[Federal Register: March 5, 2004 (Volume 69, Number 44)]
[Notices]
[Page 10402-10409]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05mr04-45]
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DEPARTMENT OF COMMERCE
International Trade Administration
(A-570-846)
Brake Rotors From the People's Republic of China: Preliminary
Results and Partial Rescission of the Sixth Administrative Review and
Preliminary Results and Final Partial Rescission of the Ninth New
Shipper Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results and partial rescission of the
sixth administrative review and preliminary results and final partial
rescission of the ninth new shipper review.
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SUMMARY: SUMMARY:The Department of Commerce (``the Department'') is
currently conducting the sixth administrative review and ninth new
shipper review of the antidumping duty order on brake rotors from the
People's Republic of China (``PRC'') covering the period April 1, 2002,
through March 31, 2003. The administrative review examines 20
exporters, five of which are exporters included in five exporter/
producer combinations. The new shipper review covers two exporters.\1\
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\1\ The new shipper review originally covered three exporters
but the Department rescinded the review with respect to one of these
exporters on July 8, 2003, based upon its timely withdrawal from the
review.
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We have preliminarily determined that no sales have been made below
normal value (``NV'') with respect to the exporters who participated
fully in these reviews. If these preliminary results are adopted in our
final results of these reviews, we will instruct 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 the final results no later than 120 days from
the date of publication of this notice.
EFFECTIVE DATE: March 5, 2004.
FOR FURTHER INFORMATION CONTACT: Brian Smith, Terre Keaton and
Margarita Panayi Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-1766, (202) 482-1280 and (202) 482-0049, respectively.
SUPPLEMENTARY INFORMATION:
Background
The Department received timely requests from Laizhou City Luqi
Machinery Co., Ltd (``Luqi'') on April 29, 2003, and from Qingdao Rotec
Auto Parts Co., Ltd. (``Rotec'') and Anda Industries Co., Ltd.
(``Anda'') on April 30, 2003, for new shipper reviews of this
antidumping duty order in accordance with 19 CFR 351.214(c).
On April 30, 2003, the petitioner\2\ requested an administrative
review pursuant to 19 CFR 351.213(b) for 20 exporters,\3\ five of which
are included in five exporter/producer combinations\4\ that received
zero rates in the less-than-fair-value (``LTFV'') investigation and
thus were excluded from the antidumping duty order only with respect to
brake rotors sold through the specified exporter/producer combinations.
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\2\ The petitioner is the Coalition for the Preservation of
American Brake Drum and Rotor Aftermarket Manufacturers.
\3\ The names of these exporters are as follows: (1) China
National Industrial Machinery Import & Export Corporation
(``CNIM''); (2) Laizhou Automobile Brake Equipment Company, Ltd.
(``LABEC''); (3) Longkou Haimeng Machinery Co., Ltd. (``Longkou
Haimeng''); (4) Laizhou Hongda Auto Replacement Parts Co., Ltd.
(``Hongda''); (5) Hongfa Machinery (Dalian) Co., Ltd. (``Hongfa'');
(6) Qingdao Gren (Group) Co. (``GREN''); (7) Qingdao Meita
Automotive Industry Company, Ltd. (``Meita''); (8) Shandong Huanri
(Group) General Company (``Huanri General''); (9) Yantai Winhere
Auto-Part Manufacturing Co., Ltd. (``Winhere''); (10) Zibo Luzhou
Automobile Parts Co., Ltd. (``ZLAP''); (11) Longkou TLC Machinery
Co., Ltd (``LKTLC''); (12) Zibo Golden Harvest Machinery Limited
Company (``Golden Harvest''); (13) Shanxi Fengkun Metallurgical
Limited Company (``Shanxi Fengkun''); (14) Xianghe Xumingyuan Auto
Parts Co. (``Xumingyuan''); (15) Xiangfen Hengtai Brake System Co.,
Ltd. (``Hengtai''); (16) China National Machinery and Equipment
Import & Export (Xianjiang) Corporation (``Xianjiang''); (17) China
National Automotive Industry Import & Export Corporation
(``CAIEC''); (18) Laizhou CAPCO Machinery Co., Ltd. (``Laizhou
CAPCO''); (19) Laizhou Luyuan Automobile Fittings Co. (``Laizhou
Luyuan''); and (20) Shenyang Honbase Machinery Co., Ltd.
(``Shenyang'').
\4\ The excluded exporter/producer combinations are: (1)
Xianjiang/Zibo Botai Manufacturing Co., Ltd.; (2) CAIEC/Laizhou
CAPCO; (3) Laizhou CAPCO/Laizhou CAPCO; (4) Laizhou Luyuan Luyuan or
Shenyang; or (5) Shenyang/Laizhou Luyuan or Shenyang.
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On May 16, 2003, Luqi, Rotec and Anda agreed to waive the time
limits applicable to the new shipper review and to permit the
Department to conduct the new shipper review concurrently with the
administrative review.
On May 21, 2003, the Department initiated an administrative review
covering the companies listed in the petitioner's April 30, 2003,
request (see Initiation of Antidumping and Countervailing Duty
Administrative Reviews and Request for Revocation in Part, 68 FR 27781
(May 21, 2003)).
On May 30, 2003, the Department initiated a new shipper review of
Anda, Luqi and Rotec (see Brake Rotors from the People's Republic of
China: Initiation of the Ninth New Shipper Antidumping Duty Review, 68
FR 33675 (June 5, 2003)).
On June 5, 2003, the Department issued a questionnaire to each
company listed in the above-referenced initiation notices.
On June 17, 2003, the Department provided the parties an
opportunity to submit publicly available information for consideration
in these preliminary results. Also on June 17, 2003, Anda timely
withdrew its request for a new shipper review. Accordingly, we
rescinded the new shipper review with respect to Anda on July 8, 2003
(see Brake Rotors from the People's Republic of China: Notice of
Partial Rescission of
[[Page 10403]]
the Ninth New Shipper Antidumping Duty Review, 68 FR 41555 (July 14,
2003)), and sent appropriate instructions to CBP on July 31, 2003,
terminating the bonding option on shipments of subject merchandise
exported and produced by Anda and requiring a cash deposit on such
shipments at the PRC-wide rate.
In July 2003, each of the exporters that received a zero rate in
the LTFV investigation stated that during the POR, it did not make U.S.
sales of brake rotors produced by companies other than those included
in its respective excluded exporter/producer combination. Also in July
2003, we received responses to the Department's questionnaires from the
remaining companies. Of these companies, Shanxi Fengkun, Hengtai,
Golden Harvest and Xumingyuan each stated that it had no sales or
shipments of subject merchandise to the United States during the POR.
On August 8, 2003, the petitioner submitted comments to the
respondents' questionnaire responses. On August 15, 2003, the
Department issued a supplemental questionnaire to each company which
submitted a questionnaire response.
On August 25, 2003, the Department conducted a data query on brake
rotor entries made during the POR from all exporters named in the
excluded exporter/producer combinations and from the four exporters
named above (i.e., Shanxi Fengkun, Hengtai, Golden Harvest and
Xumingyuan) in order to substantiate their claims that they made no
shipments of subject merchandise during the POR. As a result of the
data query, the Department requested that CBP confirm the actual
manufacturer for 11 specific entries associated with the excluded
exporter/producer combinations (see the September 29, 2003, memorandum
from Irene Darzenta Tzafolias, Program Manager, to Michael S. Craig of
the CBP (``September 29, 2003, memorandum'')). Also on August 25, 2003,
the petitioner and respondents submitted publicly available
information.
In August and September 2003, the companies submitted their
responses to the Department's supplemental questionnaires. In September
2003, the petitioner submitted comments on the supplemental
questionnaire responses of several companies. On October 2, 2003, the
Department issued a second supplemental questionnaire to 10 companies,
and these companies submitted their second supplemental responses in
October and November 2003. The petitioner submitted comments on the
second supplemental responses in October 2003. The Department issued
GREN and Meita a third supplemental questionnaire in October 2003, to
which responses were submitted in November 2003.
On October 8, 2003, the Department extended the time limit for
completion of the preliminary results until February 2, 2004 (see Brake
Rotors from the People's Republic of China: Notice of Extension of Time
Limit for Preliminary Results in Antidumping Duty Administrative and
New Shipper Reviews, 68 FR 59583 (October 16, 2003)).
On October 27, 2003, we notified Longkou Haimeng, LABEC, Luqi and
Rotec of our intent to conduct verification of their responses to the
antidumping duty questionnaire, and provided each respondent with a
verification outline for purposes of familiarizing it with the
verification process. The petitioner submitted comments on these
verification outlines in October and November 2003.
On October 31, 2003, LABEC submitted corrections to its U.S. sales
listing and factors of production listing. On November 3, 2003, Huanri
General, Meita, Hongfa, Longkou Haimeng each submitted corrections to
its factors of production listing. On November 6, 2003, the petitioner
filed an objection to Huanri General's, Meita's and Hongfa's November
3, 2003, submissions.
On November 12, 2003, Rotec notified the Department that it was no
longer able to participate in the new shipper review and subsequently
withdrew its new shipper review request. From November 5 to November
21, 2003, the Department conducted verification of the information
submitted by Longkou Haimeng, Luqi and LABEC in accordance with 19 CFR
351.307. On November 10, 14 and 21, 2003, respectively, these companies
submitted the minor corrections to their responses that they presented
to the Department verifiers at the start of verification. On November
17 and 25, 2003, the petitioner filed comments on the minor corrections
submitted by Longkou Haimeng and LABEC, respectively, at verification.
On December 10, 2003, we returned the revised U.S. sales listing
submitted by LABEC on November 21, 2003, because we neither requested
nor accepted this revised listing at verification. On December 15,
2003, LABEC resubmitted its minor corrections with the U.S. sales
listing omitted. (See the Department's memo re: Issues Related to
Preliminary Results, dated March 1, 2004.)
On December 12, 2003, the petitioner submitted comments on the
Department's September 29, 2003, memorandum. On December 19, 2003, the
Department issued a memorandum to the file in response to the
petitioner's December 12, 2003, submission.\5\
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\5\ Also in the December 19, 2003, memorandum to the file, we
informed the petitioner that we would consider for the preliminary
results any comments submitted on the verification reports if such
comments were submitted by January 20, 2004 (see December 19, 2003,
memorandum to the file).
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On December 17 and 22, 2003, we issued verification reports for
Longkou Haimeng, LABEC and Luqi. (See December 17 and 22, 2003,
verification reports for Longkou Haimeng and LABEC, respectively, in
the Sixth Antidumping Duty Administrative Review, and December 22,
2003, verification report for Luqi in the Ninth Antidumping Duty New
Shipper Review.)
On December 22, 2003, the Department issued a memorandum to the
file notifying parties of our intent to issue a final rescission
decision with respect to Rotec in the context of these preliminary
results and invited interested parties to comment on our intent to
rescind the new shipper review with respect to Rotec (see December 22,
2003, memorandum to the file). No comments were filed.
On January 14, 2004, the petitioner submitted comments on the
verification reports of Longkou Haimeng, LABEC and Luqi.
On January 30, 2004, the Department extended the time limit for
completion of the preliminary results until March 3, 2004 (see Brake
Rotors from the People's Republic of China: Notice of Extension of Time
Limit for Preliminary Results in Antidumping Duty Administrative and
New Shipper Reviews, 69 FR 6253 (February 10, 2004)).
On February 3, 2004, we requested additional clarification of
LKTLC's responses. LKTLC submitted its response on February 13, 2004.
Scope of the Order
The products covered by this order are brake rotors made of gray
cast iron, whether finished, semifinished, or unfinished, ranging in
diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight
from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters
(weight and dimension) of the brake rotors limit their use to the
following types of motor vehicles: automobiles, all-terrain vehicles,
vans and recreational vehicles under ``one ton and a half,'' and light
trucks designated as ``one ton and a half.''
Finished brake rotors are those that are ready for sale and
installation without any further operations. Semi-finished rotors are
those on which the
[[Page 10404]]
surface is not entirely smooth, and have undergone some drilling.
Unfinished rotors are those which have undergone some grinding or
turning.
These brake rotors are for motor vehicles, and do not contain in
the casting a logo of an original equipment manufacturer (``OEM'')
which produces vehicles sold in the United States. (e.g., General
Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in
this order are not certified by OEM producers of vehicles sold in the
United States. The scope also includes composite brake rotors that are
made of gray cast iron, which contain a steel plate, but otherwise meet
the above criteria. Excluded from the scope of this order are brake
rotors made of gray cast iron, whether finished, semifinished, or
unfinished, with a diameter less than 8 inches or greater than 16
inches (less than 20.32 centimeters or greater than 40.64 centimeters)
and a weight less than 8 pounds or greater than 45 pounds (less than
3.63 kilograms or greater than 20.41 kilograms).
Brake rotors are currently classifiable under subheading
8708.39.5010 of the Harmonized Tariff Schedule of the United States
(``HTSUS''). Although the HTSUS subheading is provided for convenience
and customs purposes, the written description of the scope of this
order is dispositive.
Period of Review
The POR covers April 1, 2002, through March 31, 2003.
Verification
As provided in section 782(i) of the Act, we verified information
provided by Longkou Haimeng, LABEC and Luqi. We used standard
verification procedures, including on-site inspection of their
facilities and examination of relevant sales and financial records. Our
verification results are outlined in the verification report for each
company (see December 17, 2003, verification report for Longkou Haimeng
and December 22, 2003, verification reports for LABEC and Luqi for
further discussion).
Preliminary Partial Rescission of Administrative Review
Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined
that the exporters which are part of the five exporter/producer
combinations which received zero rates in the LTFV investigation and
the four exporters that made no shipment claims did not make shipments
of subject merchandise to the United States during the POR.
Specifically, (1) Xinjiang did not export brake rotors to the United
States that were manufactured by producers other than Zibo Botai; (2)
CAIEC did not export brake rotors to the United States that were
manufactured by producers other than Laizhou CAPCO; (3) Laizhou CAPCO
did not export brake rotors to the United States that were manufactured
by producers other than Laizhou CAPCO; (4) Laizhou Luyuan did not
export brake rotors to the United States that were manufactured by
producers other than Shenyang or Laizhou Luyuan; (5) Shenyang did not
export brake rotors to the United States that were manufactured by
producers other than Laizhou Luyuan or Shenyang; and (6) Shanxi
Fengkun, Hengtai, Golden Harvest or Xumingyuan made no shipments of
subject merchandise to the United States during the POR.
In order to make this determination, we first examined PRC brake
rotor shipment data maintained by CBP. We then selected certain entries
associated with the exporter/producer combinations identified above and
requested CBP to provide documentation which would enable the
Department to determine who manufactured the brake rotors included in
those entries. Based on the information obtained from CBP, we found no
instances where the exporters included in the five exporter-producer
combinations shipped brake rotors from the PRC to the U.S. market
outside of their excluded export/producer combinations during the POR.
(See March 1, 2004, memorandum to the file, Results of Request for
Assistance from Customs and Border Protection to Further Examine U.S.
Entries Made by Exporter/Producer Combinations - Preliminary Results.)
With respect to Shanxi Fengkun, Hengtai, Golden Harvest and Xumingyuan,
the results of the CBP data query indicated that there were no
shipments of subject merchandise made by these companies during the POR
(see March 1, 2004, memorandum to the file, Review of Customs and
Border Protection Data on Brake Rotor Entries from Zibo Golden Harvest
Machinery Limited Company, Shanxi Fengkun Metallurgical Limited
Company, Xianghe Xumingyuan Auto Parts Co., and Xiangfen Hengtai Brake
System Co., Ltd.).
Therefore, based on the results of our query, in accordance with 19
CFR 351.213(d)(3), we are preliminarily rescinding the administrative
review with respect to all of the above-mentioned companies because we
found no evidence that these companies made shipments of the subject
merchandise during the POR.
Final Partial Rescission of New Shipper Review
The Department's regulations at 19 CFR 351.214(f)(1) provide that
the Department may rescind a new shipper review ''... if a party that
requested a review withdraws its request no later than 60 days after
the date of publication of notice of initiation of the requested
review.'' Rotec withdrew its request for new shipper review on November
12, 2003. Although Rotec's withdrawal is more than 60 days from the
date of initiation, consistent with the Department's past practice in
the context of administrative reviews conducted under section 751(a) of
the Act, the Department has discretion to extend the time period for
withdrawal on a case-by-case basis. (See e.g. Iron Construction
Castings from Canada: Notice of Rescission of Antidumping Duty
Administrative Review, 63 FR 45797 (August 27, 1998).) In this case,
the Department has determined to grant the request to rescind this new
shipper review with respect to Rotec because rescission of this review
would not prejudice any party in this proceeding, as Rotec would
continue to be included in the PRC-wide rate to which it was subject at
the time of its request for a new shipper review. (See Silicon Metal
from the People's Republic of China: Notice of Rescission of New
Shipper Review, 64 FR 40831 (July 28, 1999).)
Separate Rates
In proceedings involving non-market-economy (``NME'') countries,
the Department begins with a rebuttable presumption that all companies
within the country are subject to government control and thus should be
assessed a single antidumping duty deposit rate (i.e., a PRC-wide
rate).
Of the 12 respondents participating in these reviews, three of the
PRC companies (i.e., Hongfa, Meita and Winhere) are wholly foreign-
owned. Thus, for these three companies, because we have no evidence
indicating that they are under the control of the PRC government, a
separate rates analysis is not necessary to determine whether they are
independent from government control (see Notice of Final Determination
of Sales at Less Than Fair Value: Creatine Monohydrate from the
People's Republic of China, 64 FR 71104, 71105 (December 20, 1999);
Preliminary Results of First New Shipper Review and First Antidumping
Duty Administrative Review: Certain Preserved Mushrooms from the
People's Republic of China, 65 FR 66703, 66705 (November 7, 2000); and
Notice of Final Determination of Sales at Less Than
[[Page 10405]]
Fair Value: Bicycles From the People's Republic of China, 61 FR 19026
(April 30, 1996)(````'')).
The remaining nine respondents (i.e., Longkou Haimeng, CNIM, LABEC,
LKTLC, Luqi, GREN, Hongda, Huanri General and ZLAP) are either joint
ventures between PRC and foreign companies, collectively-owned
enterprises and/or limited liability companies in the PRC. Thus, for
these nine respondents, a separate rates analysis is necessary to
determine whether the exporters are independent from government control
over export activities (see Bicycles, at 61 FR 56570). To establish
whether a firm is sufficiently independent in its export activities
from government control to be entitled to a separate rate, the
Department utilizes 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''), and amplified 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''). Under the separate-rates criteria, the
Department assigns separate rates in NME cases only if the respondent
can demonstrate the absence of both de jure and de facto governmental
control over export activities.
1. De Jure Control
Evidence supporting, though not requiring, a finding of de jure
absence of government control over export activities includes: 1) an
absence of restrictive stipulations associated with the individual
exporter's business and export licenses; 2) any legislative enactments
decentralizing control of companies; and 3) any other formal measures
by the government decentralizing control of companies.
Longkou Haimeng, CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri
General and ZLAP have each placed on the administrative record
documents to demonstrate absence of de jure control (e.g., the
``Regulations of the PRC for Controlling the Registration of
Enterprises as Legal Persons,'' promulgated on June 3, 1988; the 1990
``The Regulations Governing the Rural Collective Owned Enterprises of
the PRC;'' and the 1994 ``Foreign Trade Law of the People's Republic of
China'').
As in prior cases, we have analyzed these laws and have found them
to establish sufficiently an absence of de jure control of joint
ventures between the PRC and foreign companies, collectively-owned
enterprises and limited liability companies in the PRC. See, e.g.,
Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol
from the People's Republic of China, 60 FR 22544 (May 8, 1995)
(``Furfuryl Alcohol''), and Preliminary Determination of Sales at Less
Than Fair Value: Certain Partial-Extension Steel Drawer Slides with
Rollers from the People's Republic of China, 60 FR 29571 (June 5,
1995). We have no new information in this proceeding which would cause
us to reconsider this determination with regard to Longkou Haimeng,
CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri General or ZLAP.
2. De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has
determined that an analysis of de facto control is critical in
determining whether the respondents are, in fact, subject to a degree
of governmental control which would preclude the Department from
assigning separate rates.
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) whether the export prices are set by, or
subject to the approval of, a governmental authority; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding the disposition of profits or
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
Longkou Haimeng, CNIM, LABEC, LKTLC, Luqi, GREN, Hongda, Huanri
General and ZLAP have each asserted the following: (1) it establishes
its own export prices; (2) it negotiates contracts without guidance
from any governmental entities or organizations; (3) it makes its own
personnel decisions; and (4) it retains the proceeds of its export
sales, uses profits according to its business needs, and has the
authority to sell its assets and to obtain loans. Additionally, each of
these companies' questionnaire responses indicates that its pricing
during the POR does not suggest coordination among exporters.
In this segment of the proceeding, the Department selected four
respondents for verification, namely Longkou Haimeng, LABEC, Luqi and
Rotec.\6\ The Department did not select the other nine respondents
(i.e., CNIM, LKTLC, GREN, Hongda, Huanri General, Winhere, Hongfa,
Meita and ZLAP) for verification.
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\6\ Prior to its scheduled verification, Rotec notified the
Department that it would no longer be participating in the new
shipper review and subsequently withdrew its new shipper review
request. Therefore, Rotec was not verified.
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For Longkou Haimeng, LABEC and Luqi, the Department found no
evidence at verification of government involvement in their business
operations. Specifically, Department officials examined sales documents
that showed that each of these respondents negotiated its contracts and
set its own sales prices with its customers. In addition, the
Department reviewed sales documentation, bank statements and accounting
documentation that demonstrated that each of these respondents received
payment from its U.S. customers via bank wire transfer, which was
deposited into its own bank account without government intervention.
Finally, the Department examined internal company memoranda such as
appointment notices, which demonstrated that each of these companies
selected its own management. See pages 7 and 8 of the Department's
verification report for Longkou Haimeng, pages 6 and 7 of the
Department's verification report for LABEC and pages 4 through 7 of the
Department's verification report for Luqi. This information, taken in
its entirety, supports a finding that there is a de facto absence of
governmental control of each of these companies' export functions.
With regard to CNIM, LKTLC, GREN, Hongda, Huanri General and ZLAP
(i.e., the other six respondents subject to the separate rates test in
this review), the Department elected not to verify these companies'
responses in accordance with section 351.307(b)(3) of the Department's
regulations. Based on documentation contained in each company's
responses, the Department also finds that each of these six
respondents: (1) negotiated its own contracts; (2) set its own sales
prices with its customers; (3) retained its profits and, where
applicable, arranged its own financing; and (4) selected its own
management (see each respondent's section A questionnaire responses
submitted in July 2003).
Consequently, we have determined that Longkou Haimeng, CNIM, LABEC,
LKTLC, Luqi, GREN, Hongda, Huanri
[[Page 10406]]
General and ZLAP have each met the criteria for the application of
separate rates either through documentation submitted on the record
subject to verification or through actual verification. See Notice of
Final Determination at Less Than Fair Value: Persulfates from the
People's Republic of China, 62 FR 27222 (May 19, 1997).
Normal Value Comparisons
To determine whether sales of the subject merchandise by CNIM,
GREN, Longkou Haimeng, Huanri General, Hongda, Hongfa, LABEC, Meita,
Winhere, LKTLC, Luqi and ZLAP to the United States were made at prices
below normal value (``NV''), we compared each company's export prices
(``EPs'') to NV, as described in the ``Export Price,'' ``Constructed
Export Price,'' and ``Normal Value'' sections of this notice, below.
Export Price
For each respondent, we used EP methodology in accordance with
section 772(a) of the Act for sales in which the subject merchandise
was first sold prior to importation by the exporter outside the United
States directly to an unaffiliated purchaser in the United States, and
constructed export price (``CEP'') was not otherwise indicated.
1. Hongfa, Luqi, LKTLC, Meita, Winhere and ZLAP
We calculated EP based on packed, FOB foreign port prices to the
first unaffiliated purchaser in the United States. Where appropriate,
we made deductions from the starting price (gross unit price) for
foreign inland freight and foreign brokerage and handling charges in
the PRC in accordance with section 772(c) of the Act. Because foreign
inland freight and foreign brokerage and handling fees were provided by
PRC service providers or paid for in renminbi, we based those charges
on surrogate rates from India (see ``Surrogate Country'' section below
for further discussion of our surrogate-country selection). To value
foreign inland trucking charges, we used truck freight rates published
in Indian Chemical Weekly and distance information obtained from the
following websites: http://www.infreight.com, http://www.sitaindia.com/Packages/CityDistance.php, http://www.abcindia.com, http://
http://www.eindiatourism.com, and http://www.mapsofindia.com. To value foreign
brokerage and handling expenses, we relied on 10/99-9/00 information
reported in the public U.S. sales listing submitted by Essar Steel Ltd.
in the antidumping investigation of Certain Hot-Rolled Carbon Steel
Flat Products from India: Final Determination of Sales at Less Than
Fair Value, 67 FR 50406 (October 3, 2001).
2. CNIM, GREN, Longkou Haimeng, Hongda, Huanri General and LABEC
We calculated EP based on packed, CIF, CFR, C&F or FOB foreign port
prices to the first unaffiliated purchaser in the United States. Where
appropriate, we made deductions from the starting price (gross unit
price) for foreign inland freight, foreign brokerage and handling
charges in the PRC, marine insurance, U.S. import duties and fees
(including harbor maintenance fees, merchandise processing fees, and
brokerage and handling) and international freight, in accordance with
section 772(c) of the Act. As all foreign inland freight and foreign
brokerage and handling fees were provided by PRC service providers or
paid for in renminbi, we valued these services using the Indian
surrogate values discussed above. For all six respondents (except
Longkou Haimeng\7\), we valued marine insurance based on a publicly
available price quote from a marine insurance provider obtained from
http://www.rjgconsultants.com/insurance.html, as used in the
antidumping duty investigation of Certain Malleable Iron Pipe Fittings
from the People's Republic of China: Final Results of Antidumping Duty
Investigation, 68 FR 61395 (October 28, 2003) . For international
freight (i.e., ocean freight and U.S. inland freight expenses from the
U.S. port to the warehouse (where applicable)), we used the reported
expenses because each of these six respondents used market-economy
freight carriers and paid for those expenses in a market-economy
currency (see, e.g., Brake Rotors from the People's Republic of China:
Final Results of Antidumping Duty New Shipper Review, 64 FR 9972, 9974
(March 1, 1999)).
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\7\ At Longkou Haimeng's verification, we found that its
reported international freight cost is inclusive of marine insurance
(see page 14 of the Department's verification report for Longkou
Haimeng).
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For U.S. import duties incurred on GREN's sales, we revised the
reported expenses because the per-unit amounts reported in GREN's U.S.
sales database did not comport with the corresponding calculation
worksheets in exhibit 17 of its July 21, 2003, response. To recalculate
the U.S. import duties, we multiplied the U.S. duty percentage
applicable to brake rotors (inclusive of harbor maintenance and
merchandise processing fees) against the gross unit price (net of
movement expenses as appropriate).
Based on our verification findings, we made the following revisions
to the U.S. sales data reported by LABEC: (1) we included one sale not
previously reported and excluded two sales incorrectly reported; (2) we
adjusted the gross unit price for one model number/sale; (3) we
adjusted the international freight expense for certain sales; and (4)
we excluded sales determined to be made to third-country markets. (See
pages 4, 5, 9, 11 and 12 of LABEC's verification report and the
Department's memo re: Issues Related to Preliminary Results, dated
March 1, 2004.)
Constructed Export Price
For GREN, we also calculated CEP in accordance with section 772(b)
of the Act. We found that some of GREN's sales during the POR were CEP
sales because the sales were made for the account of GREN by its
subsidiary in the United States to unaffiliated purchasers. We based
CEP on packed, delivered or ex-warehouse prices to the first
unaffiliated purchaser in the United States. Where appropriate, we made
deductions from the starting price (gross unit price) for movement
expenses in accordance with section 772(c)(2)(A) of the Act; these
included, where appropriate, foreign inland freight and foreign
brokerage and handling charges in the PRC, international freight (i.e.,
ocean freight and U.S. inland freight from the U.S. port to the
warehouse), marine insurance, U.S. import duties, and U.S. inland
freight expenses (i.e., freight from the plant to the customer). As all
foreign inland freight, foreign brokerage and handling, and marine
insurance expenses were provided by PRC service providers or paid for
in renminbi, we valued these services using the Indian surrogate values
discussed above. For international freight (where applicable), we used
the reported expense because the respondent used a market-economy
freight carrier and paid for those expenses in a market-economy
currency.
As mentioned above, we revised the U.S. import duties calculation.
In addition, we revised the U.S. inland freight expense applicable to
those sales with ``delivered'' sales terms (i.e., freight from the
warehouse to the customer) because the data in the U.S. sales database
did not reflect the data reported in the corresponding calculation
worksheet in exhibit 16 of the July 21, 2003, response. For the
remaining sales in the U.S. sales database with ``pick-up'' sales
terms,
[[Page 10407]]
we set this expense to zero as it was not applicable.
In accordance with section 772(d)(1) of the Act, we also deducted
those selling expenses associated with economic activities occurring in
the United States, including direct selling expenses (commissions and
credit expenses), and indirect selling expenses (including inventory
carrying costs) incurred in the United States. We also made an
adjustment for profit in accordance with section 772(d)(3) of the Act.
Normal Value
A. Non-Market-Economy Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. 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 (see Notice of Preliminary Results of
Antidumping Duty Administrative Review and Preliminary Partial
Rescission of Antidumping Duty Administrative Review: Freshwater
Crawfish Tail Meat From the People's Republic of China, 66 FR 52100,
52103 (October 12, 2001)). None of the parties to this proceeding has
contested such treatment. Accordingly, we calculated NV in accordance
with section 773(c) of the Act, which applies to NME countries.
B. Surrogate Country
Section 773(c)(4) of the Act requires the Department to value an
NME producer's factors of production, to the extent possible, in one or
more market-economy countries that (1) are at a level of economic
development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise. India was among the
countries comparable to the PRC in terms of overall economic
development (see Memorandum from the Office of Policy to Irene Darzenta
Tzafolias, dated June 16, 2003). In addition, based on publicly
available information placed on the record (e.g., Indian producer
financial statements), India is a significant producer of the subject
merchandise. Accordingly, we considered India the surrogate country for
purposes of valuing the factors of production because it meets the
Department's criteria for surrogate-country selection.
C. Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on the factors of production which included, but were not limited
to: (A) hours of labor required; (B) quantities of raw materials
employed; (C) amounts of energy and other utilities consumed; and (D)
representative capital costs, including depreciation. We used the
factors reported by each of the 12 respondents, which produced the
brake rotors it exported to the United States during the POR. To
calculate NV, we multiplied the reported unit factor quantities by
publicly available Indian values.
Based on our verification findings at Longkou Haimeng, we revised
the following data in its response: (1) the reported weights for
plastic bags and plastic sheets; and (2) the reported method of
delivery of firewood to Longkou Haimeng's facility (see pages 4, 18 and
20 of Longkou Haimeng's verification report).
Based on our verification findings at LABEC, we revised the
reported per-unit weight for plastic bags for all models (see pages 4,
17 and 18 of LABEC's verification report). In addition, on October 31,
2003, LABEC revised its U.S. sales listing to include two invoices that
were inadvertently omitted. One of these invoices related to a brake
rotor model, the factors of production of which were not reported in
LABEC's factors of production database. As a result, the Department
applied the formulas in exhibit 14 of the July 16, 2003, response and
exhibit 3 of the October 21, 2003, response to derive the model-
specific consumption factors, with the exception of packing materials
factors. For packing materials, we used the packing material
consumption factors for the only brake rotor model with the same
diameter, width and weight as the model excluded from the factors of
production database.
Based on our verification findings at Luqi, we revised the
following data in its response: (1) the reported per-unit weight for
plastic sheet reported for five models; and (2) the reported per-unit
consumption amounts for limestone for all models (see pages 3, 11, 12,
13 and 15 of Luqi's verification report).
The Department's selection of the surrogate values applied in this
determination was based on the quality, specificity, and
contemporaneity of the data. As appropriate, we adjusted input prices
by including freight costs to make them delivered prices. We added to
Indian surrogate values surrogate freight costs using the shorter of
the reported distance from the domestic supplier to the factory or the
distance from the nearest seaport to the factory. This adjustment is in
accordance with the Court of Appeals for the Federal Circuit's decision
in Sigma Corporation v. United States, 117 F. 3d 1401, 1407-08 (Fed.
Cir. 1997). For those values not contemporaneous with the POR and
quoted in a foreign currency, we adjusted for inflation using wholesale
price indices published in the International Monetary Fund's
International Financial Statistics. (See Preliminary Results Valuation
Memorandum, dated March 1, 2004, for a detailed explanation of the
methodology used to calculate surrogate values.)
To value pig iron, steel scrap, ferrosilicon, ferromanganese,
limestone, lug nuts, ball bearing cups, lubrication oil, coking coal,
and firewood, we used April 2002-March 2003 average import values
downloaded from the World Trade Atlas Trade Information System
(Internet Version 4.3e) (WTA). We relied on the factor specification
data submitted by the respondents for the above-mentioned inputs in
their questionnaire and supplemental questionnaire responses, as
verified by the Department, where applicable, for purposes of selecting
surrogate values from WTA. Certain respondents (i.e., Luqi, Longkou
Haimeng, Huanri General, LABEC, CNIM, LKTLC and ZLAP) stated in their
responses that they did not incur an expense for ball bearing cups and
lug nuts because their U.S. customer provided these items to them free
of charge. In support of their claim that they incurred no expense for
these items, each of these respondents provided customer
correspondence. We also examined inventory and accounting records
relevant to these items during the verification of the questionnaire
responses of Longkou Haimeng, LABEC and Luqi. Therefore, for the
preliminary results, we have not valued these items for those
respondents. (See the Department's memo re: Issues Related to
Preliminary Results, dated March 1, 2004.)
We also added an amount for loading and additional transportation
charges associated with delivering coal to the factory based on June
1999 Indian price data contained in the periodical Business Line.
We based our surrogate value for electricity on 2001 data from the
International Energy Agency's (``IEA'') report, ``Electricity Prices
for Industry,'' contained in the 2002 Key World Energy Statistics from
the IEA.
We valued labor based on a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3).
To value selling, general, and administrative (``SG&A'') expenses,
factory overhead and profit, we used the 2000-2001 financial data of
Kalyani Brakes Limited (``Kalyani'') and Rico
[[Page 10408]]
Auto Industries Limited (``Rico''), and the 2001-2002 financial data of
Mando Brake Systems India Limited (``Mando''). Where appropriate, we
removed from the surrogate overhead and SG&A calculations the excise
duty amount listed in the financial reports.
To value corrugated paper cartons, nails, plastic bags, plastic
sheets/covers, paper sheet, steel strip and straps/buckles, tape and
pallet wood, we used April 2002-March 2003 average import values from
WTA. Because there was no Indian import data available for tin clamps/
buckles during the period April 2002-March 2003, we used April 2001-
March 2002 import values from WTA to value this input, and we adjusted
the average value calculated for inflation. All respondents (with the
exception of LKTLC) included the weight of the straps/buckles in their
reported steel strip weights since the material of both inputs was the
same. Therefore, we valued these factors using the combined weight
reported by the respondents.
All inputs were shipped by truck. Therefore, to value PRC inland
freight, we used freight rates published in Indian Chemical Weekly and
distance information obtained from the following websites: http://www.infreight.com, http://www.sitaindia.com/Packages/CityDistance.php,
tance.php,
http://www.abcindia.com, http://eindiatourism.com, and http://
http://www.mapsofindia.com.
Preliminary Results of the Review
We preliminarily determine that the following margins exist during
the period April 1, 2002, through March 31, 2003:
------------------------------------------------------------------------
Manufacturer/producer/exporter Margin percent
------------------------------------------------------------------------
China National Industrial Machinery Import & Export 0.09 (de minimis)
Corporation.........................................
Hongfa Machinery (Dalian) Co., Ltd................... 0.00
Laizhou Automobile Brake Equipment Company, Ltd...... 0.18 (de minimis)
Laizhou City Luqi Machinery Co., Ltd................. 0.00
Laizhou Hongda Auto Replacement Parts Co., Ltd....... 0.00
Longkou Haimeng Machinery Co., Ltd................... 0.00
Longkou TLC Machinery Co., Ltd....................... 0.00
Qingdao Gren (Group) Co.............................. 0.03 (de minimis)
Qingdao Meita Automotive Industry Company, Ltd....... 0.11 (de minimis)
Shandong Huanri (Group) General Company.............. 0.00
Yantai Winhere Auto-Part Manufacturing Co., Ltd...... 0.01 (de minimis)
Zibo Luzhou Automobile Parts Co., Ltd................ 0.00
------------------------------------------------------------------------
We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the date of publication of this
notice. Any interested party may request a hearing within 30 days of
publication of this notice. Any hearing, if requested, will be held on
May 24, 2004.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within 30 days of the
date of publication of this notice. Requests should contain: (1) the
party's name, address, and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed. See 19 CFR
351.310(c).
Issues raised in the hearing will be limited to those raised in
case briefs and rebuttal briefs. Case briefs from interested parties
may be submitted no later than May 10, 2004. Rebuttal briefs, limited
to issues raised in the case briefs, will be due no later than May 17,
2004. Parties who submit case briefs or rebuttal briefs in this
proceeding are requested to submit with each argument (1) a statement
of the issue; and (2) a brief summary of the argument. Parties are also
encouraged to provide a summary of the arguments not to exceed five
pages and a table of statutes, regulations, and cases cited.
The Department will issue the final results of these reviews,
including the results of its analysis of issues raised in any such
written briefs or at the hearing, if held, not later than 120 days
after the date of issuance of these preliminary results.
Assessment Rates
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries. The Department will issue
appropriate appraisement instructions for the companies subject to this
review directly to CBP within 15 days of publication of the final
results of this review. Pursuant to 19 CFR 351.212(b)(1), we will
calculate importer- or customer-specific ad valorem duty assessment
rates based on the ratio of the total amount of the dumping margins
calculated for the examined sales to the total entered value of those
same sales. Where the respondent did not report actual entered value,
we will calculate individual importer- or customer-specific assessment
rates by aggregating the dumping margins calculated for all of the U.S.
sales examined and dividing that amount by the total quantity of the
sales examined. To determine whether the per-unit duty assessment rates
are de minimis (i.e., less than 0.50 percent), in accordance with the
requirement set forth in 19 CFR 351.106(c)(2), we have calculated
importer- or customer-specific ad valorem ratios based on export
prices. We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any importer or customer-
specific assessment rate calculated in the final results of this review
is above de minimis.
Cash Deposit Requirements
Upon completion of these reviews, for entries from CNIM, Hongfa,
LABEC, Luqi, Hongda, Longkou Haimeng, LKTLC, GREN, Meita, Huanri
General, Winhere and ZLAP, we will require cash deposits at the rate
established in the final results as further described below.
Bonding will no longer be permitted to fulfill security
requirements for shipments of brake rotors from the PRC produced and
exported by Luqi that are entered, or withdrawn from warehouse, for
consumption on or after the publication date of the final result of the
new shipper review. The following cash deposit requirements will be
effective upon publication of the final results of the new shipper
review for all shipments of subject merchandise from Luqi entered, or
withdrawn from warehouse, for consumption on or after the publication
date: (1) for subject merchandise manufactured and exported by Luqi, no
cash deposit will be required if the cash deposit rate calculated in
the final results is zero or de minimis; and (2) for subject
merchandise exported by Luqi but not manufactured by Luqi, the cash
deposit rate will continue to be the PRC countrywide rate (i.e., 43.32
percent).
The following deposit requirements will be effective upon
publication of the final results of the administrative review for all
shipments of brake rotors from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(1) of the Act: (1) the cash deposit rates
for CNIM, Hongfa, LABEC, Hongda, Longkou Haimeng, LKTLC, GREN, Meita,
Huanri General, Winhere, and ZLAP will be the rates determined in the
final results of review (except that if a rate is de minimis, i.e.,
less than 0.50 percent, no cash deposit will be
[[Page 10409]]
required); (2) the cash deposit rate for PRC exporters who received a
separate rate in a prior segment of the proceeding will continue to be
the rate assigned in that segment of the proceeding; (3) the cash
deposit rate for the PRC NME entity (e.g., which includes Rotec) will
continue to be 43.32 percent; and (4) the cash deposit rate for non-PRC
exporters of subject merchandise from the PRC will be the rate
applicable to the PRC exporter that supplied that exporter.
With respect to Rotec, bonding will no longer be permitted to
fulfill security requirements for shipments of brake rotors from the
PRC produced and exported by Rotec that are entered, or withdrawn from
warehouse, for consumption in the United States on or after the
publication of this partial final rescission determination in the
Federal Register.
These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
Notification to Importers
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f)(2) 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.
These administrative and new shipper reviews and notice are in
accordance with sections 751(a)(1) of the Act and 19 CFR 351.214.
Dated: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5005 Filed 3-4-04; 8:45 am]