Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof from Thailand; Final Results of Antidumping Duty Administrative Review and Revocation of Antidumping Duty Order

DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-801]

Antifriction Bearings (Other Than Tapered Roller Bearings) and

Parts Thereof from Thailand; Final Results of Antidumping Duty

Administrative Review and Revocation of Antidumping Duty Order

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review and Revocation of Antidumping Duty Order.

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SUMMARY: On December 7, 1995, the Department of Commerce (the

Department) published the preliminary results of the administrative

review of the antidumping duty order on antifriction bearings (other

than tapered roller bearings) and parts thereof from Thailand. The

class or kind of merchandise covered by this order is ball bearings.

This review covers one producer and/or exporter of antifriction

bearings to the United States for the period May 1, 1993, through April

30, 1994.

We gave interested parties an opportunity to comment on the

preliminary results. Based on our analysis of the comments received, we

have made certain changes for the final results. We have determined the

margins for NMB Thai Ltd., Pelmec Thai Ltd., NMB Hi-Tech Bearings Ltd.,

and NMB Corporation (collectively, NMB/Pelmec) to be de minimis. We

have also determined that NMB/Pelmec has met the requirements for

revocation.

EFFECTIVE DATE: June 28, 1996.

FOR FURTHER INFORMATION CONTACT: Lyn Johnson or Rich Rimlinger, Office

of Antidumping Compliance, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)

482-4733.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute and to the

Department's regulations are references to the provisions as they

existed on December 31, 1994.

Background

On May 15, 1989, the Department published in the Federal Register

(54 FR 20909) the antidumping duty order on ball bearings and parts

thereof from Thailand. On June 22, 1994, in accordance with 19 C.F.R.

353.22(c), we initiated an administrative review of this order for the

period May 1, 1993, through April 30, 1994 (59 FR 32180). The

Department conducted a verification of NMB/Pelmec's response for this

period of review.

On May 31, 1994, NMB/Pelmec submitted a request, in accordance with

19 C.F.R.353.25(b), to revoke the order with respect to NMB/Pelmec's

sales of this merchandise. In accordance with 19 C.F.R.

353.25(a)(2)(iii), this request was accompanied by certifications from

the firm that it had not sold the relevant class or kind of merchandise

at less than foreign market value (FMV) for a three-year period,

including this review period, and would not do so in the future. NMB/

Pelmec also agreed to its immediate reinstatement in the relevant

antidumping order, as long as any firm is subject to this order, if the

Department concludes under 19 C.F.R. 353.22(f) that, subsequent to

revocation, it sold the subject merchandise at less than FMV.

On December 7, 1995, we published in the Federal Register the

preliminary results of our administrative reviews of the antidumping

duty orders on antifriction bearings (other than tapered roller

bearings) and parts thereof (AFBs) from France, Germany, Japan,

Singapore, Sweden, and Thailand (60 FR 62817) wherein we gave notice of

our intent to revoke the order on Thailand and invited interested

parties to comment. On January 31, 1996, and February 8, 1996, parties

to the Thailand proceeding submitted their case and rebuttal briefs,

respectively. At the request of interested parties, we held a public

hearing for the Thailand proceeding on February 14, 1996.

The Department is conducting this administrative review in

accordance with section 751 of the Tariff Act of 1930, as amended (the

Act).

Scope of Review

The products covered by this order, antifriction bearings (other

than tapered roller bearings), mounted or unmounted, and parts thereof

(AFBs) from Thailand, fall within the following class or kind of

merchandise:

Ball Bearings and Parts Thereof: These products include all AFBs

that employ balls as the roller element. Imports of these products are

classified under the following categories: antifriction balls, ball

bearings with integral shafts, ball bearings (including radial ball

bearings) and parts thereof, and housed or mounted ball bearing units

and parts thereof. Imports of these

[[Page 33712]]

products are classified under the following Harmonized Tariff Schedule

(HTS) subheadings: 3926.90.45, 4016.93.00, 4016.93.10, 4016.93.50,

6909.19.5010, 8431.20.00, 8431.39.0010, 8482.10.10, 8482.10.50,

8482.80.00, 8482.91.00, 8482.99.05, 8482.99.10, 8482.99.35,

8482.99.6590, 8482.99.70, 8483.20.40, 8483.20.80, 8483.50.8040,

8483.50.90, 8483.90.20, 8483.90.30, 8483.90.70, 8708.50.50, 8708.60.50,

8708.60.80, 8708.70.6060, 8708.70.8050, 8708.93.30, 8708.93.5000,

8708.93.6000, 8708.93.75, 8708.99.06, 8708.99.31, 8708.99.4960,

8708.99.50, 8708.99.58, 8708.99.8080, 8803.10.00, 8803.20.00,

8803.30.00, 8803.90.30, 8803.90.90.

The size or precision grade of a bearing does not influence whether

the bearing is covered by the order. For a further discussion of the

scope of the orders being reviewed, including recent scope

determinations, see Antifriction Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof from France, et al.; Final Results of

Antidumping Duty Administrative Reviews, Partial Termination of

Administrative Reviews, and Revocation in Part of Antidumping Duty

Orders, 60 FR 10900 (February 28, 1995) (AFBs IV).

Changes Since the Preliminary Results

Based on our analysis of comments received, we have made the

following changes in the final results:

In our computer calculations of profit for constructed value (CV)

we inadvertently omitted interest expense. We have included this

expense in our final calculations. We also changed the program to

perform a test for profit so that the greater of actual profit or the

statutory minimum of eight-percent profit is used. Finally, we

improperly classified insurance as a direct selling expense. Since

insurance identified in the response covers pre-sale transportation

from the factory to the warehouse, we have reclassified it as an

indirect selling expense for the final results.

Analysis of Comments Received

We invited interested parties to comment on our preliminary results

and intent to revoke the order. We received case and rebuttal briefs

from The Torrington Company (Torrington), petitioner in this

proceeding, and respondent, NMB/Pelmec Thailand. We held a public

hearing on February 14, 1996.

Company-Specific Issues

Comment 1: Torrington argues that the Department was incorrect in

applying the statutory minimum for calculating profit, selling, general

and administrative expense (SG&A). The petitioner also claims that the

Department did not compute average home market (HM) profits as a

percentage of costs nor did it check to determine whether such profits

exceed the statutory minimum. In addition, Torrington argues that the

Department did not calculate profits based only on sales to unrelated

parties. Torrington suggests that, in calculating profit for sales to

unrelated parties, below-cost sales should be excluded since, in

Torrington's opinion, such sales should not be considered to have been

made in the ``ordinary course of trade.''

NMB/Pelmec claims that it calculated weighted-average profit

margins and determined whether actual profit was above or below the

statutory minimum before applying it to CV. Thus, it contends, it

performed a proper analysis of the profit margins prior to entering the

information into the computer database. NMB/Pelmec also argues that

Torrington's suggestion to exclude below-cost sales from the profit

calculation is at odds with the Department's past determinations.

Respondent claims that Torrington has not demonstrated that below-cost

sales were not made in the ``ordinary course of trade.'' Therefore,

NMB/Pelmec contends that the Department should include all HM sales in

the profit calculation.

Department's Position: We performed a partial analysis of the

profit margins before applying them to CV. For the preliminary results,

we calculated an average profit margin as a percentage of CV; however,

we did not test this percentage to determine whether profit was above

or below the statutory minimum. Therefore, for the final calculations,

we have tested the profit information to ensure that we use the greater

of actual profit or the statutory minimum of eight-percent profit.

In response to Torrington's argument that the Department should

limit its calculation of profit to sales to unrelated parties, such

calculations were not possible in this case. Where the Department has

calculated profit on sales to unrelated parties, it had HM cost of

production (COP) data on the record of the segment of the proceeding.

(See AFBs IV.) However, for this review, since we were not conducting a

sales-below-cost investigation, we did not have the cost information

necessary to calculate profit rates for related and unrelated parties.

Therefore, we used the profit information that we requested and which

NMB/Pelmec provided in calculating CV.

Finally, we reject Torrington's suggestion that below-cost sales

are per se outside the ordinary course of trade. See Torrington v.

United States, 881 F. Supp. 622, 633 (CIT 1995). The Department

considers a variety of circumstances in determining whether HM sales

are outside the ordinary course of trade. In this review, Torrington

has failed to provide any evidence demonstrating that below-cost sales

are outside the ordinary course of trade.

Comment 2: Torrington contends that interest expense should be

included in the calculation of COP. According to petitioners, the

formula for calculating profits in the Department's calculations does

not include interest expenses, so that the calculation of profit is

understated.

Department's Position: We agree that, for our CV calculations, it

is appropriate to include interest expenses in the cost figures we use

to calculate profit. (See section above entitled ``Changes Since the

Preliminary Results.'')

Comment 3: Torrington argues that the Department has been

inconsistent in its treatment of NMB/Pelmec's ``Route B'' sales to HM

customers. Torrington refers to NMB/Pelmec's two methods for routing

sales to customers in the home market: 1) Route A sales in which

subject merchandise is sold directly to related and unrelated customers

in Thailand, and 2) Route B sales in which subject merchandise is first

shipped to an affiliated party in Singapore prior to sale to related

and unrelated customers in Thailand. Torrington contends that Route B

sales should be excluded for purposes of assessing the viability of

Thailand as a comparison market. Torrington notes that the Court of

International Trade (CIT) remanded the 1990-91 review of this order to

the Department with two decisions: first, the CIT instructed the

Department to explain its differing treatment of Route B sales from the

original investigation and, second, that NMB/Pelmec did not establish

that Route B sales were correctly classified in the 1990-91 review

before including them as HM sales. Also, Torrington argues that, as in

the original less-than-fair-value (LTFV) investigation, the fact that

subject merchandise was exported to Singapore and was exempt from taxes

and duties confirmed, in part, that Route B sales were export sales.

NMB/Pelmec argues that the Department is correct in identifying

Route B sales as HM sales. First, NMB/Pelmec points out that the record

indicates that subject merchandise was shipped to Singapore with the

knowledge that it would be returned for sale in Thailand. Second, NMB/

Pelmec contends that the Department's decision

[[Page 33713]]

in the preliminary results is consistent with the Department's prior

decisions. NMB/Pelmec notes that the Department's explanation as to why

Route B sales are reclassified as HM sales in the second and subsequent

reviews is clear in the Final Results of Redetermination Pursuant to

Court Remand at 12, filed on August 10, 1995, in Torrington Company v.

United States, 881 F. Supp. 622 (CIT 1995).

Finally, NMB/Pelmec claims that Torrington's argument that Route B

sales were export sales because the sales were exempt from taxes and

duties has already been addressed by the Department. NMB/Pelmec notes

that in the remand in the second review, the Department stated,

``Second, we recognize that HM sales can have different tax or duty

treatments based on the particular circumstances of the sale. For

example, certain bearings may be exempted from certain taxes and duties

if they are consumed in the production of an export product such as a

machine. However, since such bearings are consumed in the home market,

they are undeniably HM sales of bearings regardless of the fact that

the machine made from these bearings was ultimately exported and the

tax treatment of these HM bearings sales is different from other HM

sales of bearings.'' See Final Results of Redetermination Pursuant to

Court Remand in Ct. No. 92-07-00483, August 14, 1995, at 12.

Department's Position: We agree with NMB/Pelmec that Route B sales

are properly classified as HM sales. Route B merchandise is shipped to

NMB/Pelmec's Singapore selling affiliate with the knowledge that it

will be returned to Thailand for delivery to the unrelated customer.

Therefore, the first unrelated sale in this review for all Route B

sales occurred in Thailand. This differs from the original LTFV

investigation in which certain sales made through the affiliate in

Singapore, which NMB Thailand classified as Route B sales, were sold to

an unrelated customer in Singapore. In the LTFV investigation, we

determined that those particular Route B sales were third country

sales, not HM sales. This distinction is significant, since, under

section 773(a)(1)(A) of the Act, the ultimate consideration as to

whether the sales in question are HM sales is whether the merchandise

``is sold, or in the absence of sales, offered for sale in the

principal markets of the country from which exported, in the usual

commercial quantities and in the ordinary course of trade for home

consumption. . . .'' (emphasis added). We have not been inconsistent in

our treatment of Route B sales since the fact pattern differs between

the LTFV investigation and this review. In addition, although HM sales

can have different tax or duty treatments based on the particular

circumstances of the sale, this does not alter the fact that the sales

were consumed in the home market, which we have previously addressed in

the remand in the second review as noted by NMB/Pelmec above.

Therefore, we have included NMB/Pelmec's Route B sales as HM sales in

our analysis.

Comment 4: The Torrington Company argues that NMB/Pelmec's reported

movement expenses and charges for Route B sales should not be deducted

from foreign market value (FMV) since Route B sales should not be

considered HM sales. It contends that such expenses, i.e., pre-sale

freight expenses, are unrelated to the sale of bearings in Thailand.

NMB/Pelmec contends that pre-sale freight expenses for Route B

sales are direct expenses and should be deducted from FMV through a

circumstance-of-sale-adjustment. However, if the Department concludes

that these expenses are indirect, NMB/Pelmec claims that it is still

entitled to an adjustment under the exporter's sales price (ESP) offset

provision of the regulations.

Department's Position: We disagree with Torrington that Route B

sales are not HM sales (see our response to comment 4). However, the

record shows that charges NMB/Pelmec incurred in shipping the

merchandise to Singapore are pre-sale freight charges. Since NMB/Pelmec

has not demonstrated that these freight charges are related directly to

particular sales made in Thailand, we have treated the charges in these

final results as indirect selling expenses.

Comment 5: Torrington argues that NMB/Pelmec should not be allowed

adjustments for duty drawback. It claims that NMB/Pelmec did not

demonstrate any link between the duties alleged to be paid and rebated

and what was actually paid and rebated.

NMB/Pelmec contends that the Department verified all aspects of

what it claimed for the adjustment for uncollected duties, and refers

to the Department's Verification Report of March 16, 1995.

Department's Position: We agree with NMB/Pelmec that we verified

respondent's claimed adjustments, as noted in our Verification Report

of March 16, 1995, and found respondent's claim to be appropriate.

General Issues

Comment 6: Torrington argues that the Department should require

respondents to affirm that responses conform to any prior Department

determinations in these reviews. As an example, Torrington comments

that, if, as a result of litigation, the Department changed its

methodology with respect to price adjustments for a firm, that firm

should indicate that its response for this review conforms to the

latest changes in methodology.

Department's Position: Torrington's comment is directed at certain

changes which do not apply in the case of NMB/Pelmec.

Comment 7: Torrington argues that the Department's calculation of

the deposit rate is not tax-neutral and is adversely affected by the

Department's new value-added tax methodology. Torrington claims that,

since United States price (USP) is likely to be higher than entered

value, the Department's deposit rate calculation based on USP results

in understated deposit rates. Therefore, Torrington argues that the

Department should recalculate deposit rates using the relationship

between the total dumping duties due and total entered value instead of

using total adjusted USP in the denominator.

Department's Position: Because we are revoking the order based on

the fact that NMB/Pelmec has had a three-year period in which we have

not calculated dumping margins greater than de minimis, we are not

establishing a deposit rate for NMB/Pelmec. Therefore, this issue is

moot for this order.

Comment 8: Torrington argues that the Department should recalculate

profit for constructed value to exclude below-cost sales. Petitioner

contends that, in such calculations, losses incurred on below-cost

sales will offset profits companies realize on above-cost sales, thus

decreasing the calculated average profit. If the Department does not

calculate profit based solely on above-cost sales, petitioner asks that

the Department calculate average profit by totalling all profits

realized on profitable sales and dividing the result by total COP on

all sales.

Department's Position: We disagree with Torrington's contention, as

we have in prior reviews, that the calculation of profit should be

based only on sales that are priced above the COP. (See Final Results

of Antidumping Duty Administrative Reviews and Revocation in Part of an

Antidumping Duty Order: Antifriction Bearings (Other Than Tapered

Roller Bearings) and Parts Thereof From France, et al., 58 FR 39729,

39752 (July 26, 1993), and AFBs IV at 10922.) The Department's

methodology for calculating profit in determining CV is in compliance

with section 773(e)(1)(B) of the Act. The

[[Page 33714]]

statute does not explicitly instruct us to disregard below-cost sales

in the calculation of profit. Accordingly, it would be inappropriate

for the Department to read such a requirement into the statute. Thus,

the Department does not deem it necessary to change its methodology as

further suggested by petitioner. (Comment 1 also relates to this

issue.)

Comment 9: Torrington argues that a sale should be presumed to be

an export sale whenever the circumstances suggest that the sales are

not for home market consumption. As an example, Torrington comments

that, where the record for a company shows that either a HM customer

(or related party) has U.S. manufacturing facilities which use bearings

in a further-manufactured article or export documents were prepared by

the manufacturer, the Department should presume that the manufacturer

knew or should have known that the sales in question were for export.

Petitioner further notes that, in this case, if the respondent provides

adequate rebuttal evidence, the presumption is then defeated.

Petitioner argues that this creates incentive for respondents to find

out whether such sales are for home market consumption and to report

relevant information.

Department's Position: With the exception of Route B sales, we find

no evidence on the record that HM sales of NMB/Pelmec's merchandise

were exported. With respect to Route B sales, see our response to

Comment 3.

Comment 10: Torrington argues that the Department should not

exclude U.S. sales of bearings used by a related party as a minor

component in a further-manufactured article.

Department's Position: Since NMB/Pelmec did not have sales of

bearings used by a related party as a minor component in further

manufacturing, and the Department did not exclude such sales in this

case, this issue does not apply to the firm.

Comment 11: Torrington argues that the Department should calculate

profit on the basis of sampled, above-cost HM sales only. Petitioner

contends that profit for CV should be based on profits on sampled HM

sales, not on sales of the class or kind of merchandise generally in

the home market. Petitioner claims that the use of the sampled sales

insures that profit is based on a verified database of sales of in-

scope merchandise of the same general class or kind, as opposed to the

use of general profit data, for which the Department has little

assurance that the reported profits are actually based on sales of in-

scope merchandise of the same general class or kind.

Department's Position: We disagree with Torrington's contention

that profit should be calculated on the basis of the sampled sales. The

Department consistently used profit information based on the general

class or kind of merchandise. See AFBs IV at 10923. As far as above-

cost sales are concerned, see our response to Comment 3.

Comment 12: Torrington asks that the Department reconsider its

treatment of antidumping duties and deduct such duties from ESP as a

selling cost.

Department's Position: We disagree with petitioner. As stated in

AFBs IV at 10905, it has been our consistent interpretation of 19 CFR

353.26 that evidence of reimbursement is necessary before we can make

an adjustment to USP. In this review, Torrington has not identified

record evidence that there was reimbursement of antidumping duties, and

we have not adjusted USP for the duties.

Final Results of Review

We determine that, for the period May 1, 1993, through April 30,

1994, NMB/Pelmec had a weighted-average antidumping duty margin of 0.19

percent, which is de minimis. We further determine that NMB/Pelmec has

not sold ball bearings at less than FMV for three consecutive review

periods, including this review period. The certification from the firm

(mentioned above) and the fact that there were no comments with respect

to our intent to revoke this order in the preliminary results warrant

revocation of the order. Therefore, the Department is revoking the

order on antifriction bearings (other than tapered roller bearings) and

parts thereof from Thailand, with regard to ball bearings, in

accordance with section 751(c) of the Act and 19 CFR 353.25.

This revocation applies to all entries of the subject merchandise

entered, or withdrawn from warehouse, for consumption on or after May

1, 1994. The Department will order the suspension of liquidation ended

for all such entries and will instruct the Customs Service to release

any cash deposit or bonds. The Department will further instruct Customs

to refund with interest any cash deposits on post-May 1, 1994 entries.

In addition, the Department will terminate the review covering subject

merchandise from Thailand sold during the period May 1, 1994, through

April 30, 1995, which was initiated on June 19, 1995 (60 FR 31952).

Assessment Rates: The Department shall determine, and the Customs

Service shall assess, antidumping duties on all appropriate entries.

Because sampling and other simplification methods prevent entry-by-

entry assessments, we will calculate wherever possible an exporter/

importer specific assessment rate for each class or kind of

antifriction bearings.

Exporter's Sales Price Sales: For ESP sales, which we sampled, we

divided the total dumping margin for the reviewed sales by the total

entered value of those reviewed sales for the importer. We will direct

Customs to assess the resulting percentage margin against the entered

Customs values for the subject merchandise on entries under the

relevant order during the review period. While the Department is aware

that the entered value of sales during the period of review (POR) is

not necessarily equal to the entered value of entries during the POR,

use of entered value of sales as the basis of the assessment rate

permits the Department to collect a reasonable approximation of the

antidumping duties which would have been determined if the Department

had reviewed those sales of merchandise actually entered during the

POR.

This notice serves as a final reminder to importers of their

responsibility under 19 CFR 353.26 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.

This notice also serves as the only reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the return or destruction of proprietary information

disclosed under APO in accordance with 19 CFR 353.34(d). Failure to

comply is a violation of the APO.

This administrative review, revocation, and notice are in

accordance with sections 751(a)(1) and 751(c) of the Act (19 U.S.C.

1675(a)(1)) and sections 353.22 and 353.25 of the Department's

regulations (19 CFR 353.22 and 19 CFR 353.25).

Dated: June 21, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-16614 Filed 6-27-96; 8:45 am]

BILLING CODE 3510-DS-P