Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from Romania; Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-485-602]

Tapered Roller Bearings and Parts Thereof, Finished or

Unfinished, from Romania; Final Results of Antidumping Duty

Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of Antidumping Duty Administrative

Review.

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SUMMARY: On December 2, 1996, the Department of Commerce (``the

Department'') published the preliminary results of its administrative

review of the antidumping duty order on tapered roller bearings and

parts thereof, finished or unfinished, (TRBs) from Romania (61 FR

63826-28). The review covers one exporter and two producers of subject

merchandise for the period June 1, 1993 through May 31, 1994. We

received comments from interested parties with regard to the

Department's preliminary determination to deny Tehnoimportexport a

separate rate for this review (see Comment 4 below). Upon consideration

of interested parties' comments, for the final results of review, we

reaffirm our determination that TIE is not entitled to a separate rate.

Based on our analysis of all comments received, we determine the

country-wide dumping margin for Romania to be zero percent for this

review period.

EFFECTIVE DATE: June 6, 1997.

FOR FURTHER INFORMATION CONTACT: Rick Johnson or Jean Kemp, AD/CVD

Enforcement Group III, Import Administration, International Trade

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

Constitution Ave., N.W., Washington, D.C. 20230; telephone: (202) 482-

3793.

SUPPLEMENTARY INFORMATION:

Applicable Statutes and Regulations

Unless otherwise stated, 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 December 2, 1996, the Department published in the Federal

Register (61 FR 63826) the preliminary results of its administrative

review of the antidumping duty order on TRBs from Romania (52 FR

23320). We have now completed this administrative review in accordance

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

Act), and 19 C.F.R. 355.22.

Scope of Review

Imports covered by this review are shipments of TRBs from Romania.

These products include 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. This merchandise is

currently classifiable under Harmonized Tariff Schedule (HTS) item

numbers 8482.20.00, 8482.91.00, 8482.99.30, 8483.20.40, 8483.30.40, and

8483.90.20. Although the HTS item numbers are provided for convenience

and Customs purposes, the written description of the scope of this

order remains dispositive.

This review covers eight companies and the period June 1, 1993

through May 31, 1994. Of the eight companies for which petitioner

requested a review, only Tehnoimportexport, S.A. (``TIE'') made

shipments of the subject merchandise to the United States during the

period of review. S.C. Rulmenti Alexandria and S.C. Rulmental S.A.

Brasov produced the merchandise sold by TIE to the United States, but

have stated that they did not ship TRBs directly to the United States.

Tehnoforestexport, Rulmenti S.A. Birlad, S.C. Rulmenti Grei S.A.

Ploiesti,

[[Page 31076]]

S.C. Rulmenti S.A. Slatina, and S.C. URB Rulmenti S.A. Suceava have

responded that they did not produce or sell TRBs subject to this

review.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received comments from respondent, TIE;

petitioner, the Timken Company; and Universal Automotive Trading

Company, Ltd. (Universal), an interested party. Comments submitted

consisted of petitioner's case brief of December 31, 1996 and rebuttal

brief of January 9, 1997; respondents' case brief of January 2, 1997

and rebuttal brief of January 8, 1997; and Universal's rebuttal brief

of January 8, 1997.

Comment 1: Petitioner asserts that the Department's use of factory

overhead and selling, general and administrative (SG&A) data from the

Preliminary Results of Review: Welded Carbon Steel Pipe and Tube from

Turkey is contrary to law and otherwise unreasonable for several

reasons. First, petitioner claims that the Department had available to

it overhead and SG&A information for producers of bearings in Thailand,

which the Department used in the 1994/95 review of this order.

Petitioner maintains that the determination in the 1994/95 review that

Thailand is at a level of economic development comparable to that of

Romania should also apply to this review period, as the per capita GNP

of Thailand in 1993 was closer to that of Romania than either Poland's

or Turkey's (according to the World Bank's World Development Report

1995).

Second, petitioner argues that the use of data for pipes and tubes

is inappropriate because the statute, at 19 U.S.C. Sec. 1677b(c) (1)(B)

and (2)(A), requires use of surrogate values for production of

comparable merchandise. Petitioner stresses that pipes and tubes are

not comparable to bearings. Specifically, petitioner notes that the

pipe and tube industry is a basic steel industry which does not require

the same degree of precision and technology required to produce subject

merchandise. Additionally, petitioner argues that no domestic or

international classification system places pipes and tubes and bearings

within groups of products or industries that can be defined as

encompassing similar or comparable merchandise.

Third, because the final results have not been issued in Turkish

Pipe and Tube, petitioner argues that its results have not been

approved or adopted by the Department as reliable.

Respondent maintains that the Department should continue to use the

statutory minimum for SG&A expenses for the purposes of the final

results, rather than relying on the Thai data. Respondent argues that

petitioner's proposal to use Thai data would be contrary to law and

unacceptable for several reasons. First, respondent notes that Thailand

was not selected as a potential surrogate country for Romania in this

administrative review.

Second, respondent argues that the Thailand data, which is from the

period 1988-90, is out of date. In contrast, the Turkish data is based

upon contemporaneous data and is therefore, according to respondent,

more appropriate.

Third, respondent asserts that the Thai data is flawed in numerous

ways: (1) there are vast differences between the Thai producers and the

Romanian producers of TRBs; (2) the Department's use of the Thai data

from a previous review was based solely upon best information available

(BIA); (3) the Thai data includes certain inapplicable SG&A and other

expenses; and (4) the Thai data is aberrational, constituting the

highest SG&A rate ever found by the Department.

With regard to petitioner's assertion that the Turkish data is

unusable because it pertains to an industry other than bearings,

respondent claims that the Department ``regularly'' uses surrogate data

from sources which are not identical to the industry being reviewed.

Respondent also claims that the Turkish rate used was for galvanized

pipe, a more complex product than regular pipe. Moreover, respondent

states that the Thai data applies to the production of miniature

bearings used in high-tech applications, while the Romanian factories

employ a technology more akin to the manufacture of pipe than to

``highly complex'' miniature bearings.

Regarding petitioner's assertion that the Turkish data has not been

``approved'' by the Department because it has not been used for a final

results notice, respondent argues that the Department ``regularly''

uses unverified financial statements from companies which are not

involved in antidumping reviews as the basis for surrogate data.

Respondent stresses that it is public data of the type commonly used by

the Department for NME cases.

Department's Position: We disagree with petitioner that Thailand

should be used as a surrogate instead of Turkey for overhead and SG&A

values.

While petitioner has stressed that Thailand's per capita GNP was

similar to Romania's for the POR, we note that this factor does not

provide the sole basis for determining economic comparability. As

discussed in the Department's surrogate country selection memorandum,

``the countries selected as potential surrogates were determined to be

at a level of economic development comparable to Romania in terms of

national distribution of labor and growth rates, as well as per capita

GNP.'' See Memorandum to the File: Selection of the surrogate country

in the 1993/1994 administrative review of tapered roller bearings and

parts thereof, finished or unfinished, from Romania, page 3 (May 4,

1996), which is on file in the Central Records Unit (room B099 of the

Main Commerce Building). Considering all three factors together,

Thailand was not included on the Department's list of surrogate

countries for this review period. Therefore, Thailand is not the most

appropriate choice to meet the requirement, under section 773(c)(4)(A),

to use a surrogate country that is at a level of economic development

comparable to that of Romania.

With regard to petitioner's objection to the use of data from the

Turkish pipe and tube industry because it is not an industry comparable

to tapered roller bearings, as we noted in the Department's first

surrogate country selection memorandum, the term ``comparable''

encompasses a larger set of products than ``such or similar.'' The

Department also noted that it has, in past cases, identified comparable

merchandise on the basis of similarities in production factors

(physical and non-physical) and factor intensities. See Memorandum for

Michael Rill: Surrogate Country Selection for Tapered Roller Bearings

from Romania, page 1 (March 24, 1995), on file in the Central Records

Unit, citing Notice of Preliminary Determination of Sales at Less than

Fair Value and Postponement of Determinations: Magnesium and Alloy

Magnesium from the PRC, 59 FR 55424 (1994). Moreover, in Beryllium from

Kazakstan, the Department selected a surrogate country which was not a

producer of either the same or comparable merchandise, because there

was no information on a market economy country which produced beryllium

and was at a level of development comparable to that of Kazakstan. See

Notice of Preliminary Determination of Sales at Less than Fair Value

and Postponement of Final Determination: Beryllium Metal and High

Beryllium Alloys from Kazakstan, 61 FR 44213, 44295 (August 28, 1996).

Concerning petitioner's assertion that the Department should not

rely on data which has not been ``approved'' by the

[[Page 31077]]

Department because it has not been used for the final results, we note

that this information is publicly available published information.

Absent information on the record which leads the Department to question

the accuracy and appropriateness of such data, the Department normally

accepts publicly available published information as reliable.

Because the Department had no useable information from Poland for

this expense, and because both industries are processors of primary

hot- and cold-rolled carbon steel products, the Department determines

that the utilization of Turkish pipe and tube data is consistent with

its statutory requirement.

Comment 2: Petitioner claims that there is no assurance that the

Turkish overhead and SG&A data includes costs for indirect labor.

Petitioner states that the Department must assure that indirect labor

is included in the final foreign market value.

Respondent argues that the Turkish response implies that indirect

labor costs have been included. Therefore, the derivation of a separate

value for indirect labor would result in a double-counting of this

factor.

Department's Position: We disagree with petitioner's supposition

that indirect labor costs and wages and salaries for non-production

workers, which are standard components of a company's reported overhead

and SG&A, have not been included in the Turkish data merely because

this component has not been explicitly itemized in the public versions

of the cost responses in Turkish Pipe and Tube. In the Turkish case,

the Department asked for direct labor to be reported separately. The

Department did not make this request for indirect labor or for the

salaries paid to non-production workers. This Departmental practice

should in no way be interpreted as an implication that indirect labor

costs have not been included in the overhead and SG&A data. As the

questionnaire in Turkish Pipe and Tube stated, general and

administrative expenses would include ``general and administrative

expenses of the corporate headquarters'' (at page 68), and variable

overhead expenses ``may include * * * indirect labor'' (at page 67).

Respondent Yucelboru Ihracat, Ithalat ve Pazarlama A.S., elaborated on

its reporting in a November 7, 1996 submission, stating that variable

overhead ``includes all overhead expenses except for depreciation.''

Therefore, there is no evidence suggesting that indirect labor has been

excluded from the Turkish respondent's overhead and SG&A data.

Comment 3: Petitioner maintains that the value used for Polish hot-

rolled scrap is unreasonably high in comparison with the value of the

finished product, as scrap is assigned a value that is over 50% of the

value of bar for cups and cones and over 40% of the value of the rod

for rollers. Instead of the hot-rolled scrap value, petitioner asserts

that the Department should apply values that bear the same relationship

to the hot-rolled bar and rod values as the cold-rolled scrap value

bears to the cold-rolled sheet value. Petitioner asserts that the Court

of International Trade in fact has rejected scrap values that, when

compared with the value of finished steel, were unreasonably high.

Respondent supports the Department's allocation of steel scrap

values. Respondent suggests that there is nothing aberrant about the

fact that scrap values vary over time. Additionally, respondent states

that the use of a steel scrap ratio derived from cold-rolled components

would be, by its very nature, less accurate.

Department's Position: We disagree with petitioner that the value

for Polish hot-rolled scrap is unreasonably high in comparison with the

value of the finished product. Petitioner seems to object to the use of

the Polish hot-rolled scrap price based solely on the fact that the

price is, in petitioner's opinion, too high. However, petitioner offers

no evidentiary support to its claim that the scrap price is aberrant,

or in any way out of line with hot-rolled scrap prices for that time

period.

Petitioner's claim that the Court of International Trade has

rejected scrap values that were unreasonably high when compared with

the value of finished steel is incorrect. In Timken Co. v. United

States, 699 F. Supp. 300 (CIT 1988), the Court rejected the

Department's use of two telexes whose ``inconsistency is laid bare when

used in conjunction with the raw material prices listed in the Steel

Authority of India's Statistics for Iron and Steel Industry in India.''

The inconsistency to which the Court refers is with regard to the

information presented in the telexes (not with regard to the Indian raw

material prices), as the Court stated that the Department ``provides no

contemporaneous rationale for concluding that one cost quotation in the

telex is more appropriate than the other.'' See Timken Co. v. United

States, 699 F. Supp. at 307. Clearly, if all the information in the two

telexes had indicated that a high scrap value relative to material cost

was appropriate, no inconsistency would have existed. Thus, we find

that petitioner's cite to Timken Co. v. United States is inapposite.

As discussed above, petitioner has not shown why the Department

should not use the Polish hot-rolled scrap value. Moreover, petitioner

has failed to support its proposal that the Department should apply a

hot-rolled scrap value based on the ratio of cold-rolled scrap value to

cold-rolled sheet value. Even assuming that the hot-rolled scrap value

is inappropriate, petitioner has not explained why the use of a ratio

for cold-rolled components is an appropriate alternative (e.g., as

opposed to some other type of steel, or a hot-rolled scrap value from

another period).

Comment 4: Respondent claims that it meets the criteria for a

separate rate, and that the Department, in refusing to provide a

separate rate for TIE, has overlooked ``substantial'' changes both in

Romania and at TIE.

Respondent states that the progression into private ownership of

TIE, in which there is no government control over the daily activities

of TIE or with respect to TIE's exports, substantiates a separate rate

determination. Additionally, respondent argues that the Department has

failed to establish a causal connection between governmental selection

of management and actual control of export prices. Finally, TIE claims

that, even in the context of a test for market-economy status, the

Department does not determine that ``government ownership'' of state-

owned enterprises precludes their independence.

Universal Automotive Trading, Inc. (``Universal''), an interested

party in this proceeding, supports respondent's argument.

Petitioner argues that, because the Department found in a

subsequent review that respondents did not meet the criteria for a

separate rate, and nothing in the record of this review indicates any

less government involvement, the Department should uphold its

preliminary determination in this review that TIE is not entitled to a

separate rate.

Department's Position: We agree with petitioner. In the final

results of review notice for the period 1994/95, the Department

described the ownership and management structure of TIE. See Tapered

Roller Bearings and Parts Thereof, Finished or Unfinished, from the

Republic of Romania; Final Results and Rescission in Part of

Antidumping Duty Administrative Review, (``TRBs from Romania'') 61 FR

51427, 51431 (October 2, 1996) (Comment 15). Significantly, there is no

difference on the record in either the ownership or the management

structure between that

[[Page 31078]]

review and this one. Therefore, for this review period, we find that

TIE has not established that it has autonomy in making decisions

regarding the selection of its management. For this reason, there is

insufficient record evidence of the absence of de facto government

control over TIE to entitle TIE to a separate rate.

Comment 5: Respondent claims that the Department's labor

calculation, based on Polish data, is erroneous. First, respondent

claims that, in the event the Department utilizes the Polish data for

the final results, it should exclude bonus payments from profits, as it

assumes profits were made by Polish bearing companies. Universal

supports respondent's argument.

Second, respondent asserts that it is unfair to use a labor rate

from Poland, a country with an allegedly much larger per capita income,

without adjusting such labor rates to account for the disparity in

incomes. Respondent proposes that the Department use an average labor

rate, taking the simple average of Ecuador (a country with a similar

per capita GNP to Romania) and Poland.

Petitioner maintains that bonus payments are part of employees'

remuneration and are properly included in a company's labor costs, and

that it is irrelevant whether part of the compensation is paid in the

form of bonuses or other fringe benefits. As costs incurred by the

employer, petitioner claims that they must be included in any fully-

loaded calculation of labor costs.

Petitioner rebuts respondent's assertion regarding the use of a

Polish labor rate by noting that surrogate values are used in the

Department's NME methodology because so-called ``actual'' costs

incurred and prices paid in a nonmarket economy do not reflect market

forces. Therefore, according to petitioner, costs and prices in Romania

are irrelevant. Additionally, petitioner rejects respondent's proposal

to incorporate Ecuadorean labor data, because there is no record

evidence that Ecuador produces TRBs or any other kind of antifriction

bearing.

Department's Position: We agree with petitioner. The Department

responded to these arguments in the final results notice for the 1994/

95 review. See TRBs from Romania, 51430-31. As discussed therein, the

Department generally does not dissect the wage rate of a surrogate

country and apply only certain components to the producing company;

rather, it is our practice to accept a valid surrogate wage rate as

wholly applicable to the NME respondent in question. Because there are

no factually significant differences between that review and this one,

the Department's determinations for the 1994/95 review apply here as

well. Therefore, the Department will continue to apply the Polish labor

rate, including bonus payments.

Comment 6: Respondent objects to the Department's methodology of

adding freight costs to raw materials costs by the CIF/FOB conversion

factor of 1.15. Respondent claims that, because Poland is contiguous to

the European Union, and because the Department has utilized steel

prices for exports from the European Union to Poland, the use of a

figure based on average costs around the world greatly overstates the

actual freight cost. Respondent concludes that in the alternative, the

Department should use inland freight rates selected for shipping

bearings to the port as the basis for calculating the freight rates to

be attached to raw material costs. Universal supports respondent's

argument.

Petitioner claims that respondent's assertion that most Polish

steel was exported from Germany has no basis and is not logical, as

steel imports are not dictated only or primarily by geographical

proximity. Also, petitioner states that this issue was decided in the

1994/95 review, and TIE has not offered any better alternative in its

case brief for this segment of the proceeding.

Department's Position: We disagree with respondent. As the

Department noted in the final results notice of the 1994/95 review,

although freight distances for steel imported into Poland might differ

from the average freight distance reflected in the conversion factor,

we have no way to ascertain that difference. See TRBs from Romania at

51433 (Comment 21).

With regard to respondent's proposed alternative, the Department's

established methodology is to utilize information available from the

primary surrogate country before turning to data pertaining to the

secondary surrogate country. The CIF/FOB data is specific to Poland,

our primary surrogate country for this review. Further, the Department

only resorted to use of the Turkish freight rates for foreign inland

freight because the Department had ``no useable information for this

expense.'' See Memorandum to the File: Analysis for the preliminary

results of the 1993/1994 administrative review of tapered roller

bearings and parts thereof, finished or unfinished, from Romania--

Tehnoimportexport, S.A., October 28, 1996, page 2, which is on file in

the Central Records Unit. Clearly, the Department had useable

information pertaining to Poland for freight and insurance for raw

materials inputs. Finally, use of the Turkish data would not provide a

more acceptable alternative because the record of that case does not

indicate whether the Turkish data includes insurance.

Comment 7: Respondent states that the Department should utilize the

former statutory minimum of eight percent to calculate profit.

Universal supports respondent's assertion.

Petitioner notes that respondent has offered no reason in support

of its proposal. Petitioner maintains that the statutory minimum is

only to be used if no data above the minimum are available. Therefore,

the Department should continue to use the profit rate from the Turkish

pipe and tube producer used in the preliminary results.

Department's Position: We agree with petitioner. First, we note

that, as this segment of the proceeding is controlled by the pre-URAA

statute, the provision of that statute and the corresponding regulation

regarding the eight percent statutory minimum for profit are fully

applicable to this review. See section 773(e)(1)(B)(ii) of the Act; 19

CFR Sec. 353.50(a)(2).

The Department's Antidumping Manual states the Department's

practice with regard to the calculation of profit when using the

factors of production methodology. Specifically, it states that ``if

the profit in the surrogate were higher than the eight percent

statutory minimum, we would use the actual profit.'' See Antidumping

Manual, Chapter 8, pp. 72-73.

Moreover, as the Department noted in another case involving a non-

market economy, the statute requires that we ``value profit in a

surrogate country, provided that the surrogate's profit percentage

exceeds the statutory minimum of eight percent.'' See Comment 4, Final

Results of Antidumping Duty Administrative Review: Certain Iron

Construction Castings from the People's Republic of China, 57 FR 10644

(March 27, 1992). As discussed in response to Comment 1, for purposes

of this review, the Department has found that the Turkish pipe and tube

industry is sufficiently comparable to Romania's tapered roller bearing

industry to justify using values from that industry to calculate FMV in

this review. Therefore, in the absence of surrogate profit information

from bearing producers, it is appropriate for the Department to utilize

the profit rate from the Turkish pipe and tube producer.

[[Page 31079]]

Final Results of the Review

As a result of our review, we determine that the following margin

exists:

------------------------------------------------------------------------

Margin

Manufacturer/exporter Time period (percent)

------------------------------------------------------------------------

Romania Rate.............................. 6/1/93-5/31/94 0.00

------------------------------------------------------------------------

The Department will instruct the Customs Service to assess

antidumping duties on all appropriate entries. The Department will

issue appraisement instructions directly to the Customs Service.

Deposit rates are governed by the final results of the 1994/95

administrative review of this proceeding. See Tapered Roller Bearings

and Parts Thereof, Finished or Unfinished, from Romania; Final Results

of Antidumping Duty Administrative Review, 61 FR 51434 (October 2,

1996).

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 a reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d)(1). Timely written notification

of the return/destruction of APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations and terms of an APO is a

sanctionable violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: May 27, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-14869 Filed 6-5-97; 8:45 am]

BILLING CODE 3510-DS-P