Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Preliminary Results of Antidumping Administrative Review and Partial Termination of Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]

Tapered Roller Bearings and Parts Thereof, Finished and

Unfinished, From the People's Republic of China; Preliminary Results of

Antidumping Administrative Review and Partial Termination of

Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review of tapered roller bearings and parts thereof,

finished and unfinished, from the People's Republic of China and

partial termination of administrative review.

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SUMMARY: In response to requests by the petitioner and by Peer Bearing

Company/Chin Jun Industrial, Ltd. (Chin Jun), the Department of

Commerce is conducting an administrative review of the antidumping duty

order on tapered roller bearings and parts thereof, finished and

unfinished, from the People's Republic of China. The period of review

is June 1, 1995, through May 31, 1996.

Although we included Shanghai General Bearing Co., Ltd. in our

initiation notice, we subsequently revoked the order with regard to

this respondent. Therefore, we are terminating this review with respect

to this respondent (see Background section below).

We have preliminarily determined that sales have been made below

normal

[[Page 36765]]

value by various companies subject to this review. If these preliminary

results are adopted in our final results of administrative review, we

will instruct U.S. Customs to assess antidumping duties on all

appropriate entries.

We invite interested parties to comment on these preliminary

results. Parties who submit comments in this proceeding are requested

to submit with each argument (1) a statement of the issue and (2) a

brief summary of the argument.

EFFECTIVE DATE: July 9, 1997.

FOR FURTHER INFORMATION CONTACT: Thomas O. Barlow or the appropriate

case analyst, for the various respondent firms listed below, at 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: Andrea Chu: Jilin Machinery Import &

Export Corporation (Jilin), Wanxiang Group Corporation (Wanxiang),

China National Machinery & Equipment Import & Export Corporation

(CMEC); Mike Panfeld: Xiangfan Machinery Foreign Trade Corporation

(formerly Xiangfan International Trade Corporation) (Xiangfan), China

National Automotive Industry Import & Export Corporation (Guizhou

Automotive), Chin Jun; Charles Riggle: Shandong Machinery & Equipment

Import & Export Corporation (Shandong), Tianshui Hailin Import & Export

Corporation (Hailin), Zhejiang Machinery Import & Export Corporation

(Zhejiang); Tom Schauer: Premier Bearing & Equipment, Ltd. (Premier),

Shanghai General Bearing Co. Ltd. & General Bearing Corporation

(Shanghai), Guizhou Machinery Import & Export Corporation (Guizhou

Machinery); Kristie Strecker: China National Machinery Import & Export

Corporation (CMC), Luoyang Bearing Factory (Luoyang), Liaoning MEC

Group Co., Ltd. (Liaoning), Hangzhou Metals, Mineral, Machinery &

Chemical Import Export Corp. (Hangzhou), China Great Wall Industry

Corp. (Great Wall).

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act), are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Round Agreements Act (URAA). In addition, all references

to the Department's regulations are to 19 CFR 353 (1997).

Background

On May 27, 1987, the Department of Commerce (the Department)

published in the Federal Register (52 FR 19748) the antidumping duty

order on tapered roller bearings and parts thereof, finished and

unfinished (TRBs), from the People's Republic of China (PRC). On June

6, 1996, we published a notice of opportunity to request an

administrative review of the order for the period June 1, 1995 through

May 31, 1996 (61 FR 28840). In accordance with 19 CFR 353.22(a), the

petitioner, The Timken Company, and Chin Jun requested that we conduct

an administrative review. On August 8, 1996, in accordance with 19 CFR

353.22(c), we published a notice of initiation of this antidumping duty

administrative review (61 FR 41374) for the period of review (POR) June

1, 1995, through May 31, 1996 (the 9th review period).

On August 12, 1996, we sent a questionnaire to the secretary

general of the Basic Machinery Division of the Chamber of Commerce for

Import & Export of Machinery and Electronics Products (CCCME) and

requested that the CCCME identify all companies that manufactured or

exported the subject merchandise during the POR. We also requested that

the questionnaire be forwarded to all PRC companies identified in our

initiation notice for which we did not have addresses. In this letter

we also requested information relevant to the issue of whether the

companies named in the initiation request are independent from

government control. See Separate Rates below. Finally, on September 20,

1996, we sent questionnaires directly to the PRC companies for which we

had addresses on the record. We also sent questionnaires to the Hong

Kong companies listed in our initiation notice, using addresses

supplied in the petitioner's initiation request as well as information

from the Hong Kong branch of the U.S. & Foreign Commercial Service.

We received responses to our questionnaire from the following 15 of

the 324 companies named in the initiation notice: Jilin, Wanxiang,

Xiangfan, Guizhou Automotive, Chin Jun, Shandong, Hailin, Zhejiang,

Premier, Guizhou Machinery, CMC, Luoyang, Shanghai, CMEC and Liaoning.

We also received a response to the Separate Rates section of the

questionnaire from one company, Hangzhou, that was not named in the

initiation notice but which was included in the review by virtue of the

fact that our initiation was conditionally intended to include, in

addition to companies specifically named, all exporters of TRBs from

the PRC which were not entitled to rates separate from the PRC entity.

See Initiation of Antidumping and Countervailing Duty Administrative

Reviews and Request for Revocation In Part, 61 FR 41373, 41380 (August

8, 1996).

In addition, we received a response to the Separate Rates section

of the questionnaire from Great Wall, which had received a separate

rate in the 1994-95 review, but for which no review had been requested

for the 1995-96 period. Because we are not reviewing Great Wall's

entries for this POR we need not reconsider its separate-rates status

at this time. Great Wall's rate will continue to be 25.56 percent, the

rate established for that firm in the 1994-95 review.

Shanghai was included by name in our notice of initiation of this

review. However, on February 11, 1997, we published a notice of

revocation of the order with respect to Shanghai (62 FR 6189).

Therefore, we are terminating this review with respect to Shanghai.

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

Scope of Review

Merchandise covered by this review includes TRBs and parts thereof,

finished and unfinished, from the PRC. This merchandise is classifiable

under the Harmonized Tariff Schedule (HTS) item numbers 8482.20.00,

8482.91.00.60, 8482.99.30, 8483.20.40, 8483.20.80, 8483.30.80,

8483.90.20, 8483.90.30 and 8483.90.80. Although the HTS item numbers

are provided for convenience and customs purposes, our written

description of the scope of the order and this review is dispositive.

Verification

As provided in section 782(i) of the Act, we verified information

provided by CMC, Guizhou Machinery, Liaoning and Luoyang, using

standard verification procedures, including on-site inspection of

manufacturers' facilities, the examination of relevant sales and

financial records, and selection of original documentation containing

relevant information. Because of the large number of producers and

resellers included in this review and the limited resources available

to the Department, it was impractical to verify factual information for

each company. In accordance with 19 CFR 353.36(a)(B) of the

regulations, we selected for verification companies for which we had

conducted no verification during either of the two immediately

preceding reviews. Our verification results are outlined in the

[[Page 36766]]

public versions of the verification reports.

Separate Rates

1. Background and Summary of Findings

It is the Department's standard policy to assign all exporters of

the merchandise subject to review in non-market-economy (NME) countries

a single rate unless an exporter can demonstrate an absence of

government control, both in law and in fact, with respect to exports.

To establish whether an exporter is sufficiently independent of

government control to be entitled to a separate rate, the Department

analyzes the exporter in light of the criteria established in the Final

Determination of Sales at Less Than Fair Value: Sparklers from the

People's Republic of China (56 FR 20588, May 6, 1991) (Sparklers), as

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). 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 an 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. See Sparklers at 20589. Evidence relevant to a de facto

analysis of absence of government control over exports is based on four

factors--whether the respondent: (1) sets its own export prices

independent from the government and other exporters; (2) can retain the

proceeds from its export sales; (3) has the authority to negotiate and

sign contracts; and (4) has autonomy from the government regarding the

selection of management. See Silicon Carbide at 22587; see also

Sparklers at 20589.

The Department determined in prior reviews that Guizhou Machinery,

Jilin, Luoyang, Liaoning, Guizhou Automotive, CMC, Hailin, Zhejiang,

Xiangfan, Shandong and Wanxiang were entitled to separate rates. See,

e.g., Tapered Roller Bearings and Parts Thereof, Finished and

Unfinished, From the People's Republic of China; Final Results and

Partial Termination of Antidumping Administrative Review, 62 FR 6173

(February 11, 1997). Information submitted by these companies for the

record in the current review is consistent with these findings.

Further, there have been no allegations regarding changes in control of

these companies in this review. Therefore, we preliminarily determine

that the government does not exercise control over the export

activities of these firms.

As shown below, Hangzhou also meets both the de jure and de facto

criteria and is entitled, therefore, to a separate rate (see De Jure

Analysis and De Facto Analysis, infra). Accordingly, we preliminarily

determine to apply a rate separate from the PRC rate to Hangzhou.

Finally, we note that Premier and Chin Jun are privately owned Hong

Kong trading companies. Because we have determined that these firms,

rather than their PRC-based suppliers, are the proper respondents with

respect to their sales of TRBs to the United States, no separate-rates

analyses of Premier's and Chin Jun's suppliers are necessary.

2. De Jure Analysis: Hangzhou

Information submitted during this review indicates that Hangzhou is

owned ``by all of the people.'' In Silicon Carbide (at 22586), we found

that the PRC central government had devolved control of state-owned

enterprises, i.e., enterprises owned ``by all of the people.'' As a

result, we determined that companies owned ``by all of the people''

were eligible for individual rates if they met the criteria developed

in Sparklers and Silicon Carbide.

The following laws, which have been placed on the record in this

case, indicate a lack of de jure government control over these

companies, and establish that the responsibility for managing companies

owned by ``all of the people'' has been transferred from the government

to the enterprises themselves. These laws include: ``Law of the

People's Republic of China on Industrial Enterprises Owned by the Whole

People,'' adopted on April 13, 1988 (1988 Law); ``Regulations for

Transformation of Operational Mechanism of State-Owned Industrial

Enterprises,'' approved on August 23, 1992 (1992 Regulations); and the

``Temporary Provisions for Administration of Export Commodities,''

approved on December 21, 1992 (Export Provisions). The 1988 Law states

that enterprises have the right to set their own prices (see Article

26). This principle was restated in the 1992 Regulations (see Article

IX). Finally, the 1992 ``Temporary Provisions for Administration of

Export Commodities'' list those products subject to direct government

control. TRBs do not appear on this list and are not subject,

therefore, to the constraints of these provisions.

Consistent with Silicon Carbide, we preliminarily determine that

the existence of these laws demonstrates that Hangzhou, a company owned

by ``all of the people,'' is not subject to de jure government control

with respect to export activities. In light of reports 1

indicating that laws shifting control from the government to the

enterprises themselves have not been implemented uniformly, an analysis

of de facto control is critical in determining whether respondents are,

in fact, subject to government control with respect to export

activities.

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\1\ See ``PRC Government Findings on Enterprise Autonomy,'' in

Foreign Broadcast Information Service--China--93-133 (July 14,

1993), and 1992 Central Intelligence Agency Report to the Joint

Economic Committee, Hearings on Global Economic and Technological

Change: Former Soviet Union and Eastern Europe and China, Pt. 2 (102

Cong., 2d Sess.).

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3. De Facto Analysis: Hangzhou

After we reviewed Hangzhou's original response to the separate-

rates section of our questionnaire we sent a supplemental questionnaire

in order to obtain additional information necessary for our

determination of Hangzhou's eligibility for a separate rate. The

following record evidence, which is contained in the questionnaire

responses, indicates a lack of de facto government control over the

export activities of Hangzhou. We have found that this respondent's

pricing and export strategy decisions with respect to subject

merchandise are not subject to any entity's review or approval and that

there are no government policy directives that affect these decisions.

There are no restrictions on the use of this respondent's revenues or

profits, including export earnings.

The company's general manager or chairman of the board has the

right to negotiate and enter into contracts, and he may delegate this

authority to other employees within the company. There is no evidence

that this authority is subject to any level of governmental approval.

The general manager is elected by an employees' assembly consisting

of representatives of Hangzhou's employees. The representatives are

elected by the general employees. The results of Hangzhou's management

elections are recorded with the Foreign Trade and Economic Cooperation

Commission. There is no evidence that this commission controls the

selection process or that it has rejected a general manager selected

through the election process.

Decisions made by Hangzhou concerning purchases of subject

[[Page 36767]]

merchandise from other suppliers are not subject to government

approval. Finally, Hangzhou's sources of funds are its own savings or

bank loans, and it has sole control over, and access to, its bank

accounts, which are held in Hangzhou's own name.

Based on the foregoing analysis of the evidence of record, we find

no evidence of either de jure or de facto government control over the

export activities of Hangzhou. Accordingly, we preliminarily determine

that Hangzhou is not part of the ``PRC enterprise'' under review and is

entitled to a separate rate. Because no interested party requested a

review of Hangzhou, it is not subject to this review. Therefore,

consistent with our established practice, we have not reviewed

Hangzhou's entries during the 1995-96 POR. See Tapered Roller Bearings

and Parts Thereof, Finished and Unfinished, From the People's Republic

of China; Final Results and Partial Termination of Antidumping Duty

Administrative Review, 62 FR 6173, 6176 (February 11, 1997). Hangzhou's

rate will remain 29.40 percent, the rate assigned to it as a part of

the PRC entity in the 1994-95 review.

4. Separate-Rate Determinations for Non-Responsive Companies

We have determined that those companies for which we initiated a

review and which did not respond to the questionnaire do not merit

separate rates. See Use of Facts Otherwise Available, below.

Use of Facts Otherwise Available

We preliminarily determine that, in accordance with section 776(a)

of the Act, the use of partial facts available is appropriate for Chin

Jun, Premier, Guizhou Machinery and Shandong and the use of total facts

available is appropriate for Hailin, Guizhou Automotive, Jilin, CMEC

and all companies which have not shown that they are independent of

government control and which did not respond to our requests for

information. Furthermore, we determine that, pursuant to section 776(b)

of the Act, it is appropriate to make inferences adverse to the

interests of the non-responding companies because they failed to

cooperate by not responding to the best of their abilities.

Where the Department must base its determination on facts available

because that respondent failed to cooperate by not acting to the best

of its ability to comply with a request for information, section 776(b)

of the Act authorizes the Department to use inferences adverse to the

interests of that respondent in choosing facts available. Section

776(b) of the Act also authorizes the Department to use as adverse

facts available information derived from the petition, the final

determination, a previous administrative review, or other information

placed on the record. Information from prior segments of the proceeding

constitutes secondary information and section 776(c) of the Act

provides that the Department shall, to the extent practicable,

corroborate that secondary information from independent sources

reasonably at its disposal. The Statement of Administrative Action

(SAA) provides that ``corroborate'' means simply that the Department

will satisfy itself that the secondary information to be used has

probative value. (See H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870

(1994).)

To corroborate secondary information, the Department will, to the

extent practicable, examine the reliability and relevance of the

information to be used. However, unlike other types of information,

such as input costs or selling expenses, there are no independent

sources for calculated dumping margins. Thus, in an administrative

review, if the Department chooses as total adverse facts available a

calculated dumping margin from a prior segment of the proceeding, it is

not necessary to question the reliability of the margin for that time

period. With respect to the relevance aspect of corroboration, however,

the Department will consider information reasonably at its disposal as

to whether there are circumstances that would render a margin

inappropriate. Where circumstances indicate that the selected margin is

not appropriate as adverse facts available, the Department will

disregard the margin and determine an appropriate margin (see, e.g.,

Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty

Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the

Department disregarded the highest margin as adverse facts available

because the margin was based on another company's uncharacteristic

business expense resulting in an unusually high margin)).

1. Companies that did not respond to the questionnaire: We have

preliminarily assigned a margin of 29.40 percent to those companies for

which we initiated a review and which did not respond to the

questionnaire. This margin, calculated for sales by Wafangdian Bearing

Factory during the 1994-95 review, represents the highest overall

margin calculated for any firm during any segment of this proceeding.

As discussed above, it is not necessary to question the reliability of

a calculated margin from a prior segment of the proceeding. Further,

there are no circumstances indicating that this margin is inappropriate

as adverse facts available. Therefore, we preliminarily find that the

29.40 percent rate is corroborated. As noted in the Separate Rates

section above, we have also determined that the non-responsive

companies do not merit separate rates. Therefore, the facts available

for these companies forms the basis for the PRC rate, which is 29.40

percent for this review.

2. CMEC: The Department determined in the original investigation of

this case that CMEC was entitled to a separate rate. See Tapered Roller

Bearings From the People's Republic of China; Final Determination of

Sales at Less Than Fair Value, 52 FR 19748 (May 27, 1987), and Tapered

Roller Bearings From the People's Republic of China; Amendment to Final

Determination of Sales at Less Than Fair Value and Antidumping Duty

Order in Accordance With Decision Upon Remand, 55 FR 6669 (February 26,

1990). However, the Department made the prior separate-rate

determination before the development of its amplified analysis in

Silicon Carbide, which added de facto criteria (3) and (4) noted above.

Accordingly, for these preliminary results we have examined these two

additional criteria with respect to CMEC. Because CMEC failed in its

supplemental questionnaire response to provide information concerning

the company's management-selection process, we are unable to determine

that CMEC meets the de facto standards which would indicate an absence

of government control. Therefore, we preliminarily determine that CMEC

is not entitled to a separate rate and have applied the PRC rate of

29.40 percent.

3. Jilin: Jilin provided sufficient information in response to the

separate rates section of our questionnaire for us to determine that it

is entitled to a separate rate for this review. However, because Jilin

did not provide information related to factors of production or to its

U.S. sales during the POR as we requested, section 776(a) of the Act

requires us to use the facts otherwise available in determining Jilin's

margin for the 1995-96 review. Section 776(b) of the Act allows us to

use an adverse inference in selecting from the facts otherwise

available. As adverse facts available, we have selected 29.40 percent,

the highest overall margin calculated in any segment of this

proceeding.

4. Premier: Premier provided factors data from its suppliers for

some models which it sold to the United States. For

[[Page 36768]]

a majority of its U.S. sales (see Analysis Memo from analyst to the

file, June 23, 1997), Premier, a Hong Kong-based reseller, stated that

it was unable to provide factors data from any of its PRC suppliers.

However, for some models involved in those sales, Premier provided

factors data from other PRC suppliers of the same models. For the

remainder of its U.S. sales, Premier reported no factors data.

We have determined that there is little variation in factor-

utilization rates among the TRB producers from which we have received

factors-of-production data. For this reason we are using, as facts

available, the factors data provided by Premier, including information

from manufacturers which did not supply Premier during the POR, in

order to calculate CV. For Premier's U.S. sales of models for which it

reported no factors data, we have applied, as adverse facts available,

a margin of 25.56 percent, the highest overall margin ever applicable

to Premier. This margin was calculated for sales by Jilin during the

1993-94 review. As discussed above, it is not necessary to question the

reliability of a calculated margin from a prior segment of the

proceeding. Further, there are no circumstances indicating that this

margin is inappropriate as adverse facts are available. Therefore, we

preliminarily find that the 25.56 percent rate is corroborated.

5. Hailin: We find that Hailin failed to cooperate by not allowing

us to conduct an on-site verification of the information the company

supplied in its questionnaire responses. We have, therefore, rejected

Hailin's submissions in accordance with section 782(e)(4) of the Act.

Section 776(b) of the Act allows us to use an adverse inference in

selecting from the facts otherwise available when a firm does not

permit verification of the information contained in its response. As

adverse facts are available, we have determined that Hailin is not

entitled to a separate rate, and have applied the PRC rate of 29.40

percent.

6. Guizhou Automotive: Guizhou Automotive failed to respond to a

supplemental questionnaire in a timely manner. The firm's initial

questionnaire response was incomplete, particularly with regard to

separate rate issues, SG&A, overhead, packing, scrap, and expenses

related to CEP sales. Because Guizhou Automotive did not provide in a

timely manner sufficient information for the Department to determine

whether Guizhou Automotive is eligible to retain its separate rate, we

have determined that Guizhou Automotive is not entitled to a separate

rate and have applied the PRC rate of 29.40 percent.

7. Chin Jun: Chin Jun provided factors data from its PRC-based

supplier for substantially all of its U.S. sales during the POR, and we

have used these data to calculate CV for the applicable models. For

certain other models it sold to the United States, Chin Jun provided

factors data from other PRC suppliers of the same models. However, we

have determined that the data submitted by Chin Jun for two such

suppliers is unacceptable and have rejected these data. Because our

decision relies on business proprietary information it is discussed

further in the business proprietary analysis memo from analyst to the

file dated June 30, 1997. For the remainder of its U.S. sales, Chin Jun

reported no factors data.

We determined that there is little variation in factor-utilization

rates among the TRBs producers from which we have received factors-of-

production data. For this reason we have calculated CV using, as facts

available, the factors data provided by Chin Jun for PRC-based

suppliers from which Chin Jun did not purchase the models in question.

Chin Jun has stated that it attempted to obtain from its PRC-based

suppliers factors data for the remaining U.S. sales. Because we

preliminarily determine that Chin Jun cooperated to the best of its

ability to provide data, we are applying to Chin Jun's U.S. sales for

which no factors data were reported, as facts available, the weighted-

average margin calculated for those U.S. sales for which acceptable

data were reported. However, we intend to seek documentation of Chin

Jun's claim's that it attempted to solicit from all of its PRC-based

suppliers the information requested in our questionnaires.

8. Shandong: Shandong purchased TRBs for resale to the United

States from a supplier whose factors data we determined to be

unacceptable. Because our decision relies on business proprietary

information it is discussed further in the business proprietary

analysis memo from analyst to the file dated June 23, 1997. Therefore,

for Shandong's sales of TRBs purchased from this particular supplier we

have applied, as facts available, a margin of 29.40 percent, the

highest rate calculated during any segment of this proceeding.

9. Guizhou Machinery: Guizhou Machinery provided factors data from

its suppliers for models which represented most of its U.S. sales

during the POR. For some models, Guizhou Machinery failed to report

factors data. For Guizhou Machinery's U.S. sales of models for which it

did not provide factors data we have applied, as adverse facts

available, a margin of 17.65 percent, the highest overall margin ever

applicable to Guizhou Machinery.

In addition, we used partial facts available for other factors data

provided by Guizhou Machinery. However, because of the proprietary

nature of this situation, we have discussed this use of partial facts

available in Guizhou Machinery's preliminary analysis memorandum dated

June 23, 1997.

Duty Absorption

On September 6, 1996, the Timken Company requested that the

Department determine with respect to all respondents whether

antidumping duties had been absorbed during the POR. This request was

filed pursuant to section 751(a)(4) of the Act. On June 11, 1997, the

Timken Company withdrew its request for a duty absorption determination

in this review. Accordingly, we have not made a determination as to

whether antidumping duties have been absorbed by a foreign producer or

exporter subject to the order.

United States Sales

Both Premier and Chin Jun reported that they maintain inventories

in Hong Kong and, therefore, their PRC-based suppliers have no

knowledge when they sell to these firms that the shipments are destined

for the United States. Accordingly, Premier and Chin Jun are the first

parties to sell the merchandise to the United States and export price

(EP) and constructed export price (CEP) are properly based on their

respective U.S. sales.

For sales made by Guizhou Machinery, Liaoning, Luoyang, Premier,

Xiangfan, Shandong and Zhejiang, we based the U.S. sales on export

price (EP), in accordance with section 772(a) of the Act, because the

subject merchandise was sold to unrelated purchasers in the United

States prior to importation into the United States and because the

constructed export price (CEP) methodology was not indicated by other

circumstances. For sales made by Chin Jun we based the U.S. sales on

CEP in accordance with section 772(b) of the Act because the first sale

to an unrelated purchaser occurred after importation of the merchandise

into the United States. CMC had a combination of EP and CEP sales

subject to review.

We calculated EP based on, as appropriate, the FOB, CIF or C&F port

price to unrelated purchasers. We made deductions for brokerage and

handling, foreign inland freight, ocean freight, and marine insurance.

When marine insurance and ocean freight were provided by PRC-owned

companies, we based the deduction on surrogate

[[Page 36769]]

values. See Final Determination of Sales at Less Than Fair Value:

Saccharin from the People's Republic of China, 59 FR 58818, 58825

(November 15, 1994). For Premier and Chin Jun, because marine insurance

and ocean freight were provided by market-economy companies, we based

the deduction on the actual expense values reported by Premier and Chin

Jun for these services. We valued foreign inland freight deductions

using surrogate data based on Indian freight costs. We selected India

as the surrogate country for the reasons explained in the Normal Value

section of this notice.

We calculated CEP based on the packed, ex-warehouse price from the

U.S. subsidiary to unrelated customers. We made deductions from the

starting price for CEP for international freight, foreign brokerage &

handling, foreign inland freight, marine insurance, customs duties,

U.S. brokerage, U.S. inland freight insurance and U.S. inland freight.

In accordance with section 772(d)(1) of the Act, we made further

deductions from the starting price for CEP for the following selling

expenses that related to economic activity in the United States:

commissions; direct selling expenses, including advertising,

warranties, and credit expenses; and indirect selling expenses,

including inventory carrying costs. In accordance with section

772(d)(3) of the Act, we have deducted from the starting price an

amount for profit.

Normal Value

Section 773(c) of the Act provides that the Department shall

determine the normal value (NV) using a factors-of-production

methodology if (1) the merchandise is exported from an NME country, and

(2) available information does not permit the calculation of NV using

home market prices, third-country prices, or constructed value (CV)

under section 773(a). In such cases, the factors include, but are not

limited to: (1) hours of labor required; (2) quantities of raw

materials employed; (3) amounts of energy and other utilities consumed;

and (4) representative capital cost, including depreciation.

The Department has treated the PRC as an NME country in all

previous cases. In accordance with section 771(18)(C)(i), any

determination that a foreign country is an NME country shall remain in

effect until revoked by the administering authority. Furthermore,

available information does not permit the calculation of NV using home

market prices, third-country prices, or CV under section 773(a).

Therefore, except as noted below, we calculated NV based on factors of

production in accordance with section 773(c) of the Act and section

353.52 of our regulations. See Memorandum from the analyst to the file,

dated June 20, 1997.

Although Premier and Chin Jun are Hong Kong companies, we also

calculated NV for Premier and Chin Jun based on factors-of-production

data. We did not use these respondents' third-country sales (they had

no Hong Kong sales) in calculating NV because their PRC-based suppliers

knew at the time of sale that the subject merchandise was destined for

exportation. See section 773(a)(3)(A) of the Act, providing that under

such conditions NV of a product exported from an intermediate country

to the United States may be determined in the country of origin of the

subject merchandise. Accordingly, we calculated NV for Premier and Chin

Jun on the basis of PRC production inputs and surrogate country factor

prices. For certain models for which Premier and Chin Jun reported no

factors data we based NV on the facts available in this review. See Use

of Facts Otherwise Available above.

In accordance with section 773(c)(4), we valued PRC factors of

production, to the extent possible, using the prices or costs of

factors of production in a market-economy country that is: (1) at a

level of economic development comparable to that of the NME country,

and (2) a significant producer of comparable merchandise.

We chose India as the most comparable surrogate on the basis of the

criteria set out in 19 CFR 353.52(b). See Memorandum from Director,

Office of Policy to Office Director, AD/CVD Enforcement Group I, Office

3, dated May 28, 1997. We chose Indonesia as the second-choice

surrogate based on the same memorandum. Information on the record

indicates that both India and Indonesia are significant producers of

TRBs. See Memorandum from the analyst to the file, dated June 3, 1997.

We used publicly available information relating to India to value the

various factors of production with the exception of steel inputs and

scrap. For valuing steel inputs and scrap we used publicly available

information relating to Indonesia because we determined that publicly

available information related to India was unreliable.

We valued the factors of production as follows:

For hot-rolled alloy steel bars used in the production of cups and

cones, cold-rolled steel rods used in the production of rollers, cold-

rolled steel sheet, cold-rolled steel sheet used in the production of

cages, and steel scrap, we used import prices obtained from Foreign

Trade Statistical Bulletin, Imports, Jakarta, Indonesia. We used data

from the November 1995 issue, which included cumulative data covering

the period January 1995 through November 1995. We subtracted cumulative

data from the May 1995 issue, covering the period January 1995 through

May 1995, because these data were not within the POR. We applied data

for the period June 1995 through November 1995, the first six months of

the POR, to the entire POR because we were unable to obtain more recent

information. However, for steel bar used to produce cups and cones, the

steel rod used to produce rollers and for the relevant steel scrap

category, interested parties provided data through December 1995, on a

country-specific basis. We used these data because we were able to

eliminate from our calculation steel imports sourced from NME countries

and small quantities sourced from market-economy countries. We made

adjustments to include freight costs incurred between the PRC-based

steel suppliers and the TRB factories.

For direct labor, we used 1996 data from Investing, Licensing &

Trading Conditions Abroad, India, published in November 1996 by the

Economist Intelligence Unit. We then adjusted the 1996 labor value to

the POR to reflect inflation using consumer price indices (CPI) of

India as published in the International Financial Statistics by the

International Monetary Fund (IMF). We calculated the labor cost for

each component by multiplying the labor time requirement by the

surrogate labor rate. Indirect labor is reflected in the selling,

general and administrative (SG&A) and overhead rates.

For factory overhead, we used information obtained from the 1995-96

annual report of SKF Bearings India, Ltd. (SKF India), a producer of

similar merchandise in India. See SKF Bearings India, Ltd. Annual

Report 1995-96. From this source, we were able to calculate factory

overhead as a percentage of total cost of manufacture.

For SG&A expenses, we used information obtained from the same

financial report used to obtain factory overhead. This information

showed SG&A expenses as a percentage of the cost of manufacture.

For profit, we used SKF India's profit rate. The annual report

showed profit as a percentage of cost of production.

For export packing, we used the facts available because the

respondents did not supply sufficient factor information for us to

calculate packing costs. As facts available we used 1 percent of the

sum of total ex-factory costs and SG&A expenses. This percentage,

obtained from publicly available data, was used

[[Page 36770]]

in the Final Determination of Sales at Less than Fair Value: Tapered

Roller Bearings from Italy, 52 FR 24198 (June 29, 1987). This

methodology is consistent with the Department's valuation of packing in

the Final Results of Antidumping Duty Administrative Review: Tapered

Roller Bearings from the People's Republic of China, 56 FR 67590

(December 31, 1991), and subsequent reviews of this order. We used this

percentage because there was no publicly available information from a

comparable surrogate country.

For foreign inland freight, as the most recent publicly available

published source, we used a rate derived from a newspaper article in

the April 20, 1994 issue of The Times of India, as submitted in the

antidumping duty investigation on honey from the PRC. We adjusted the

value of freight to the POR using a wholesale price index (WPI)

published by the International Monetary Fund (IMF).

We made no adjustments to CV for selling expenses because the

surrogate SG&A information we used did not allow a breakout of selling

expenses.

Partial Termination of Review

Shanghai was included in our notice of initiation of this review.

However, on February 11, 1997, we published a notice of revocation of

the order with respect to Shanghai (62 FR 6189). Therefore, we are

terminating this review with respect to Shanghai.

Petitioner requested reviews for East Sea Bearing Co., Ltd. (East

Sea), and Changshan Bearing Factory (Changshan). On August 26, 1996,

East Sea and Changshan both reported no shipments of subject

merchandise to the United States during the POR. We independently

confirmed with U.S. Customs that there were no shipments from these two

companies. Therefore, we have terminated the review with respect to

East Sea. See Calcium Hypochlorite From Japan: Termination of

Antidumping Duty Administrative Review, 62 FR 18086 (April 14, 1997).

However, because Changshan has not been granted a separate rate the

deposit rate applicable to Changshan will continue to be the PRC rate

as established in the final results of this review.

Currency Conversion

We made currency conversions in accordance with section 773A of the

Act. Currency conversions were made at the rates certified by the

Federal Reserve Bank. Section 773A(a) directs the Department to use a

daily exchange rate to convert foreign currencies into U.S. dollars

unless the daily rate involves a ``fluctuation.'' It is our practice to

find that a fluctuation exists when the daily exchange rate differs

from a benchmark rate by 2.25 percent or more. See Preliminary Results

of Antidumping Duty Administrative Review: Certain Welded Carbon Steel

Pipe and Tube from Turkey, 61 FR 35188, 35192 (July 5, 1996). The

benchmark rate is defined as the rolling average of the rates for the

past 40 business days.

Preliminary Results of the Review

As a result of our comparison of the EP or CEP, as applicable, to

NV, we preliminarily determine that the following dumping margins exist

for the period June 1, 1995, through May 31, 1996:

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

Margin

Manufacturer/Exporter 2 3 (percent)

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

Wanxiang................................................... 8.70

Shandong................................................... 14.65

Luoyang.................................................... 3.16

CMC........................................................ 0.00

Xiangfan................................................... 1.55

Guizhou Machinery.......................................... 20.19

Zhejiang................................................... 0.10

Jilin...................................................... 29.40

Liaoning................................................... 0.03

Premier.................................................... 5.42

Chin Jun................................................... 3.41

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

\2\ Although Hangzhou has not been assigned a rate for this review we

note that its independent rate will continue to be 29.40 percent, the

rate assigned in the 1994-95 review, in which Hangzhou was considered

part of the PRC entity and was not specifically named.

\3\ The PRC rate applies to CMEC, Hailin, Guizhou Automotive and all

firms which did not respond to the questionnaire and which are not

entitled to a separate rate.

Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held approximately 44 days after the publication of

this notice. Interested parties may submit written comments (case

briefs) within 30 days of the date of publication of this notice.

Rebuttal comments (rebuttal briefs), which must be limited to issues

raised in the case briefs, may be filed not later than 37 days after

the date of publication. The Department will issue a notice of final

results of this administrative review, including the results of its

analysis of issues raised in any such written comments, within 120 days

of publication of these preliminary results.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between EP or CEP, as applicable, and NV may vary from the

percentages stated above. The Department will issue appraisement

instructions directly to the Customs Service.

Furthermore, the following cash deposit requirements will be

effective upon publication of the final results of this administrative

review for all shipments of the subject merchandise entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751(a)(1) of the Act: (1) For the PRC

companies named above that have separate rates and were reviewed

(Guizhou Machinery, Luoyang, Jilin, Liaoning, CMC, Zhejiang, Xiangfan,

Shandong, Wanxiang), the cash deposit rates will be the rates for these

firms established in the final results of this review, except that for

exporters with de minimis rates, i.e., less than 0.50 percent, no

deposit will be required; (2) for Hangzhou, which we preliminarily

determine to be entitled to a separate rate, the rate will continue be

29.40 percent, the rate which currently applies to this company; (3)

for PRC companies (e.g., Great Wall) which established eligibility for

a separate rate in a previous review and for which no review was

requested, the cash deposit rate will continue to be the rate assigned

in the previous review; (4) for all remaining PRC exporters, all of

which were found to not be entitled to separate rates, the cash deposit

will be 29.40 percent; and (5) for non-PRC exporters Premier and Chin

Jun the cash deposit rates will be the rates established in the final

results of this review; (6) for non-PRC exporters of subject

merchandise from the PRC, other than Premier and Chin Jun, the cash

deposit rate will be the rate applicable to the PRC supplier of that

exporter. These deposit requirements, when imposed, shall remain in

effect until publication of the final results of the next

administrative review.

This notice also serves as a preliminary 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 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.

[[Page 36771]]

Dated June 30, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-17948 Filed 7-8-97; 8:45 am]

BILLING CODE 3510-DS-P