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 March 11, 1996, the Department of Commerce (``the

Department'') published in the Federal Register 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 (62 FR 11152-55). The review covers one exporter and two

producers of subject merchandise for the period June 1, 1995 through

May 31, 1996.

We gave interested parties an opportunity to comment on our

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

have changed the results from those presented in the preliminary

results of review.

We received no comments from interested parties with regard to the

Department's preliminary determination to grant Tehnoimportexport a

separate rate for this review. Therefore, for the final results of

review, we reaffirm our determination that TIE is entitled to a

separate rate.

EFFECTIVE DATE: July 11, 1997.

FOR FURTHER INFORMATION CONTACT: Rick Johnson or Carrie Blozy, AD/CVD

Enforcement Group III, Import Administration, International Trade

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

Constitution Ave., NW., Washington, DC 20230; telephone: (202) 482-

3793.

SUPPLEMENTARY INFORMATION:

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, unless

otherwise indicated, all references to the Department's regulations are

to Part 353 of 19 CFR, as amended by the regulations published in the

Federal Register on May 19, 1997 (62 Fed. Reg. 27296).

Background

On March 11, 1996, the Department published in the Federal Register

the preliminary results of its administrative review of the antidumping

duty order on TRBs from Romania. 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. As a result

of changes made to the preliminary results based on interested party

comments, the calculated margin for imports from TIE, the only company

with sales covered by this review, has changed to 2.70%.

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

[[Page 37195]]

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 28 companies and the period June 1, 1995 through

May 31, 1996. Of the 28 companies for which petitioner requested a

review, only TIE made shipments of the subject merchandise to the

United States during the period of review (POR). 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. The Department has received

information from the Government of Romania and other respondents

stating that the other manufacturers/exporters covered by this review

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 April 10, 1997 and rebuttal

brief of April 17, 1997; respondent's case brief of April 10, 1997 and

rebuttal brief of April 24, 1997; and Universal's rebuttal brief of

April 17, 1997.

Comment 1: Petitioner asserts that, in valuing material inputs, the

Department improperly considered two types of imports into Indonesia:

(1) Materials from non-market economy countries; and (2) small

quantities of materials from individual countries. Petitioner also

contends that, when deriving values for bearing-quality steel inputs

based on Indonesian six-digit categories, the Department must exclude

imports from countries that are known not to produce bearing quality

steel.

Respondent argues that the Department should include data from all

countries except for those countries which exported de minimis amounts

to Indonesia. Respondent asserts that the Department should reject

petitioner's proposal to exclude data from countries which are not

listed in the 1994 edition of Iron and Steel Works of the World as

producers of bearing-quality steel because there is no evidence that

this source, which it presumes contains 1993 data, contains a

comprehensive list of all bearing steel producers. Respondent adds that

petitioner's contention that data from these same countries should be

included for the purposes of scrap calculations is inconsistent and

would lead to skewed results.

Further, respondent argues that among the countries petitioner said

must be excluded are some highly industrialized countries which have

bearing producers, such as the Netherlands. According to respondent,

this fact makes petitioner's proposed methodology suspect.

Department's Position: We agree with petitioner that it is

Departmental practice to exclude imports from countries we have

previously determined to be non-market economies (NMEs) in calculating

surrogate values for material inputs, where such exclusions are

possible based on record information. See, e.g., Tapered Roller

Bearings and Parts Thereof, Finished and Unfinished, from the People's

Republic of China; Final Results of Antidumping Duty Administrative

Reviews (``1990-93 TRBs from the PRC''), 61 FR 65527, 65532 (December

13, 1996). Therefore, for the final results, we have adjusted the

surrogate values accordingly for hot-rolled steel bars used for inner

and outer races (cups and cones). See Attachment 1 of the Analysis

Memorandum for the Final Results of Review (July 7, 1997), which is on

file in the Central Records Unit (room B099 of the Main Commerce

Building).

With regard to the exclusion of data pertaining to small quantities

of imports from individual countries, we agree that the inclusion of

such data potentially may be distortive. However, the Department will

only disregard small-quantity import data when the per-unit value in

fact is at variance with other information on the record. See, e.g.,

Heavy Forged Hand Tools from the People's Republic of China: Final

Results of Antidumping Duty Administrative Reviews, 11814, 11815

(Comment 2) (March 13, 1997), in which the Department utilized 1995

Indian import data from Saudi Arabia because it was comparable to other

data on the record. Thus, the Department will reject data from

countries with small quantities of imports only when the per unit value

of those imports is substantially different from the per unit values of

the larger-quantity imports of that product from other countries.

With respect to the exclusion of material input data from countries

which allegedly do not produce bearing-quality steel, we agree with

petitioner that such information should be excluded from our

calculation of surrogate values for bearing-quality steel. We note that

the only information on the record of this review regarding which

countries produce bearing steel is from the 1994 edition of Iron and

Steel Works of the World. Thus, respondent's assertion that some of the

countries which petitioner has identified as not producing bearing-

quality steel do in fact have bearing producers is not supported by any

record evidence. Finally, we agree with petitioner's argument that

countries not producing bearing quality steel nevertheless can produce

bearing-quality scrap. While respondent has asserted that a failure to

adjust the surrogate value for alloy scrap when making such an

adjustment for bearing-quality steel would lead to ``skewed results,''

respondent has not explained how such an adjustment is distortive. In

fact, consistently adjusting values only when record evidence indicates

that a country does not produce that material results in the most

reliable calculation of surrogate values.

There is country-specific information on the record of this review

for four material inputs. Based on this information, we have adjusted

the surrogate value for hot-rolled steel bars for inner and outer races

(cups and cones) to exclude small-quantity exports, and exports from

countries not known to produce bearing-quality steel, to Indonesia.

Additionally, we have adjusted the surrogate value for hot-rolled alloy

steel bar in coils for rollers to exclude exports to Indonesia from

countries not known to produce bearing-quality steel. See Attachment 1

of the Analysis Memorandum for the Final Results of Review.

Comment 2: Petitioner claims that the value for non-alloy scrap is

anomalous, as it allegedly amounts to almost 47 percent of the value of

the cold-rolled sheet from which it would be produced. Instead,

petitioner asserts that the Department should use a ``reasonable''

ratio between the value of scrap and the value of the steel from which

it originates, such as the 20 percent ratio that was used in the

redetermination on remand in TRBs from the PRC. Moreover, petitioner

argues that the ratio should not be higher than the ratio between alloy

scrap and alloy bar for cups and cones used by the Department in the

preliminary results.

Respondent did not comment on this issue.

Department's Position: We disagree with petitioner. We note that,

in the 1993-94 segment of this proceeding, petitioner put forward a

similar

[[Page 37196]]

argument with respect to the value used for Polish hot-rolled scrap in

comparison with the value of the finished product. In Tapered Roller

Bearings and Parts Thereof, Finished and Unfinished, from Romania:

Final Results of Review (1993-94) ``Final Results of Review''), 62 FR

31075, 31077 (June 6, 1997) for that review period, we disagreed with

petitioner, noting that petitioner appeared to object to the use of the

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

was, in petitioner's opinion, too high. We noted that petitioner

offered no evidentiary support to their claim that the scrap price was

aberrant, or in any way out of line with hot-rolled scrap prices for

that time period. Petitioner also cited Timken Co. v. United States,

699 F. Supp. 300 (CIT 1988) in that review, claiming that the Court of

International Trade's (CIT) decision upheld the proposition that the

Department must correct unreasonably high scrap values. However, for

the 1993-94 final results, we rejected petitioner's interpretation of

the CIT ruling, noting that the basis of the CIT ruling was due to the

unexplained inconsistency with regard to information presented in two

embassy telexes. Thus, the Department found in the 1993-94 final

results that ``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.''

For this review, petitioner has cited to the Federal Circuit appeal

894 F.2d 385 (Fed. Circ. 1990) in the above referenced Timkin case. The

Court of Appeals agreed with the CIT's finding that Commerce erred in

failing to reconcile the calculated ratio with other ratios in the

record:

these values must be contrasted not only with the 20 percent ratio

mentioned in the second telex, but also with evidence in the record

that the scrap steel/raw steel ratio in other countries is also much

lower * * *

See Timken Co. v. United States at 894 F.2d at 388.

By contrast, in this review, petitioner has not identified any such

differing record evidence with regard to non-alloy scrap/cold-rolled

sheet ratios. Thus, the Federal Circuit's ruling in Timken does not

require the Department to reject the scrap ratio used in the

preliminary results of this review.

We note that petitioner has proposed that the ratio should not be

higher than the ratio of almost 26 percent between alloy scrap and

alloy bar for cups and cones used by the Department in the preliminary

results. However, petitioner has provided no justification for the

proposition that using the alloy scrap to alloy bar ratio is in any way

representative of the non-alloy scrap to cold-rolled sheet ratio.

Furthermore, contrary to petitioner's assertion, we do not find that

the 20 percent value used in the redetermination on remand in TRBs from

the PRC would be a reasonable alternative, because that figure applies

to 1987 data from India.

Comment 3: Petitioner argues that the Department has applied

minimum labor wages to value labor, and therefore has not accounted for

the full cost to the employer, as petitioner states is required by

Departmental practice. Second, petitioner contends that the Department

applied wages from the wrong industry because wages for ``laborers in

the iron and steel basic industries'' are not within the same industry

category as laborers in the industry producing bearings. Third,

petitioner asserts that the same shortcoming exists for the surrogate

value used for wages for indirect labor, since the Department used data

for supervisors and general foremen from the ``crude petroleum and

natural gas production industry.'' Petitioner also argues that the

Department should not use this data because it is from the year 1992.

Petitioner contends that the Department's preference is to use data

concurrent with the period of review whenever possible.

Finally, petitioner argues that the Department was mistaken to

assume an eight-hour workday for Indonesian labor. Petitioner notes

that, according to two publications, Investing, Licensing & Trade

Conditions Abroad: Indonesia and Doing Business in Indonesia, a seven-

hour working day is the norm for Indonesia.

In light of the alleged deficiencies of the data used by the

Department, petitioner proposes that the Department utilize data for

unskilled and skilled labor and factory supervisors in Indonesia based

on data from Investing, Licensing & Trade Conditions Abroad: Indonesia.

Respondent contends that petitioner's proposed labor wage

calculation is flawed. First, respondent argues that the wage rates

reported by petitioner are for generic classifications and, thus, are

inherently less accurate or reliable than those relied upon by the

Department (which were for the iron and steel industry). Respondent

notes that the Department has rejected, in its Final Antidumping Duty

Determination: Disposable Pocket Lighters from the People's Republic of

China (1995) wage rates from Doing Business in Indonesia ``because

these wages were specific to Jakarta.'' See Calculation Memorandum at

page 3.

Second, respondent contends that the unskilled labor rate put

forward by petitioner is the rate for Jakarta, ``the most expensive

city in Indonesia.'' Respondent states that there are ``several''

bearing producers in Indonesia, not all of whom are located in or near

Jakarta. Further, respondent claims that petitioner has acknowledged

that ``the only Indonesian bearing producer known to the Department * *

* is located close to Jakarta,'' and thus is not in Jakarta.

Respondent notes that petitioner's calculation of labor assumes

4.15 working weeks per month. Respondent claims that it is Department

practice to use 4.33 weeks/month in its surrogate labor calculations.

Respondent notes that the Department applied a 4.33 weeks per month and

42 hour work week to calculate labor costs for the 1994-95 review of

this proceeding. Therefore, if the Department chooses to use the labor

data provided by petitioner, respondent claims that 4.33 weeks per

month should be employed.

Respondent disputes petitioner's statement that there is a maximum

of seven working hours per day in Indonesia, noting that the Price

Waterhouse report states that the labor law provides for a six-day, 40

hour week. Respondent notes that the Department applied an eight hour

per day wage in Disposable Pocket Lighters from the PRC.

In response to petitioner's criticism of the rates used by the

Department in the preliminary results of review as minimum rates,

respondent notes that the Department has relied on this data in

previous cases, such as in the Final Antidumping Duty Determination:

Disposable Pocket Lighters from the PRC, Calculation Memorandum at

Exhibits B-1 and B-4 (1995). Respondent argues that it is unclear

whether added benefits such as accident, health and retirement

insurance, as well as a ``bonus'' wage, are appropriate for application

to unskilled laborers. Even if they are, respondent argues that

petitioner has overstated the appropriate allotment for such benefits.

Department's Position: We agree with petitioner that the source

from which the Department took the labor values indicates that these

values are ``minimum'' daily wage or salary rates. However, the

unskilled labor value is the only labor value on the record of this

review pertaining to an industry in Indonesia comparable to the

bearings industry, and petitioner has suggested no methodology for

adjusting this

[[Page 37197]]

figure. Moreover, there is no indication on the record that the

``minimum'' rate for the industry excludes any employee benefit costs

normally considered by the Department.

With regard to the utilization of wage rates for laborers in the

iron and steel basic industries, we agree with petitioner's argument

that the iron and basic steel industry is not the same as the bearings

industry. The Department's clear preference is to use data from the

same industry, when that is possible from the information placed on the

record. However, we note that, for this review, there is no information

on the record which pertains specifically to the bearings industry.

Furthermore, as the Department indicated in its surrogate country

selection memorandum (at attachment 4), when the Department cannot

locate information from the same industry, the Department attempts to

find producers of ``comparable'' products in selecting surrogate

countries. In the surrogate country selection memorandum, the

Department noted that countries with ``significant producers of any

steel products'' may enable the Department to choose that country as a

surrogate (emphasis added). See Memorandum to the File: Antidumping

Administrative Review of Tapered Roller Bearings from Romania:

Selection of a Surrogate Country in the 1995/96 Review, February 25,

1997. Therefore, we find that applying labor rates from the iron and

basic steel industry as a surrogate value for the bearings industry is

appropriate.

Finally, we agree with respondent that the data proposed by

petitioner from the publications Investing, Licensing & Trade

Conditions Abroad: Indonesia and Doing Business in Indonesia are in

fact less preferable than the information used by the Department in the

preliminary results with respect to valuing unskilled labor, since

those data are not specific to any industry, but instead are generic

classifications. In fact, the guide for Doing Business in Indonesia

specifically notes that ``wages vary significantly according to

industry and location within Indonesia.'' See Attachment 8, page 104 of

petitioner's April 2, 1997 submission of factual information.

The Department recognizes that the use of indirect labor costs and

wages and salaries for non-production workers from the ``crude

petroleum and natural gas production industry'' suffers from the

limitation of not being derived from either the bearings industry or an

industry comparable to the bearings industry. However, we note that

none of the information on this issue placed on the record by

petitioner (or respondent) is applicable to an industry equivalent or

comparable to the bearing industry. Section 776(a)(1) of the Act

stipulates that if the ``necessary information is not available on the

record * * * the administering authority * * * shall, subject to

section 782(d), use the facts otherwise available in reaching the

applicable determination under this title.'' In this case, in

determining facts otherwise available, we have no reason to employ an

adverse inference under Section 776(b). Therefore, for the final

results of review, we determined the ratio between the average wage

rate for unskilled laborers and the average wage rate for factory

supervisors reported in the 1996 publication of Investing, Licensing &

Trade Conditions Abroad: Indonesia. Then, we used this ratio to

calculate an estimated indirect labor rate by applying this ratio to

the direct labor rate for the iron and basic steel industry. Thus, the

resulting figure estimates the wage rates for non-production workers in

the iron and basic steel industry, which we determine to be comparable

to the bearing industry. See Attachment 2 of the Analysis Memorandum

for the Final Results of Review.

With regard to petitioner's statement that the Department's ``clear

preference'' is to use data concurrent with the period of review

whenever possible, we agree. However, in this case we do not have any

useable labor data that is concurrent with the period of review.

Moreover, as we discuss in response to Comment 6 below in agreeing with

petitioner regarding the use of data from the dinnerware industry, when

data derives from an industry not comparable to the industry under

review, the time period from which the data is derived is a moot issue.

We note that respondent's discussion of the appropriate figure to

use for the number of weeks per month is moot, as we have calculated

labor rates based on daily rates, and not based on monthly figures.

With regard to the appropriate number of hours in a work day in

Indonesia, we agree with petitioner that record evidence indicates that

the maximum number of hours in each work day, according to Indonesian

labor law, is seven hours. See petitioner's April 2, 1997 submission of

factual information, Attachment 8, page 105. Since the figure utilized

by the Department for the preliminary results is a daily rate,

respondent's comment that a 40 hour work week is spread over six days

may become relevant only if it can be proven that the daily wage rate

reported by the Bulletin of Labor Statistics is derived from a weekly

wage rate. While the document reporting the daily wage rate also

indicates that a 40 hour work week is the norm in Indonesia, there is

no evidence that the daily rate is derived from the number of hours

worked each week. Absent such record evidence, the Department finds no

basis for assuming an 8 hour work day for Indonesia. Therefore, for the

final results of review, we have recalculated the labor values based on

a 40 hour, six day work week. See Attachment 2 of the Analysis

Memorandum for the Final Results of Review.

Finally, with regard to information provided by Investing,

Licensing & Trade Conditions Abroad: Indonesia and Doing Business in

Indonesia concerning bonus payments, insurance and other contributions

paid by the employer, vacations, etc., as we discuss above, there is no

indication that the values employed by the Department for the

preliminary results do not already represent these amounts. Thus, it

would not be appropriate to apply any additional values to these wage

rates, since it may result in double-counting.

Comment 4: Petitioner argues that the Department should use SG&A

and profit data from the financial statements of a manufacturer of

industrial and commercial machinery and service equipment, instead of

data pertaining to the pipe fitting industry. Petitioner claims that

the industrial and commercial machinery and service equipment industry

is more closely related to the bearing industry.

Petitioner also argues against using the information on SG&A,

profit, and factory overhead placed on the record by respondent,

because that information pertains to products that are more remote from

the bearing industry than the pipe fitting industry used by the

Department in the preliminary results.

Respondent notes that petitioner has argued for the use of SG&A and

profit data from another source, while asserting at the same time that

the factory overhead rate from the embassy cable should continue to be

used for the final results. However, respondent claims that the

Department has traditionally tried to utilize overhead, SG&A, and

profit information from a single source. Respondent states that the

issue has been specifically addressed in the Notice of Proposed

Rulemaking and Request for Public Comment, 61 FR 7308, 7374 (February

27, 1996), in which the Department stated that ``particularly for

manufacturing overhead, general expenses and profit, the Department

prefers to use a single surrogate.'' Further, respondent argues that

petitioners has advocated the use of

[[Page 37198]]

a single source in another proceeding (TRBs from the PRC, 61 FR 65527,

65528 (December 13, 1996).

Respondent argues that the company information provided by

petitioner is flawed, as parties do not know the components which

comprise SG&A, and some elements, such as ``distribution costs'' and

petitioner's proposed calculation of interest expense, are of doubtful

use.

Respondent also claims that petitioner's characterization of the

company as a manufacturer of machinery and equipment and from the

industry most closely related to the bearings industry is misleading.

Respondent notes that the company in question is a manufacturer of

office and hospital equipment and high security products. As such,

respondent contends that there is no indication that its distribution

costs and administrative expenses resemble those of a bearing company.

Respondent concludes by noting that, using petitioner's proposed

surrogates, raw material and labor would constitute only 43 percent of

the constructed value of TRBs. Respondent argues that such a result is

contradicted by evidence from other cases before the Department, in

which raw materials and labor constitute greater percentages of the

constructed value of TRBs.

Department's Position: For the preliminary results of review, the

Department used factory overhead, SG&A, and profit percentages provided

in 1991 by the U.S. Embassy in Jakarta from the pipe fitting industry,

a similar metal manufacturing industry. Because interested parties

first learned of the Department's choice of primary surrogate country

for this review at the time of publication of the preliminary results,

we sent letters to interested parties after publication of the

preliminary results allowing parties the opportunity to place further

information regarding Indonesian factors of production on the record of

this review. See letters from the Department to interested parties The

Timken Company, Tehnoimportexport, and Universal Automotive Trading

Company Ltd., dated March 25, 1997, soliciting information on

Indonesian factors of production. See also Comment 6 below.

In response to our request for information, Timken submitted

financial information for the year 1995 from PT Lion Metal Works, an

Indonesian manufacturer of office equipment, ``C'' channel, building

construction equipment, hospital equipment, and high security products.

PT Lion Metal Works is classified in the International Standard

Industrial Classification of All Economic Activities (ISIC) Major group

382, which is the same major group as subject merchandise (``ball and

roller bearings''). The pipe fitting industry falls in the ISIC

category 381. Additionally, under the Harmonized Tariff Schedule of the

United States (1995), pipe fittings fall within Section XV (Base Metals

and Articles of Base Metal), in the category 7307; roller bearings are

in Section XVI (Machinery and Mechanical Appliances; Electrical

Equipment; Parts Thereof; Sound Recorders and Reproducers, Television

Image and Sound Recorders and Reproducers, and parts and Accessories of

Such Articles), in the categories 8482 and 8483; and ``industrial and

commercial machinery and service equipment'' appears to fall within

Section XVI. Therefore, the record evidence suggests that PT Lion Metal

Works produces products which more closely approximate the bearing

industry than the pipe fitting industry.

Additionally, we note that the PT Lion Metal Works data is from

1995, which partially coincides with the period of review. The pipe

fitting industry data, in contrast, was provided in a 1991 Embassy

cable. As the Department noted in final results notice of 1990-93 TRBs

from the PRC (at 65530), ``it is preferable, for the sake of accuracy,

to apply surrogate values coincident with the POR whenever possible.''

With regard to respondent's comment that the Department prefers to

use a single surrogate, particularly for manufacturing overhead,

general expenses and profit, we agree with respondent that, ceteris

paribus, single-sourcing is desirable. However, as respondent itself

has noted in its case brief, the Department has stated that, compared

with cable data obtained from various embassies and consulates, ``it is

more appropriate in any NME cases to rely, to the extent possible, on

public, published statistics from the first choice surrogate country *

* * Thus, for the factors for which public statistical information is

not available (typically, SG&A, factory overhead and profit), the

Department will continue to rely on information from U.S. embassies and

consulates from the first choice country when necessary.'' See Final

Determination of Sales at Less Than Fair Value: Certain Carbon Steel

Butt-Weld Pipe Fittings from the People's Republic of China, 57 FR

21058, 21062 (May 18, 1992) (emphasis added).

Section 773(c)(1) of the Act states that, for purposes of

determining normal value in a non-market economy, ``the valuation of

the factors of production shall be based on the best available

information regarding the values of such factors.'' Therefore, for the

purposes of the final results of review, we believe it is more

appropriate to utilize the PT Lion Metal Works data because: 1) it is

coincident with the POR; 2) it relates to an industry which appears to

more closely relate to the bearings industry; and 3) as a source of

data, it is preferable to U.S. Embassy cable information. Such factors

supporting the use of the PT Lion Metal Works information outweigh the

benefit of extracting overhead, profit, and SG&A data from a single

source.

With regard to the actual calculation of SG&A and profit from the

PT Lion Metal Works data, we agree with respondent that the inclusion

of the amount associated with ``distribution costs'' would double-count

movement expenses. Therefore, we have calculated SG&A without including

``distribution costs.'' Additionally, we agree with respondent that

interest income, as well as interest expenses, should be included in

the calculation of SG&A. We do not agree with respondent that the

inclusion of ``interest payable'' for interest expense is

inappropriate, since it is highly improbable from the financial figures

that interest expenses would be reported anywhere else in these

financial reports. For the exact calculations of SG&A and profit,

please see Attachment 3 of the Analysis Memorandum for the Final

Results of Review.

Comment 5: Petitioner asserts that the Department improperly based

freight costs on the net weight of bearings packed for shipment,

instead of basing freight costs on gross weight. Petitioner asserts

that, as packaging does not ``travel free of charge,'' the Department

should make an allowance for the weight of packaging materials in

calculating freight rates. Petitioner suggests that the Department

should employ the same adjustment in this case as it made in certain

administrative reviews of TRBs from the PRC.

Petitioner also states that the same adjustment may apply for ocean

freight, but that the record is not clear regarding whether the

Department accepted rates based on weight or number of bearings.

Respondent did not comment on this issue.

Department's Position: We agree with petitioner that a cost is

incurred with respect to shipment of packing materials. Therefore, to

account for the additional packing weight, we have calculated foreign

inland freight by multiplying the net weights by 1.08. The Department

used this figure, based on

[[Page 37199]]

its determination that it was an independent and reliable source of

information, in Tapered Roller Bearings and Parts Thereof, Finished and

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

Antidumping Duty Administrative Review (1993-94), 62 FR 6189, 6203

(February 11, 1997), and the 1994-95 segment of the same proceeding (62

FR 6173, 6184 (February 11, 1997)).

With regard to TIE's reported ocean freight, we noted in the

verification report that TIE calculated its international freight

values by dividing ``Total Shipping Expense (from freight invoice)'' by

``Total Invoice Value (from invoice),'' and then multiplying that

figure by the unit price. Additionally, the TIE verification sales

trace exhibits support the conclusion that ocean freight expenses have

not been reported on a per weight basis. Thus, TIE accurately reported

its actual ocean freight expense, and no adjustment for packing

materials is warranted.

Comment 6: Respondent argues that the Department should not have

used a 1991 cable from the U.S. Embassy in Jakarta as the source of

factory overhead, SG&A, and profit data in this case. Specifically,

respondent argues that the information is not substantiated in any

respect, and is six years old.

Respondent argues that the Department has established a preference

for the use of publicly-available information over cable data obtained

from U.S. embassies, citing Final Determination of Sales at Less Than

Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the

People's Republic of China. For this review, respondent contends that

it would be more appropriate to use information from Melamine

Institutional Dinnerware from the People's Republic of China

(``Dinnerware''). While respondent acknowledges that the industry is

different than bearings, respondent notes that they are both

manufactured products which involve a basic raw material. Furthermore,

according to respondent, there is no other data on the record which

would allow the Department to obtain overhead, SG&A, and profit data

from a single source. Because this data is transparent, verified, and

pertains to a more recent period, respondent maintains that it is

superior to the data used in the preliminary results.

Petitioner argues that, while it believes there are problems with

the use of the pipe fittings data (see Comment 4), respondent has

proposed the utilization of information from proceedings involving

products which petitioner argues bear ``no relationship at all'' to the

TRBs under review. While petitioner notes that the degree of

specificity acceptable in surrogate value selection depends to a

``considerable'' extent upon what information is available on the

record, petitioner argues that there is no reason to accept the data

proposed by TIE on the basis of the record in this review.

First, petitioner claims that while the Dinnerware information is

more recent and closer in time to the review period than the

information used by the Department, that is irrelevant. Specifically,

petitioner claims that the timeliness of data only becomes relevant

when the data themselves are relevant. In this case, no matter how

contemporaneous, petitioner asserts that plastic dishes are not

comparable to bearings. Additionally, as the figures used by the

Department are percentage rates, petitioner argues that, while actual

prices may vary considerably over time, it is less likely that the

overall cost structure of an industry would change drastically over a

few years. Petitioner concludes that it is reasonable to assume that an

industry's cost structure, and its overhead, SG&A, and profit ratios,

would remain basically the same between 1991 and 1995-96.

Finally, petitioner claims that the materials and production

process for pipe fittings are more similar to bearing production than

the melamine dinnerware materials and production process. Pipe fittings

are made of steel, like bearings, and the production process involves

heating and forging, or cold-forming, and machining to final size.

Department's Position: We disagree with respondent that it would be

more appropriate to utilize overhead, SG&A, and profit data from

Dinnerware. Most importantly, we note that the statute, at 19 U.S.C.

1677b(c) (1)(B) and (2)(A), requires use of surrogate values for

production of comparable merchandise. As the Department noted in

Comment One of the final results of review of the 1993-94 segment of

this proceeding, in defending the use of data from the Turkish pipe and

tube industry, ``the term `comparable' encompasses a larger set of

products than `such or similar.' '' Thus, we have supported the use of

pipe industry data in earlier reviews of this proceeding as being

sufficiently ``comparable'' to tapered roller bearings.

In contrast, there is no Departmental precedent for the application

of data pertaining to the production of melamine dinnerware to the

tapered roller bearing industry. This is not surprising, based on the

fact that, other than respondent's observation that they are both

manufactured products which involve a basic raw material, there is

nothing comparable about these two types of merchandise. Additionally,

the Department offered guidance in determining the potential universe

of comparable products for this review period. Specifically, in

Attachment 4 of the Department's surrogate country selection

memorandum, the Department stated that ``if any of the listed possible

surrogates are significant producers of any steel products they may be

appropriate surrogates.'' See February 25, 1997 Memorandum to the File:

Antidumping Administrative Review of Tapered Roller Bearings from

Romania: Selection of a Surrogate Country in the 1995/96 Review.

Dinnerware, of course, does not fall within this category.

Because the melamine dinnerware data pertains to an industry which

is not comparable to the merchandise under review, we agree with

petitioner that the time period for which the dinnerware data is

applicable is a moot issue.

Comment 7: Respondent contends that the SG&A rate used in the

preliminary results is unreasonably high, both compared to rates used

in other bearings reviews, as well as compared to any other instances

in which the Department has used actual data.

Petitioner responds that the SG&A rate is not abnormally high. For

example, petitioner notes that the SG&A rate from the only Indonesian

company on the record in this review that petitioner believes can be

regarded as a producer of merchandise reasonably similar to bearings is

higher than the rate used by the Department in the preliminary results.

Department's Position: Respondent's contention that the SG&A rate

used in the preliminary results is unreasonably high, both compared to

rates used in other bearings reviews, as well as compared to any other

instances in which the Department has used actual data, is not

sufficient grounds to lower the SG&A figure for the final results of

review in the absence of preferable data. As discussed above in Comment

6, respondent's suggested use of data from the Dinnerware case is

unacceptable, as dinnerware is not comparable to tapered roller

bearings. Therefore, the only possible alternative data on the record

of this review for use as surrogate SG&A data is the PT Lion Metal

Works data. As petitioner has suggested, this data supports the

conclusion that the SG&A figure from the embassy cable is not

aberrational compared to the SG&A expenses of an industry comparable to

the bearing industry.

[[Page 37200]]

Comment 8: Respondent argues that, while it believes that the

Department should employ overhead data from Dinnerware, it has provided

additional information on the record which it contends is ``clearly as

reasonable'' as the embassy cable used in the preliminary results.

Department's Position: Respondent's proposals to employ overhead

data from Notice of Final Determination of Sales at Less than Fair

Value: Disposable Pocket Lighters from the People's Republic of China,

60 FR 22359 (May 5, 1995) and Notice of Final Determination of Sales at

Less than Fair Value: Furfuryl Alcohol from the People's Republic of

China, 60 FR 22544 (May 8, 1995) antidumping duty investigations suffer

the same limitation as respondent's proposal to utilize data from

Dinnerware. That is, the data from these cases pertain to industries

that are not comparable to the bearing industry and therefore, we are

not using them in these final results.

Comment 9: Respondent objects to the Department's utilization of a

foreign inland freight rate based on information from Dinnerware.

First, respondent argues that the rate used by the Department results

in a deduction of 2 percent to 8 percent from gross unit price for most

models, when the rate used in the previous review resulted in a

deduction of far less than 1 percent from gross unit price. Second,

respondent notes that the rate is almost 20 times more than the rate

used the 1994-95 TRBs from the PRC review. Third, respondent states

that the Department's selection of this rate suggests that it is three

times more expensive to ship bearings from Brasov to Constanta, Romania

than to send the bearings from Constanta to Baltimore, USA.

Respondent alleges that the reason for this high price is either a

mathematical error on the Department's part, or the fact that the short

distance between the factory and the port (40 km) make the cost per

kilometer abnormally high. Respondent asserts that the Department has

taken the position in Final Determination of Sales at Less than Fair

Value: Certain Cased Pencils from the People's Republic of China

(``Pencils from the PRC''), 59 FR 55625, 55629 (November 8, 1994) that

it will examine surrogate values for reasonableness. Where the

Department find that the surrogate values are unreasonable or

aberrational, respondent maintains that the Department has stated it

will compare the questionable data with other data to determine its

reliability and to use other more reliable data, if necessary.

Petitioner argues that respondent has made no attempt to

demonstrate that the rate used by the Department in the preliminary

results is objectively too high. In the absence of such demonstration,

petitioner claims that there is no evidence that the rate is actually

too high and, in fact, petitioner suggests that it can be argued just

as persuasively that the rates used in the other instances were too

low.

Furthermore, petitioner maintains that the lack of an objective

basis for TIE's complaint is highlighted by its use of a hypothetical

example (in which respondent argues that, if the bearing factories were

1500 km from the port, the freight cost would be 27 percent of the cost

of the bearings). In fact, according to petitioner, the factories are

not 1500 km from the port. The actual distances (350 and 380 km),

according to petitioner, are more comparable to the 40 km used as the

basis for the Department's calculation.

Department's Position: In the preliminary results of review, the

Department used information submitted on the record for the 1995

antidumping investigation on Dinnerware. However, as we noted above in

Comment 4, interested parties were provided the opportunity to submit

information regarding Indonesian factors of production after

publication of the preliminary results of review notice. In response to

the Department's letter, TIE submitted freight data used in Disposable

Pocket Lighters from the PRC. We note that this data, which includes

freight values for truck and rail separately, is based on the same U.S.

Embassy cable from which the Department took the SG&A, profit, and

overhead values.

Because the cable data pertains to the pipe fitting industry (an

industry comparable to the bearing industry), it is inherently

preferable to the Dinnerware data. Additionally, in comparison with

actual data used in other cases involving tapered roller bearings, the

cable data appears to more reasonably approximate the true cost of

freight for producers of tapered roller bearings. We agree with

respondent that the Department has taken the position in Pencils from

the PRC that it will examine surrogate values for reasonableness. Thus,

the rate used in the preliminary results of review, when contrasted

with rates from the Romanian TRBs cases for 1993-94 and 1994-95, and

the Chinese TRB case for 1994-95, does not appear to reasonably

approximate the true cost of freight.

Therefore, for the final results of review, we have revised freight

based on the values for truck and rail appearing in the 1991 Embassy

cable. See Analysis Memorandum for the Final Results of Review (July 7,

1997).

Comment 10: Respondent argues that the Department should utilize

the former statutory minimum of 8 percent or rely upon the rate in

Dinnerware to calculate profit.

Petitioner claims that the Department has rejected the use of the

former statutory minimum for profit as contrary to law, for example, in

the 1994-95 segment of this proceeding. Furthermore, use of the rate in

Dinnerware should be rejected as not applying to an industry producing

similar merchandise, as discussed by petitioner in Comment 6 above.

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

controlling statute, the statutory minimum of 8 percent for profit is

invalid, and the Department must use actual rates when possible. See 19

U.S.C. 1677b(e)(2). Additionally, as discussed above, Dinnerware is not

comparable merchandise to the merchandise under review. Therefore, the

Department cannot consider the profit rate from that case. Hence, the

Department has continued to use the actual profit rate reported for the

Indonesian pipe fitting industry, as this rate applies to producers of

comparable merchandise from a qualifying surrogate country.

Comment 11: Respondent alleges ministerial errors for certain

observations in the database, caused by incorrect labor costs, which

should be corrected for the final results of review.

Petitioner argues that the reporting errors were made by TIE, not

the Department. Thus, petitioner notes that it is ``just as possible''

that the error, if one exists, lies in the values used for the other

observations TIE alleges are correct, or that the labor costs for the

observation cited are correct and the model number listed is incorrect.

Petitioner argues that post hoc changes in data submitted ``long ago''

cannot reasonably be accepted now.

In the event the Department changes these values, petitioner

asserts that, under the adverse inference rule, the Department should

use, as facts otherwise available, the highest normal value information

for that part number in all cases.

Department's Position: We agree with respondent. The Department has

corrected these ministerial errors, which were cell referencing errors

in the spreadsheet program written by the Department, for the final

results of review.

[[Page 37201]]

Final Results of the Review

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

exists:

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

Margin

Manufacturer/exporter Time period (percent)

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

TIE....................................... 6/1/95-5/31/96 2.70

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

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.

Furthermore, the following cash deposit requirements will be effective

upon publication of these final results for all shipments of this

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) The cash deposit rates for TIE will be the rate stated above

(except that if the rate is de minimis, i.e., less than 0.5 percent, a

cash deposit rate of zero will be required); (2) the cash deposit rate

for all other Romanian exporters will be the Romania-wide rate made

effective by the amended final results of the 1994-95 administrative

review. See Tapered Roller Bearings and Parts Thereof, Finished or

Unfinished, from Romania; Amendment of Final Results of Antidumping

Duty Administrative Review, 61 FR 59416 (November 22, 1996); (3) for

non-Romanian exporters of subject merchandise from Romania, the cash

deposit rate will be the rate applicable to the Romanian supplier of

that exporter. These deposit requirements shall remain in effect until

publication of the final results of the next administrative review.

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: July 7, 1997.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-18286 Filed 7-10-97; 8:45 am]

BILLING CODE 3510-DS-P