Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2003-2004 Administrative Review and Partial Rescission of Review, 2517-2524 [E6-411]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 10 (Tuesday, January 17, 2006)]
[Notices]
[Pages 2517-2524]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-411]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Final Results of 2003-
2004 Administrative Review and Partial Rescission of Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') published its 
preliminary results of administrative review of the antidumping duty 
order on tapered roller bearings and parts thereof, finished and 
unfinished (``TRBs''), from the People's Republic of China (``PRC'') on 
July 11, 2005. The period of review (``POR'') is June 1, 2003, through 
May 31, 2004. We invited interested parties to comment on our 
preliminary results. Based on our analysis of the comments received, we 
have made changes to our margin calculations. Therefore, the final 
results differ from the preliminary results. The final dumping margins 
for this review are listed in the ``Final Results of Review'' section 
below.

EFFECTIVE DATE: January 17, 2006.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita, Eugene Degnan or Hua 
Lu, Office 8, AD/CVD Operations, Office 8, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone 
(202) 482-4243, (202) 482-0414 or (202) 482-6478, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 11, 2005, the Department published its preliminary results. 
See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
from the People's Republic of China: Preliminary Results of 2003-2004

[[Page 2518]]

Antidumping Administrative Review, and Notice of Intent to Rescind in 
Part, 70 FR 39744 (July 11, 2005) (``Preliminary Results''). On July 
27, 2005, Yantai Timken Company Limited (``Yantai Timken'') submitted 
additional surrogate value information. On July 29, 2005, The Timken 
Company (``Petitioner'') submitted comments on surrogate values. On 
August 2, 2005, Yantai Timken requested an extension of the briefing 
schedule. On August 4 and August 8, 2005, Yantai Timken requested to 
submit additional factual information. On August 10, 2005, Yantai 
Timken requested a hearing. On September 21, 2005, the Department 
determined that it was unable to grant Yantai Timken's requests to 
supplement the record with new factual information. On October 5, 2005, 
we received case briefs from China National Machinery Import & Export 
Corporation (``CMC''), Luoyang Bearing Corporation (Group) (``LYC'') 
and Yantai Timken. On October 13, 2005, the Department rejected Yantai 
Timken's case brief because it contained new factual information. On 
November 8, 2005, the Department published a notice extending the time 
limit for the final results of review until January 7, 2006. See Notice 
of Extension of Final Results of the 2003-2004 Administrative Review of 
Tapered Roller Bearings and Parts Thereof, Finished or Unfinished from 
the People's Republic of China, 70 FR 67668 (November 8, 2005). On 
November 30, 2005, Yantai Timken resubmitted its case brief. On 
December 5, 2005, Peer Bearing Company (``Peer'') and Petitioner 
submitted rebuttal briefs. On December 9, 2005, the Department held a 
public hearing.
    We have conducted this administrative review in accordance with 
section 751 of the Tariff Act of 1930, as amended (``the Act''), and 19 
CFR 351.213.

Scope of Order

    Merchandise covered by this order is TRBs from the PRC; flange, 
take up cartridge, and hanger units incorporating tapered roller 
bearings; and tapered roller housings (except pillow blocks) 
incorporating tapered rollers, with or without spindles, whether or not 
for automotive use. This merchandise is currently classifiable under 
the Harmonized Tariff Schedule of the United States (``HTSUS'') item 
numbers 8482.20.00, 8482.91.00.50, 8482.99.30, 8483.20.40, 8483.20.80, 
8483.30.80, 8483.90.20, 8483.90.30, 8483.90.80, 8708.99.80.15, and 
8708.99.80.80. Although the HTSUS item numbers are provided for 
convenience and customs purposes, the written description of the scope 
of the order is dispositive.

Rescission of Review

    In our preliminary results, we stated we are rescinding the review 
with respect to Chin Jun Industrial Ltd. (``Chin Jun''), Weihai 
Machinery Holding (Group) Company, Ltd. (``Weihai Machinery''), and 
Zhejiang Machinery Import & Export Corp (``ZMC'') because we had no 
evidence that Chin Jun, Weihai Machinery or ZMC had any shipments to 
the United State. of subject merchandise during the POR. See 
Preliminary Results, 70 FR at 39746. Consequently, in accordance with 
19 CFR 351.213(d)(1) and consistent with the Department's practice, we 
preliminarily rescinded our review with respect to Chin Jun, Weihai 
Machinery and ZMC. Since we have received no new information since the 
preliminary results that contradicts the decision made in the 
preliminary results of review, we are rescinding the administrative 
review with respect to Chin Jun, Weihai Machinery and ZMC.

Analysis of Comments Received

    All issues raised in the post-preliminary comments by parties in 
this review are addressed in the memorandum from Stephen J. Claeys, 
Deputy Assistant Secretary for Import Administration, to David M. 
Spooner Assistant Secretary, for Import Administration, ``Issues and 
Decision Memorandum for the Final Results of the 17th Administrative 
Review of the Antidumping Duty Order on Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from the People's Republic of 
China,'' dated January 9, 2006 (``Issues and Decision Memorandum''), 
which is hereby adopted by this notice. A list of the issues which 
parties raised and to which we responded in the Issues and Decision 
Memorandum is attached to this notice as an appendix. The Issues and 
Decision Memorandum is a public document which is on file in the 
Central Records Unit (``CRU'') in room B-099 in the main Department 
building, and is accessible on the Web at https://ia.ita.doc.gov/. The 
paper copy and electronic version of the memorandum are identical in 
content.

Changes Since the Preliminary Results

    Based on our analysis of comments received, we have made changes in 
the margin calculations for CMC and LYC. See Issues and Decision 
Memorandum at Comments 1-6.

CMC

     In the preliminary results, we inadvertently cited the 
variable name for skilled packing labor incorrectly in the margin 
calculation program. We have corrected the error for the final results. 
See Issues and Decisions Memo at Comment 1 for a thorough discussion of 
this issue and ``Analysis Memorandum for the Final Determination of 
Administrative Review on Tapered Roller Bearings and Parts Thereof from 
the People's Republic of China of China: National Machinery Import & 
Export Corp'' from Hua Lu, Case Analyst, through Robert Bolling, 
Program Manager, to the File, dated January 9, 2006 (``CMC Final 
Analysis Memorandum.'')
     In the preliminary results we inadvertently used 
``0.0001'' as the conversion factor from metric tons to kilograms for 
the freight surrogate values for steel consumption of cups, rollers and 
cages. No interested party commented on this error. We have corrected 
the conversion factor to ``0.001'' for these final results of review. 
See CMC Final Analysis Memorandum.
     For the preliminary results, when calculating ratios for 
factory overhead, selling, general, and administrative expenses, 
interest, depreciation, and profit from the surrogate companies' 
financial statements, we inadvertently included excise duties in the 
sum of the cost of materials for one of the surrogate companies. For 
the final results, we have excluded excise duties from the cost of 
manufacturing when calculating the surrogate financial ratios. Further, 
we have applied the revised surrogate financial ratios to all 
respondents in this review for whom we are calculating a margin. See 
Issues and Decisions Memorandum at Comment 5 and Memorandum to the 
final regarding ``Final Results of Review of Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, from the People's Republic 
of China: Surrogate Value Memorandum for the Final Results of Review'' 
(``Final Results Surrogate Value Memorandum''), dated January 9, 2005.

LYC

     In the preliminary results, the Department applied partial 
adverse facts available (``AFA'') to LYC's U.S. inventory carrying 
costs (``ICCs'') for certain constructed export price (``CEP'') sales. 
For

[[Page 2519]]

these final results, we have used LYCs ICCs as reported. See Issues and 
Decisions Memorandum at Comment 3 and ``Final Results of Review of the 
Order on Tapered Roller Bearings and Parts Thereof from the People's 
Republic of China, Program Analysis for the Final Results of Review: 
Luoyang Bearing Corporation (Group)'' (``LYC Final Analysis 
Memorandum''), dated January 9, 2006.
     In the preliminary results we failed to convert the 
surrogate value for ``cage'' from Indian rupees to U.S. dollars in the 
margin calculation program. For the final results, we have made this 
conversion. See Issues and Decisions Memorandum at Comment 6.
     For the preliminary results, when calculating ratios for 
factory overhead, selling, general, and administrative expenses, 
interest, depreciation, and profit from the surrogate companies' 
financial statements, we inadvertently included excise duties in the 
sum of the cost of materials for one of the surrogate companies. For a 
complete discussion on this issue, see CMC above and Comment 5 in the 
Issues and Decisions Memorandum.

Calculation of a Margin for Yantai Timken

    In addition, based on further analysis of record evidence in this 
review, the Department is reversing its decision to apply total AFA to 
Yantai Timken's margin for the final results. After examining the 
record of this review, including the verification reports and the 
documentation provided at verification, we have determined that Yantai 
Timken was able to substantiate one of its reported expenses, marine 
insurance. However, we continue to conclude that Yantai Timken was 
unable to substantiate two reported factors of production and several 
other expenses reported as adjustments to U.S. price. Thus, we have 
determined that the use of partial AFA is warranted. See Issues and 
Decision Memorandum at Comments 7-16. As a result, we have calculated a 
margin for Yantai Timken in this review. An explanation of our 
calculations follows.

Separate Rates

    In proceedings involving non-market-economy (``NME'') countries, 
the Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and, thus, should 
be assigned a single antidumping duty deposit rate. It is the 
Department's policy to assign all exporters of merchandise subject to 
administrative review in an NME country this single rate unless an 
exporter can demonstrate that it is sufficiently independent so as to 
be entitled to a separate rate.
    In the Preliminary Results, we found that Yantai Timken did not 
demonstrate its eligibility for a separate rate as a consequence of our 
determination to base its margin on total AFA. Accordingly, we 
preliminarily determined that Yantai Timken was a part of the PRC-wide 
entity. For the final results of review, we have reconsidered our 
determination to apply total AFA to Yantai Timken's margin and its 
eligibility for a separate rate.
    The Department's separate-rate test to determine whether the 
exporters are independent from government control does not consider, in 
general, macroeconomic/border-type controls, e.g., export licenses, 
quotas, and minimum export prices, particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 
(November 17, 1997), and Notice of Final Determination of Sales at less 
Than Fair Value: Certain Frozen and Canned Warmwater Shrimp From the 
People's Republic of China, 69 FR 71005 (December 8, 2004), and 
accompanying Issues and Decision Memoramdum, at Comment II.
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588, 20589 (May 6, 1991) 
(``Sparklers''), as modified by Final Determination of Sales at Less 
Than Fair Value: Silicon Carbide from the People's Republic of China, 
59 FR 22585, 22586 (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 government control over its export activities. See 
Silicon Carbide, 59 FR at 22586, and 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'').
    Yantai Timken provided company-specific separate-rates information 
and stated that it met the standards for the assignment of separate 
rates.
A. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; or (3) any other formal 
measures by the government decentralizing control of companies. See 
Sparklers.
    Yantai Timken placed on the record statements and documents to 
demonstrate absence of de jure control. In its questionnaire responses, 
Yantai Timken reported that it is a wholly foreign-owned enterprise, 
established in accordance with the ``Law of the PRC on Foreign Capital 
Enterprise'' See Yantai Timken's August 26, 2004, Section A response 
(``AQR'') at A-2. Yantai Timken reported that it is 100-percent owned 
by The Timken Company. See AQR at A-2. Yantai Timken reported that it 
does not have any relationship with the central, provincial, or local 
governments with respect to ownership, internal management, and daily 
business operations. See AQR at A-3. Yantai Timken submitted a copy of 
its business license and stated it is renewed annually as long as the 
company submits its annual financial statements and profit/loss 
statement to the appropriate State Administration of Industry and 
Commerce office and no activities prohibited by Article 30 of the 
Administrative Regulations have occurred. See AQR at A-5 and at exhibit 
A-5. Yantai Timken reported that the subject merchandise did not appear 
on any government list regarding export provisions or export licensing, 
and the subject merchandise is not subject to export quotas or export 
control licenses imposed by the PRC government. See AQR at A-6. Yantai 
Timken reported that it may engage in business activities within the 
scope of its business license. See AQR at A-4. Furthermore, Yantai 
Timken stated that the China Chamber of Commerce is not involved in 
Yantai Timken's export activities. See AQR at A-8. Yantai Timken 
submitted a copy of the ``Regulations of the PRC for Controlling the 
Registration of Enterprises as Legal Persons'' and the ``Company Law of 
the PRC'' to demonstrate that there is no centralized

[[Page 2520]]

control over its export activities. See AQR at exhibits A-3 and A-4. 
Through the questionnaire responses, we examined each of the related 
laws and Yantai Timken's business license and have determined that they 
demonstrate the absence of de jure control over the export activities 
and evidence in favor of the absence of government control associated 
with Yantai Timken's business license.
B. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255, 72257 
(December 31, 1998). Therefore, the Department has determined that an 
analysis of de facto control is critical in determining whether 
respondents are, in fact, subject to a degree of government control 
which would preclude the Department from assigning separate rates. The 
Department typically considers four factors in evaluating whether each 
respondent is subject to de facto government control of its export 
functions: (1) whether the exporter sets its own export prices 
independent of the government and without the approval of a government 
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 its management; and (4) whether the respondent retains the 
proceeds of its export sales and makes independent decisions regarding 
disposition of profits or financing of losses. See Furfuryl Alcohol.
    In support of an absence of de facto control, Yantai Timken 
reported the following. During the POR, Yantai Timken explained that it 
sold the subject merchandise in the United States only to its 
affiliated party in the United States, The Timken Company. See AQR at 
A-7 and A-8. Therefore, Yantai Timken reported that the question of 
whether its prices are subject to governmen control is not applicable, 
since The Timken Company in the United States sets and negotiates the 
prices with its customers in the United States. See AQR at A-7. Yantai 
Timken explained that its Board of Directors appoints the general 
manager and all other senior management members are nominated by the 
general manager and approved by the board of directors. See AQR at A-9. 
Yantai Timken explained that it is required to notify the Yantai 
Administration for Industry & Commerce of any senior management changes 
for informational purposes. See AQR at A-9. Yantai Timken explained 
that there are no restrictions on the use of its export revenues. See 
AQR at A10. Additionally, Yantai Timken stated that it is not required 
to sell any of its foreign currency earnings to the government and it 
is allowed to freely convert all foreign currency earnings on sales of 
the merchandise under review to the United States into renminbi for 
domestic use in China at the prevailing market rates of any bank. See 
AQR at A-11 and A-12. Yantai Timken explained that it can and does use 
foreign currency for operating expenses and capital equipment 
purchases. See AQR at A-11.
    The evidence placed on the record of this administrative review by 
Yantai Timken, and verified by the Department, demonstrates an absence 
of government control, both in law and in fact, with respect to Yantai 
Timken's exports of the merchandise under review. See Memorandum to the 
File, from Laurel LaCivita, Senior Case Analyst and Eugene Degnan, 
Analyst, through Robert Bolling, Program Manager, and Wendy Frankel, 
Director, NME/China Unit, Office 8, ``Verification of Sales and Factors 
of Production Reported by the Yantai Timken Company in the 2003/2004 
Antidumping Duty Administrative Review of Tapered Roller Bearings and 
Parts, Thereof from the People's Republic of China,'' dated June 30, 
2005 (``FOP Verification Report''). As a result, for these final 
results, the Department is granting a separate, company-specific rate 
to Yantai Timken, the exporter which shipped the subject merchandise to 
the United States during the POR.

Partial Adverse Facts Available

    We have determined that the use of partial facts available with 
adverse inferences is warranted for Yantai Timken's consumption rate 
for electricity and natural gas in the determination of normal value. 
In addition, we have determined that the use of a partial facts 
available with adverse inferences is warranted with respect to Yantai 
Timken's adjustments to U.S. prices for indirect selling expenses 
(``ISEs''), warehousing, ocean freight, rebates, and commissions 
incurred in the United States.
    During Yantai Timken's factors-of-production (``FOP'') 
verification, we determined that Yantai Timken failed to account for 
its total consumption of electricity and to substantiate its allocation 
of natural gas to the production of the subject merchandise. See FOP 
Verification Report at 2 and the Preliminary Results, 70 FR at 39749. 
Because Yantai Timken provided factor values for electricity and 
natural gas that could not be verified, pursuant to section 
776(a)(1)(D) of the Act, we have resorted to the facts otherwise 
available to determine the consumption rates for these inputs. The 
Department also finds that Yantai Timken did not act to the best of its 
ability through its failure to accurately report its factor consumption 
rates for electricity and natural gas pursuant to section 776(b) of the 
Act. Thus, adverse inferences are warranted for electricity and natural 
gas. We used the total quantity of Yantai Timken's electricity 
consumption during the POR, as determined at verification, as AFA for 
electricity. See the memorandum to the file from Laurel LaCivita, 
Senior Case Analyst, through Robert Bolling, Program Manager, 
``Analysis for the Final Results of the 2003-2004 Administrative Review 
of Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, 
from the People's Republic of China: Yantai Timken Company, Ltd. and 
the Timken Company,'' dated January 9, 2006 (``Yantai Timken Final 
Analysis Memorandum''), at 8. In addition, Yantai Timken could not 
substantiate its allocation of natural gas between production- and non-
production-related activities. See Yantai Timken Final Analysis 
Memorandum at 9. Therefore, as AFA, we have attributed 50 percent of 
Yantai Timken's total factory-wide consumption of natural gas (as 
determined at verification) to the production of the subject 
merchandise.
    During Yantai Timken's constructed export sales (``CEP'') 
verification, we determined that the Timken Company, Yantai Timken's 
parent, could not demonstrate that the expenses it reported in its 
Section C response for warehousing, ISEs, international freight, 
commissions, and rebates represent the total value of these expenses 
applicable to the subject merchandise during the POR. See the 
memorandum to the file from Laurel LaCivita, Senior Case Analyst and 
Hua Lu, Case Analyst, through Robert Bolling, Program Manager, and 
Wendy J. Frankel, Director, NME/China Unit, Office 8, ``Verification of 
the Constructed Export Price Sales Reported by The Timken Company 
(``Timken'') in the Antidumping Duty Administrative Review of Tapered 
Roller Bearings and Parts, Thereof from the People's Republic of 
China,'' dated June 30, 2005 (``Timken CEP Verification Report''), at

[[Page 2521]]

2, 14, 25, 20, and 22, and the Preliminary Results, 70 FR at 39749. In 
addition, we found at verification that Timken based its distributor 
warehousing expenses, U.S. inland freight, commissions, and rebates 
reported in the Section C response on either preliminary or 
hypothetical data. See Timken CEP Verification Report at 2, 3, 20, and 
21, and the Preliminary Results, 70 FR at 39749. Because Timken 
reported values for warehousing, ISE, international freight, 
commissions and rebates that could not be verified, pursuant to section 
776(a)(1)(D) of the Act, we must resort to the facts otherwise 
available to determine the values for these adjustments. Further, 
pursuant to section 776(b) of the Act, the Department also finds that 
Timken did not act to the best of its ability through its failure to 
accurately report its adjustment data for these items. Thus, adverse 
inferences are warranted for warehousing, ISE, international freight, 
commissions and rebates. We used the total verified value of Timken's 
warehousing expense, ISE expense, and international freight as the 
basis of AFA for these items. See Yantai Timken Final Analysis 
Memorandum at pages 3 and 4, and Attachments III, IV, and V. We could 
not tie Timken's reported commissions and rebates into its audited 
financial statements, and thus could not determine the completeness of 
its reporting methodology. Moreover, Timken could not demonstrate the 
full universe of commissions and rebates paid on sales of sujbect 
merchandise during the POR. Therefore, we applied, as total AFA, the 
highest contractual amount of commissions and rebates that its sales 
agents or customers could earn to all sales of subject merchandise in 
the United States during the POR. See Yantai Timken Final Analysis 
Memorandum at 4.
    In our Preliminary Results, we stated that because we could not 
verify the total value of Timken's marine insurance expense, pursuant 
to section 776(a)(1)(D) of the Act, we must resort to the facts 
otherwise available. See Preliminary Results, 70 FR at 39749. However, 
further examination of the information on the record reveals that 
Yantai Timken appropriately reported and substantiated its marine 
insurance expense. Therefore, for the final results, we will not apply 
AFA or make adverse inferences with respect to Timken's marine 
insurance expense, but will use the amount as reported in its Section C 
questionnaire response. See Yantai Timken Final Analysis Memorandum at 
4.

Date of Sale

    Section 351.401(i) of the Department's regulation states that ``in 
identifying the date of sale of the subject merchandise or foreign like 
product, the Secretary normally will use the date of invoice, as 
recorded in the exporter or producer's records kept in the normal 
course of business. However, the Secretary may use a date other than 
the date of invoice if the Secretary is satisfied that a different date 
better reflects the date on which the exporter or producer establishes 
the material terms of sale.'' 19 CFR 351.401(i); See also Allied Tube 
and Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 1090-1093 
(CIT 2001).
    After examining the sales documentation placed on the record by 
Yantai Timken, we determine that invoice date is the most appropriate 
date of sale for Yantai Timken's CEP sales. We made this determination 
based on statements on page C-9 of the October 4, 2004, Section C 
response that Yantai Timken's invoice date, which is generally the same 
as the shipment date from the U.S. warehouse, establishes the material 
terms of sale to the extent required by our regulations. See Notice of 
Final Determination of Sales at Less Than Fair Value: Structural Steel 
Beams From Germany, 67 FR 35497 (May 20, 2002), and accompanying Issues 
and Decision Memorandum at Comment 2.

Normal Value Comparisons

    To determine whether sales of TRBs to the United States by Yantai 
Timken were made at less than normal value (``NV''), we compared CEP to 
NV, as described in the ``Constructed Export Price'' and ``Normal 
Value'' sections of this notice.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772 (c) and 
(d). In accordance with section 772(b) of the Act, we used CEP for all 
of Yantai Timken's sales because it sold all of its subject merchandise 
to Timken, its affiliated party in the United States, which in turn 
sold subject merchandise to unaffiliated U.S. customers.
    We compared NV to individual CEP transactions, in accordance with 
section 777A(d)(2) of the Act. For Timken's CEP sales, we based the CEP 
on delivered prices to unaffiliated purchasers in the United States. In 
accordance with section 772(d)(1) of the Act, we made deductions from 
the starting price for billing adjustments, movement expenses, 
discounts, commissions, rebates and re-packing expenses. Movement 
expenses included expenses for foreign inland freight from the plant to 
the port of exportation, domestic brokerage and handling, international 
freight, marine insurance, U.S. brokerage and handling, U.S. duty, U.S. 
inland freight, U.S. warehousing expenses, distributor warehousing 
expenses, and inland freight from the warehouse to the unaffiliated 
U.S. customer. We made adjustments to Timken's reported ISEs, 
commissions, rebates, international movement expenses (ocean freight 
and U.S. brokerage) and U.S. warehouse expense to account for failures 
at verification. See the ``Partial AFA'' section of this notice. In 
addition, we adjusted Timken's reported distributor warehouse and 
inland freight from the warehouse to the unaffiliated U.S. customer to 
account for minor corrections presented at verification. See CEP 
Verification Report at 1 to 3 and Yantai Timken Final Analysis 
Memorandum at 4 and 5. In accordance with section 772(d)(1) of the Act, 
we additionally deducted credit expenses, iICCs and ISEs from the U.S. 
price, all of which relate to commercial activity in the United States. 
In accordance with section 772(d)(1) of the Act, we calculated Yantai 
Timken's credit expenses and ICCs based on the Federal Reserve short-
term rate. Finally, we deducted CEP profit in accordance with sections 
772(d)(3) and 772(f) of the Act. See Yantai Timken Prelim Analysis 
Memorandum at 2-5.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using an FOP methodology if: (A) the merchandise is 
exported from an NME country; and (B) 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 FOPs because the presence of government controls on 
various aspects of these economies renders price comparisons and the 
calculation of production costs invalid under our normal methodologies.
    FOPs include: (1) hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4)

[[Page 2522]]

representative capital costs. We based our determination of NV on 
Yantai Timken's reported FOPs for materials, energy (with the 
exceptions discussed above), labor, by-products, and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value FOPs, but when a 
producer sources an input from a market economy and pays for it in 
market-economy currency, the Department will normally value the factor 
using the actual price paid for the input. See 19 CFR 351.408(c)(1); 
See also Lasko Metal Products v. United States, 43 F. 3d 1442, 1445-
1446 (Fed. Cir. 1994). Yantai Timken reported that a significant 
portion of at least one of its raw material inputs was sourced from a 
market-economy country and paid for in a market-economy currency. See 
Yantai Timken's October 4, 2004, Section D response at page D-16. 
Pursuant to 19 CFR 351.408(c)(1), we used Yantai Timken's verified 
actual price for inputs purchased from a market-economy supplier and 
paid for in a market-economy currency, except when prices may have been 
distorted by subsidies.
    With regard to both the Indian import-based surrogate values and 
the market-economy input values, we have disregarded prices that we 
have reason to believe or suspect may be subsidized. We have reason to 
believe or suspect that prices of inputs from India, 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 
infer that all exports to all markets from these countries may be 
subsidized. See Certain Helical Spring Lock Washers from the People's 
Republic of China; Final Results of Administrative Review, 61 FR 66255 
(December 17, 1996) and accompanying Issues and Decision Memorandum, at 
Comment 1; Automotive Replacement Glass Windshields From the People's 
Republic of China: Final Results of Administrative Review, 69 FR 61790 
(October 21, 2004) and accompanying Issues and Decision Memorandum, at 
Comment 5; and, China National Machinery Import & Export Corporation v. 
United States, 293 F. Supp. 2d 1334 (CIT 2003), aff'd, 104 Fed. Appx. 
183 (Fed. Cir. 2004). We are also guided by the legislative history not 
to conduct a formal investigation to ensure that such prices are not 
subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, the Department 
was instructed by Congress to base its decision on information that is 
available to it at the time it is making its determination. Therefore, 
we have not used prices from these countries either in calculating the 
Indian import-based surrogate values or in calculating market-economy 
input values. In instances where a market-economy input was obtained 
solely from suppliers located in these countries, we used Indian 
import-based surrogate values to value the input.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on Yantai Timken's FOPs for the POR. To calculate NV, the per-
unit factor quantities were multiplied by publicly available Indian 
surrogate values (except as noted below). In selecting the surrogate 
values, we considered the quality, specificity, and contemporaneity of 
the data.
    We valued packing material inputs using the weighted-average unit 
import values derived from the World Trade Atlas[reg] online (``Indian 
Import Statistics''), which were published by the Directorate General 
of Commercial Intelligence and Statistics (``DGCI&S''), Ministry of 
Commerce of India, were reported in rupees and are contemporaneous with 
the POR. See memoranda to the file from Eugene Degnan, Case Analyst, 
through Wendy Frankel and Robert Bolling, ``Preliminary Results of 
Review of Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Factors of Production 
Valuation Memorandum for the Preliminary Results of Review,'' dated 
June 30, 2005 (``Factor Valuation Memorandum'') and Yantai Timken Final 
Analysis Memorandum. Where we could not obtain publicly available 
information contemporaneous with the POR with which to value factors, 
we adjusted the surrogate values using the Indian Wholesale Price Index 
(``WPI'') as published in the International Financial Statistics of the 
International Monetary Fund. We adjusted Yantai Timken's reported 
factors for wooden pallets and packing labels to account for minor 
corrections to the response: See FOP Verification Report at 23-24 and 
Yantai Timken Final Analysis Memorandum at 7. We also revised the 
factor consumption rate of boxes, packing boards and packing buttons to 
account for findings at verification. See FOP Verification Report at 
23-24 and Yantai Timken Final Analysis Memorandum at 8.
    We adjusted the Indian surrogate values for packing materials to 
account for freight delivery charges. Specifically, we calculated the 
surrogate freight charges based on the shorter of the reported distance 
from the domestic supplier to the factory or the distance from the 
nearest seaport to the factory. See Yantai Timken's November 30, 2005, 
case brief at 12. We made no freight adjustments to raw material prices 
for those materials which Yantai Timken purchased from market-economy 
suppliers on a delivered basis. See Yantai Timken's October 4, 2004, 
Section D response (``DQR'') at D-10 to D-12 and exhibits D-5 and D-6. 
For raw materials purchased from a market-economy supplier on an FOB 
basis, we calculated a surrogate freight value using the distance from 
the port of import to the factory. See DQR at D-12 and exhibit D-7. 
This adjustment is in accordance with the decision of the Federal 
Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 
1997).
    To value electricity, we used values from the International Energy 
Agency (``IEA'') to calculate a surrogate value in India for 2000, 
adjusted for inflation. The Petitioner was the only interested party to 
submit information or comments regarding surrogate values for 
electricity on the record. However, the submitted value was less 
contemporaneous than the 2000 value reported by the IEA, which has been 
used in previous cases. See Notice of Final Determination of Sales at 
Less Than Fair Value: Chlorinated Isocyanurates From the People's 
Republic of China, 70 FR 24502 (May 10, 2005) and accompanying Issues 
and Decision Memorandum, at Comment 5; and, Amended Final Determination 
of Sales at Less Than Fair Value: Magnesium Metal from the People's 
Republic of China, 70 FR 15838 (March 29, 2005). Further, the 
Department was unable to find a more contemporaneous surrogate value 
than the 2000 value reported by the IEA. Therefore, we used the 
International Energy Agency 2000 Indian price for electricity to the 
POR, as adjusted for inflation. We adjusted Yantai Timken's factor 
consumption rate for electricity to account for findings at 
verification. See FOP Verification Report at 16-19 and attachment IV. 
See also Yantai Timken Final Analysis Memorandum at 9.
    To value natural gas, we used values obtained from https://
www.indiainfoline.com in June 2000, used in the Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Structural Steel Beams From The People's Republic 
of China, 66 FR 67197, 67202 (December 28, 2001), as unchanged in the 
Notice of Final Determination of Sales at Less Than Fair Value: 
Structural Steel Beams From

[[Page 2523]]

Germany, 67 FR 35497 (May 20, 2002), and reported in Yantai Timken's 
November 17, 2004, surrogate value submission. See letter from Yantai 
Timken, ``Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Administrative Review 
(6/1/03-5/31/04): Submission of Yantai Timken's Surrogate Country 
selection and Potential Surrogate Values,'' at page 3 and exhibit 3. 
Yantai Timken was the only interested party to submit information or 
comments regarding surrogate values for natural gas on the record. In 
addition, we were unable to find a more contemporaneous surrogate 
value. Therefore, we adjusted this value for inflation. We adjusted 
Yantai Timken's factor consumption rate for natural gas to account for 
minor corrections to the response and for other findings at 
verification. See FOP Verification Report at 3, 20-21 and verification 
exhibit 1B. See also Yantai Timken Final Analysis Memorandum at 9-10, 
and Issues and Decisions Memorandum at Comment 8.
    For direct labor, indirect labor, SG&A labor and packing labor, 
consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based 
wage rate as reported on Import Administration's home page, Import 
Library, Expected Wages of Selected NME Countries, revised in November 
2004, https://ia.ita.doc.gov/wages/02wages/02wages.html. The source of 
these wage rate data on the Import Administration's web site is the 
Yearbook of Labour Statistics 2002, ILO, (Geneva: 2002), Chapter 5B: 
Wages in Manufacturing. The years of the reported wage rates range from 
1996 to 2002. Because this regression-based wage rate does not separate 
the labor rates into different skill levels or types of labor, we have 
applied the same wage rate to all skill levels and types of labor 
reported by each respondent.
    To value factory overhead, depreciation, selling, general and 
administrative expense, interest expenses and profit, we used the 2003 
audited financial statements for two Indian producers of tapered roller 
bearings, SKF Bearings India Ltd., and Timken India Limited. See Final 
Results Surrogate Value Memorandum for a full discussion of the 
calculation of these ratios from the Indian companies' financial 
statements.
    In order to demonstrate that prices paid to market-economy sellers 
for some portion of a given input are representative of prices paid 
overall for that input, the amounts purchased from the market-economy 
supplier must be meaningful. See Antidumping Duties; Countervailing 
Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997). Where the 
quantity of the input purchased from market-economy suppliers is 
insignificant, the Department will not rely on the price paid by an NME 
producer to a market-economy supplier because it cannot have confidence 
that a company could fulfill all its needs at that price. Yantai 
Timken's reported information demonstrates that the quantity of steel 
purchased from a market economy source used to produce cups and cones 
is significant. See Yantai Timken's October 4, 2004 Section D response 
at page D-10. Therefore, we used the actual price Yantai Timken paid 
for this steel in our calculations.
    Yantai Timken reported that it also recovered scrap steel from the 
production of cups, cones and rollers resale. We offset Yantai Timken's 
cost of production by the amount of scrap that Yantai Timken reported 
that it sold. See Factor Valuation Memorandum at 3-4 and attachment 3.
    Finally, we used Indian Import Statistics for the POR to value 
material inputs for packing which, for Yantai Timken, are wooden 
pallets, plastic covers, cardboard boxes, packing labels, plastic 
strips and packing cardboard. We used Indian Import Statistics for the 
POR for wooden pallets, plastic covers, cardboard boxes and plastic 
strips, and packing cardboard. See Factor Valuation Memorandum at page 
4 and attachment 3 for wooden pallets, plastic covers, cardboard boxes 
and plastic strips. See Yantai Timken Final Analysis Memorandum at 
Attachment VIII for packing labels and packing cardboard. We were 
unable to find contemporaneous information for packing labels. 
Therefore, we used the Indian Import Statistics for packing labels from 
a previous period adjusted for inflation in our calculations.

Final Results of Review

    We determine that the following dumping margins exist for the 
period June 1, 2003, through May 31, 2004:

------------------------------------------------------------------------
                                                            Weighted-
                 Exporter/manufacturer                    average margin
                                                            percentage
------------------------------------------------------------------------
China National Machinery Import & Export Corporation              0.00
 [ast][ast]............................................
Luoyang Bearing Corporation (Group) [ast][ast].........           0.18
Yantai Timken Company Limited..........................          41.58
------------------------------------------------------------------------
[ast][ast] These rates are de minimis.

Assessment Rates

    The Department will issue appraisement instructions directly to 
U.S. Customs and Border Protection (``CBP'') within 15 days of 
publication of these final results of administrative review. In 
accordance with 19 CFR 351.212(b)(1), we have calculated importer-
specific assessment rates for merchandise subject to this review. For 
LYC and CMC, we divided the total dumping margins of its reviewed sales 
by the total entered value of its reviewed sales for each applicable 
importer to calculate ad-valorem assessment rates. For Yantai Timken, 
we divided the total dumping margins of its reviewed sales by the total 
quantity of its reviewed sales for each applicable importer to 
calculate per-unit assessment rates. We will direct CBP to assess the 
resulting assessment rates against the entered customs values for the 
subject merchandise on each importer's entries under the relevant order 
during the POR.
    To determine whether the duty assessment rates were de minimis, in 
accordance with the requirement set forth in 19 CFR 351.106(c)(2), we 
calculated importer-specific ad valorem rates. For CMC and LYC, we 
aggregated the dumping margins calculated for all U.S. sales to each 
importer and divided this amount by the entered value of the sales to 
each importer. For further details see CMC Final Analysis Memo and LYC 
Final Analysis Memo. Where an importer-specific ad valorem rate is de 
minimis, we will order CBP to liquidate appropriate entries without 
regard to antidumping duties.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of this notice of final results of administrative review 
for all shipments of TRBs from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by Section 751(a)(1) of the Act: (1) The cash deposit rates 
for the reviewed companies will be the rates shown above, except that 
the Department shall require no deposit of estimated antidumping duties 
for firms whose weighted-average margins are less than 0.5 percent and 
therefore de minimis; (2) for previously reviewed or investigated 
companies not listed above that have a separate rate, the cash deposit 
rate will continue to be the company-specific rate published for the 
most recent period; (3) the cash deposit rate for all other PRC 
exporters will be 60.95 percent, the current PRC-wide rate; and (4) the 
cash deposit rate for all non-PRC exporters will be the rate applicable 
to the PRC exporter that supplied that exporter. These deposit 
requirements, when imposed, shall remain in effect until publication of 
the

[[Page 2524]]

final results of the next administrative review.

Notification of Interested Parties

    This notice also serves as a final 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 the antidumping duties occurred and the subsequent 
assessment of double antidumping duties. This notice also serves as a 
reminder to parties subject to administrative protective orders 
(``APOs'') of their responsibility concerning the return or destruction 
of proprietary information disclosed under APO in accordance with 19 
CFR 351.305, which continues to govern business proprietary information 
in this segment of the proceeding. Timely written notification of the 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and terms of an APO is a violation which is subject to 
sanction.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: January 9, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.

APPENDIX

List of Comments and Issues in the Decision Memorandum

CMC

Comment 1: Skilled Packing Labor Citing Error for CMC

LYC

Comment 2: Application of Adverse Facts Available to Value Certain 
Merchandise of LYC
Comment 3: Application of Adverse Facts Available to Value Inventory 
Carrying Costs (``ICC'') for Certain Constructed Export Price (``CEP'') 
Sales
Comment 4: Federal Reserve Board Prime Rate Used to Value ICC
Comment 5: Excise Duties on Closing Stock
Comment 6: Calculation of the Surrogate Value for the Raw Material 
Input ``Cage''

YANTAI TIMKEN

Comment 7: The Department Should Find That Yantai Timken Was 
Cooperative and Use Yantai Timken's Data as Modified by the Results of 
Verification.
Comment 8: Yantai Timken's Verification Results and Level of 
Cooperation: Natural Gas
Comment 9: Yantai Timken's Verification Results and Level of 
Cooperation: Electricity
Comment 10: Yantai Timken's Verification Results and Level of 
Cooperation: Supplier's Distances for Packing Materials
Comment 11: Yantai Timken's Verification Results and Level of 
Cooperation: Indirect Selling Expenses in the U.S. Market
Comment 12: Yantai Timken's Verification Results and Level of 
Cooperation: Warehouse Expense
Comment 13: Yantai Timken's Verification Results and Level of 
Cooperation: Marine Insurance
Comment 14: Yantai Timken's Verification Results and Level of 
Cooperation: International Freight
Comment 15: Yantai Timken's Verification Results and Level of 
Cooperation: Rebates and Commissions
Comment 16: Yantai Timken's Request to Supplement the Record
Comment 17: The Department Should Determine a Margin That Is Not 
Punitive
Comment 18: Continued Application of the Order to Yantai Timken Is 
Necessary to Offset Dumping
Comment 19: Separate Rate Status for Yantai Timken
[FR Doc. E6-411 Filed 1-16-06; 8:45 am]
BILLING CODE 3510-DS-S