------------------------------------
\62\ See Surrogate Value Memorandum.
---------------------------------------------------------------------------
We valued water using the revised Maharashtra Industrial
Development Corporation water rates available at http://www.midcindia.com/water-supply.\63\
---------------------------------------------------------------------------
\63\ See Id.
---------------------------------------------------------------------------
The Department is valuing international ocean freight from the PRC
to the United States using data obtained from the Descartes Carrier
Rate Retrieval Database (``Descartes''), which can be accessed via
http://descartes.com/. The Department has calculated the period-average
international freight rate by obtaining rates from multiple carriers
for a single day in each quarter of the POR. For any rate that the
Department determined was from a non-market economy carrier, the
Department has not included that rate in the period-average
international freight calculation. Additionally, the Department has not
included any charges included in the rate that are covered by brokerage
and handling charges that the respondent incurred and are valued by the
reported market economy purchase or the appropriate surrogate value in
the calculation.\64\
---------------------------------------------------------------------------
\64\ See Id.
---------------------------------------------------------------------------
Because PBCD and SKF had shipments of subject merchandise to a
third country for further manufacturing during the POR, we added the
additional international freight cost to NV, and applied the surrogate
value for international freight from the PRC to the third country. The
Department valued ocean freight using publicly available data collected
from Maersk Line.\65\
---------------------------------------------------------------------------
\65\ See Id.
---------------------------------------------------------------------------
For direct, indirect, and packing labor, pursuant to a recent
decision by the Court of Appeals for the Federal Circuit, we have
calculated an hourly wage rate to use in valuing each respondent's
reported labor input by averaging earnings and/or wages in countries
that are economically comparable to the PRC and that are significant
producers of comparable
[[Page 41156]]
merchandise.\66\ Because this wage rate does not separate the labor
rates into different skill levels or types of labor, the Department has
applied the same wage rate to all skill levels and types of labor
reported by the respondents.\67\
---------------------------------------------------------------------------
\66\ See Dorbest Ltd. v. United States, 2009-1257 at 20 (CAFC
2010) (``Dorbest'').
\67\ See Surrogate Value Memorandum.
---------------------------------------------------------------------------
To value factory overhead, selling, general and administrative
expenses and profit, the Department used the average of the ratios
derived from the financial statements of three Indian producers: SKF
India Limited (for the year ending on December 31, 2008), ABC Bearings
Limited (for the year ending on March 31, 2009), and FAG Bearings India
Limited (for the year ending on December 31, 2008).\68\
---------------------------------------------------------------------------
\68\ See Id.
---------------------------------------------------------------------------
Each respondent reported that steel scrap was recovered as a by-
product of the production of subject merchandise and successfully
demonstrated that the scrap has commercial value, therefore, we have
granted by-product offset for the quantities of these reported by-
products, valued using Indian GTA data.\69\
---------------------------------------------------------------------------
\69\ See Id.
---------------------------------------------------------------------------
Currency Conversion
Where appropriate, we made currency conversions into U.S. dollars,
in accordance with section 773A(a) of the Act, based on the exchange
rates in effect on the dates of the U.S. sales as certified by the
Federal Reserve Bank.
Preliminary Results of Review
We preliminarily determine that the following weighted-average
dumping margin exists for the period June 1, 2008, through May 31,
2009:
TRBs From the PRC
------------------------------------------------------------------------
Weighted-
average
Exporter margin
(percent)
------------------------------------------------------------------------
Spungen-Owned Peer Bearing Company-Changshan............... 52.26
SKF-Owned Changshan Peer Bearing Co., Ltd.................. 9.94
Hubei New Torch Science & Technology Co., Ltd.............. 00.00
------------------------------------------------------------------------
Disclosure and Public Comment
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b).
Interested parties may submit written comments no later than 30 days
after the date of publication of these preliminary results of
review.\70\ Rebuttals to written comments may be filed no later than
five days after the written comments are filed.\71\ Further, parties
submitting written comments and rebuttal comments are requested to
provide the Department with an additional copy of those comments on
diskette.
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\70\ See 19 CFR 351.309(c).
\71\ See 19 CFR 351.309(d).
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Any interested party may request a hearing within 30 days of
publication of this notice.\72\ 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.\73\
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\72\ See 19 CFR 351.310(c).
\73\ See 19 CFR 351.310(d).
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The Department will issue the final results of this administrative
review, which will include the results of its analysis of issues raised
in any such comments, within 120 days of publication of these
preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
The Department will determine, and CBP shall assess, antidumping
duties on all appropriate entries of subject merchandise in accordance
with the final results of this review. For assessment purposes, we
calculated exporter/importer- (or customer) -specific assessment rates
for merchandise subject to this review. Where appropriate, we
calculated an ad valorem rate for each importer (or customer) by
dividing the total dumping margins for reviewed sales to that party by
the total entered values associated with those transactions. For duty-
assessment rates calculated on this basis, we will direct CBP to assess
the resulting ad valorem rate against the entered customs values for
the subject merchandise. Where appropriate, we calculated a per-unit
rate for each importer (or customer) by dividing the total dumping
margins for reviewed sales to that party by the total sales quantity
associated with those transactions. For duty-assessment rates
calculated on this basis, we will direct CBP to assess the resulting
per-unit rate against the entered quantity of the subject merchandise.
Where an importer- (or customer) -specific assessment rate is de
minimis (i.e., less than 0.50 percent), the Department will instruct
CBP to assess that importer (or customer's) entries of subject
merchandise without regard to antidumping duties. We intend to instruct
CBP to liquidate entries containing subject merchandise exported by the
PRC-wide entity at the PRC-wide rate we determine in the final results
of this review. The Department intends to issue appropriate assessment
instructions directly to CBP 15 days after publication of the final
results of this review.
Cash-Deposit Requirements
The following cash-deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of the subject merchandise from the PRC entered, or withdrawn
from warehouse, for consumption on or after the publication date, as
provided by section 751(a)(2)(C) of the Act: (1) For PBCD, SKF, and New
Torch, the cash deposit rate will be their respective rates established
in the final results of this review, except if the rate is zero or de
minimis no cash deposit will be required; (2) for previously
investigated or reviewed PRC and non-PRC exporters not listed above
that have separate rates, the cash deposit rate will continue to be the
exporter-specific rate published for the most recent period; (3) for
all 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 92.84 percent; and (4) for all non-PRC exporters of
subject merchandise which have not received their own rate, the cash
deposit rate will be the rate applicable to the PRC exporters that
supplied that non-PRC exporter. These deposit requirements, when
imposed, shall remain in effect until further notice.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
We are issuing and publishing these preliminary results of review
in accordance with sections 751(a)(1) and
[[Page 41157]]
777(i)(1) of the Act, and 19 CFR 351.213.
Dated: July 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-17302 Filed 7-14-10; 8:45 am]
BILLING CODE 3510-DS-P