Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent To Rescind in Part, 40069-40075 [06-6238]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 135 (Friday, July 14, 2006)]
[Notices]
[Pages 40069-40075]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-6238]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, From the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review and Notice of Intent To Rescind 
in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce
SUMMARY: The Department of Commerce (``the Department'') is conducting 
the eighteenth administrative review of the

[[Page 40070]]

antidumping duty order on tapered roller bearings and parts thereof, 
finished or unfinished, (``TRBs'') from the People's Republic of China 
(``PRC''), covering the period June 1, 2004, through May 31, 2005. We 
have preliminary determined that sales have not been made below normal 
value by China National Machinery Import & Export Corporation 
(``CMC''). If these preliminary results are adopted in our final 
results of this review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess to antidumping duties on entries of 
subject merchandise exported by CMC during the period of review 
(``POR''). We are also preliminary rescinding the review with respect 
to four exporters because none of these respondents made shipments of 
subject merchandise during the POR.
    Interested parties are invited to comment on these preliminary 
results. We intend to issue the final results no later than 120 days 
from the date of publication of this notice.

DATES: Effective Date: July 14, 2006.

FOR FURTHER INFORMATION CONTACT: Ryan Radford or Eugene Degnan, 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-
4037 and (202) 482-0414, respectively.

Background

    On June 1, 2005, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
TRBs from the PRC for the period June 1, 2004, through May 31, 2005. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation: Opportunity to Request Administrative Review, 70 FR 
31422 (June 1, 2005). On June 30, 2005, The Yantai Timken Company 
(``Yantai Timken'' or ``Petitioner'') requested that the Department 
conduct an administrative review of the antidumping duty order covering 
TRBs from the PRC for entries of subject merchandise produced and/or 
exported by CMC, Chin Jun Industrial Ltd. (``Chin Jun''), Peer Bearing 
Company--Changshan (``CPZ''), Weihai Machinery Holding (Group) Company, 
Ltd. (``Weihai Machinery''), and Zhejiang Machinery Import & Export 
Corp (``ZMC''). Additionally, on June 30, 2005, Wanxiang Group Company 
(``Wanxiang'') requested the Department conduct an administrative 
review of its sales. On July 21, 2005, the Department published in the 
Federal Register a notice of the initiation of the antidumping duty 
administrative review of TRBs from the PRc for the period June 1, 2004, 
through May 31, 2005, for CMC, Chin Jun, CPZ, Weihai Machinery, Yantai 
Timken, and ZMC. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 70 FR 42028 
(July 21, 2005) (``Initiation Notice''). On August 29, 2005, the 
Department published in the Federal Register a notice of the initiation 
of the antidumping duty administrative review of TRBs from the PRC from 
Wanxiang for the period June 1, 2004, through May 31, 2005. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 70 FR 51009 (August 29, 
2005).
    On August 15, 2005, the Department issued its antidumping duty 
questionnaire to all of the above respondents.
    On July 1, 2005, Wanxiang withdrew its request for an 
administrative review. On September 6, 2005, CPZ reported to the 
Department that it had no exports of subject merchandise during the POR 
and asked the Department to rescind the antidumping duty administrative 
review for CPZ. Also, on September 6, 2005, Chin Jun reported to the 
Department that it is a dormant company, has not been in business for 
years, and had no sales of subject merchandise during the POR. On 
September 12, 2005 the Petitioner withdrew its request for a review of 
Yantai Timken's 2004-2005 exports of subject merchandise. On October 7, 
the Department sent e-mail correspondence to the U.S. embassy in 
Beijing asking for help in locating Weihai Machinery and ZMC. See 
Memorandum to the File from Laurel LaCivita dated October 7, 2005. On 
October 18, 2005, the Department sent a letter to Mr. Liu Danyang, 
Division Chief of the People's Republic of China, Ministry of Commerce, 
Bureau of Fair Trade for Imports, requesting Mr. Danyang to assist the 
Department in locating the business addresses of Weihai Machinery and 
ZMC. See Letter from Wendy Frankel to Mr. Liu Danyang dated October 18, 
2005.
    On October 26, 2005, the Department published a notice of partial 
rescission of the antidumping duty administrative review on TRBs from 
the PRC rescinding this review with respect to Yantai Timken and 
Wanxiang. See Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from the People's Republic of China: Notice of Partial 
Rescission of the Antidumping Duty Administrative Review, 70 FR 61788 
(October 26, 2005) (``Rescission Notice.'').
    On February 28, 2006, the Department published a notice in the 
Federal Register extending the time limit for the preliminary results 
of review until May 1, 2006. See Tapered Roller Bearings and Parts 
Thereof, Finished or Unfinished, from the People's Republic of China: 
Extension of Time Limit for the Preliminary Results of the Antidumping 
Duty Administrative Review, 71 FR 10010 (February 28, 2006). 
Additionally, on April 28, 2006, the Department published a notice in 
the Federal Register further extending the time limit for the 
preliminary results of review until June 30, 2006. See Tapered Roller 
Bearings and Parts Thereof, Finished or Unfinished, from the People's 
Republic of China: Extension of Time Limit for Preliminary Results of 
the Antidumping Duty Administrative Review, 71 FR 25149 (April 28, 
2006).
    On October 18, 2005, ZMC reported that it does not exist anymore 
and subsequently responded on November 4, 2005, that it had no sales of 
subject merchandise during the POR. On June 15, 2006, the Department 
sent a letter to Mu. Huang Shan, an attorney in Shanghai, China, who 
assisted the Department in the previous review to help locate Weihai 
Machinery and to obtain its response. See Letter from Wendy Frankel to 
Mr. Huang Shan dated June 15, 2006. In our June 15 letter, we again 
requested that Mr. Shan assist us in contacting Weihai Machinery. On 
June 19, 2006, Mr. Shan responded that he was unable to contact Weihai 
Machinery with the contact information that he had on file. Mr. Shan 
also stated that last year he was told, but could not confirm, that 
Weihai Machinery was in the process of liquidating. See Memorandum to 
the File from Ryan Radford, Correspondence with Huang Shan regarding 
bankruptcy situation of Weihai Machinery, dated June 19, 2006.
    On June 19, 2006, we again asked our U.S. Embassy in Beijing for 
assistance in contacting Weihai Machinery. On June 19, 2006, the 
Embassy responded that the recipient of the questionnaire sent by the 
Department of Weihai Machinery stated upon inquiry that Weihai 
Machinery was no longer in business. Additionally, on June 23, 2006, 
the Embassy informed us that a completely different business was not at 
the address and telephone number that the Department has on file for 
Weihai Machinery.

[[Page 40071]]

CMC

    CMC submitted its Section A questionnaire response on September 13, 
2005, and its Sections C and D response on September 30, 2005. The 
Department issued a Section A supplemental questionnaire to CMC on 
January 12, 2006, to which CMC responded on February 10, 2006. The 
Department issued a Sections C and D supplemental questionnaire to CMC 
on January 23, 2006. CMC provided its response on February 21, 2006. We 
issued a second supplemental questionnaire for Sections A, C, and D on 
March 15, 2006, and a third supplemental questionnaire for Sections A, 
C, and D on March 21, 2006. CMC responded to both of these 
questionnaires on March 31, 2006. On April 7, 2006, the Department 
issued its fourth supplemental questionnaire. CMC provided its fourth 
supplemental questionnaire response on April 12, 2006.

Notice of Intent To Rescind in Part

    Pursuant to 19 CFR 351.213(d)(3), the Department may rescind an 
administrative review, in whole or in part, with respect to a 
particular exporter or producer, if the Secretary concludes that, 
during the period covered by the review, there were no entries, 
exports, or sales of the subject merchandise. The Department explains 
this practice in the preamble to the Department's regulations.
    See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27317 
(May 19, 1997) (``Preamble''); see also Stainless Steel Plate in Coils 
From Taiwan: Preliminary Results and Rescission in Part of Antidumping 
Duty Administrative Review, 67 FR 5789, 5790 (February 7, 2002), and 
Stainless Steel Plate in Coils from Taiwan: Final Rescission of 
Antidumping Duty Administrative Review, 66 FR 18610 (April 10, 2001). 
To confirm CPZ's Chin Jun's, and ZMC's respective claims that each had 
no U.S. sales of subject merchandise nor shipments of subject 
merchandise to the United States during the POR, the Department 
conducted a customs inquiry. See Memorandum to the File from Laurel 
LaCivita, Tapered Roller Bearings and parts Thereof, from the People's 
Republic of China, No Shipment Inquiry for Chin Jun Industrial Ltd., 
and peer Bearing Company--Changshan, dated November 4, 2005, and see 
Memorandum to the File from Ryan Radford, Tapered Roller Bearings and 
Parts Thereof, from the People's Republic of China, No Shipment Inquiry 
for Zhijiang Machinery Import & Export Corporation, dated June 29, 
2006. We have received no evidence that Chin Jun, CPZ, or ZMC had any 
shipments to the United States of subject merchandise during the POR. 
Therefore, pursuant to 19 CFR 351.213(d)(3), the Department intends to 
rescind this review as to Chin Jun, CPZ, and ZMC. Additionally, the 
customs inquiry provided no evidence that Weihai Machinery had any 
shipments of subject merchandise during the POR. Therefore, because 
information on the record indicates that Weihai Machinery had no 
shipments and may be out of business, the Department also preliminarily 
rescinds this review with respect to Weihai Machinery, but will 
continue to pursue this issue for the final results. The Department may 
take additional steps to confirm that these companies had no sales, 
shipments or entries of subject merchandise to the United States during 
the POR.
    Therefore, for this administrative review, the Department will 
review only those sales of subject merchandise made by CMC.

Period of Review

    The POR is June 1, 2004, through May 31, 2005.

Scope of the Order

    Merchandise covered by this antidumping order includes TRBs and 
parts thereof, finished and unfinished, from the PRC; flange, take up 
cartridge, and hangar 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.

Verification of Responses

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(``the Act''), we verified information provided by CMC. We used 
standard verification procedures of constructed export price (``CEP'') 
and export price (``EP'') sales, including on-site inspection of the 
manufacturers' and exporters' facilities, and examination of relevant 
sales and financial records.
    The Department conducted a CEP sales verification at the facilities 
of CMC's subsidiary, YCB International Inc., in Bolingbrook, IL, from 
April 18, 2006, through April 21, 2006. See Verification of the 
Constructed Export Sales Reported by CMC in the Antidumping Duty 
Administrative Review of Tapered Roller Bearings and Parts Thereof, 
from the People's Republic of China, dated June 30, 2006 (``CMC CEP 
Verification Report''). The Department conducted the sales and factors 
of production (``FOP'') verification at CMC's facilities in Yantai, 
Shandong Province, from May 22, 2006, through May 26, 2006. Our 
verification results are outlined in the verification report for CMC. 
For further details, see Verification of Sales and Factors of 
Production Reported by CMC in the Antidumping Duty Administrative 
Review of Tapered Roller Bearings and Parts Thereof, from the People's 
Republic of China, dated June 30, 2006 (``CMC Verification Report'').

Surrogate Value Information

    On November 2, 2005, the Department requested interested parties to 
submit comments on surrogate values. On December 7, 2005, we received 
surrogate value information from Petitioner. No other party responded 
to our request for information.

Nonmarket-Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. See Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From the People's Republic of 
China; Preliminary Results of Antidumping Duty Administrative Review 
and Notice of Intent to Rescind in Part, 70 FR 39744 (July 11, 2005). 
No party to this proceeding has contested such treatment. Accordingly, 
we calculated normal value (``NV'') in accordance with section 773(c) 
of the Act, which applies to NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV on the NME 
producer's FOPs, valued in a surrogate market-economy country or 
countries considered to be appropriate by the Department. IN accordance 
with section 773(c)(4) of the Act, in valuing the FOPs, the Department 
shall utilize, to the extent possible, the prices or costs of FOPs in 
one or more market-economy

[[Page 40072]]

countries that are: (1) At a level of economic development comparable 
to that of the NME country; and (2) significant producers of comparable 
merchandise. The sources of the surrogate factor values are discussed 
under the ``Normal Value'' section below and in the memorandum to the 
file from Ryan Radford, 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, 2006 (`` Factor Valuation 
Memorandum'').
    The Department has determined that India, Indonesia, Sri Lanka, the 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See Memorandum from Ron Lorentzen to Wendy 
Frankel; Administrative Review of Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, (``TRBs''), from the People's 
Republic of China (PRC): Request for a List of Surrogate Countries 
``Policy Memo''), dated October 11, 2005. Customarily, we select an 
appropriate surrogate country identified in the Policy Memo based on 
the availability and reliability of data from the countries that are 
significant producers of comparable merchandise.
    On November 16, 2005, Petitioner submitted comments on the 
surrogate country selection. Petitioner stated that India is the 
appropriate surrogate country because India is at a comparable economic 
level and is a significant producer of subject merchandise. No other 
party to the proceeding submitted comments or information concerning 
the selection of a surrogate country.
    On February 17, 2006, the Department issued its surrogate country 
memorandum in which we addressed Petitioner's comments. See Memorandum 
to the File titled, ``Antidumping Duty Administrative Review of Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from the 
People's Republic of China; Selection of a Surrogate Country,'' dated 
February 17, 2006 (``Surrogate Country Memorandum''). Thus, a 
Department has evaluated Petitioner's concerns and comments and has 
determined India is the appropriate surrogate country. See Surrogate 
Country Memorandum.
    The Department used India as the primary surrogate country, and, 
accordingly, has calculated NY using Indian prices to value the PRC 
producers' FOPs, when available and appropriate. See Surrogate Country 
Memorandum and Factor Valuation Memorandum. We have obtained and relied 
upon publicly available information wherever possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review, interested parties may submit 
publicly available information to value FOPs within 20 days after the 
date of publication of the preliminary results or review.

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 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.
    We have considered whether CMC is eligible 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 Administrative Review, 62 FR 61276, 61279 
(November 17, 1997).
    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 (May 6, 1991) (``Sparklers'') 
at Comment 1, as modified by Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 
22585, 22586-87 (May 2, 1994). 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 export activities. See Silicon Carbide 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).

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 
Sparkers at Comment 1 (May , 1991).

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 he 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 preliminarily 
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 o 
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 Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995).
    CMC placed on the record statements and documents to demonstrate 
the absence of de jure control. In its questionnaire responses, CMC 
reported that it is not administratively subject to any national, 
provincial or local government agencies. See CMC's September 13, 2005, 
Section A response (``CMC AQR'') at 4. CMC submitted a copy of its 
business license issued by the State Administration of Industry and

[[Page 40073]]

Commerce. See CMC AQR at 4 and Exhibit 3. CMC reported that the subject 
merchandise did not appear on any government list regarding export 
provisions or export licensing in effect during the POR. CMC reported 
that its business license provides for a broad range of business 
activities and does not constrain or limit its activities with respect 
to the sale of the subject merchandise. Furthermore, CMC stated that 
The China Chamber of Commerce of Machinery and Electronic Exporters 
does not coordinate or interfere with CMC's export activities. CMC 
submitted a copy of the Foreign Trade Law of the PRC and excerpts from 
the ``PRC Regulations for Transformation of Operational Mechanism of 
State-Owned Industrial Enterprises (1992),'' to demonstrate that there 
is no centralized control over its export activities. See CMC AQR at 5 
and Exhibit 4. Through questionnaire responses and at verification, we 
examined each of the related laws and CMC's business license and 
preliminarily 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 CMC's business license.
    In support of an absence of de facto control, CMC reported the 
following: (1) CMC sets the prices of the subject merchandise exported 
to the United States by direct arm's-length negotiations with its 
customers, and the prices are not subject to review by or guidance from 
any government organization; (2) CMC's sales transactions are not 
subject to the review or approval of any organization outside the 
company; (3) CMC is not required to notify any government authorities 
of its management selection; and (4) CMC is free to spend its export 
revenues and its profit can be used for any lawful purpose. See CMC AQR 
at pages 7-8.
    The evidence placed on the record of this administrative review by 
CMC demonstrates an absence of government control, both in law and in 
fact, with respect of CMC's exports of the merchandise under review. As 
a result, for the purposes of these preliminary results, the Department 
is granting a separate, company-specific rate to CMC, the exporter 
which shipped the subject merchandise to the United States during the 
POR.

Date of Sale

    19 CFR 351.401(i) 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 questionnaire responses and the sales 
documentation that CMC placed on the record, we preliminarily determine 
that invoice date is the most appropriate date of sale for CMC. We made 
this determination based on record evidence which demonstrates that 
CMC's invoices establish the material terms of sale to the extent 
required by our regulations. Thus, the record evidence does not rebut 
the presumption that invoice date is the proper date of sale. See 
Notice of Preliminary Determination of Sales at Less Than Fair Value: 
Saccharin From the People's Republic of China, 67 FR 79049, 79054 
(December 27, 2002), unchanged in Notice of Final Determination of 
Sales at Less Than Fair Value: Saccharin From the People's Republic of 
China, 68 FR 27530 (May 20, 2003).

Normal Value Comparisons

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

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we used EP for 
CMC's U.S. sales where the subject merchandise was sold directly to the 
unaffiliated customers in the United States prior to importation and 
because CEP was not otherwise indicated.

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 merchandiser or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under section 772(c) and 
(d). In accordance with section 772(b) of the Act, we used CEP for 
CMC's sales where CMC sold subject merchandise to its affiliated 
company in the United States, which in turn sold subject merchandise to 
unaffiliated company in the United States, which in turn sold subject 
merchandise to unaffiliated U.S. customers.
    We compared NV to individual EP and CEP transactions, in accordance 
with section 777A(d)(2) of the Act.
    We calculated EP for CMC based on delivered prices to unaffiliated 
purchasers in the United States. We made deductions from the U.S. sale 
price for movement expenses in accordance with section 772(c)(2)(A) of 
the Act. These included foreign inland freight from the plant to the 
port of exportation and, where applicable, ocean freight and marine 
insurance. No other adjustments to EP were reported or claimed.
    We calculated CEP for CMC based on delivered prices unaffiliated 
purchasers in the United States. We made deductions from the U.S. sale 
price for movement expenses in accordance with section 772(c)(2)(A) of 
the Act. These included foreign inland freight from the plant to the 
port of exportation, ocean freight, marine insurance, U.S. customs 
duty, where applicable, U.S. inland freight from port to the warehouse, 
and U.S. inland freight from the warehouse to the customer. In 
accordance with section 772(d)(1) of the Act, the Department deducted 
credit expenses, inventory carrying costs and indirect selling expenses 
from the U.S. price, all of which relate to commercial activity in the 
United States. In accordance with section 773(a) of the Act, we 
calculated CMC's credit expenses and inventory carrying costs based on 
the Federal Reserve prime short-term rate. Finally, we deducted CEP 
profit, in accordance with sections 772(d)(3) and 772(f) of the Act. 
See CMC Preliminary Results of Administrative Review: Program Analysis 
Memorandum (``Program Analysis Memo''), dated June 30, 2006.
    At verification, we found CMC did not provide any of its U.S. 
brokerage and handling expenses. See CMC CEP Verification Report. Thus, 
for the preliminary results, we calculated brokerage and handling 
expenses based on CMC's financial statements. See Program Analysis 
Memo. Additionally, at verification, CMC reported that it incorrectly 
reported certain payment dates. See CMC CEP Verification Report. For 
the preliminary results, we have

[[Page 40074]]

corrected these payment dates and recalculated credit expenses for the 
relevant sales. See Program Analysis Memo.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using an FOP methodology if: (1) The merchandise is 
exported from an NME country; and (2) the information does not permit 
the calculate 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 control 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) representative capital costs. We used the FOPs reported by 
respondents for materials, energy, 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 may 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). CMC reported that a significant portion of one of its raw 
material inputs was sourced from a market-economy country and paid for 
in market-economy currencies. See CMC's September 30, 2005, Section D 
response at page D-4 and D-7. See Factor Valuation Memorandum for 
identification of this raw material input. Pursuant to 19 CFR 
351.408(c)(1), we used the actual price paid by CMC for this input 
purchased from a market-economy supplier and paid for in a market-
economy currency, except when prices may be distorted by subsidies. See 
discussion below under Factor Valuations.
    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 to believe 
or suspect that prices of inputs from India, Indonesia, South Korea, 
and Thailand may be 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 form 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), at Comment 1; and, China National Machinery Import & Export 
Corporation v. United States, 293 F. Supp. 2d 1334 (CIT 2003), as 
affirmed by the Federal Circuit, 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 FOPs reported by CMC for the POR. to calculate NC, the 
reported 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. As appropriate, we adjusted input prices 
by including freight costs to make them delivered prices. Specifically, 
we added to Indian import surrogate values a 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 (i.e., where the sales terms for the market-economy 
inputs were not delivered to the factory). 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). For a detailed 
description of all surrogate values used for respondents, See Factor 
Valuation Memorandum.
    Except as noted below, we valued raw 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, which were reported in 
rupees and are contemporaneous with the POR. See Factor Valuation 
Memorandum. Where we could not obtain publicly valuable 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.
    To value electricity, we used values from the International Energy 
Agency (``IEA'') to calculate a surrogate value in India. The 
Department was unable to find a more contemporaneous surrogate value 
than the 2000 value reported by the IEA. Therefore we in inflated the 
IEA 2000 Indian price for electricity to the POR.
    For direct labor, indirect labor, selling general and 
administrative expenses (``SG&A'') labor, crate building 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 2005, https://ia.ita.doc.gov/wages. The source of these wage 
rate data on the Import Administration's Web site is the Yearbook of 
Labour Statistics 2003, ILO, (Geneva: 2003), Chapter 5B: Wages in 
Manufacturing. The years of the reported wage rates range from 1996 to 
2003. 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 CMC.
    We used Indian transports information in order to value the 
freight-in cost of the raw materials. The Department determined the 
best available information for valuing truck freight to be from 
www.infreight.com. This source provides daily rates from six major 
points of origin to five destinations in India during the POR. The 
Department obtained a price quote on the first day of each month of the 
POR from each point or origin to each destination and averaged the data 
accordingly. See Factor Valuation Memorandum. Additionally, at 
verification, we found that CMC did not report the total round-trip 
distance from its main factory to other factories for the 
transportation of certain raw materials and certain semi-finished 
components. Thus, for the preliminary results, we have included these 
transportation costs into our calculation for surrogate values for 
certain raw materials. See Program Analysis Memo.

[[Page 40075]]

    Top value factory overhead, depreciation, SG&A, interest expenses 
and profit, we used the 2004 audited financial statements for two 
Indian producers of TRBs, SKF Bearings India Ltd., and Timken India 
Limited. See Factor Valuation 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. CMC's 
reported information demonstrates that the quantity of steel purchased 
from market-economy suppliers and used to produce cups and cones is 
significant See CMC's September 30, 2005, Section D response at page D-
7. Therefore, we used the actual price that CMC paid for the steel used 
to produce cups and cones in our calculations.
    CMC reported that it sourced the steel that it used to produce 
cages within the PRC. Therefore, we used Indian Import Statistics to 
value this input. CMC reported that it recovered steel scrap from the 
production of cups, cones, rollers and cages for resale. We offset 
CMC's normal value by the amount of scrap that CMC reported that sold. 
See Factor Valuation Memorandum for a complete discussion of scrap 
valuation.
    Finally, we used POR Indian Import Statistics to value material 
inputs for packing which, for CMC, are plastic film, plastic bags, 
plastic sleeves, large plastic bags, cardboard box, paper pallets, 
plastics strip, adhesive tape, and steel strips. See Factor Valuation 
Memorandum.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the following weighted-average 
dumping margins exist for the period June 1, 2004, through May 31, 
2005:

                            TRBs From the PRC
------------------------------------------------------------------------
                                                             Weighted-
                    Producer/exporter                     average margin
                                                             (percent)
------------------------------------------------------------------------
CMC.....................................................            0.00
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results. See 19 CFR 351.310(c). Any hearing, if 
requested, will be held 37 days after the date of publication of this 
notice. See 19 CFR 351.310(d). Interested parties may submit case 
briefs and/or written comments no later than 30 days after the date of 
publication of these preliminary results of review. See 19 CFR 
351.309(c)(ii). Rebuttal briefs and rebuttals to written comments, 
limited to issues raised in such briefs or comments, may be filed no 
later than 35 days after the date of publication. See 19 CFR 
351.309(d). The Department requests that parties submitting written 
comments also provide the Department with an additional copy of those 
comments on diskette. The Department will issue the final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments, within 120 days of 
publication of these preliminary results, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department will issue appropriate assessment instructions directly 
to CBP upon completion of this review. If these preliminary results are 
adopted in our final results of review, we will direct 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, 
except where the importer or customer's rate is zero or de minimis no 
duties will be assessed. Additionally, the Department will instruct CBP 
to assess antidumping duties for these rescinded companies (i.e., ZMC, 
CPZ, Weihai Machinery, and Chin Jun) at rates equal to the cash deposit 
of estimated antidumping duties required at the time of entry, or 
withdrawal from warehouse, for consumption, in accordance with 19 CFR 
351.212(c)(1)(i).

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 from the PRC entered, or withdrawn 
from warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(2)(C) of the Act: (1) For CMC, the cash 
deposit rate will be that established in the final results of these 
reviews, except if the rate is zero or de minimis no cash deposit will 
be required; (2) for previously investigated or reviewed PRC and non-
PRC exporters not listed above that have separate rates, the cash 
deposit rate will continue to be the exporter-specific rate published 
for the most recent period; (3) for all PRC exporters of subject 
merchandise which have not been found to be entitled to a separate 
rate, the cash deposit rate will be the PRC-wide rate of 60.95 percent; 
and (4) for all non-PRC exporters of subject merchandise which have not 
received their own rate, the cash deposit rate will be the rate 
applicable to the PRC exporters that supplied that non-PRC exporter. 
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: June 30, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. 06-6238 Filed 7-13-06; 8:45 am]
BILLING CODE 3510-DS-M