Brake Rotors From the People's Republic of China: Preliminary Results and Partial Rescission of the Seventh Administrative Review and Preliminary Results of the Eleventh New Shipper Review, 24382-24393 [E5-2229]

Download as PDF 24382 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices CBP to assess the resulting rate against the entered customs value for the subject merchandise on each importer’s/ customer’s entries during the POR. Cash-Deposit Requirements 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publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for each of the reviewed companies will be the rate listed in the final results of review (except where the rate for a particular company is de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for previously investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value (‘‘LTFV’’) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be the ‘‘PRCwide’’ rate of 124.5 percent, which was established in the LTFV investigation. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. Notification to Importers This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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. We are issuing and publishing these preliminary results of review in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act, and 19 CFR 351.221(b). Dated: May 2, 2005. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. E5–2233 Filed 5–6–05; 8:45 am] BILLING CODE 3510–DS–P VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 DEPARTMENT OF COMMERCE International Trade Administration (A–570–846) Brake Rotors From the People’s Republic of China: Preliminary Results and Partial Rescission of the Seventh Administrative Review and Preliminary Results of the Eleventh New Shipper Review Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce (‘‘the Department’’) is currently conducting the seventh administrative review and eleventh new shipper review of the antidumping duty order on brake rotors from the People’s Republic of China (‘‘PRC’’) covering the period April 1, 2003, through March 31, 2004. We preliminarily determine that no sales have been made below normal value (‘‘NV’’) with respect to the exporters who participated fully and are entitled to a separate rate in these reviews. If these preliminary results are adopted in our final results of these reviews, we will instruct the U.S. Customs and Border Protection (‘‘CBP’’) to assess antidumping duties on entries of subject merchandise during the period of review (‘‘POR’’) for which the importer-specific assessment rates are above de minimis. Interested parties are invited to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice. EFFECTIVE DATE: May 9, 2005. FOR FURTHER INFORMATION CONTACT: Steve Winkates or Brian Smith, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482–1904 or (202) 482– 1766, respectively. SUPPLEMENTARY INFORMATION: AGENCY: Background On February 19, 1999, the Department published in the Federal Register the antidumping duty order on brake rotors from the PRC. See Notice of Antidumping Duty Order: Brake Rotors from the People’s Republic of China, 62 FR 18740 (April 17, 1997). The Department received a timely request from Longkou Jinzheng Machinery Co., Ltd. (‘‘Longkou Jinzheng’’) on December 15, 2003, for a new shipper review of this antidumping duty order in accordance with 19 CFR 351.214(c). PO 00000 Frm 00017 Fmt 4703 Sfmt 4703 On April 1, 2004, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on brake rotors from the PRC. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 69 FR 17129 (April 1, 2004). On April 30, 2004, the petitioner 1 requested an administrative review pursuant to 19 CFR 351.213(b) for 24 companies,2 which it claimed were producers and/or exporters of the subject merchandise. Five of these companies are included in five exporter/producer combinations 3 that received zero rates in the less-than-fairvalue (‘‘LTFV’’) investigation and thus were excluded from the antidumping duty order only with respect to brake rotors sold through the specified exporter/producer combinations. On May 7, 2004, Longkou Jinzheng agreed to waive the time limits applicable to the new shipper review and to permit the Department to conduct the new shipper review concurrently with the administrative review. On May 20, 2004, the Department initiated a new shipper review of Longkou Jinzheng (see Brake Rotors from the People’s Republic of China: Initiation of the Eleventh New 1 The petitioner is the Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers. 2 The names of these exporters are as follows: (1) China National Industrial Machinery Import & Export Corporation (‘‘CNIM’’); (2) Laizhou Automobile Brake Equipment Company, Ltd. (‘‘LABEC’’); (3) Longkou Haimeng Machinery Co., Ltd. (‘‘Longkou Haimeng’’); (4) Laizhou Hongda Auto Replacement Parts Co., Ltd. (‘‘Hongda’’); (5) Hongfa Machinery (Dalian) Co., Ltd. (‘‘Hongfa’’); (6) Qingdao Gren (Group) Co. (‘‘Gren’’); (7) Qingdao Meita Automotive Industry Company, Ltd. (‘‘Meita’’); (8) Shandong Huanri (Group) General Company (‘‘Huanri General’’); (9) Yantai Winhere Auto-Part Manufacturing Co., Ltd. (‘‘Winhere’’); (10) Zibo Luzhou Automobile Parts Co., Ltd. (≥ZLAP≥); (11) Longkou TLC Machinery Co., Ltd. (‘‘LKTLC’’); (12) Zibo Golden Harvest Machinery Limited Company (‘‘Golden Harvest’’); (13) Shanxi Fengkun Metallurgical Limited Company (‘‘Shanxi Fengkun’’); (14) Xianghe Xumingyuan Auto Parts Co. (‘‘Xumingyuan’’); (15) Xiangfen Hengtai Brake System Co., Ltd. (‘‘Hengtai’’); (16) Laizhou City Luqi Machinery Co., Ltd. (‘‘Luqi’’); (17) Qingdao Rotec Auto Parts Co., Ltd. (‘‘Rotec’’); (18) Shenyang Yinghao Machinery Co. (‘‘Shenyang Yinghao’’); (19) China National Machinery and Equipment Import & Export (Xianjiang) Corporation (‘‘Xianjiang’’); (20) China National Automotive Industry Import & Export Corporation (‘‘CAIEC’’); (21) Laizhou CAPCO Machinery Co., Ltd. (‘‘Laizhou CAPCO’’); (22) Laizhou Luyuan Automobile Fittings Co. (‘‘Laizhou Luyuan’’); and (23) Shenyang Honbase Machinery Co., Ltd. (‘‘Shenyang Honbase’’). 3 The excluded exporter/producer combinations are: (1) Xianjiang/Zibo Botai Manufacturing Co., Ltd. (‘‘Zibo Botai’’); (2) CAIEC/Laizhou CAPCO; (3) Laizhou CAPCO/Laizhou CAPCO; (4) Laizhou Luyuan/Laizhou Luyuan or Shenyang Honbase; or (5) Shenyang Honbase/Laizhou Luyuan or Shenyang Honbase. E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Shipper Antidumping Duty Review, 69 FR 29920 (May 26, 2004)). On May 21, 2004, the Department initiated an administrative review covering the companies listed in the petitioner’s April 30, 2004, request (see Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 69 FR 30282 (May 27, 2004)). On May 24, 2004, the Department requested from CBP copies of all customs documents pertaining to the entry of brake rotors from the PRC exported by Longkou Jinzheng during the period of April 1, 2003, through March 31, 2004 (see May 24, 2004, Memorandum from Edward Yang, Office Director, to William R. Scopa of CBP). On July 30, 2004, we received documentation from CBP regarding our May 24, 2004, request for Longkou Jinzheng’s entry information. On August 19, 2004, the Department conducted a data query of CBP entry information on brake rotor entries made during the POR from all exporters named in the excluded exporter/ producer combinations in order to substantiate their claims that and/or determine whether they made no shipments of subject merchandise during the POR. As a result of the data query, the Department requested that CBP confirm the actual manufacturer for 20 specific entries associated with the excluded exporter/producer combinations (see the August 19, 2004, memorandum from Edward Yang, Office Director, to William Scopa of CBP (‘‘August 19, 2004, memorandum’’)). On October 6, 2004, we placed on the record the entry documentation received from CBP in response to our August 11, 2004, request for information on the excluded exporter/producer combinations (see October 6, 2004, memorandum to the file, Results of Request for Assistance from Customs and Border Protection to Further Examine U.S. Entries Made by Exporter/ Producer Combinations). On October 18, 2004, the petitioner requested the Department to select more entries made by the excluded exporter/ producer combinations during the POR and obtain the entry documentation for those entries from CBP. On December 17, 2004, the Department published in the Federal Register a notice of postponement of the preliminary results until no later than April 30, 2005 (see Brake Rotors from the People’s Republic of China: Notice of Extension of Time Limit for the Preliminary Results in the Seventh Antidumping Duty Administrative Review and the Eleventh New Shipper VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 Review, 69 FR 75510 (December 17, 2004)). On January 3, 2005, the Department issued the verification outline to Longkou Jinzheng. The Department conducted verification of the responses of Longkou Jinzheng during the period January 17 through 21, 2005. On February 22, 2005, the Department issued the verification report for Longkou Jinzheng. On March 14 and 16, 2005, the Department issued verification outlines to Laizhou Hongda and Huanri General, respectively. The Department conducted verification of the responses of Laizhou Hongda and Huanri General during the period March 21 through 26, 2005. On March 30 and April 6, 2005, the Department issued the verification reports for Laizhou Hongda and Huanri General, respectively. Respondents On May 25 and 26, 2004, we issued a questionnaire to each company listed in the above–referenced initiation notices. On July 6, 2004, with the exception of Xinjiang, each of the exporters that received a zero rate in the LTFV investigation stated that during the POR, it did not make U.S. sales of brake rotors produced by companies other than those included in its respective excluded exporter/producer combination. Also on July 6, 2004, Luqi, Shenyang Yinghao, and Xumingyuan each stated that it did not have shipments of the subject merchandise to the United States during the POR. On July 13, 2004, Longkou Jinzheng submitted its response to the Department’s antidumping duty questionnaire. On July 20, 2004, we received responses to the Department’s questionnaires from the remaining companies. Rotec did not respond to the Department’s questionnaire. On August 10, 2004, the petitioner submitted comments on Huanri General’s July 20, 2004, questionnaire response. From August 4 through September 27, 2004, the Department issued a Supplemental Questionnaire to the 15 companies (hereafter referred to as the 15 respondents) which submitted a questionnaire response. From August 25 through October 22, 2004, the 15 respondents submitted their responses to the Department’s Supplemental Questionnaires. On October 25, 2004, the petitioner submitted comments on Huanri General’s Supplemental Questionnaire response. PO 00000 Frm 00018 Fmt 4703 Sfmt 4703 24383 From November 1 through 12, 2004, the Department issued a second Supplemental Questionnaire to Gren, Golden Harvest, Hengtai, Huanri General, Longkou Jinzheng, Shanxi Fengkun, and ZLAP. From November 15 through 22, 2004, Gren, Golden Harvest, Hengtai, Huanri General, Longkou Jinzheng, Shanxi Fengkun, and ZLAP submitted their responses to the Department’s second Supplemental Questionnaire. On December 20, 2004, the Department issued each of the 15 respondents a sales and cost reconciliation questionnaire, which respondents submitted to the Department from January 7 through January 26, 2005. As a result of not receiving a response to the antidumping duty questionnaire, the Department issued a letter to Rotec on January 3, 2005, which notified this company of the consequences of not having responded to the Department’s antidumping questionnaire. From February 1 through 2, 2005, the Department issued a second supplemental questionnaire to Laizhou Hongda, LABEC, Haimeng, and Winhere, and a third Supplemental Questionnaire to Longkou TLC. On February 22, 2005, Laizhou Hongda, LABEC, Haimeng, and Winhere submitted their responses to the Department’s third Supplemental Questionnaire. On February 23, 2005, Longkou TLC submitted its response to the Department’s third Supplemental Questionnaire. For those respondents 4 who claimed that their U.S. customers provided them with certain inputs (i.e., lug bolts and bearing cups) which they used during the POR free–of-charge, the Department issued these respondents a supplemental questionnaire (‘‘input questionnaire’’) from February 17 through February 24, 2005, which requested documentation to support their claim. From March 3 through March 15, 2005, each respondent (which claimed free–of-charge inputs) submitted its response to the Department’s input questionnaire. On March 17, 2005, the Department issued Hengtai another supplemental questionnaire which requested source documentation to support further the data contained in its January 18, 2005, sales and cost reconciliation questionnaire response, to which Hengtai submitted its response on April 1, 2005. 4 These respondents include CNIM, Huanri General, LABEC, Longkou Haimeng, and ZLAP. E:\FR\FM\09MYN1.SGM 09MYN1 24384 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Because certain source documents were either illegible or not provided as requested in its April 5, 2005, supplemental questionnaire response, the Department issued Hengtai another Supplemental Questionnaire on April 4, 2005, to address these deficiencies. On April 12, 2005, Hengtai submitted its response to the Department’s April 4, 2005, Supplemental Questionnaire. Surrogate Country and Factors On June 8, 2004, the Department provided the parties an opportunity to submit publicly available information (‘‘PAI’’) on surrogate countries and values for consideration in these preliminary results. On March 11, 2005, CNIM, Gren, Shanxi Fengkun, and ZLAP submitted PAI for consideration in the preliminary results. Period of Reviews The POR covers April 1, 2003, through March 31, 2004. Scope of the Order The products covered by this order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, ranging in diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters (weight and dimension) of the brake rotors limit their use to the following types of motor vehicles: automobiles, all–terrain vehicles, vans and recreational vehicles under ‘‘one ton and a half,’’ and light trucks designated as ‘‘one ton and a half.’’ Finished brake rotors are those that are ready for sale and installation without any further operations. Semi– finished rotors are those on which the surface is not entirely smooth, and have undergone some drilling. Unfinished rotors are those which have undergone some grinding or turning. These brake rotors are for motor vehicles, and do not contain in the casting a logo of an original equipment manufacturer (‘‘OEM’’) which produces vehicles sold in the United States. (e.g., General Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in this order are not certified by OEM producers of vehicles sold in the United States. The scope also includes composite brake rotors that are made of gray cast iron, which contain a steel plate, but otherwise meet the above criteria. Excluded from the scope of this order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, with a diameter less than 8 inches or greater than 16 inches (less than 20.32 centimeters or greater than 40.64 centimeters) and a weight less VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 than 8 pounds or greater than 45 pounds (less than 3.63 kilograms or greater than 20.41 kilograms). Brake rotors are currently classifiable under subheading 8708.39.5010 of the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive. Verification On November 16, 2004, the petitioner requested that the Department conduct verification of the data submitted by the following respondents: Hengtai, Huanri General, Laizhou Hongda, Longkou Jinzheng, and Shanxi Fengkun. However, due to the Department’s resource constraints in conducting these reviews, we only selected Huanri General, Laizhou Hongda, and Longkou Jinzheng for verification pursuant to Section 782(i)(2) of the Act and 19 CFR 351.307. We used standard verification procedures, including on–site inspection of the manufacturers’ and exporters’ facilities, and examination of relevant sales and financial records. Our verification results are outlined in the verification report for each company. (For further discussion, see February 22, 2005, verification report for Jinzheng in the Eleventh Antidumping Duty New Shipper Review (‘‘Jinzheng verification report’’); March 30, 2005, verification report for Hongda in the Seventh Antidumping Duty Administrative Review (‘‘Hongda verification report’’); and April 6, 2005, verification report for Huanri General in the Seventh Antidumping Duty Administrative Review (‘‘Huanri General verification report’’).) Preliminary Partial Rescissions of Administrative Reviews Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined that the exporters which are part of the five exporter/producer combinations which received zero rates in the LTFV investigation (i.e., four exporters that made no shipment claims and the one exporter in this group which did not respond to the Department’s antidumping duty questionnaire) did not make shipments of subject merchandise to the United States during the POR. These specific exporter/ producer combinations continue to have a rate of zero percent. Specifically, (1) Xinjiang (i.e., the exporter which did not respond to the Department’s questionnaire) did not export any brake rotors to the United States during the POR and thus did not export any brake PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 rotors that were manufactured by producers other than Zibo Botai; (2) CAIEC did not export brake rotors to the United States that were manufactured by producers other than Laizhou CAPCO; (3) Laizhou CAPCO did not export brake rotors to the United States that were manufactured by producers other than Laizhou CAPCO; (4) Laizhou Luyuan did not export brake rotors to the United States that were manufactured by producers other than Shenyang Honbase or Laizhou Luyuan; and (5) Shenyang Honbase did not export brake rotors to the United States that were manufactured by producers other than Laizhou Luyuan or Shenyang Honbase. In order to make this determination, we first examined PRC brake rotor shipment data maintained by CBP. We then selected five entries associated with each applicable exporter/producer combination identified above and requested CBP to provide documentation which would enable the Department to determine who manufactured the brake rotors included in those entries. In the case of Xinjiang, the CBP data did not contain any entries from this excluded exporter. Based on the information obtained from CBP, we found no instances where the exporters included in the five exporter/producer combinations shipped brake rotors from the PRC to the U.S. market outside of their excluded export/producer combinations during the POR. (See October 6, 2004, memorandum to the file, Results of Request for Assistance from Customs and Border Protection to Further Examine U.S. Entries Made by Exporter/Producer Combinations Preliminary Results.) Although the petitioner requested on October 18, 2004, that the Department select more entries made by the zero rate exporter/producer combinations during the POR and obtain the entry documentation for those entries from CBP because the Department’s sampling method was not representative, we find that the sampling technique we used provided representative results. Because the results of the data query provided a voluminous number of entries associated with four of the five zero rate exporter/producer combinations, we deemed it appropriate to sample the entries in this instance (see May 2, 2005, Memorandum to the File from Steve Winkates regarding results of CBP data query). Specifically, in order to ensure that the entries we selected from the CBP for customs data for further examination were representative, we randomly selected five entries for each applicable exporter for which the customs data reflected entries from that E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices exporter. As indicated in our selections, we further ensured that our selections were representative by selecting entries for each applicable exporter from different U.S. ports. Based on the results of our query, we conclude that the number of selections provided representative results. Moreover, we find that the sampling method used in this review is consistent with the method used in previous administrative reviews in this case. Furthermore, the Department also deemed it appropriate in this instance to select a random sample of the entries provided by the query to determine whether each exporter/producer combination at issue was in compliance with the terms of its zero rate status. The Department’s discretion for using sampling techniques in situations where the information to be checked is voluminous has been upheld in previous cases by the Court of International Trade (‘‘CIT’’) (see Federal–Mogul Corp. v. United States, 20 CIT 234, 918 F. Supp. 386, 403–404 (CIT 1996) (‘‘Federal–Mogul Corp. v. United States’’)). See also Brake Rotors From the People’s Republic of China: Final Results and Partial Rescission of Fourth New Shipper Review and Rescission of Third Antidumping Duty Administrative Review, 66 FR 27063 (May 16, 2001) (‘‘Brake Rotors Third Administrative Review’’) and accompanying Issues and Decision Memorandum at Comment 1; and Brake Rotors From the People’s Republic of China: Final Results and Partial Rescission of Fourth Antidumping Duty Administrative Review, 67 FR 65779 (October 28, 2002) (‘‘Brake Rotors Fourth Administrative Review’’) and accompanying Issues and Decision Memorandum at Comment 1. With respect to Luqi, Shenyang Yinghao, and Xumingyuan, the shipment data we examined did not show U.S. entries of the subject merchandise during the POR from these companies (see May 2, 2005, Memorandum to the File from case analyst). Therefore, for the reasons mentioned above and based on the results of our queries, we are preliminarily rescinding the administrative review with respect to all of the above–mentioned companies because we found no evidence that these companies made shipments of the subject merchandise during the POR in accordance with 19 CFR 351.213(d)(3). Bona Fide Sale Analysis - Longkou Jinzheng For the reasons stated below, we preliminarily find that Longkou VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 Jinzheng’s reported U.S. sale during the POR appears to be a bona fide sale, as required by 19 CFR 351.214(b)(2)(iv)(c), based on the totality of the facts on the record. Specifically, we find that (1) the net prices reported for its two brake rotor models included in its single sales invoice (i.e., gross unit price because Longkou Jinzheng did not incur international freight or U.S. brokerage and handling expenses) were similar to the average unit value of U.S. imports of comparable brake rotors from the PRC during the POR; (2) the prices reported for both model numbers were within the range of prices of comparable goods imported from the PRC during the POR; and (3) the FOB prices reported for the two brake rotor models were comparable to the FOB prices reported for those same two brake rotor models sold during the POR by other PRC exporters which are involved in the concurrent administrative review. We also find that (1) the quantity of the sale was within the range of shipment sizes of comparable goods imported from the PRC during the POR; and (2) the quantities reported for the two brake rotor models were comparable to the quantities reported for those same two brake rotor models sold during the POR by other PRC exporters which are involved in the concurrent administrative review. Furthermore, Jinzheng received payment for this sale in a timely manner. (See May 2, 2005, Memorandum to the File for further discussion of our price and quantity analysis.) Therefore, for the reasons mentioned above, the Department preliminarily finds that Longkou Jinzheng’s sole U.S. sale during the POR was a bona fide commercial transaction. Non–Market Economy Country In every case conducted by the Department involving the PRC, the PRC has been treated as a non–market economy (‘‘NME’’) country. Pursuant to section 771(18)(C)(i) of the Act, any determination that a foreign country is a NME country shall remain in effect until revoked by the administering authority. (See Fresh Garlic from the People’s Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Rescission in Part, 69 FR 70638 (December 7, 2004)). None of the parties to this proceeding has contested such treatment. Accordingly, we calculated NV in accordance with section 773(c) of the Act, which applies to NME countries. PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 24385 Surrogate Country Section 773(c)(4) of the Act requires the Department to value an NME producer’s factors of production, to the extent possible, in one or more market– economy countries that (1) are at a level of economic development comparable to that of the NME country, and (2) are significant producers of comparable merchandise. India is among the countries comparable to the PRC in terms of overall economic development (see June 4, 2004, Memorandum from the Office of Policy to Irene Darzenta Tzafolias). In addition, based on publicly available information placed on the record (e.g., world production data), India is a significant producer of the subject merchandise. Accordingly, we have considered India the surrogate country for purposes of valuing the factors of production because it meets the Department’s criteria for surrogate– country selection (see Memorandum Re: Seventh Antidumping Duty Administrative Review and Eleventh Antidumping Duty New Shipper Review on Brake Rotors from the People’s Republic of China: Selection of a Surrogate Country, dated May 2, 2005, for further discussion). Facts Available - Rotec For the reasons stated below, we have applied total adverse facts available to Rotec. Rotec failed to respond to the Department’s antidumping duty questionnaire. Pursuant to sections 776(a) and (b) of the Act, the Department may apply adverse facts available if it finds a respondent has not acted to the best of its ability in cooperating with the Department in this segment of the proceeding. By failing to respond to the Department’s questionnaire, Rotec has failed to act to the best of its ability in cooperating with the Department’s request for information in this segment of the proceeding. As a result of its failure to respond to the Department’s questionnaire, Rotec failed to establish its eligibility for a separate rate. Therefore, Rotec is not eligible to receive a separate rate and will be part of the PRC NME entity, subject to the PRC–wide rate. Pursuant to section 776(b) of the Act, we have applied total adverse facts available with respect to the PRC–wide entity, including Rotec. In this segment of the proceeding, in accordance with Department practice (see, e.g., Brake Rotors from the People’s Republic of China: Rescission of Second New Shipper Review and Final Results and Partial Rescission of First E:\FR\FM\09MYN1.SGM 09MYN1 24386 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Antidumping Duty Administrative Review, 64 FR 61581, 61584 (November 12, 1999) (‘‘Brake Rotors First Administrative Review’’), as adverse facts available, we have assigned to exports of the subject merchandise by Rotec a rate of 43.32 percent, which is the PRC–wide rate. Corroboration of Facts Available Section 776(c) of the Act requires that the Department corroborate, to the extent practicable, a figure which it applies as facts available. To be considered corroborated, information must be found to be both reliable and relevant. We are applying as adverse facts available (‘‘AFA’’) the highest rate from any segment of this administrative proceeding, which is the rate currently applicable to all exporters subject to the PRC–wide rate. The information upon which the AFA rate is based in the current review (i.e., the PRC–wide rate of 43.32 percent) was the highest rate from the petition in the LTFV investigation. (See Notice of Antidumping Duty Order: Brake Rotors from the People’s Republic of China, 62 FR 18740 (April 17, 1997)). This AFA rate is the same rate which the Department assigned to brake rotor companies in a prior review and the rate itself has not changed since the original LTFV determination (see Brake Rotors First Administrative Review, 64 FR at 61584). For purposes of corroboration, the Department will consider whether that margin is both reliable and relevant. The AFA rate we are applying for the current review was corroborated in reviews subsequent to the LTFV investigation to the extent that the Department referred to the history of corroboration. Furthermore, no information has been presented in the current review that calls into question the reliability of this information (see, e.g., Brake Rotors First Administrative Review, 64 FR at 61584). To further corroborate the AFA margin of 43.32 percent in this review, we compared that margin to the margins we found for the other respondents which sold identical and/or similar products. Based on our above– mentioned analysis, we find that 43.32 percent is within the range of margins for individual sales of identical and/or similar products reported by certain respondents in this review (see Memorandum Re: Seventh Antidumping Duty Administrative Review on Brake Rotors from the People’s Republic of China: Corroboration, dated May 2, 2005, for further discussion). Thus, the Department finds that the information is reliable. VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as adverse best information available (the predecessor to facts available) because the margin was based on another company’s uncharacteristic business expense resulting in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). The information used in calculating this margin was based on sales and production data submitted by the petitioner in the LTFV investigation, together with the most appropriate surrogate value information available to the Department chosen from submissions by the parties in the LTFV investigation, as well as gathered by the Department itself. Furthermore, the calculation of this margin was subject to comment from interested parties in the proceeding. Moreover, as there is no information on the record of this review that demonstrates that this rate is not appropriately used as AFA, we determine that this rate has relevance. Based on our analysis as described above, we find that the margin of 43.32 percent is reliable and has relevance. As the rate is both reliable and relevant, we determine that it has probative value. Accordingly, we determine that the calculated rate of 43.32 percent, which is the current PRC–wide rate, is in accord with the requirement of section 776(c) that secondary information be corroborated to the extent practicable (i.e., that it have probative value). We have assigned this AFA rate to exports of the subject merchandise by the PRC– wide entity, including Rotec. Separate Rates In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty deposit rate (i.e., a PRC–wide rate). Of the 15 respondents participating in these reviews, three of the PRC PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 companies (i.e., Hongfa, Meita, and Winhere) are owned wholly by entities located in market–economy countries. Thus, for these three companies, because we have no evidence indicating that they are under the control of the PRC government, a separate rates analysis is not necessary to determine whether they are independent from government control. (See Brake Rotors from the People’s Republic of China: Final Results and Partial Rescission of Fifth New Shipper Review, 66 FR 44331 (August 23, 2001) (‘‘Brake Rotors Fifth New Shipper Review’’), which cites Brake Rotors from the People’s Republic of China: Preliminary Results and Partial Rescission of the Fifth New Shipper Review and Rescission of the Third Antidumping Duty Administrative Review, 66 FR 29080 (May 29, 2001) (where the respondent was wholly owned by a U.S. registered company); Brake Rotors Third Administrative Review, which cites Brake Rotors from the People’s Republic of China: Preliminary Results and Partial Rescission of the Fourth New Shipper Review and Rescission of the Third Antidumping Duty Administrative Review, 66 FR 1303, 1306 (January 8, 2001) (where the respondent was wholly owned by a company located in Hong Kong); and Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate from the People’s Republic of China, 64 FR 71104, 71105 (December 20, 1999) (where the respondent was wholly owned by persons located in Hong Kong)). The remaining 12 respondents (i.e., CNIM, Golden Harvest, Gren, Hengtai, Hongda, Huanri General, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP) are either joint ventures between PRC and foreign companies, collectively– owned enterprises and/or limited liability companies in the PRC. Thus, for these 12 respondents, a separate rates analysis is necessary to determine whether the export activities of each of above–mentioned respondents is independent from government control. (See Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People’s Republic of China, 61 FR 56570 (April 30, 1996) (‘‘Bicycles’’).) To establish whether a firm is sufficiently independent in its export activities from government control to be entitled to a separate rate, the Department utilizes a test arising from 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’’), and E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices 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’’). Under the separate– rates criteria, the Department assigns separate rates in NME cases only if the respondent can demonstrate the absence of both de jure and de facto governmental control over its export activities. 1. De Jure Control 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 the 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. CNIM, Golden Harvest, Gren, Hengtai, Hongda, Huanri General, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP have each placed on the administrative record documents to demonstrate an absence of de jure control (e.g., the 1979 ‘‘Law of the People’s Republic of China on Chinese–Foreign Joint Ventures;’’ the ‘‘Regulations of the PRC for Controlling the Registration of Enterprises as Legal Persons,’’ promulgated in June 1988; the 1990 ‘‘Regulations Governing the Rural Collective Owned Enterprises of the PRC;’’ the 1994 ‘‘Foreign Trade Law of the People’s Republic of China;’’ the 1999 ‘‘Company Law of the People’s Republic of China;’’ and the 2000 ‘‘Law of the People’s Republic of China on Foreign Capital Enterprises’’). As in prior cases, we have analyzed the laws mentioned above and have found them to establish sufficiently an absence of de jure control over joint ventures between the PRC and foreign companies, and limited liability companies in the PRC. See, e.g., Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol from the People’s Republic of China, 60 FR 22544 (May 8, 1995) (‘‘Furfuryl Alcohol’’), and Preliminary Determination of Sales at Less Than Fair Value: Certain Partial– Extension Steel Drawer Slides with Rollers from the People’s Republic of China, 60 FR 29571 (June 5, 1995). We have no new information in this proceeding which would cause us to reconsider this determination with regard to CNIM, Golden Harvest, Gren, Hengtai, Hongda, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP. With respect to Huanri General’s claim that it is entitled to a separate VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 rate, in a prior segment of this case, the Department granted Huanri General a separate rate. See Brake Rotors Fifth New Shipper Review. However, the Department has preliminarily determined to deny Huanri General a separate rate in this administrative review for two reasons: (1) the Department has analyzed the February 25, 1999, Organic Law on the Village Committee of the PRC (‘‘Village Committee Law’’) and has determined that the Panjacun Village Committee is a form of local government in the PRC, and (2) new information obtained at verification demonstrates that the Panjacun Village Committee, as a local PRC government entity, controls the export activities of Huanri General. As explained below, we find that the Village Committee Law does not conclusively establish an absence of de jure government control. Nor does this law, on its face, conclusively negate the possibility, based on the other laws referenced above and a de facto analysis, that Huanri General is subject to government control. Therefore, our preliminary determination to deny Huanri General a separate rate is based on our conclusion that it has not demonstrated an absence of de facto government control. The petitioner submitted on the record of the administrative review the Village Committee Law and supporting news articles which explain the role and functions of PRC village committees. At the outset, we note that as with other laws the Department considers in its de jure analysis, the Village Committee Law was promulgated by the central government of the PRC. Article 1 of the Village Committee Law states that the law was formulated ‘‘to protect villagers’ self–governance in rural areas, through which villagers can manage their own affairs by law.’’ It also states, however, that ‘‘this law is formulated in line with the relevant requirements of The Constitution of the People’s Republic of China.’’ Article 2 states that a ‘‘Village Committee is a self– governance organization at the grassroots level.’’ In addition, village committees are entrusted with ‘‘educating villagers on reasonable use of natural resources,’’ ‘‘protect{ing} and improv{ing} the environment (see Article 5), ‘‘protect{ing} public property,’’ and ‘‘protect{ing} the legal rights and interests of villagers’’ (see Article 6). However, Article 2 also clearly states that ‘‘It is the village committee’s responsibility to develop public services, manage public affairs, mediate civil disputes, help maintain social stability and report to the PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 24387 people’s government villagers’ opinions, requests and suggestions.’’ In the case of the Panjacun Village Committee, members are selected by village representatives, who are elected by villagers eligible to vote (see pages 8–9 of the April 6, 2005, Huanri General verification report (‘‘Huanri General verification report’’)). Based on its examination of the provisions of the Village Committee Law, the Department has determined that villages organized and operating under this law are a form of local government in the PRC. The Village Committee Law also contains provisions which assign village committees in the PRC with certain economic responsibilities. For example, Article 5 states that village committees ‘‘shall support and organize villagers developing collective economy by law in all forms, serve and coordinate the village production, and promote the development of rural socialist production and a socialist market economy.’’ In order to accomplish this, village committees are able to ‘‘manage land and other properties of the village that are collectively owned by all villagers’’ while ‘‘respect{ing} the autonomy of collective economic units in conducting economic activities by law’’ (see Article 5), use ‘‘income collected from village collective economies’’ (e.g., companies), or begin ‘‘development of any new village collective economies’’ for purposes of improving the social welfare of the village itself (see Article 19). In addition, to emphasize the importance of these functions, the Village Committee Law stipulates that for villagers’ monitoring purposes, village committees should promptly publicize the decision of the village committee and its implementation on financial– related issues (among others) mentioned in Article 19 (see Article 22). Therefore, the law appears to provide village committees with the means to exercise control over certain activities of companies wholly owned by the villagers in its jurisdiction. Based on the Department’s analysis, it appears that the purpose of the Village Committee Law is to decentralize certain government operations at the village level, as distinct from the town, township, or minority town or township levels of government immediately above it, while at the same time providing for the control of certain companies at the village level. Nonetheless, the Village Committee Law itself does not appear to establish conclusively village government control over any particular company, or, by law, require restrictive stipulations on the business or export licenses of enterprises operating in the E:\FR\FM\09MYN1.SGM 09MYN1 24388 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices village. Therefore, we find that the Village Committee Law does not at this time alter our de jure analysis, and we preliminarily find that Huanri General, by virtue of the applicability of the other PRC laws referenced above, has demonstrated an absence of de jure central government control. However, because it appears that village committees are, by promulgation of law by the central government of the PRC, permitted to exercise control over village–owned companies, it is necessary for the Department to examine whether the Panjacun village committee, as a matter of fact, controls the export–related activities of Huanri General. 2. De Facto Control As stated in previous cases, there is evidence that certain enactments of the PRC central government have not been implemented uniformly among different sectors and/or jurisdictions in the PRC. See Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has determined that an analysis of de facto control is critical in determining whether the respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates. In addition, as discussed above, certain articles contained in the Village Committee Law appear to grant village committees the means to control companies wholly owned by the villagers located in the village committee’s jurisdiction. In the case of Huanri General, a de facto analysis is necessary to determine whether the Panjacun village committee is, in fact, controlling the export–related activities of the company. The Department typically considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by, or subject to the approval of, a governmental authority; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding the disposition of profits or financing of losses (see Silicon Carbide and Furfuryl Alcohol). CNIM, Golden Harvest, Gren, Hengtai, Hongda, Huanri General, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP have each asserted the following: (1) It VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 establishes its own export prices; (2) it negotiates contracts without guidance from any governmental entities or organizations; (3) it makes its own personnel decisions; and (4) it retains the proceeds of its export sales, uses profits according to its business needs, and has the authority to sell its assets and to obtain loans. Additionally, each of these companies’ questionnaire responses indicates that its pricing during the POR does not suggest coordination among exporters. Furthermore, with respect to Laizhou Hongda, we examined documentation at verification which substantiated its claims as noted above (see the Laizhou Hongda verification report at pages 5–8). Consequently, with the exception of Huanri General (as discussed below), we have preliminarily determined that CNIM, Golden Harvest, Gren, Hengtai, Hongda, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP have each met the criteria for the application of separate rates based on the documentation each of these respondents has submitted on the record of these reviews. With respect to Huanri General, the Department preliminarily finds that it has not demonstrated a de facto absence of government control with respect to making its own decisions in key personnel selections, the use of its profits from the proceeds of export sales, and the authority to negotiate and sign contracts and other agreements. See Silicon Carbide. Huanri General is therefore not entitled to a separate rate. In so determining, the Department is clarifying its policy regarding the level of government control that is relevant to the separate rates analysis. Government control of companies in non–market economies, such as the PRC, is not limited strictly to central government control, but can also include levels of sub–national government, including provincial, township or village government. If a company’s export activities are subject to government control at any level, there is the possibility that export prices and export–related activities are subject to manipulation by the relevant NME government entity. Therefore, the relevant question in the Department’s separate rates analysis is whether, as a matter of fact, the company operates autonomously from a government entity at any level with respect to export– related activities. Data examined at verification confirmed that individuals of the local government (whether it be the village committee or the village representatives (i.e., individuals selected by the villagers themselves, who then elect PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 members of the village committee)) have effectively appointed themselves as key decision makers (i.e., chairman, directors, and/or shareholder representatives, as provided by the Village Committee Law) in Huanri General since 2001. Huanri General was set up by the Panjacun village committee in 1999 through capital voluntarily provided by all of the inhabitants of Panjacun village, consistent with Article 5 of the Village Committee Law (see page 6 of the Huanri General verification report). Those investors also included village committee members who were elected to their positions by 41 village representatives (see pages 8–9 of the Huanri General verification report). After Huanri General’s first full year of operation, the local government’s involvement in Huanri General’s management became even more intertwined when the 41 village representatives appointed themselves as the shareholder representatives in Huanri General (see page 9 of the Huanri General verification report). In further diluting the distinction between the local government’s management and Huanri General’s management, our verification findings also confirmed that two of the village committee members are not only village representatives but also are members of Huanri General’s board of directors (see page 11 of the Huanri General verification report and Article 5 of the Village Committee Law). More importantly, the village committee chairman has continued to serve as chairman of Huanri General’s board of directors since the company’s establishment (see pages 9–11 of the Huanri General verification report). Thus, the Panjacun Village Committee is so intertwined in personnel, and involved in key financing operations with Huanri General with respect to export activities, that there can be no meaningful consideration of separateness between the local PRC government and Huanri General. Therefore, based on the facts, we cannot conclude that Huanri General makes its own personnel decisions. With respect to whether Huanri General makes its own decisions on the use of its profits from the proceeds of its export sales, our verification findings further note that the 41 village representatives (serving in the capacity of Huanri General’s shareholder representatives) have also been directly involved in profit distribution decisions made at Huanri General as evidenced by shareholder meeting minutes examined at verification (see Huanri General verification report at page 12). E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Therefore, based on the facts mentioned above, we cannot conclude that Huanri General makes its own profit decisions. Rather, the evidence on the record of this review indicates that the same individuals who appointed the village committee members also decided how Huanri General’s profits are distributed, consistent with Article 19 of the Village Committee Law. With respect to whether Huanri General has the authority to negotiate and sign its own contracts or other agreements, our verification findings note that, after initial deliberations which began in 2001, the village representatives (serving in the capacity of Huanri General’s shareholder representatives) decided during 2003 to acquire the funds necessary for establishing a tire production plant as part of Huanri General’s operations, consistent with Article 19 of the Village Committee Law. However, to pursue this objective (which required a significant amount of capital), the village representatives had to obtain the entire capital investment amount from the Panjacun Village Committee which subsequently furnished it to Huanri General by obtaining a bank loan (using the villagers’ households as collateral) and by providing a portion of its rental income received from land lease agreements (see pages 5–6 and 10–12 of the Huanri General verification report). Therefore, we conclude that Huanri General does not have the ability to obtain its own loans. Rather, the evidence on the record of this review indicates that the local government’s assistance was required for this purpose. Therefore, based on the facts noted above, we preliminarily conclude that Huanri General has not demonstrated a de facto absence of government control and is therefore not entitled to a separate rate. Although there is no information on the record regarding Huanri General’s ability to sign contracts and set its own export prices independent of any governmental authority, the pervasive nature of the interrelationship between the Panjacun Village Committee and Huanri General leads us to conclude that the company is not able to select its own management and make personnel decisions, as well as make its own decisions on the use of its profits, independent of any governmental authority. Thus, on balance, the record points to de facto government control of Huanri General. We note that these preliminary results on this issue differ from the final results of the new shipper review regarding Huanri General. The Department reached these results primarily as a result of its preliminary analysis of the VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 Village Committee Law, which on balance leads the Department to conclude that the Panjacun Village Committee is a level of government in the PRC as described above. These results also depend on the Department’s preliminary view that it is appropriate to consider that governmental control at the village level can affect the export operations of an enterprise in general. This is consistent with the Department’s recently promulgated separate rates application which explicitly requests information regarding local government control (see Office of AD Enforcement, Separate–Rate Application and Request for Supporting Documentation on the Import Administration website: https:// ia.ita.doc.gov). Finally, there are even more indicia on this record than the record of the Brake Rotors Fifth New Shipper Review that the village government and Huanri General are so intertwined that the export operations of Huanri General cannot on balance properly be considered to be independent with respect to Huanri General’s export functions. However, the Department recognizes that the articles of the Village Committee Law may be interpreted in different manners. As a result, the Department invites both especial comment as well as additional supporting information on these two considerations. Such information and additional comment is due on June 14, 2005. Rebuttal comments will be due on June 21, 2005. No rebuttal information will be permitted. Fair Value Comparisons To determine whether sales of the subject merchandise by CNIM, Golden Harvest, Gren, Hengtai, Hongda, Hongfa, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Meita, Shanxi Fengkun, Winhere, and ZLAP to the United States were made at prices below normal value (‘‘NV’’), we compared each company’s export prices (‘‘EPs’’) or constructed export prices (‘‘CEPs’’) to NV, as described in the ‘‘Export Price,’’ ‘‘Constructed Export Price,’’ and ‘‘Normal Value’’ sections of this notice, below. Export Price For each respondent, we used EP methodology in accordance with section 772(a) of the Act for sales in which the subject merchandise was first sold prior to importation by the exporter outside the United States directly to an unaffiliated purchaser in the United States and for sales in which CEP was not otherwise indicated. We made the following company–specific adjustments: PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 24389 A. CNIM, Golden Harvest, Hengtai, Hongfa, LKTLC, Longkou Jinzheng, Meita, Shanxi Fengkun, and Winhere We calculated EP based on packed, FOB foreign port prices to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions from the starting price (gross unit price) for foreign inland freight and foreign brokerage and handling charges in the PRC in accordance with section 772(c) of the Act. Because foreign inland freight and foreign brokerage and handling fees were provided by PRC service providers or paid for in renminbi, we based those charges on surrogate rates from India (see ‘‘Surrogate Country’’ section below for further discussion of our surrogate– country selection). To value foreign inland trucking charges, we used truck freight rates published in Indian Chemical Weekly and distance information obtained from the following websites: https://www.infreight.com, https://www.sitaindia.com/Packages/ CityDistance.php, https:// www.abcindia.com, https:// www.eindiatourism.com, and https:// www.mapsofindia.com. To value foreign brokerage and handling expenses, we relied on October 1999– September 2000 information reported in the public U.S. sales listing submitted by Essar Steel Ltd. in the antidumping investigation of Certain Hot–Rolled Carbon Steel Flat Products from India: Final Determination of Sales at Less Than Fair Value, 67 FR 50406 (October 3, 2001). CNIM claims that the producer (which supplied it with specific integral brake rotor models) did not incur an expense for the ball bearing cups and lug bolts used in those brake rotor models (i.e., the subject merchandise) which it exported to the United States during the POR because its U.S. customers of those brake rotor models provided these items to its producer free–of-charge. In response to the Department’s supplemental questionnaire which further examined its claim, CNIM provided documentation which sufficiently supported its claim that (1) its U.S. customers contracted with PRC ball bearing cup and lug bolts producers and that these producers had indeed delivered the ball bearing cups and lug bolts to CNIM’s producer in a certain quantity on a certain date, free–ofcharge; and (2) that these free–of-charge ball bearing cups and lug bolts were used in the required quantities for the integral brake rotor models sold to its applicable U.S. customers during the POR. E:\FR\FM\09MYN1.SGM 09MYN1 24390 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Therefore, for the reasons mentioned above, the Department has adjusted the U.S. price of those applicable integral brake rotor transactions reported by CNIM by assigning Indian surrogate values to the ball bearing cups and lug bolts used in those integral brake rotor transactions to reflect its U.S. customers’ expenditures for these items. This preliminary decision on this matter is consistent with Brake Rotors from the People’s Republic of China: Preliminary Results and Partial Rescission of the Sixth Administrative Review and Preliminary Results and Final Partial Rescission of the Ninth New Shipper Review, 69 FR 10402, 10407 (March 5, 2004); and Certain Preserved Mushrooms from the People’s Republic of China: Preliminary Results and Partial Rescission of Fifth Antidumping Duty Administrative Review, 70 FR 10965, 10973 (March 5, 2005). B. Gren, Laizhou Hongda, LABEC, Longkou Haimeng, and ZLAP We calculated EP based on packed, CIF, CFR, C&F, or FOB foreign port prices to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions from the starting price (gross unit price) for foreign inland freight, foreign brokerage and handling charges in the PRC, marine insurance, U.S. import duties and fees (including harbor maintenance fees, merchandise processing fees, and brokerage and handling) and international freight, in accordance with section 772(c) of the Act. As all foreign inland freight and foreign brokerage and handling fees were provided by PRC service providers or paid for in renminbi, we valued these services using the Indian surrogate values discussed above. We valued marine insurance based on a publicly available price quote from a marine insurance provider obtained from https:// www.rjgconsultants.com/ insurance.html, as used in the antidumping duty investigation of Certain Malleable Iron Pipe Fittings from the People’s Republic of China: Final Results of Antidumping Duty Investigation, 68 FR 61395 (October 28, 2003) . For international freight (i.e., ocean freight and U.S. inland freight expenses from the U.S. port to the warehouse (where applicable)), we used the reported expenses because each of these six respondents used market– economy freight carriers and paid for those expenses in a market–economy currency (see, e.g., Brake Rotors from the People’s Republic of China: Final Results of Antidumping Duty New Shipper Review, 64 FR 9972, 9974 (March 1, 1999)). VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 LABEC, Longkou Haimeng, and ZLAP each claims that it did not incur an expense for the ball bearing cups and lug bolts used in specific integral brake rotor models (i.e., the subject merchandise) which each respondent exported to the United States during the POR because their U.S. customers of those brake rotor models provided these items to them free–of-charge. In response to the Department’s supplemental questionnaire which further examined their claims, LABEC, Longkou Haimeng, and ZLAP each provided documentation which sufficiently supported its claim that (1) its U.S. customers contracted with PRC ball bearing cup and lug bolts producers and that these producers had indeed delivered the ball bearing cups and lug bolts to them in a certain quantity on a certain date, free–of-charge; and (2) that these free–of-charge ball bearing cups and lug bolts were used in the required quantities for the integral brake rotor models sold to their applicable U.S. customers during the POR. Therefore, for the reasons mentioned above, the Department has adjusted the U.S. price of those applicable integral brake rotor transactions reported by LABEC, Longkou Haimeng, and ZLAP by assigning Indian surrogate values to the ball bearing cups and lug bolts used in those integral brake rotor transactions to reflect their U.S. customers’ expenditures for these items. Constructed Export Price For Gren, we also calculated CEP in accordance with section 772(b) of the Act. We found that some of Gren’s sales during the POR were CEP sales because the sales were made for the account of Gren by its subsidiary in the United States to unaffiliated purchasers. We based CEP on packed, delivered or ex– warehouse prices to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions from the starting price (gross unit price) for movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, foreign inland freight and foreign brokerage and handling charges in the PRC, international freight (i.e., ocean freight and U.S. inland freight from the U.S. port to the warehouse), marine insurance, U.S. import duties, and U.S. inland freight expenses (i.e., freight from the plant to the customer). As all foreign inland freight, foreign brokerage and handling, and marine insurance expenses were provided by PRC service providers or paid for in renminbi, we valued these services using the Indian surrogate values discussed above. For international freight (where applicable), PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 we used the reported expense because the respondent used a market–economy freight carrier and paid for those expenses in a market–economy currency. In accordance with section 772(d)(1) of the Act, we also deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (commissions and credit expenses), and indirect selling expenses (including inventory carrying costs) incurred in the United States. We also made an adjustment for profit in accordance with section 772(d)(3) of the Act. Normal Value Section 773(c)(1) of the Act provides that the Department shall determine NV using a factors–of-production methodology if the merchandise is exported from an NME country and the information does not permit the calculation of NV using home–market prices, third–country prices, or constructed value under section 773(a) of the Act. The Department will base NV on the factors of production because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under its normal methodologies. For purposes of calculating NV, we valued the PRC factors of production in accordance with section 773(c)(1) of the Act. Factors of production include, but are not limited to, hours of labor required, quantities of raw materials employed, amounts of energy and other utilities consumed, and representative capital costs, including depreciation. See section 773(c)(3) of the Act. In examining surrogate values, we selected, where possible, the publicly available value which was an average non–export value, representative of a range of prices within the POR or most contemporaneous with the POR, product–specific, and tax–exclusive. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Chlorinated Isocyanurates from the People’s Republic of China, 69 FR 75294, 75300 (December 16, 2004) (‘‘Chlorinated Isocyanurates’’). We used the usage rates reported by the respondents for materials, energy, labor, by–products, and packing. See Preliminary Results Valuation Memorandum, dated May 2, 2005, for a detailed explanation of the methodology used to calculate surrogate values (‘‘Factor Valuation Memo’’). Section 773(c)(3) of the Act states that ‘‘the factors of production utilized in E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices producing merchandise include, but are not limited to the quantities of raw materials employed.’’ Therefore, the Department is required under the Act to value all inputs (including inputs which the respondent claims were provided to it purportedly free of charge). As explained in the ‘‘Export Price’’ section above, certain respondents (i.e., CNIM, LABEC, Longkou Haimeng, and ZLAP) sufficiently support their claim that each of its applicable U.S. customers provided the ball bearing cups and lug bolts to them free–of-charge which were used in specific integral brake rotor models sold to those same U.S. customers. For this reason, we have adjusted, where applicable, these respondents’ reported U.S. prices to include the value of ball bearing cups and lug bolts for certain sales of integral brake rotor models in these preliminary results. In addition to making the above–referenced adjustment to these respondents’ U.S. prices reported for sales of the subject merchandise which contained ball bearing cups and lug bolts, section 773(c)(3) of the Act requires the Department to value each factor of production used to produce the subject merchandise. Accordingly, for these preliminary results, the Department has valued the ball bearing cups and lug bolts usage amounts reported by these respondents for specific integral brake rotor models by using an Indian surrogate value for each input (see Factor Valuation Memo). For other respondents (i.e., Laizhou Hongda and Winhere) who purchased the ball bearing cups and lug bolts used in their integral brake rotor models sold to the U.S. market during the POR, we used Indian surrogate values to value these inputs (see also Factor Valuation Memo). Factor Valuations In accordance with section 773(c) of the Act, we calculated NV based on the factors of production reported by the respondents for the POR. We relied on the factor specification data submitted by the respondents for the above– mentioned inputs in their questionnaire and supplemental questionnaire responses, where applicable, for purposes of selecting surrogate values. To calculate NV, we multiplied the reported per–unit factor quantities by publicly available Indian surrogate values (except where noted below). In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to Indian import surrogate values a VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory, where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit’s decision in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). Due to the extensive number of surrogate values it was necessary to assign in this investigation, we present a discussion of the main factors. For a detailed description of all surrogate values used for respondents, see Factor Valuation Memo. Except where discussed below, we valued raw material inputs using April 2003–March 2004 weighted–average Indian import values derived from the World Trade Atlas online (‘‘WTA’’) (see also Factor Valuation Memo). The Indian import statistics we obtained from the WTA were published by the DGCI&S, Ministry of Commerce of India, which were reported in rupees. Indian surrogate values denominated in foreign currencies were converted to U.S. dollars using the applicable average exchange rate for India for the POR. The average exchange rate was based on exchange rate data from the Department’s website. Where we could not obtain publicly available information contemporaneous with the POR with which to value factors, we adjusted the surrogate values for inflation using Indian wholesale price indices (‘‘WPIs’’) as published in the International Monetary Fund’s International Financial Statistics. See Factor Valuation Memo. Furthermore, with regard to the Indian import–based surrogate values, we have disregarded prices from NME countries and those that we have reason to believe or suspect may be subsidized. We have reason to believe or suspect that prices of inputs from Indonesia, South Korea, and Thailand may have been subsidized. We have found in other proceedings that these countries maintain broadly available, non– industry-specific export subsidies and, therefore, it is reasonable to conclude that there is reason to believe or suspect all exports to all markets from these countries are subsidized. See Final Determination of Sales at Less Than Fair Value: Certain Helical Spring Lock Washers From The People’s Republic, 61 FR 66255 (February 12, 1996), and accompanying Issues and Decision Memorandum at Comment 1. Finally, imports that were labeled as originating from an ‘‘unspecified’’ country were excluded from the average value, because the Department could not be certain that they were not from PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 24391 either an NME or a country with general export subsidies. Surrogate Valuations To value lubrication oil, we used January 2003–December 2003 WTA average import values from the Philippines because the post–March 2000 Indian import values from WTA for this input were all labeled as originating from an ‘‘unspecified’’ country, and because the import values from WTA for the other recommended surrogate countries (e.g., Indonesia, Pakistan, etc.) either did not provide data on a country–of-origin–specific basis or were unavailable. We adjusted the WTA average value for this input for inflation. We valued electricity using the 2000 total average price per kilowatt hour for ‘‘Electricity for Industry’’ as reported in the International Energy Agency’s (‘‘IEA’s’’) publication, Energy Prices and Taxes, Fourth Quarter, 2003. We added an amount for loading and additional transportation charges associated with delivering coal to the factory based on June 1999 Indian price data contained in the periodical Business Line. Section 351.408(c)(3) of the Department’s regulations requires the use of a regression–based wage rate. Therefore, to value the labor input, the Department used the regression–based wage rate for the PRC published by Import Administration on our website. The source of the wage rate data is the Yearbook of Labour Statistics 2002, published by the International Labour Office (‘‘ILO’’), (Geneva: 2002), Chapter 5B: Wages in Manufacturing. See the Import Administration website: https:// ia.ita.doc.gov/wages/02wages/ 02wages.html. To value corrugated paper cartons, nails, plastic bags, plastic sheets/covers, paper sheet, steel strip, particle board, plywood and straps/buckles, tape and pallet wood, we used April 2003–March 2004 average import values from WTA. All respondents (with the exception of Golden Harvest, Hengtai, LKTLC, and Longkou Jinzheng) included the weight of the clamps/buckles in their reported steel strip weights since the material of both inputs was the same. Therefore, we valued these factors using the combined weight reported by the respondents. To value PRC inland freight for inputs shipped by truck, we used Indian freight rates published in the October 2003– April 2004 issues of Chemical Weekly and obtained distances between cities from the following websites: https:// www.infreight.com and https:// www.sitaindia.com/Packages/ CityDistance.php. E:\FR\FM\09MYN1.SGM 09MYN1 24392 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices To value factory overhead (‘‘FOH’’) and selling, general and administrative (‘‘SG&A’’) expenses, and profit, we used data from the 2003–2004 financial reports of Kalyani Brakes Limited (‘‘Kalyani’’) and Rico Auto Industries Limited (‘‘Rico’’), and data from the 2002–2003 financial report of Mando Brake Systems India Limited (‘‘Mando’’). These Indian companies are producers of the subject merchandise based on data contained in each Indian company’s financial reports. Where appropriate, we did not include in the surrogate overhead and SG&A calculations the excise duty amount listed in the financial reports. We made certain adjustments to the ratios calculated as a result of reclassifying certain expenses contained in the financial reports. For a further discussion of the adjustments made, see Factor Valuation Memo. We will disclose the calculations used in our analysis to parties to this proceeding within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication of this notice. Any hearing, if requested, will be held on July 12, 2005. Interested parties who wish to request a hearing or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, Room B–099, within 30 days of the date of publication of this notice. Requests should contain: (1) The party’s name, address, and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in case briefs and rebuttal briefs. Case briefs from interested parties may be submitted not later than June 30, 2005, pursuant to 19 Preliminary Results of Reviews CFR 351.309(c). Rebuttal briefs, limited to issues raised in the case briefs, will We preliminarily determine that the be due not later than July 7, 2005, following margins exist during the period April 1, 2003, through March 31, pursuant to 19 CFR 351.309(d). Parties who submit case briefs or rebuttal briefs 2004: in this proceeding are requested to submit with each argument (1) a BRAKE ROTORS FROM THE PRC statement of the issue and (2) a brief MANDATORY RESPONDENTS summary of the argument. Parties are Weighted-Average also encouraged to provide a summary Manufacturer/exporter of the arguments not to exceed five margin (percent) pages and a table of statutes, China National Indusregulations, and cases cited. trial Machinery Import The Department will issue the final & Export Corporation 0.49 results of these reviews, including the Hongfa Machinery results of its analysis of issues raised in (Dalian) Co., Ltd. ....... 0.05 any such written briefs or at the hearing, Laizhou Automobile if held, not later than 120 days after the Brake Equipment Co., Ltd. ............................ 0.17 date of publication of this notice. Laizhou Hongda Auto Replacement Parts Co., Ltd. .................... Longkou Haimeng Machinery Co., Ltd. ........ Longkou Jinzheng Machinery Co., Ltd. ........ Longkou TLC Machinery Co., Ltd. .............. Qingdao Gren (Group) Co. ............................. Qingdao Meita Automotive Industry Company, Ltd. .................. Shanxi Fengkun Metallurgical Limited Company ................... Xiangfen Hengtai Brake System Co., Ltd. ....... Yantai Winhere Auto– Part Manufacturing Co., Ltd. .................... Zibo Golden Harvest Machinery Limited Company ................... Zibo Luzhou Automobile Parts Co., Ltd. ........... PRC–Wide Rate ........... VerDate jul<14>2003 17:20 May 06, 2005 0.08 0.23 0.00 0.06 0.18 0.00 2.57 0.00 1.32 0.00 0.90 43.32 Jkt 205001 Assessment Rates The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions for the companies subject to this review directly to CBP within 15 days of publication of the final results of this review. Pursuant to 19 CFR 351.212(b)(1), we will calculate importer- or customer–specific ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. For certain respondents for which we calculated a margin, we do not have the actual entered value because they are either not the importers of record for the subject merchandise or were unable to obtain the entered value data for their reported sales from the importer of record. For these respondents, we intend to calculate individual PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 customer–specific assessment rates by aggregating the dumping margins calculated for all of the U.S. sales examined and dividing that amount by the total quantity of the sales examined. To determine whether the duty assessment rates are de minimis (i.e., less than 0.50 percent), in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we will calculate customer–specific ad valorem ratios based on export prices. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if any importer or customer–specific assessment rate calculated in the final results of this review is above de minimis. For entries of the subject merchandise during the POR from companies not subject to these reviews, we will instruct CBP to liquidate them at the cash deposit rate in effect at the time of entry. The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable. Cash Deposit Requirements Bonding will no longer be permitted to fulfill security requirements for shipments of brake rotors from the PRC produced and exported by Longkou Jinzheng that are entered, or withdrawn from warehouse, for consumption on or after the publication date of the final result of the new shipper review. The following cash deposit requirements will be effective upon publication of the final results of the new shipper review for all shipments of subject merchandise from Longkou Jinzheng entered, or withdrawn from warehouse, for consumption on or after the publication date: (1) For subject merchandise manufactured and exported by Longkou Jinzheng, no cash deposit will be required if the cash deposit rate calculated in the final results is zero or de minimis; and (2) for subject merchandise exported by Longkou Jinzheng but not manufactured by Longkou Jinzheng, the cash deposit rate will continue to be the PRC countrywide rate (i.e., 43.32 percent). The following deposit requirements will be effective upon publication of the final results of the administrative review for all shipments of brake rotors from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(1) of the Act: (1) The cash deposit rates for CNIM, Golden Harvest, Gren, Hengtai, Hongda, Hongfa, LABEC, Longkou Haimeng, LKTLC, Meita, E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 70, No. 88 / Monday, May 9, 2005 / Notices Shanxi Fengkun, Winhere, and ZLAP will be the rates determined in the final results of review (except that if a rate is de minimis, i.e., less than 0.50 percent, no cash deposit will be required); (2) the cash deposit rate for PRC exporters who received a separate rate in a prior segment of the proceeding (which were not reviewed in this segment of the proceeding) will continue to be the rate assigned in that segment of the proceeding (i.e., Luqi, Shenyang Yinghao, and Xumingyuan); (3) the cash deposit rate for the PRC NME entity (including Huanri General and Rotec) will continue to be 43.32 percent; and (4) the cash deposit rate for non–PRC exporters of subject merchandise from the PRC will be the rate applicable to the PRC exporter that supplied that exporter. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. Notification to Importers This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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. These administrative and new shipper reviews and notice are in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act and 19 CFR 351.213 and 351.214. Dated: May 2, 2005. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. E5–2229 Filed 5–6–05; 8:45 am] BILLING CODE: 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration (A–588–824) Certain Corrosion–Resistant Carbon Steel Flat Products From Japan: Notice of Extension of Preliminary Results of Antidumping Duty Administrative Review. Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: May 9, 2005. AGENGY: VerDate jul<14>2003 17:20 May 06, 2005 Jkt 205001 FOR FURTHER INFORMATION CONTACT: Christopher Hargett or James Terpstra, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482–4161 or (202) 482– 3965. SUPPLEMENTARY INFORMATION: Background The Department of Commerce (‘‘the Department’’) published an antidumping duty order on certain corrosion–resistant carbon steel flat products from Japan on August 19, 1993. See Antidumping Duty Order: Certain Corrosion–Resistant Carbon Steel Flat Products from Japan, 58 FR 44163 (August 19, 1993). Nucor Corporation (‘‘Nucor’’), the petitioner, requested that the Department conduct an administrative review of the order. See Letter from Nucor Corporation, August 31, 2004. On September 22, 2004, the Department published a notice of initiation of administrative review of the antidumping duty order on certain corrosion–resistant carbon steel flat products from Japan, covering the period of August 1, 2003, to July 31, 2004. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation, In Part, 69 FR 56745. The preliminary results for this review are currently due no later than May 3, 2005. Extension of Time Limits for Preliminary Results Section 751(a)(3)(A) of the Tariff Act of 1930, as amended (‘‘the Act’’), requires the Department to issue the preliminary results of an administrative review within 245 days after the last day of the anniversary month of an order for which a review is requested. If it is not practicable to complete the review within the time period, section 751(a)(3)(A) of the Act and section 351.213(h)(2) of the Department’s regulations allow the Department to extend this deadline to a maximum of 365 days. Both respondents, JFE and Nippon Steel, have declined to participate in this review. As such, the Department will apply adverse facts available pursuant to section 776(a) and (b) of the Act. The Department has continuing concerns about what the appropriate rate is to assign to JFE and Nippon Steel as adverse facts available. Therefore, the Department determines that it is not practicable to complete the review within the original time period, and is extending the time limit for completion of the preliminary results by 30 days to PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 24393 no later than June 2, 2005. We intend to issue the final results no later than 120 days after publication of the notice of the preliminary results. This notice is being issued and published in accordance with section 751(a)(3)(A) of the Act. Dated: May 3, 2005. Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration. [FR Doc. E5–2230 Filed 5–6–05; 8:45 am] BILLING CODE 3510–DS–S DEPARTMENT OF COMMERCE International Trade Administration (A–570–805, A–428–807, A–412–805) Sodium Thiosulfate from the People’s Republic of China, Germany, and the United Kingdom: Final Results of Sunset Reviews and Revocation of Orders Import Administration, International Trade Administration, Department of Commerce. SUMMARY: On February 2, 2005, the Department of Commerce (‘‘Department’’) initiated the sunset reviews of the antidumping duty orders on sodium thiosulfate from the People’s Republic of China, Germany and the United Kingdom (70 FR 5415). Because the domestic interested parties did not participate in these sunset reviews, the Department is revoking these antidumping duty orders. EFFECTIVE DATE: March 7, 2005 FOR FURTHER INFORMATION CONTACT: Hilary Sadler, Esq., Office of Policy, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482–4340. SUPPLEMENTARY INFORMATION: AGENCY: Background On February 19, 1991, the Department issued antidumping duty orders on sodium thiosulfate from the People’s Republic of China, Germany, and the United Kingdom (56 FR 2904). On July 1, 1999, the Department initiated sunset reviews on these orders and later published its notice of continuation of the antidumping duty orders. See Continuation of Antidumping Duty Orders: Sulfur Chemicals (Sodium Thiosulfate) from the Untied Kingdom, Germany and the People’s Republic of China, 65 FR 11985 (March 7, 2000). On February 2, 2005, the Department initiated the second sunset reviews of these orders. E:\FR\FM\09MYN1.SGM 09MYN1

Agencies

[Federal Register Volume 70, Number 88 (Monday, May 9, 2005)]
[Notices]
[Pages 24382-24393]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2229]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-846)


Brake Rotors From the People's Republic of China: Preliminary 
Results and Partial Rescission of the Seventh Administrative Review and 
Preliminary Results of the Eleventh New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is currently 
conducting the seventh administrative review and eleventh new shipper 
review of the antidumping duty order on brake rotors from the People's 
Republic of China (``PRC'') covering the period April 1, 2003, through 
March 31, 2004. We preliminarily determine that no sales have been made 
below normal value (``NV'') with respect to the exporters who 
participated fully and are entitled to a separate rate in these 
reviews. If these preliminary results are adopted in our final results 
of these reviews, we will instruct the U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the period of review (``POR'') for which the 
importer-specific assessment rates are above de minimis.
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: May 9, 2005.

FOR FURTHER INFORMATION CONTACT: Steve Winkates or Brian Smith, AD/CVD 
Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1904 or (202) 482-1766, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1999, the Department published in the Federal 
Register the antidumping duty order on brake rotors from the PRC. See 
Notice of Antidumping Duty Order: Brake Rotors from the People's 
Republic of China, 62 FR 18740 (April 17, 1997).
    The Department received a timely request from Longkou Jinzheng 
Machinery Co., Ltd. (``Longkou Jinzheng'') on December 15, 2003, for a 
new shipper review of this antidumping duty order in accordance with 19 
CFR 351.214(c).
    On April 1, 2004, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
brake rotors from the PRC. See Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 69 FR 17129 (April 1, 2004).
    On April 30, 2004, the petitioner \1\ requested an administrative 
review pursuant to 19 CFR 351.213(b) for 24 companies,\2\ which it 
claimed were producers and/or exporters of the subject merchandise. 
Five of these companies are included in five exporter/producer 
combinations \3\ that received zero rates in the less-than-fair-value 
(``LTFV'') investigation and thus were excluded from the antidumping 
duty order only with respect to brake rotors sold through the specified 
exporter/producer combinations.
---------------------------------------------------------------------------

    \1\ The petitioner is the Coalition for the Preservation of 
American Brake Drum and Rotor Aftermarket Manufacturers.
    \2\ The names of these exporters are as follows: (1) China 
National Industrial Machinery Import & Export Corporation 
(``CNIM''); (2) Laizhou Automobile Brake Equipment Company, Ltd. 
(``LABEC''); (3) Longkou Haimeng Machinery Co., Ltd. (``Longkou 
Haimeng''); (4) Laizhou Hongda Auto Replacement Parts Co., Ltd. 
(``Hongda''); (5) Hongfa Machinery (Dalian) Co., Ltd. (``Hongfa''); 
(6) Qingdao Gren (Group) Co. (``Gren''); (7) Qingdao Meita 
Automotive Industry Company, Ltd. (``Meita''); (8) Shandong Huanri 
(Group) General Company (``Huanri General''); (9) Yantai Winhere 
Auto-Part Manufacturing Co., Ltd. (``Winhere''); (10) Zibo Luzhou 
Automobile Parts Co., Ltd. (ZLAP); (11) 
Longkou TLC Machinery Co., Ltd. (``LKTLC''); (12) Zibo Golden 
Harvest Machinery Limited Company (``Golden Harvest''); (13) Shanxi 
Fengkun Metallurgical Limited Company (``Shanxi Fengkun''); (14) 
Xianghe Xumingyuan Auto Parts Co. (``Xumingyuan''); (15) Xiangfen 
Hengtai Brake System Co., Ltd. (``Hengtai''); (16) Laizhou City Luqi 
Machinery Co., Ltd. (``Luqi''); (17) Qingdao Rotec Auto Parts Co., 
Ltd. (``Rotec''); (18) Shenyang Yinghao Machinery Co. (``Shenyang 
Yinghao''); (19) China National Machinery and Equipment Import & 
Export (Xianjiang) Corporation (``Xianjiang''); (20) China National 
Automotive Industry Import & Export Corporation (``CAIEC''); (21) 
Laizhou CAPCO Machinery Co., Ltd. (``Laizhou CAPCO''); (22) Laizhou 
Luyuan Automobile Fittings Co. (``Laizhou Luyuan''); and (23) 
Shenyang Honbase Machinery Co., Ltd. (``Shenyang Honbase'').
    \3\ The excluded exporter/producer combinations are: (1) 
Xianjiang/Zibo Botai Manufacturing Co., Ltd. (``Zibo Botai''); (2) 
CAIEC/Laizhou CAPCO; (3) Laizhou CAPCO/Laizhou CAPCO; (4) Laizhou 
Luyuan/Laizhou Luyuan or Shenyang Honbase; or (5) Shenyang Honbase/
Laizhou Luyuan or Shenyang Honbase.
---------------------------------------------------------------------------

    On May 7, 2004, Longkou Jinzheng agreed to waive the time limits 
applicable to the new shipper review and to permit the Department to 
conduct the new shipper review concurrently with the administrative 
review. On May 20, 2004, the Department initiated a new shipper review 
of Longkou Jinzheng (see Brake Rotors from the People's Republic of 
China: Initiation of the Eleventh New

[[Page 24383]]

Shipper Antidumping Duty Review, 69 FR 29920 (May 26, 2004)).
    On May 21, 2004, the Department initiated an administrative review 
covering the companies listed in the petitioner's April 30, 2004, 
request (see Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 69 FR 30282 
(May 27, 2004)).
    On May 24, 2004, the Department requested from CBP copies of all 
customs documents pertaining to the entry of brake rotors from the PRC 
exported by Longkou Jinzheng during the period of April 1, 2003, 
through March 31, 2004 (see May 24, 2004, Memorandum from Edward Yang, 
Office Director, to William R. Scopa of CBP).
    On July 30, 2004, we received documentation from CBP regarding our 
May 24, 2004, request for Longkou Jinzheng's entry information.
    On August 19, 2004, the Department conducted a data query of CBP 
entry information on brake rotor entries made during the POR from all 
exporters named in the excluded exporter/producer combinations in order 
to substantiate their claims that and/or determine whether they made no 
shipments of subject merchandise during the POR. As a result of the 
data query, the Department requested that CBP confirm the actual 
manufacturer for 20 specific entries associated with the excluded 
exporter/producer combinations (see the August 19, 2004, memorandum 
from Edward Yang, Office Director, to William Scopa of CBP (``August 
19, 2004, memorandum'')).
    On October 6, 2004, we placed on the record the entry documentation 
received from CBP in response to our August 11, 2004, request for 
information on the excluded exporter/producer combinations (see October 
6, 2004, memorandum to the file, Results of Request for Assistance from 
Customs and Border Protection to Further Examine U.S. Entries Made by 
Exporter/Producer Combinations).
    On October 18, 2004, the petitioner requested the Department to 
select more entries made by the excluded exporter/producer combinations 
during the POR and obtain the entry documentation for those entries 
from CBP.
    On December 17, 2004, the Department published in the Federal 
Register a notice of postponement of the preliminary results until no 
later than April 30, 2005 (see Brake Rotors from the People's Republic 
of China: Notice of Extension of Time Limit for the Preliminary Results 
in the Seventh Antidumping Duty Administrative Review and the Eleventh 
New Shipper Review, 69 FR 75510 (December 17, 2004)).
    On January 3, 2005, the Department issued the verification outline 
to Longkou Jinzheng. The Department conducted verification of the 
responses of Longkou Jinzheng during the period January 17 through 21, 
2005. On February 22, 2005, the Department issued the verification 
report for Longkou Jinzheng.
    On March 14 and 16, 2005, the Department issued verification 
outlines to Laizhou Hongda and Huanri General, respectively. The 
Department conducted verification of the responses of Laizhou Hongda 
and Huanri General during the period March 21 through 26, 2005. On 
March 30 and April 6, 2005, the Department issued the verification 
reports for Laizhou Hongda and Huanri General, respectively.

Respondents

    On May 25 and 26, 2004, we issued a questionnaire to each company 
listed in the above-referenced initiation notices.
    On July 6, 2004, with the exception of Xinjiang, each of the 
exporters that received a zero rate in the LTFV investigation stated 
that during the POR, it did not make U.S. sales of brake rotors 
produced by companies other than those included in its respective 
excluded exporter/producer combination. Also on July 6, 2004, Luqi, 
Shenyang Yinghao, and Xumingyuan each stated that it did not have 
shipments of the subject merchandise to the United States during the 
POR.
    On July 13, 2004, Longkou Jinzheng submitted its response to the 
Department's antidumping duty questionnaire.
    On July 20, 2004, we received responses to the Department's 
questionnaires from the remaining companies. Rotec did not respond to 
the Department's questionnaire.
    On August 10, 2004, the petitioner submitted comments on Huanri 
General's July 20, 2004, questionnaire response.
    From August 4 through September 27, 2004, the Department issued a 
Supplemental Questionnaire to the 15 companies (hereafter referred to 
as the 15 respondents) which submitted a questionnaire response.
    From August 25 through October 22, 2004, the 15 respondents 
submitted their responses to the Department's Supplemental 
Questionnaires.
    On October 25, 2004, the petitioner submitted comments on Huanri 
General's Supplemental Questionnaire response.
    From November 1 through 12, 2004, the Department issued a second 
Supplemental Questionnaire to Gren, Golden Harvest, Hengtai, Huanri 
General, Longkou Jinzheng, Shanxi Fengkun, and ZLAP. From November 15 
through 22, 2004, Gren, Golden Harvest, Hengtai, Huanri General, 
Longkou Jinzheng, Shanxi Fengkun, and ZLAP submitted their responses to 
the Department's second Supplemental Questionnaire.
    On December 20, 2004, the Department issued each of the 15 
respondents a sales and cost reconciliation questionnaire, which 
respondents submitted to the Department from January 7 through January 
26, 2005.
    As a result of not receiving a response to the antidumping duty 
questionnaire, the Department issued a letter to Rotec on January 3, 
2005, which notified this company of the consequences of not having 
responded to the Department's antidumping questionnaire.
    From February 1 through 2, 2005, the Department issued a second 
supplemental questionnaire to Laizhou Hongda, LABEC, Haimeng, and 
Winhere, and a third Supplemental Questionnaire to Longkou TLC. On 
February 22, 2005, Laizhou Hongda, LABEC, Haimeng, and Winhere 
submitted their responses to the Department's third Supplemental 
Questionnaire.
    On February 23, 2005, Longkou TLC submitted its response to the 
Department's third Supplemental Questionnaire.
    For those respondents \4\ who claimed that their U.S. customers 
provided them with certain inputs (i.e., lug bolts and bearing cups) 
which they used during the POR free-of-charge, the Department issued 
these respondents a supplemental questionnaire (``input 
questionnaire'') from February 17 through February 24, 2005, which 
requested documentation to support their claim.
---------------------------------------------------------------------------

    \4\ These respondents include CNIM, Huanri General, LABEC, 
Longkou Haimeng, and ZLAP.
---------------------------------------------------------------------------

    From March 3 through March 15, 2005, each respondent (which claimed 
free-of-charge inputs) submitted its response to the Department's input 
questionnaire.
    On March 17, 2005, the Department issued Hengtai another 
supplemental questionnaire which requested source documentation to 
support further the data contained in its January 18, 2005, sales and 
cost reconciliation questionnaire response, to which Hengtai submitted 
its response on April 1, 2005.

[[Page 24384]]

    Because certain source documents were either illegible or not 
provided as requested in its April 5, 2005, supplemental questionnaire 
response, the Department issued Hengtai another Supplemental 
Questionnaire on April 4, 2005, to address these deficiencies. On April 
12, 2005, Hengtai submitted its response to the Department's April 4, 
2005, Supplemental Questionnaire.

Surrogate Country and Factors

    On June 8, 2004, the Department provided the parties an opportunity 
to submit publicly available information (``PAI'') on surrogate 
countries and values for consideration in these preliminary results. On 
March 11, 2005, CNIM, Gren, Shanxi Fengkun, and ZLAP submitted PAI for 
consideration in the preliminary results.

Period of Reviews

    The POR covers April 1, 2003, through March 31, 2004.

Scope of the Order

    The products covered by this order are brake rotors made of gray 
cast iron, whether finished, semifinished, or unfinished, ranging in 
diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight 
from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters 
(weight and dimension) of the brake rotors limit their use to the 
following types of motor vehicles: automobiles, all-terrain vehicles, 
vans and recreational vehicles under ``one ton and a half,'' and light 
trucks designated as ``one ton and a half.''
    Finished brake rotors are those that are ready for sale and 
installation without any further operations. Semi-finished rotors are 
those on which the surface is not entirely smooth, and have undergone 
some drilling. Unfinished rotors are those which have undergone some 
grinding or turning.
    These brake rotors are for motor vehicles, and do not contain in 
the casting a logo of an original equipment manufacturer (``OEM'') 
which produces vehicles sold in the United States. (e.g., General 
Motors, Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in 
this order are not certified by OEM producers of vehicles sold in the 
United States. The scope also includes composite brake rotors that are 
made of gray cast iron, which contain a steel plate, but otherwise meet 
the above criteria. Excluded from the scope of this order are brake 
rotors made of gray cast iron, whether finished, semifinished, or 
unfinished, with a diameter less than 8 inches or greater than 16 
inches (less than 20.32 centimeters or greater than 40.64 centimeters) 
and a weight less than 8 pounds or greater than 45 pounds (less than 
3.63 kilograms or greater than 20.41 kilograms).
    Brake rotors are currently classifiable under subheading 
8708.39.5010 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheading is provided for convenience 
and customs purposes, the written description of the scope of this 
order is dispositive.

Verification

    On November 16, 2004, the petitioner requested that the Department 
conduct verification of the data submitted by the following 
respondents: Hengtai, Huanri General, Laizhou Hongda, Longkou Jinzheng, 
and Shanxi Fengkun. However, due to the Department's resource 
constraints in conducting these reviews, we only selected Huanri 
General, Laizhou Hongda, and Longkou Jinzheng for verification pursuant 
to Section 782(i)(2) of the Act and 19 CFR 351.307.
    We used standard verification procedures, including on-site 
inspection of the manufacturers' and exporters' facilities, and 
examination of relevant sales and financial records. Our verification 
results are outlined in the verification report for each company. (For 
further discussion, see February 22, 2005, verification report for 
Jinzheng in the Eleventh Antidumping Duty New Shipper Review 
(``Jinzheng verification report''); March 30, 2005, verification report 
for Hongda in the Seventh Antidumping Duty Administrative Review 
(``Hongda verification report''); and April 6, 2005, verification 
report for Huanri General in the Seventh Antidumping Duty 
Administrative Review (``Huanri General verification report'').)

Preliminary Partial Rescissions of Administrative Reviews

    Pursuant to 19 CFR 351.213(d)(3), we have preliminarily determined 
that the exporters which are part of the five exporter/producer 
combinations which received zero rates in the LTFV investigation (i.e., 
four exporters that made no shipment claims and the one exporter in 
this group which did not respond to the Department's antidumping duty 
questionnaire) did not make shipments of subject merchandise to the 
United States during the POR. These specific exporter/producer 
combinations continue to have a rate of zero percent. Specifically, (1) 
Xinjiang (i.e., the exporter which did not respond to the Department's 
questionnaire) did not export any brake rotors to the United States 
during the POR and thus did not export any brake rotors that were 
manufactured by producers other than Zibo Botai; (2) CAIEC did not 
export brake rotors to the United States that were manufactured by 
producers other than Laizhou CAPCO; (3) Laizhou CAPCO did not export 
brake rotors to the United States that were manufactured by producers 
other than Laizhou CAPCO; (4) Laizhou Luyuan did not export brake 
rotors to the United States that were manufactured by producers other 
than Shenyang Honbase or Laizhou Luyuan; and (5) Shenyang Honbase did 
not export brake rotors to the United States that were manufactured by 
producers other than Laizhou Luyuan or Shenyang Honbase.
    In order to make this determination, we first examined PRC brake 
rotor shipment data maintained by CBP. We then selected five entries 
associated with each applicable exporter/producer combination 
identified above and requested CBP to provide documentation which would 
enable the Department to determine who manufactured the brake rotors 
included in those entries. In the case of Xinjiang, the CBP data did 
not contain any entries from this excluded exporter. Based on the 
information obtained from CBP, we found no instances where the 
exporters included in the five exporter/producer combinations shipped 
brake rotors from the PRC to the U.S. market outside of their excluded 
export/producer combinations during the POR. (See October 6, 2004, 
memorandum to the file, Results of Request for Assistance from Customs 
and Border Protection to Further Examine U.S. Entries Made by Exporter/
Producer Combinations - Preliminary Results.)
    Although the petitioner requested on October 18, 2004, that the 
Department select more entries made by the zero rate exporter/producer 
combinations during the POR and obtain the entry documentation for 
those entries from CBP because the Department's sampling method was not 
representative, we find that the sampling technique we used provided 
representative results. Because the results of the data query provided 
a voluminous number of entries associated with four of the five zero 
rate exporter/producer combinations, we deemed it appropriate to sample 
the entries in this instance (see May 2, 2005, Memorandum to the File 
from Steve Winkates regarding results of CBP data query). Specifically, 
in order to ensure that the entries we selected from the CBP for 
customs data for further examination were representative, we randomly 
selected five entries for each applicable exporter for which the 
customs data reflected entries from that

[[Page 24385]]

exporter. As indicated in our selections, we further ensured that our 
selections were representative by selecting entries for each applicable 
exporter from different U.S. ports. Based on the results of our query, 
we conclude that the number of selections provided representative 
results.
    Moreover, we find that the sampling method used in this review is 
consistent with the method used in previous administrative reviews in 
this case. Furthermore, the Department also deemed it appropriate in 
this instance to select a random sample of the entries provided by the 
query to determine whether each exporter/producer combination at issue 
was in compliance with the terms of its zero rate status. The 
Department's discretion for using sampling techniques in situations 
where the information to be checked is voluminous has been upheld in 
previous cases by the Court of International Trade (``CIT'') (see 
Federal-Mogul Corp. v. United States, 20 CIT 234, 918 F. Supp. 386, 
403-404 (CIT 1996) (``Federal-Mogul Corp. v. United States'')). See 
also Brake Rotors From the People's Republic of China: Final Results 
and Partial Rescission of Fourth New Shipper Review and Rescission of 
Third Antidumping Duty Administrative Review, 66 FR 27063 (May 16, 
2001) (``Brake Rotors Third Administrative Review'') and accompanying 
Issues and Decision Memorandum at Comment 1; and Brake Rotors From the 
People's Republic of China: Final Results and Partial Rescission of 
Fourth Antidumping Duty Administrative Review, 67 FR 65779 (October 28, 
2002) (``Brake Rotors Fourth Administrative Review'') and accompanying 
Issues and Decision Memorandum at Comment 1.
    With respect to Luqi, Shenyang Yinghao, and Xumingyuan, the 
shipment data we examined did not show U.S. entries of the subject 
merchandise during the POR from these companies (see May 2, 2005, 
Memorandum to the File from case analyst).
    Therefore, for the reasons mentioned above and based on the results 
of our queries, we are preliminarily rescinding the administrative 
review with respect to all of the above-mentioned companies because we 
found no evidence that these companies made shipments of the subject 
merchandise during the POR in accordance with 19 CFR 351.213(d)(3).

Bona Fide Sale Analysis - Longkou Jinzheng

    For the reasons stated below, we preliminarily find that Longkou 
Jinzheng's reported U.S. sale during the POR appears to be a bona fide 
sale, as required by 19 CFR 351.214(b)(2)(iv)(c), based on the totality 
of the facts on the record. Specifically, we find that (1) the net 
prices reported for its two brake rotor models included in its single 
sales invoice (i.e., gross unit price because Longkou Jinzheng did not 
incur international freight or U.S. brokerage and handling expenses) 
were similar to the average unit value of U.S. imports of comparable 
brake rotors from the PRC during the POR; (2) the prices reported for 
both model numbers were within the range of prices of comparable goods 
imported from the PRC during the POR; and (3) the FOB prices reported 
for the two brake rotor models were comparable to the FOB prices 
reported for those same two brake rotor models sold during the POR by 
other PRC exporters which are involved in the concurrent administrative 
review. We also find that (1) the quantity of the sale was within the 
range of shipment sizes of comparable goods imported from the PRC 
during the POR; and (2) the quantities reported for the two brake rotor 
models were comparable to the quantities reported for those same two 
brake rotor models sold during the POR by other PRC exporters which are 
involved in the concurrent administrative review. Furthermore, Jinzheng 
received payment for this sale in a timely manner. (See May 2, 2005, 
Memorandum to the File for further discussion of our price and quantity 
analysis.)
    Therefore, for the reasons mentioned above, the Department 
preliminarily finds that Longkou Jinzheng's sole U.S. sale during the 
POR was a bona fide commercial transaction.

Non-Market Economy Country

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. 
Pursuant to section 771(18)(C)(i) of the Act, any determination that a 
foreign country is a NME country shall remain in effect until revoked 
by the administering authority. (See Fresh Garlic from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review and Rescission in Part, 69 FR 70638 (December 7, 
2004)). None of the parties to this proceeding has contested such 
treatment. Accordingly, we calculated NV in accordance with section 
773(c) of the Act, which applies to NME countries.

Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production, to the extent possible, in one or 
more market-economy countries that (1) are at a level of economic 
development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. India is among the 
countries comparable to the PRC in terms of overall economic 
development (see June 4, 2004, Memorandum from the Office of Policy to 
Irene Darzenta Tzafolias). In addition, based on publicly available 
information placed on the record (e.g., world production data), India 
is a significant producer of the subject merchandise. Accordingly, we 
have considered India the surrogate country for purposes of valuing the 
factors of production because it meets the Department's criteria for 
surrogate-country selection (see Memorandum Re: Seventh Antidumping 
Duty Administrative Review and Eleventh Antidumping Duty New Shipper 
Review on Brake Rotors from the People's Republic of China: Selection 
of a Surrogate Country, dated May 2, 2005, for further discussion).

Facts Available - Rotec

    For the reasons stated below, we have applied total adverse facts 
available to Rotec.
    Rotec failed to respond to the Department's antidumping duty 
questionnaire. Pursuant to sections 776(a) and (b) of the Act, the 
Department may apply adverse facts available if it finds a respondent 
has not acted to the best of its ability in cooperating with the 
Department in this segment of the proceeding. By failing to respond to 
the Department's questionnaire, Rotec has failed to act to the best of 
its ability in cooperating with the Department's request for 
information in this segment of the proceeding.
    As a result of its failure to respond to the Department's 
questionnaire, Rotec failed to establish its eligibility for a separate 
rate. Therefore, Rotec is not eligible to receive a separate rate and 
will be part of the PRC NME entity, subject to the PRC-wide rate. 
Pursuant to section 776(b) of the Act, we have applied total adverse 
facts available with respect to the PRC-wide entity, including Rotec.
    In this segment of the proceeding, in accordance with Department 
practice (see, e.g., Brake Rotors from the People's Republic of China: 
Rescission of Second New Shipper Review and Final Results and Partial 
Rescission of First

[[Page 24386]]

Antidumping Duty Administrative Review, 64 FR 61581, 61584 (November 
12, 1999) (``Brake Rotors First Administrative Review''), as adverse 
facts available, we have assigned to exports of the subject merchandise 
by Rotec a rate of 43.32 percent, which is the PRC-wide rate.

Corroboration of Facts Available

    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, a figure which it applies as facts 
available. To be considered corroborated, information must be found to 
be both reliable and relevant. We are applying as adverse facts 
available (``AFA'') the highest rate from any segment of this 
administrative proceeding, which is the rate currently applicable to 
all exporters subject to the PRC-wide rate. The information upon which 
the AFA rate is based in the current review (i.e., the PRC-wide rate of 
43.32 percent) was the highest rate from the petition in the LTFV 
investigation. (See Notice of Antidumping Duty Order: Brake Rotors from 
the People's Republic of China, 62 FR 18740 (April 17, 1997)). This AFA 
rate is the same rate which the Department assigned to brake rotor 
companies in a prior review and the rate itself has not changed since 
the original LTFV determination (see Brake Rotors First Administrative 
Review, 64 FR at 61584). For purposes of corroboration, the Department 
will consider whether that margin is both reliable and relevant. The 
AFA rate we are applying for the current review was corroborated in 
reviews subsequent to the LTFV investigation to the extent that the 
Department referred to the history of corroboration. Furthermore, no 
information has been presented in the current review that calls into 
question the reliability of this information (see, e.g., Brake Rotors 
First Administrative Review, 64 FR at 61584).
    To further corroborate the AFA margin of 43.32 percent in this 
review, we compared that margin to the margins we found for the other 
respondents which sold identical and/or similar products. Based on our 
above-mentioned analysis, we find that 43.32 percent is within the 
range of margins for individual sales of identical and/or similar 
products reported by certain respondents in this review (see Memorandum 
Re: Seventh Antidumping Duty Administrative Review on Brake Rotors from 
the People's Republic of China: Corroboration, dated May 2, 2005, for 
further discussion). Thus, the Department finds that the information is 
reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). The information used in calculating this 
margin was based on sales and production data submitted by the 
petitioner in the LTFV investigation, together with the most 
appropriate surrogate value information available to the Department 
chosen from submissions by the parties in the LTFV investigation, as 
well as gathered by the Department itself. Furthermore, the calculation 
of this margin was subject to comment from interested parties in the 
proceeding. Moreover, as there is no information on the record of this 
review that demonstrates that this rate is not appropriately used as 
AFA, we determine that this rate has relevance.
    Based on our analysis as described above, we find that the margin 
of 43.32 percent is reliable and has relevance. As the rate is both 
reliable and relevant, we determine that it has probative value. 
Accordingly, we determine that the calculated rate of 43.32 percent, 
which is the current PRC-wide rate, is in accord with the requirement 
of section 776(c) that secondary information be corroborated to the 
extent practicable (i.e., that it have probative value). We have 
assigned this AFA rate to exports of the subject merchandise by the 
PRC-wide entity, including Rotec.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate (i.e., a PRC-wide rate).
    Of the 15 respondents participating in these reviews, three of the 
PRC companies (i.e., Hongfa, Meita, and Winhere) are owned wholly by 
entities located in market-economy countries. Thus, for these three 
companies, because we have no evidence indicating that they are under 
the control of the PRC government, a separate rates analysis is not 
necessary to determine whether they are independent from government 
control. (See Brake Rotors from the People's Republic of China: Final 
Results and Partial Rescission of Fifth New Shipper Review, 66 FR 44331 
(August 23, 2001) (``Brake Rotors Fifth New Shipper Review''), which 
cites Brake Rotors from the People's Republic of China: Preliminary 
Results and Partial Rescission of the Fifth New Shipper Review and 
Rescission of the Third Antidumping Duty Administrative Review, 66 FR 
29080 (May 29, 2001) (where the respondent was wholly owned by a U.S. 
registered company); Brake Rotors Third Administrative Review, which 
cites Brake Rotors from the People's Republic of China: Preliminary 
Results and Partial Rescission of the Fourth New Shipper Review and 
Rescission of the Third Antidumping Duty Administrative Review, 66 FR 
1303, 1306 (January 8, 2001) (where the respondent was wholly owned by 
a company located in Hong Kong); and Notice of Final Determination of 
Sales at Less Than Fair Value: Creatine Monohydrate from the People's 
Republic of China, 64 FR 71104, 71105 (December 20, 1999) (where the 
respondent was wholly owned by persons located in Hong Kong)).
    The remaining 12 respondents (i.e., CNIM, Golden Harvest, Gren, 
Hengtai, Hongda, Huanri General, LABEC, LKTLC, Longkou Haimeng, Longkou 
Jinzheng, Shanxi Fengkun, and ZLAP) are either joint ventures between 
PRC and foreign companies, collectively-owned enterprises and/or 
limited liability companies in the PRC. Thus, for these 12 respondents, 
a separate rates analysis is necessary to determine whether the export 
activities of each of above-mentioned respondents is independent from 
government control. (See Notice of Final Determination of Sales at Less 
Than Fair Value: Bicycles From the People's Republic of China, 61 FR 
56570 (April 30, 1996) (``Bicycles'').) To establish whether a firm is 
sufficiently independent in its export activities from government 
control to be entitled to a separate rate, the Department utilizes a 
test arising from 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''), and

[[Page 24387]]

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''). Under the separate-rates criteria, the 
Department assigns separate rates in NME cases only if the respondent 
can demonstrate the absence of both de jure and de facto governmental 
control over its export activities.
1. De Jure Control
    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 the 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.
    CNIM, Golden Harvest, Gren, Hengtai, Hongda, Huanri General, LABEC, 
LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP have 
each placed on the administrative record documents to demonstrate an 
absence of de jure control (e.g., the 1979 ``Law of the People's 
Republic of China on Chinese-Foreign Joint Ventures;'' the 
``Regulations of the PRC for Controlling the Registration of 
Enterprises as Legal Persons,'' promulgated in June 1988; the 1990 
``Regulations Governing the Rural Collective Owned Enterprises of the 
PRC;'' the 1994 ``Foreign Trade Law of the People's Republic of 
China;'' the 1999 ``Company Law of the People's Republic of China;'' 
and the 2000 ``Law of the People's Republic of China on Foreign Capital 
Enterprises'').
    As in prior cases, we have analyzed the laws mentioned above and 
have found them to establish sufficiently an absence of de jure control 
over joint ventures between the PRC and foreign companies, and limited 
liability companies in the PRC. See, e.g., Final Determination of Sales 
at Less than Fair Value: Furfuryl Alcohol from the People's Republic of 
China, 60 FR 22544 (May 8, 1995) (``Furfuryl Alcohol''), and 
Preliminary Determination of Sales at Less Than Fair Value: Certain 
Partial-Extension Steel Drawer Slides with Rollers from the People's 
Republic of China, 60 FR 29571 (June 5, 1995). We have no new 
information in this proceeding which would cause us to reconsider this 
determination with regard to CNIM, Golden Harvest, Gren, Hengtai, 
Hongda, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi 
Fengkun, and ZLAP.
    With respect to Huanri General's claim that it is entitled to a 
separate rate, in a prior segment of this case, the Department granted 
Huanri General a separate rate. See Brake Rotors Fifth New Shipper 
Review. However, the Department has preliminarily determined to deny 
Huanri General a separate rate in this administrative review for two 
reasons: (1) the Department has analyzed the February 25, 1999, Organic 
Law on the Village Committee of the PRC (``Village Committee Law'') and 
has determined that the Panjacun Village Committee is a form of local 
government in the PRC, and (2) new information obtained at verification 
demonstrates that the Panjacun Village Committee, as a local PRC 
government entity, controls the export activities of Huanri General. As 
explained below, we find that the Village Committee Law does not 
conclusively establish an absence of de jure government control. Nor 
does this law, on its face, conclusively negate the possibility, based 
on the other laws referenced above and a de facto analysis, that Huanri 
General is subject to government control. Therefore, our preliminary 
determination to deny Huanri General a separate rate is based on our 
conclusion that it has not demonstrated an absence of de facto 
government control.
    The petitioner submitted on the record of the administrative review 
the Village Committee Law and supporting news articles which explain 
the role and functions of PRC village committees. At the outset, we 
note that as with other laws the Department considers in its de jure 
analysis, the Village Committee Law was promulgated by the central 
government of the PRC. Article 1 of the Village Committee Law states 
that the law was formulated ``to protect villagers' self-governance in 
rural areas, through which villagers can manage their own affairs by 
law.'' It also states, however, that ``this law is formulated in line 
with the relevant requirements of The Constitution of the People's 
Republic of China.'' Article 2 states that a ``Village Committee is a 
self-governance organization at the grassroots level.'' In addition, 
village committees are entrusted with ``educating villagers on 
reasonable use of natural resources,'' ``protect{ing{time}  and 
improv{ing{time}  the environment (see Article 5), ``protect{ing{time}  
public property,'' and ``protect{ing{time}  the legal rights and 
interests of villagers'' (see Article 6). However, Article 2 also 
clearly states that ``It is the village committee's responsibility to 
develop public services, manage public affairs, mediate civil disputes, 
help maintain social stability and report to the people's government 
villagers' opinions, requests and suggestions.'' In the case of the 
Panjacun Village Committee, members are selected by village 
representatives, who are elected by villagers eligible to vote (see 
pages 8-9 of the April 6, 2005, Huanri General verification report 
(``Huanri General verification report'')). Based on its examination of 
the provisions of the Village Committee Law, the Department has 
determined that villages organized and operating under this law are a 
form of local government in the PRC.
    The Village Committee Law also contains provisions which assign 
village committees in the PRC with certain economic responsibilities. 
For example, Article 5 states that village committees ``shall support 
and organize villagers developing collective economy by law in all 
forms, serve and coordinate the village production, and promote the 
development of rural socialist production and a socialist market 
economy.'' In order to accomplish this, village committees are able to 
``manage land and other properties of the village that are collectively 
owned by all villagers'' while ``respect{ing{time}  the autonomy of 
collective economic units in conducting economic activities by law'' 
(see Article 5), use ``income collected from village collective 
economies'' (e.g., companies), or begin ``development of any new 
village collective economies'' for purposes of improving the social 
welfare of the village itself (see Article 19). In addition, to 
emphasize the importance of these functions, the Village Committee Law 
stipulates that for villagers' monitoring purposes, village committees 
should promptly publicize the decision of the village committee and its 
implementation on financial-related issues (among others) mentioned in 
Article 19 (see Article 22). Therefore, the law appears to provide 
village committees with the means to exercise control over certain 
activities of companies wholly owned by the villagers in its 
jurisdiction.
    Based on the Department's analysis, it appears that the purpose of 
the Village Committee Law is to decentralize certain government 
operations at the village level, as distinct from the town, township, 
or minority town or township levels of government immediately above it, 
while at the same time providing for the control of certain companies 
at the village level. Nonetheless, the Village Committee Law itself 
does not appear to establish conclusively village government control 
over any particular company, or, by law, require restrictive 
stipulations on the business or export licenses of enterprises 
operating in the

[[Page 24388]]

village. Therefore, we find that the Village Committee Law does not at 
this time alter our de jure analysis, and we preliminarily find that 
Huanri General, by virtue of the applicability of the other PRC laws 
referenced above, has demonstrated an absence of de jure central 
government control. However, because it appears that village committees 
are, by promulgation of law by the central government of the PRC, 
permitted to exercise control over village-owned companies, it is 
necessary for the Department to examine whether the Panjacun village 
committee, as a matter of fact, controls the export-related activities 
of Huanri General.
2. De Facto Control
    As stated in previous cases, there is evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether the respondents are, in fact, subject to a degree 
of governmental control which would preclude the Department from 
assigning separate rates. In addition, as discussed above, certain 
articles contained in the Village Committee Law appear to grant village 
committees the means to control companies wholly owned by the villagers 
located in the village committee's jurisdiction. In the case of Huanri 
General, a de facto analysis is necessary to determine whether the 
Panjacun village committee is, in fact, controlling the export-related 
activities of the company.
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by, or 
subject to the approval of, a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding the disposition of profits or 
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
    CNIM, Golden Harvest, Gren, Hengtai, Hongda, Huanri General, LABEC, 
LKTLC, Longkou Haimeng, Longkou Jinzheng, Shanxi Fengkun, and ZLAP have 
each asserted the following: (1) It establishes its own export prices; 
(2) it negotiates contracts without guidance from any governmental 
entities or organizations; (3) it makes its own personnel decisions; 
and (4) it retains the proceeds of its export sales, uses profits 
according to its business needs, and has the authority to sell its 
assets and to obtain loans. Additionally, each of these companies' 
questionnaire responses indicates that its pricing during the POR does 
not suggest coordination among exporters. Furthermore, with respect to 
Laizhou Hongda, we examined documentation at verification which 
substantiated its claims as noted above (see the Laizhou Hongda 
verification report at pages 5-8).
    Consequently, with the exception of Huanri General (as discussed 
below), we have preliminarily determined that CNIM, Golden Harvest, 
Gren, Hengtai, Hongda, LABEC, LKTLC, Longkou Haimeng, Longkou Jinzheng, 
Shanxi Fengkun, and ZLAP have each met the criteria for the application 
of separate rates based on the documentation each of these respondents 
has submitted on the record of these reviews.
    With respect to Huanri General, the Department preliminarily finds 
that it has not demonstrated a de facto absence of government control 
with respect to making its own decisions in key personnel selections, 
the use of its profits from the proceeds of export sales, and the 
authority to negotiate and sign contracts and other agreements. See 
Silicon Carbide. Huanri General is therefore not entitled to a separate 
rate.
    In so determining, the Department is clarifying its policy 
regarding the level of government control that is relevant to the 
separate rates analysis. Government control of companies in non-market 
economies, such as the PRC, is not limited strictly to central 
government control, but can also include levels of sub-national 
government, including provincial, township or village government. If a 
company's export activities are subject to government control at any 
level, there is the possibility that export prices and export-related 
activities are subject to manipulation by the relevant NME government 
entity. Therefore, the relevant question in the Department's separate 
rates analysis is whether, as a matter of fact, the company operates 
autonomously from a government entity at any level with respect to 
export-related activities.
    Data examined at verification confirmed that individuals of the 
local government (whether it be the village committee or the village 
representatives (i.e., individuals selected by the villagers 
themselves, who then elect members of the village committee)) have 
effectively appointed themselves as key decision makers (i.e., 
chairman, directors, and/or shareholder representatives, as provided by 
the Village Committee Law) in Huanri General since 2001. Huanri General 
was set up by the Panjacun village committee in 1999 through capital 
voluntarily provided by all of the inhabitants of Panjacun village, 
consistent with Article 5 of the Village Committee Law (see page 6 of 
the Huanri General verification report). Those investors also included 
village committee members who were elected to their positions by 41 
village representatives (see pages 8-9 of the Huanri General 
verification report). After Huanri General's first full year of 
operation, the local government's involvement in Huanri General's 
management became even more intertwined when the 41 village 
representatives appointed themselves as the shareholder representatives 
in Huanri General (see page 9 of the Huanri General verification 
report). In further diluting the distinction between the local 
government's management and Huanri General's management, our 
verification findings also confirmed that two of the village committee 
members are not only village representatives but also are members of 
Huanri General's board of directors (see page 11 of the Huanri General 
verification report and Article 5 of the Village Committee Law). More 
importantly, the village committee chairman has continued to serve as 
chairman of Huanri General's board of directors since the company's 
establishment (see pages 9-11 of the Huanri General verification 
report). Thus, the Panjacun Village Committee is so intertwined in 
personnel, and involved in key financing operations with Huanri General 
with respect to export activities, that there can be no meaningful 
consideration of separateness between the local PRC government and 
Huanri General. Therefore, based on the facts, we cannot conclude that 
Huanri General makes its own personnel decisions.
    With respect to whether Huanri General makes its own decisions on 
the use of its profits from the proceeds of its export sales, our 
verification findings further note that the 41 village representatives 
(serving in the capacity of Huanri General's shareholder 
representatives) have also been directly involved in profit 
distribution decisions made at Huanri General as evidenced by 
shareholder meeting minutes examined at verification (see Huanri 
General verification report at page 12).

[[Page 24389]]

Therefore, based on the facts mentioned above, we cannot conclude that 
Huanri General makes its own profit decisions. Rather, the evidence on 
the record of this review indicates that the same individuals who 
appointed the village committee members also decided how Huanri 
General's profits are distributed, consistent with Article 19 of the 
Village Committee Law.
    With respect to whether Huanri General has the authority to 
negotiate and sign its own contracts or other agreements, our 
verification findings note that, after initial deliberations which 
began in 2001, the village representatives (serving in the capacity of 
Huanri General's shareholder representatives) decided during 2003 to 
acquire the funds necessary for establishing a tire production plant as 
part of Huanri General's operations, consistent with Article 19 of the 
Village Committee Law. However, to pursue this objective (which 
required a significant amount of capital), the village representatives 
had to obtain the entire capital investment amount from the Panjacun 
Village Committee which subsequently furnished it to Huanri General by 
obtaining a bank loan (using the villagers' households as collateral) 
and by providing a portion of its rental income received from land 
lease agreements (see pages 5-6 and 10-12 of the Huanri General 
verification report). Therefore, we conclude that Huanri General does 
not have the ability to obtain its own loans. Rather, the evidence on 
the record of this review indicates that the local government's 
assistance was required for this purpose.
    Therefore, based on the facts noted above, we preliminarily 
conclude that Huanri General has not demonstrated a de facto absence of 
government control and is therefore not entitled to a separate rate. 
Although there is no information on the record regarding Huanri 
General's ability to sign contracts and set its own export prices 
independent of any governmental authority, the pervasive nature of the 
interrelationship between the Panjacun Village Committee and Huanri 
General leads us to conclude that the company is not able to select its 
own management and make personnel decisions, as well as make its own 
decisions on the use of its profits, independent of any governmental 
authority. Thus, on balance, the record points to de facto government 
control of Huanri General. We note that these preliminary results on 
this issue differ from the final results of the new shipper review 
regarding Huanri General. The Department reached these results 
primarily as a result of its preliminary analysis of the Village 
Committee Law, which on balance leads the Department to conclude that 
the Panjacun Village Committee is a level of government in the PRC as 
described above. These results also depend on the Department's 
preliminary view that it is appropriate to consider that governmental 
control at the village level can affect the export operations of an 
enterprise in general. This is consistent with the Department's 
recently promulgated separate rates application which explicitly 
requests information regarding local government control (see Office of 
AD Enforcement, Separate-Rate Application and Request for Supporting 
Documentation on the Import Administration website: https://
ia.ita.doc.gov). Finally, there are even more indicia on this record 
than the record of the Brake Rotors Fifth New Shipper Review that the 
village government and Huanri General are so intertwined that the 
export operations of Huanri General cannot on balance properly be 
considered to be independent with respect to Huanri General's export 
functions. However, the Department recognizes that the articles of the 
Village Committee Law may be interpreted in different manners. As a 
result, the Department invites both especial comment as well as 
additional supporting information on these two considerations. Such 
information and additional comment is due on June 14, 2005. Rebuttal 
comments will be due on June 21, 2005. No rebuttal information will be 
permitted.

Fair Value Comparisons

    To determine whether sales of the subject merchandise by CNIM, 
Golden Harvest, Gren, Hengtai, Hongda, Hongfa, LABEC, LKTLC, Longkou 
Haimeng, Longkou Jinzheng, Meita, Shanxi Fengkun, Winhere, and ZLAP to 
the United States were made at prices below normal value (``NV''), we 
compared each company's export prices (``EPs'') or constructed export 
prices (``CEPs'') to NV, as described in the ``Export Price,'' 
``Constructed Export Price,'' and ``Normal Value'' sections of this 
notice, below.

Export Price

    For each respondent, we used EP methodology in accordance with 
section 772(a) of the Act for sales in which the subject merchandise 
was first sold prior to importation by the exporter outside the United 
States directly to an unaffiliated purchaser in the United States and 
for sales in which CEP was not otherwise indicated. We made the 
following company-specific adjustments:
A. CNIM, Golden Harvest, Hengtai, Hongfa, LKTLC, Longkou Jinzheng, 
Meita, Shanxi Fengkun, and Winhere
    We calculated EP based on packed, FOB foreign port prices to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
foreign inland freight and foreign brokerage and handling charges in 
the PRC in accordance with section 772(c) of the Act. Because foreign 
inland freight and foreign brokerage and handling fees were provided by 
PRC service providers or paid for in renminbi, we based those charges 
on surrogate rates from India (see ``Surrogate Country'' section below 
for further discussion of our surrogate-country selection). To value 
foreign inland trucking charges, we used truck freight rates published 
in Indian Chemical Weekly and distance information obtained from the 
following websites: https://www.infreight.com, https://www.sitaindia.com/
Packages/CityDistance.php, https://www.abcindia.com, https://
www.eindiatourism.com, and https://www.mapsofindia.com. To value foreign 
brokerage and handling expenses, we relied on October 1999-September 
2000 information reported in the public U.S. sales listing submitted by 
Essar Steel Ltd. in the antidumping investigation of Certain Hot-Rolled 
Carbon Steel Flat Products from India: Final Determination of Sales at 
Less Than Fair Value, 67 FR 50406 (October 3, 2001).
    CNIM claims that the producer (which supplied it with specific 
integral brake rotor models) did not incur an expense for the ball 
bearing cups and lug bolts used in those brake rotor models (i.e., the 
subject merchandise) which it exported to the United States during the 
POR because its U.S. customers of those brake rotor models provided 
these items to its producer free-of-charge. In response to the 
Department's supplemental questionnaire which further examined its 
claim, CNIM provided documentation which sufficiently supported its 
claim that (1) its U.S. customers contracted with PRC ball bearing cup 
and lug bolts producers and that these producers had indeed delivered 
the ball bearing cups and lug bolts to CNIM's producer in a certain 
quantity on a certain date, free-of-charge; and (2) that these free-of-
charge ball bearing cups and lug bolts were used in the required 
quantities for the integral brake rotor models sold to its applicable 
U.S. customers during the POR.

[[Page 24390]]

    Therefore, for the reasons mentioned above, the Department has 
adjusted the U.S. price of those applicable integral brake rotor 
transactions reported by CNIM by assigning Indian surrogate values to 
the ball bearing cups and lug bolts used in those integral brake rotor 
transactions to reflect its U.S. customers' expenditures for these 
items. This preliminary decision on this matter is consistent with 
Brake Rotors from the People's Republic of China: Preliminary Results 
and Partial Rescission of the Sixth Administrative Review and 
Preliminary Results and Final Partial Rescission of the Ninth New 
Shipper Review, 69 FR 10402, 10407 (March 5, 2004); and Certain 
Preserved Mushrooms from the People's Republic of China: Preliminary 
Results and Partial Rescission of Fifth Antidumping Duty Administrative 
Review, 70 FR 10965, 10973 (March 5, 2005).

B. Gren, Laizhou Hongda, LABEC, Longkou Haimeng, and ZLAP

    We calculated EP based on packed, CIF, CFR, C&F, or FOB foreign 
port prices to the first unaffiliated purchaser in the United States. 
Where appropriate, we made deductions from the starting price (gross 
unit price) for foreign inland freight, foreign brokerage and handling 
charges in the PRC, marine insurance, U.S. import duties and fees 
(including harbor maintenance fees, merchandise processing fees, and 
brokerage and handling) and international freight, in accordance with 
section 772(c) of the Act. As all foreign inland freight and foreign 
brokerage and handling fees were provided by PRC service providers or 
paid for in renminbi, we valued these services using the Indian 
surrogate values discussed above. We valued marine insurance based on a 
publicly available price quote from a marine insurance provider 
obtained from https://www.rjgconsultants.com/insurance.html, as used in 
the antidumping duty investigation of Certain Malleable Iron Pipe 
Fittings from the People's Republic of China: Final Results of 
Antidumping Duty Investigation, 68 FR 61395 (October 28, 2003) . For 
international freight (i.e., ocean freight and U.S. inland freight 
expenses from the U.S. port to the warehouse (where applicable)), we 
used the reported expenses because each of these six respondents used 
market-economy freight carriers and paid for those expenses in a 
market-economy currency (see, e.g., Brake Rotors from the People's 
Republic of China: Final Results of Antidumping Duty New Shipper 
Review, 64 FR 9972, 9974 (March 1, 1999)).
    LABEC, Longkou Haimeng, and ZLAP each claims that it did not incur 
an expense for the ball bearing cups and lug bolts used in specific 
integral brake rotor models (i.e., the subject merchandise) which each 
respondent exported to the United States during the POR because their 
U.S. customers of those brake rotor models provided these items to them 
free-of-charge. In response to the Department's supplemental 
questionnaire which further examined their claims, LABEC, Longkou 
Haimeng, and ZLAP each provided documentation which sufficiently 
supported its claim that (1) its U.S. customers contracted with PRC 
ball bearing cup and lug bolts producers and that these producers had 
indeed delivered the ball bearing cups and lug bolts to them in a 
certain quantity on a certain date, free-of-charge; and (2) that these 
free-of-charge ball bearing cups and lug bolts were used in the 
required quantities for the integral brake rotor models sold to their 
applicable U.S. customers during the POR.
    Therefore, for the reasons mentioned above, the Department has 
adjusted the U.S. price of those applicable integral brake rotor 
transactions reported by LABEC, Longkou Haimeng, and ZLAP by assigning 
Indian surrogate values to the ball bearing cups and lug bolts used in 
those integral brake rotor transactions to reflect their U.S. 
customers' expenditures for these items.

Constructed Export Price

    For Gren, we also calculated CEP in accordance with section 772(b) 
of the Act. We found that some of Gren's sales during the POR were CEP 
sales because the sales were made for the account of Gren by its 
subsidiary in the United States to unaffiliated purchasers. We based 
CEP on packed, delivered or ex-warehouse prices to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (gross unit price) for movement 
expenses in accordance with section 772(c)(2)(A) of the Act; these 
included, where appropriate, foreign inland freight and foreign 
brokerage and handling charges in the PRC, international freight (i.e., 
ocean freight and U.S. inland freight from the U.S. port to the 
warehouse), marine insurance, U.S. import duties, and U.S. inland 
freight expenses (i.e., freight from the plant to the customer). As all 
foreign inland freight, foreign brokerage and handling, and marine 
insurance expenses were provided by PRC service providers or paid for 
in renminbi, we valued these services using the Indian surrogate values 
discussed above. For international freight (where applicable), we used 
the reported expense because the respondent used a market-economy 
freight carrier and paid for those expenses in a market-economy 
currency.
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (commissions and 
credit expenses), and indirect selling expenses (including inventory 
carrying costs) incurred in the United States. We also made an 
adjustment for profit in accordance with section 772(d)(3) of the Act.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using a factors-of-production methodology if the 
merchandise is exported from an NME country and the information does 
not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act. 
The Department will base NV on the factors of production because the 
presence of government controls on various aspects of these economies 
renders price comparisons and the calculation of production costs 
invalid under its normal methodologies.
    For purposes of calculating NV, we valued the PRC factors of 
production in accordance with section 773(c)(1) of the Act. Factors of 
production include, but are not limited to, hours of labor required, 
quantities of raw materials employed, amounts of energy and other 
utilities consumed, and representative capital costs, including 
depreciation. See section 773(c)(3) of the Act. In examining surrogate 
values, we selected, where possible, the publicly available value which 
was an average non-export value, representative of a range of prices 
within the POR or most contemporaneous with the POR, product-specific, 
and tax-exclusive. See, e.g., Notice of Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determination: 
Chlorinated Isocyanurates from the People's Republic of China, 69 FR 
75294, 75300 (December 16, 2004) (``Chlorinated Isocyanurates''). We 
use