Final Results of Expedited Sunset Review: Ball Bearings From Romania

DEPARTMENT OF COMMERCE

International Trade Administration

[A-485-801]

Final Results of Expedited Sunset Review: Ball Bearings From

Romania

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Expedited Sunset Review: Ball

Bearings from Romania.

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SUMMARY: On April 1, 1999, the U.S. Department of Commerce (``the

Department'') initiated a sunset review of the antidumping duty order

on ball bearings from Romania pursuant to section 751(c) of the Tariff

Act of 1930, as amended (``the Act''). On the basis of a notice of

intent to participate and adequate response filed on behalf of a

domestic interested party and inadequate response from respondent

interested parties in this review, the Department conducted an

expedited sunset review. As a result of this review, the Department

finds that revocation of the antidumping duty order would likely lead

to recurrence of dumping at

[[Page 60314]]

the levels indicated in the Final Results of Review section of this

notice.

FOR FURTHER INFORMATION CONTACT: Mark D. Young or Melissa G. Skinner,

Office of Policy for Import Administration, International Trade

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

Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-3207

or (202) 482-1560, respectively.

EFFECTIVE DATE: November 4, 1999.

Statute and Regulations

This review was conducted pursuant to sections 751(c) and 752 of

the Act. The Department's procedures for conducting sunset reviews are

set forth in Procedures for Conducting Five-year (``Sunset'') Reviews

of Antidumping and Countervailing Duty Orders, 63 FR 13516 (March 20,

1998) (``Sunset Regulations''), and 19 CFR part 351 (1999) in general.

Guidance on methodological or analytical issues relevant to the

Department's conduct of sunset reviews is set forth in the Department's

Policy Bulletin 98:3--Policies Regarding the Conduct of Five-year

(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders;

Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy

Bulletin'').

Scope

The products covered by this order are ball bearings (``BBs'') and

parts thereof from Romania. For a detailed description of the products

covered by this order, including a compilation of all pertinent scope

determinations, refer to the notice of final results of expedited

sunset reviews on antifriction bearings from Japan, publishing

concurrently with this notice.

History of the Order

On May 3, 1989, the Department issued a final determination of

sales at less than fair value (``LTFV'') with respect to imports of BBs

from Romania.1 The antidumping duty order on BBs was issued

by the Department on May 15, 1989, and the dumping margins that were

found in the final determination of sales at LTFV were

confirmed.2 Since the imposition of this order, the

Department has conducted several administrative reviews.3

The order remains in effect for all manufacturers and exporters of the

subject merchandise.

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\1\ See Final Determination of Sales at Less Than Fair Value;

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof From Romania, May 3, 1989 54 FR 18992.

\2\ See Ball Bearings, Cylindrical Roller Bearings, and

Spherical Plain Bearings and Parts Thereof From Romania; Antidumping

Duty Order, May 15, 1989 54 FR 20900.

\3\ See Ball Bearings, Cylindrical Roller Bearings, and

Spherical Plain Bearings and Parts Thereof From Romania; Final

Results of Antidumping Duty Administrative Review, 64 FR 35590 (July

1, 1999); 63 FR 33320 (June 18, 1998); 62 FR 54043 (October 17,

1997); 58 FR 39729 (July 26, 1993); 57 FR 28360 (June 24, 1992); and

56 FR 31692 (July 11, 1991).

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This review covers all producers and exporters of BBs from Romania.

Background

On April 1, 1999, the Department initiated a sunset review of the

antidumping duty order on BBs from Romania pursuant to section 751(c)

of the Act. By April 16,1999, within the deadline specified in section

351.218(d)(1)(i) of the Sunset Regulations, we received notices of

intent to participate from The Torrington Company (``Torrington'') and

MPB Corporation (``MPB''), Roller Bearing Company of America (``RBC''),

Link-Belt Bearing Division (``Link-Belt''), New Hampshire Ball Bearing,

Inc. (``NHBB''), and NSK Corporation (``NSK''). Each of these parties

claimed status as domestic interested parties on the basis that they

are domestic producers, manufacturers, or wholesalers of BBs.

Within the deadline specified in the Sunset Regulations under

section 351.218(d)(3)(i), on May 3, 1999, the Department received

complete substantive responses from each of these domestic interested

parties. In addition, Tehnoimportexport S.A. (``TIE'') notified the

Department that it would not file a substantive response in the review

of the BBs order. We received substantive comments from Torrington and

MPB, RBC, NHBB, and NSK, on May 12, 1999, within the deadline. We did

not receive a substantive response from Link-Belt.

On May 21, 1999, we informed the International Trade Commission

(``Commission'') that, on the basis of inadequate response from

respondent interested parties, we were conducting an expedited sunset

review of this order consistent with 19 CFR 351.218(e)(1)(ii)(C)(2).

(See Letter to Lynn Featherstone, Director, Office of Investigations

from Jeffrey A. May, Director, Office of Policy.)

In accordance with section 751(c)(5)(C)(v) of the Act, the

Department may treat a review as extraordinarily complicated if it is a

review of a transition order (i.e., an order in effect on January 1,

1995). Therefore, on August 5, 1999, the Department determined that the

sunset review of the antidumping duty order on BBs from Romania is

extraordinarily complicated and extended the time limit for completion

of the final results of this review until not later than October 28,

1999, in accordance with section 751(c)(5)(B) of the Act.4

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\4\ See Tapered Roller Bearings, 4 Inches and Under From Japan,

et. al.: Extension of Time Limit for Final Results of Five-Year

Reviews, 64 FR 42672 (August 5, 1999).

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Determination

In accordance with section 751(c)(1) of the Act, the Department

conducted this review to determine whether revocation of the

antidumping duty order would be likely to lead to continuation or

recurrence of dumping. Section 752(c) of the Act provides that, in

making this determination, the Department shall consider the weighted-

average dumping margins determined in the investigation and subsequent

reviews and the volume of imports of the subject merchandise for the

period before and the period after the issuance of the antidumping duty

order. Pursuant to section 752(c)(3) of the Act, the Department shall

provide to the Commission the magnitude of the margin likely to prevail

if the order is revoked.

The Department's determinations concerning continuation or

recurrence of dumping and the magnitude of the margin are discussed

below. In addition, the parties' comments with respect to the

continuation or recurrence of dumping and the magnitude of the margin

are addressed within the respective sections below.

Adequacy

As noted above, we notified the Commission that we intended to

conduct an expedited review of this order. On June 10, 1999, we

received comments on behalf of Torrington and MPB supporting our

determination to conduct an expedited review. NHBB and NSK also

submitted comments on whether an expedited sunset review was warranted.

In both submissions, both parties assert that most of the domestic

interested parties that submitted substantive responses are in favor of

revocation of the Department's various antidumping duty orders on

antifriction bearings. These parties also offered new argument

regarding the likely effect of revocation of these orders.

The magnitude of domestic support for continuation or revocation of

an order, however, does not enter into the Department's determination

of adequacy of participation nor, for that matter, the Department's

determination of likelihood. We made clear in our

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regulations that a complete substantive response from one domestic

interested party, which we have received in this case from Torrington

and MPB, RBC, NHBB, and NSK, would be considered adequate for purpose

of continuing a sunset review (see section 351.218(e)(1)). Nowhere in

the statute or legislative history is there reference to consideration

of domestic industry support during the course of a sunset review

(other than the statutory provision that if there is no domestic

industry interest in continuation of the order, the Department will

revoke the order automatically). In fact, the Senate Report (at S. Rep.

No. 103-412, at 46 (1994)) makes clear that the purpose of adequacy

determinations in sunset reviews is for the Department to determine

whether to issue a determination based on the facts available without

further fact-gathering. Further, the statute, at section 751(c)(1),

specifies that the Department is to determine whether revocation of an

order would be likely to lead to continuation or recurrence of dumping.

Section 752(c) specifies that the Department is to consider the

weighted-average dumping margins determined in the investigation and

subsequent reviews, as well as the volume of imports of the subject

merchandise for the period before and the period after the issuance of

the order.

Continuation or Recurrence of Dumping

Drawing on the guidance provided in the legislative history

accompanying the Uruguay Round Agreements Act (``URAA''), specifically

the Statement of Administrative Action (``the SAA''), H.R. Doc. No.

103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1

(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the

Department issued its Sunset Policy Bulletin providing guidance on

methodological and analytical issues, including the bases for

likelihood determinations. In its Sunset Policy Bulletin, the

Department indicated that determinations of likelihood will be made on

an order-wide basis (see section II.A.2). In addition, the Department

indicated that normally it will determine that revocation of an

antidumping duty order is likely to lead to continuation or recurrence

of dumping when (a) dumping continued at any level above de minimis

after the issuance of the order, (b) imports of the subject merchandise

ceased after the issuance of the order, or (c) dumping was eliminated

after the issuance of the order and import volumes for the subject

merchandise declined significantly (see Section II.A.3).

In their substantive responses, Torrington, MPB, and RBC argue that

revocation of the antidumping duty order on the subject merchandise

would likely lead to the recurrence of dumping. They base this

conclusion on the fact that imports declined significantly while

dumping margins remained at de minimis levels. Torrington and MPB argue

that the post-order volume of imports for complete unmounted BBs, which

they assert is the only category for which statistics are available on

a consistent basis, have declined significantly since the issuance of

the order. They argue further that, since the post-order import volume

was 83% lower than the pre-order volume, the Department should conclude

that dumping is likely to recur if the order were revoked. In

conclusion, Torrington and MPB assert that no ``good cause'' exists to

consider other factors, such as sales below the cost of production.

NHBB and NSK assert that revocation of the order is not likely to

result in continuation or recurrence of dumping. NHBB bases its

assertion on the fact that dumping would undercut the U.S. domestic

price structure, thus causing injury to the very industry of which

foreign owners are a part. NSK claims that the margin of dumping would

be no higher than the margin for TIE found in the most recent

administrative review (i.e., 0.02 percent).

In their rebuttal comments, Torrington and MPB assert that the

Department should take into account the submitter's affiliation in its

consideration of comments of various parties filing as domestic

producers. Further, citing to Ball Bearings and Parts Thereof From

Thailand; Final Results of Changed Circumstances Countervailing Duty

Review and Revocation of Countervailing Duty Order, 61 FR 20799, 20800

(May 8, 1996), they argue that the Department has recognized that

domestic producers who are affiliated with subject foreign producers

and exporters do not have a common ``stake'' with the petitioner in the

maintenance of the order. Additionally, Torrington and MPB argue that

other parties' comments addressing issues other than margins and import

volumes should not be considered unless such parties establish ``good

cause'' to consider such additional factors, which, in this review,

they have not done.

As discussed in section II.A.3 of the Sunset Policy Bulletin, the

SAA at 890, and the House Report at 63-64, existence of dumping margins

after the order is highly probative of the likelihood of continuation

or recurrence of dumping. If companies continue to dump with the

discipline of an order in place, the Department may reasonably infer

that dumping would continue if the discipline of the order were

removed. Therefore, as noted above, in determining whether revocation

of an order is likely to lead to continuation or recurrence of dumping,

the Department considers the margins determined in the investigation

and subsequent administrative reviews and the volume of imports.

Whatever relevance the arguments of NHBB and NSK concerning possible

disincentives for producers and/or exporters to dump in the U.S. market

might have had is mooted by the evidence that dumping continues and has

continued over the life of the order.

As set forth in the Sunset Policy Bulletin (section II.A.3) and

consistent with the SAA at 889-90 and the House Report at 63, where

dumping was eliminated after the issuance of the order and import

volumes from the subject merchandise declined significantly, the

Department normally will determine that revocation of the antidumping

duty order would be likely to lead to recurrence of dumping. Although

dumping has been eliminated, shipments of the subject merchandise have

declined dramatically. In addition, respondent interested parties

waived participation in this review. Therefore, we determine that,

consistent with section II.A.3 of the Sunset Policy Bulletin, dumping

is likely to recur if the order were revoked. Because we have based

this determination on the fact that import volumes of the subject

merchandise declined significantly after the issuance of the order, we

have not addressed the comments submitted by Torrington and MPB with

respect to ``good cause'' nor have we addressed the arguments of other

interested parties regarding the condition of the U.S. market.

Magnitude of the Margin

In the Sunset Policy Bulletin, the Department stated that,

consistent with the SAA and House Report, the Department normally will

provide to the Commission a margin from the investigation because that

is the only calculated rate that reflects the behavior of exporters

without the discipline of an order in place. Further, for companies not

specifically investigated or for companies that did not begin shipping

until after the order was issued, the Department normally will provide

a margin based on the ``all others'' rate from the investigation. (See

section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this

policy include the

[[Page 60316]]

use of a more recently calculated margin, where appropriate, and

consideration of duty-absorption determinations. (See sections II.B.2

and 3 of the Sunset Policy Bulletin.)

In their substantive responses, Torrington, MPB, and RBC argue that

the margins that are likely to prevail should the order be revoked are

the dumping margins found for each company in the original

investigation (as opposed to margins calculated in succeeding annual

administrative reviews), including margins based on best information

available, except where the most current margin, increased by the

Department's duty-absorption determination, exceeds the original

investigation margin.

NHBB argues that the dumping margins likely to prevail if the order

were revoked are de minimis. NHBB goes on to argue that it would be

illogical for companies with significant U.S. bearings investments to

undercut that investment by dumping. In addition, NHBB argues that the

Department should not report margins from the original investigation.

In support of this argument, NHBB notes that the SAA provides that, in

certain instances, it is more appropriate to rely on a more recently

calculated margin. NHBB asserts that one such instance is where, as in

the bearings cases, dumping margins have declined over the life of the

order and imports have remained steady or increased. Additionally, NHBB

argues that, because the structure of the U.S. domestic industry that

exists today bears little resemblance to the industry when the

antidumping duty order was imposed in 1989, the rates from the original

investigation are inappropriate as indicators of the rates that would

be found upon revocation. Finally, NHBB argues that, in light of

changes in the methodology used to calculated antidumping duty margins

introduced by the Uruguay Round, use of margins calculated by the

Department prior to the URAA would be unfair and would be contrary to

the WTO Agreement on Implementation of Article VI of the General

Agreement on Tariffs and Trade 1994.

Similarly, NSK argues that the margins likely to prevail are de

minimis. As support, NSK argues that, were the order not in existence,

the Department would apply the average-to-average methodology used in

an investigation as opposed to the transaction-to-average methodology

common to administrative reviews to measure the extent of any dumping.

In such a case, NSK believes any margin found would be below the two

percent de minimis level applicable in investigations. NSK argues

further that, the Department's unorthodox approach during the original

investigation, plus the liberal use of best information available,

skewed the results of the original investigation seriously, rendering

those results inappropriate indicators of the magnitude of the margin

likely to prevail if the order were revoked. Finally, NSK also argues

that dumping margins have declined over time while, at the same time,

importations have remained at or around 20 percent of the U.S. market.

As support, it cites to The Economic Effects of Antidumping and

Countervailing Duty Orders and Suspension Agreements, USITC Pub. 2900,

Inv. No. 332-334, at 14-26--14-31 (June 1995).

In their rebuttal comments, Torrington and MPB argue that other

parties' comments ignore the Department's stated policies regarding the

selection of margins likely to prevail. Citing to the Sunset Policy

Bulletin, Torrington and MPB argue that the Department's policies are

clear--normal reliance on the margins from the investigation as the

only margins that reflect the behavior of exporters without the

discipline of the order. Torrington and MPB argue that the two-percent

de minimis standard is not applicable to sunset reviews. Further, there

is no authority which would authorize or justify the rejection of the

investigation rate on the basis of the particular methodology used at

the time of the investigation. Additionally, with respect to claims

that more recent margins should be used based on declining margins

accompanied by steady or increasing imports, Torrington and MPB argue

that it is the responsibility of such claimants to provide information

regarding companies' relative market share. Since no such information

was provided, Torrington and MPB argue that the Department should not

accept these assertions.

We agree with Torrington, MPB, and RBC that, normally, we will

provide a margin from the original investigation because that is the

rate that reflects the behavior of exporters absent the discipline of

the order. As noted above, exceptions to this policy include the use of

a more recently calculated margin, where appropriate, and consideration

of duty-absorption determinations.

In the Sunset Policy Bulletin we indicated that, consistent with

the SAA at 889-90 and the House Report at 63, we may determine, in

cases where declining (or no) dumping margins are accompanied by steady

or increasing imports, that a more recently calculated rate reflects

that companies do not have to dump to maintain market share in the

United States and, therefore, that dumping is less likely to continue

or recur if the order was revoked. Alternatively, if a company chooses

to increase dumping in order to increase or maintain market share, the

Department may provide the Commission with a more recently calculated

margin for that company. The Sunset Policy Bulletin provides that we

will entertain such considerations in response to argument from an

interested party. Further, we noted that, in determining whether a more

recently calculated margin is probative of an exporter's behavior

absent the discipline of an order, the Department normally will

consider the company's relative market share, with such information to

be provided by the parties. It is clear, therefore, that in determining

whether a more recently calculated margin is probative of the behavior

of exporters were the order revoked, the Department considers company-

specific exports and company-specific margins. Additionally, although

we expressed a clear preference for market-share information, in past

sunset reviews, where market-share information was not available, we

relied on changes in import volumes between the periods before and

after the issuance of the order. See, e.g., Final Results of Expedited

Sunset Review: Stainless Steel Plate from Sweden, 63 FR 67658 (December

8, 1998), and Final Results of Expedited Sunset Reviews: Certain Iron

Construction Castings From Brazil, Canada, and the People's Republic of

China, 64 FR 30310 (June 7, 1999).

In sunset reviews, although we make likelihood determinations on an

order-wide basis, we report company-specific margins to the Commission.

Therefore, it is appropriate that our determinations regarding the

magnitude of the margin likely to prevail be based on company-specific

information. Generic arguments that margins decreased over the life of

the order while, at the same time, exporters' share of the U.S. market

remained constant do not address the question of whether any particular

company decreased its margin of dumping while at the same time

maintaining or increasing market share. In fact, such generic argument

may disguise company-specific behavior demonstrating increased dumping

coupled with increased market share.

Our review of import statistics, provided by Torrington and MPB,

covering BBs from Romania demonstrates that imports have declined

significantly since 1988, dropping from 13.5 million units to 0.7

million units. Although imports increased to 2.5 million units in 1997,

[[Page 60317]]

they remain significantly below pre-order volumes. While we acknowledge

that we may select a more recently calculated margin when declining (or

no) margins are accompanied by steady or increasing imports, we do not

agree that the facts of this case support such a determination.

Although dumping margins, in the instant case, have remained at levels

below de minimis levels from 1990 through 1998, the record reflects a

dramatic decline in import levels. As mentioned above, the Department

normally will determine that revocation of an antidumping duty order is

likely to lead to continuation or recurrence of dumping where there is

a significant decline in import levels. Therefore, we find that the use

of a more recently calculated margin in its report to the Commission

would be inappropriate. Rather, we find that the margins from the

original investigation reflect the behavior of exporters absent the

discipline of the order. Therefore, consistent with the Sunset Policy

Bulletin, we will report to the Commission the margins indicated in the

Final Results of the Review section of this notice.

Final Results of Review

As a result of this review, the Department finds that revocation of

the antidumping duty order would likely lead to recurrence of dumping

at the margins indicated below:

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Margin

Manufacturer/ Exporter (percent)

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Ball Bearings:

TIE.................................................... 39.61

All Others............................................. 39.61

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This notice serves as the only 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 351.305 of the Department's regulations.

Timely notification of return/destruction of APO materials or

conversion to judicial protective order is hereby requested. Failure to

comply with the regulations and the terms of an APO is a sanctionable

violation.

This five-year (``sunset'') review and notice are in accordance

with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: October 28, 1999.

Richard Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-28777 Filed 11-3-99; 8:45 am]

BILLING CODE 3510-DS-P