Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 41033-41040 [E8-16376]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 138 (Thursday, July 17, 2008)]
[Notices]
[Pages 41033-41040]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16376]


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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: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting 
the twentieth 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''), covering the 
period June 1, 2006, through May 31, 2007. We have preliminarily 
determined that sales have been made below normal value. 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 
antidumping duties on entries of subject merchandise during the period 
of review (``POR'') for which the importer-specific assessment rates 
are above de minimis.
    Interested parties are invited to comment on these preliminary 
results. We intend to issue the final results no later than 120 days 
from the date of publication of this notice.

EFFECTIVE DATE: July 17, 2008.

FOR FURTHER INFORMATION CONTACT: Lori Apodaca or Paul Stolz, 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-
4551 and (202) 482-4474, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 26, 2007, 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, 2006, through May 31, 2007. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity To Request Administrative Review, 72 FR 
30542 (June 1, 2007). On June 29, 2007, Koyo Corporation of U.S.A. 
(``Koyo'') requested that the Department conduct an administrative 
review of the duty order for entries of subject merchandise produced 
and/or exported by Yantai Timken Company Limited (``Yantai Timken''). 
Additionally, on June 29, 2007, Peer Bearing Company Changshan 
(``CPZ''), an exporter of TRBs, requested that the Department conduct 
an administrative review of its sales. On July 26, 2007, 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, 2006, through May 31, 2007, for CPZ and Yantai Timken. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 72 FR 41057 (July 26, 
2007). On September 4, 2007, the Department issued its antidumping duty 
questionnaire to CPZ and Yantai Timken.
    On October 5, 2007, the Department requested interested parties to 
submit comments on surrogate values. On October 19, 2007, we received a 
surrogate country submission from the Timken Company (``Petitioner''). 
On November 1, 2007, the Department received a surrogate values 
submission from Petitioner. On April 14, 2008, we received corrected 
factor values from Petitioner. On June 3, 2008, the Department received 
additional surrogate values from CPZ. On June 13, 2008, Petitioner 
submitted comments to the Department in response to CPZ's surrogate 
value comments.
    On March 4, 2008, the Department published a notice in the Federal 
Register extending the time limit for the preliminary results of review 
until June 30, 2008. 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 Antidumping Duty 
Administrative Review, 73 FR 11617 (March 4, 2008).

CPZ

    CPZ submitted its Section A questionnaire response on October 3, 
2007, its Section C response on October 31, 2007, and its Section D 
response on November 5, 2007. The Department issued a Sections A, C and 
D supplemental questionnaire to CPZ on April 2, 2008. CPZ submitted its 
Sections A, C and D supplemental questionnaire response on April 29, 
2008.

Yantai Timken

    Yantai Timken submitted a letter to the Department dated September 
25, 2007, stating that it will not be filing a questionnaire response 
as it had only a few exports to the United States, which were for use 
by its parent company, the Timken Company. See Letter from Yantai 
Timken to Department of Commerce, dated September 25, 2007 (``Non-
Participation Letter'').

Period of Review

    The POR is June 1, 2006, through May 31, 2007.

Scope of the Order

    Imports covered by this order are shipments of tapered roller 
bearings and parts thereof, finished and unfinished, 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. These products are currently classifiable under 
Harmonized Tariff Schedule of the United States (``HTSUS'') item 
numbers 8482.20.00, 8482.91.00.50, 8482.99.15, 8482.99.45, 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.

Non-Market 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 Tariff Act of 1930, as 
amended (``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: Final Results of 2003-
2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 
(January 17, 2006). 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 factors of production (``FOP'') when available information 
does not permit NV to be

[[Page 41034]]

determined under section 773(a) of the Act. The Act further instructs 
the Department to value FOPs based on the best available information in 
a surrogate market economy country or countries considered to be 
appropriate by the Department. See Section 773(c)(1) of the Act.
    When valuing the FOPs, the Department shall utilize, to the extent 
possible, the prices or costs of FOPs in one or more market economy 
countries that are: (1) at a level of economic development comparable 
to that of the NME country; and (2) significant producers of comparable 
merchandise. See Section 773(c)(4) of the Act. Further, the Department 
normally values all FOPs in a single surrogate country. See 19 CFR 
351.408(c)(2). The sources of the surrogate values (``SVs'') are 
discussed under the ``Normal Value'' section below and in the 
Memorandum to the File, ``Factors Valuations for the Preliminary 
Results of the Administrative Review,'' dated June 30, 2008 (``Factor 
Valuation Memorandum''), which is on file in the Central Records Unit, 
Room 1117 of the main Department building.
    The Department has determined that India, Indonesia, the 
Philippines, Egypt and Sri Lanka are countries comparable to the PRC in 
terms of economic development. See Memorandum from Ron Lorentzen to 
Robert Bolling; Antidumping Administrative Review of Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished (``Bearings''), 
from the People's Republic of China (PRC): Request for a List of 
Surrogate Countries, dated October 3, 2007. Once the economically 
comparable countries have been identified, we select an appropriate 
surrogate country by determining whether one of these countries is a 
significant producer of comparable merchandise and whether the data for 
valuing FOPs is both available and reliable.
    On October 19, 2007, 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 with 
the PRC and is a significant producer of subject merchandise.
    We have determined it appropriate to use India as a surrogate 
country pursuant to section 773(c)(4) of the Act based on the 
following: (A) India is at a level of economic development comparable 
to that of the PRC, and (B) India is a significant producer of 
comparable merchandise. Furthermore, we have reliable data from India 
that we can use to value the FOPs. See Factor Valuation Memorandum. 
Thus, we have calculated NV using Indian prices when available and 
appropriate to value CPZ's FOPs.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assigned a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation/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. 
Exporters can demonstrate this independence through the absence of both 
de jure and de facto government control over export activities. The 
Department analyzes each entity exporting the subject merchandise under 
a test arising from the Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) (``Sparklers''), as further developed in the Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon 
Carbide''). However, if the Department determines that a company is 
wholly foreign-owned or located in a market economy, then a separate-
rate analysis is not necessary to determine whether it is independent 
from government control.
    The sole participating company in this review, CPZ, stated that it 
is a China-Foreign joint venture, owned by two shareholders: Changshan 
Jingmi Bearing Group Co., Ltd., a Chinese company, and Illinois Peer 
Bearing Company LLC, a U.S. company. Therefore, the Department must 
analyze whether CPZ has demonstrated the absence of both de jure and de 
facto government control over export activities, and is entitled to a 
separate rate.

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; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    The evidence provided by CPZ supports a preliminary finding of de 
jure absence of government control based on the following: (1) an 
absence of restrictive stipulations associated with the individual 
exporter's business and export licenses; (2) there are applicable 
legislative enactments decentralizing control of the company; and (3) 
there are formal measures by the government decentralizing control of 
the company. See CPZ's Section A Questionnaire Response, dated October 
3, 2007.

b. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a government agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also 
Notice of 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).
    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 over export activities which would 
preclude the Department from assigning separate rates. We determine for 
CPZ that the evidence on the record supports a preliminary finding of 
de facto absence of government control based on record statements and 
supporting documentation showing the following: (1) CPZ sets its own 
export prices independent of the government and without the approval of 
a government authority; (2) CPZ retains the proceeds from its sales and 
makes independent decisions regarding disposition of profits or 
financing of losses; (3) CPZ has the authority to negotiate and sign 
contracts and other agreements; and (4) CPZ has autonomy from the 
government regarding the selection of management. See CPZ's Section A 
Questionnaire Response, dated October 3, 2007.
    The evidence placed on the record of this review by CPZ 
demonstrates an absence of de jure and de facto government control with 
respect to its

[[Page 41035]]

exports of the merchandise under review, in accordance with the 
criteria identified in Sparklers and Silicon Carbide. Therefore, we are 
granting CPZ a separate rate.

Application of Facts Available

    Sections 776(a)(1) and (2) of the Act provide that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person (A) withholds information that has been requested, (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782 of the Act, (C) significantly impedes a 
proceeding, or (D) provides information that cannot be verified as 
provided by section 782(i) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information supplied if it 
can do so without undue difficulties.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Such an adverse 
inference may include reliance on information derived from the 
petition, the final determination, a previous administrative review, or 
other information placed on the record.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is defined as 
``[i]nformation derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316, 
Vol. 1, at 870 (1994) (``SAA''), reprinted in 1994 U.S.C.C.A.N. 4040, 
4198-99. Corroborate means that the Department will satisfy itself that 
the secondary information to be used has probative value. Id. To 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
to be used.

Application of Total Adverse Facts Available

Yantai Timken
    On September 4, 2007, the Department issued its original 
questionnaire to Yantai Timken. On September 25, 2007, Yantai Timken 
stated it will not be filing a questionnaire response in this 
administrative review because it had only a few exports, which were for 
use by its parent company, Timken, and therefore had no commercial 
exports during the year. See Non-Participation Letter. Furthermore, 
Yantai Timken reported that its U.S. sales of subject merchandise (from 
pre-existing U.S. inventory) were few in number and small in value. 
Moreover, Yantai Timken stated that given the small volume of exports 
and sales it made during the POR, it has determined to forgo the 
expense of preparing and filing a questionnaire response. Because 
Yantai Timken failed to submit a questionnaire response, the Department 
was unable to conduct a separate-rate analysis of Yantai Timken. 
Accordingly, the Department finds that Yantai Timken has not 
demonstrated its entitlement to a separate rate and is, therefore, 
subject to the PRC-wide rate.
The PRC-Wide Entity
    Because Yantai Timken did not respond to the Department's 
questionnaire, and therefore did not demonstrate its eligibility for 
separate-rate status, the Department is treating this PRC producer/
exporter as part of the PRC-wide entity.
    Additionally, because we have determined that Yantai Timken is part 
of the PRC-wide entity, the PRC-wide entity is now under review. 
Pursuant to section 776(a) of the Act, we further find that because the 
PRC-wide entity failed to respond to the Department's questionnaires, 
withheld or failed to provide information in a timely manner or in the 
form or manner requested by the Department, or otherwise impeded the 
proceeding, it is appropriate to apply a dumping margin for the PRC-
wide entity using facts otherwise available on the record. 
Additionally, we determine that the application of adverse facts 
available (``AFA'') is appropriate because the PRC-wide entity has 
failed to cooperate by not acting to the best of its ability to respond 
to the Department's request for information.

Selection of the Adverse Facts Available Rate

    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the Department to rely on 
information derived from (1) the petition, (2) a final determination in 
the investigation, (3) any previous review or determination, or (4) any 
information placed on the record. In administrative reviews, the 
Department normally selects, as AFA, the highest rate determined for 
any respondent in any segment of the proceeding. See, e.g., Certain 
Frozen Warmwater Shrimp From the People's Republic of China: Notice of 
Final Results and Rescission, in Part, of 2004/2006 Antidumping Duty 
Administrative and New Shipper Reviews, 72 FR 52049, 52051 (September 
12, 2007); see also Freshwater Crawfish Tail Meat from the People's 
Republic of China: Notice of Final Results of Antidumping Duty 
Administrative Review, 68 FR 19504, 19506 (April 21, 2003).
    The Court of International Trade (``CIT'') and the Court of Appeals 
for the Federal Circuit (``Federal Circuit'') have consistently upheld 
the Department's practice. See Rhone Poulenc, Inc. v. United States, 
899 F.2d 1185, 1190 (Fed. Circ. 1990) (``Rhone Poulenc''); NSK Ltd. v. 
United States, 346 F. Supp. 2d 1312, 1335 (CIT 2004)(upholding a 73.55 
percent total AFA rate, the highest available dumping margin from a 
different respondent in a less-than-fair-value investigation); see also 
Kompass Food Trading Int'l v. United States, 24 CIT 678, 684 (2000) 
(upholding a 51.16 percent total AFA rate, the highest available 
dumping margin from a different, fully cooperative respondent); and 
Shanghai Taoen International Trading Co., Ltd. v. United States, 2005

[[Page 41036]]

Ct. Int'l. Trade 23 *23; Slip Op. 05-22 (February 17, 2005) (upholding 
a 223.01 percent total AFA rate, the highest available dumping margin 
from a different respondent in a previous administrative review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Notice of 
Final Determination of Sales at Less than Fair Value: Static Random 
Access Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 
23, 1998). The Department's practice also ensures ``that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See SAA at 890; see also Notice of Final 
Determination of Sales at Less than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp From Brazil, 69 FR 76910 (December 23, 2004); 
see also D&L Supply Co. v. United States, 113 F.3d 1220, 1223 (Fed. 
Cir. 1997). In choosing the appropriate balance between providing 
respondents with an incentive to respond accurately and imposing a rate 
that is reasonably related to the respondent's prior commercial 
activity, selecting the highest prior margin ``reflects a common sense 
inference that the highest prior margin is the most probative evidence 
of current margins, because, if it were not so, the importer, knowing 
of the rule, would have produced current information showing the margin 
to be less.'' Rhone Poulenc, 899 F.2d at 1190.
    Consistent with the Department's practice and the purposes of 
section 776(b) of the Act, as AFA, we are assigning the rate of 60.95 
percent to the PRC-wide entity, which is the highest rate found in any 
segment of the proceeding. This rate was calculated for Premier Bearing 
and Equipment Ltd. (``Premier'') in the final results of 
redetermination on remand from the CIT for the seventh administrative 
review of TRBs covering the POR of June 1, 1993, to May 31, 1994. Peer 
Bearing Co. v. United States, slip op. 02-53 (CIT 2002); as upheld by 
the Federal Circuit in 78 Fed. Appx. 718 (Fed. Cir. 2003); see also 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished From 
the People's Republic of China: Amended Final Results of Antidumping 
Duty Administrative Review, 67 FR 79902 (December 31, 2002) (``TRBs 
Amended Final''), and Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From the People's Republic of China: Amended 
Final Results of Antidumping Duty Administrative Review, 69 FR 10423 
(March 5, 2004) (``TRBs Amended Final 2''). The Department 
preliminarily determines that this information is the most appropriate, 
from the available sources, to effectuate the purposes of AFA. The 
Department's reliance on secondary information to determine an AFA rate 
is subject to the requirement to corroborate. See section 776(c) of the 
Act and the ``Corroboration of Secondary Information'' section below.

Corroboration of Secondary Information

    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``[i]nformation derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. The Department has determined that to have 
probative value information must be reliable and relevant. See Certain 
Tissue Paper Products from the People's Republic of China: Final 
Results and Final Rescission, In Part, of Antidumping Duty 
Administrative Review, 72 FR 58642 (October 16, 2007). The SAA also 
states that independent sources used to corroborate such evidence may 
include, for example, published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. See SAA at 870; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Live Swine From 
Canada, 70 FR 12181 (March 11, 2005).
    The reliability of the AFA rate was determined by the calculation 
of the margin for Premier, pursuant to the final results of 
redetermination on remand from the CIT, for the seventh administrative 
review of TRBs (covering the POR of June 1, 1993, to May 31, 1994). See 
TRBs Amended Final and TRBs Amended Final 2. The Department has 
received no information to date that warrants revisiting the issue of 
the reliability of the rate calculation itself. See e.g., Certain 
Preserved Mushrooms From the People's Republic of China: Final Results 
and Partial Rescission of the New Shipper Review and Final Results and 
Partial Rescission of the Third Antidumping Duty Administrative Review, 
68 FR 41304, 41307-41308 (July 11, 2003). No information has been 
presented in the current review that calls into question the 
reliability of this information. Thus, the Department finds that the 
information contained in the 1993-1994 review is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. See Fresh Cut Flowers From Mexico: Final Results of 
Antidumping Duty Administrative Review, 61 FR 6812 (February 22, 1996) 
(where the Department disregarded the highest margin in that case as 
adverse best information available (the predecessor to facts available) 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin). Similarly, the 
Department does not apply a margin that has been discredited. See D&L 
Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) 
(ruling that the Department will not use a margin that has been 
judicially invalidated). To assess the relevancy of the rate used, the 
Department compared the margin calculations of CPZ in this 
administrative review to the 60.95 percent rate. The Department found 
that the margin of 60.95 percent was within the range of the margins 
calculated on the record of this administrative review. See Margin 
Calculation Program, dated June 30, 2008. Because the record of this 
administrative review contains margins within the range of 60.95 
percent, we determine that the 60.95 percent rate continues to be 
relevant for use in this administrative review.
    As the adverse margin is both reliable and relevant, we determine 
that it has probative value. Accordingly, we determine that this rate 
meets the corroboration criterion established in section 776(c) of the 
Act that secondary information has probative value. As a result, the 
Department determines that the margin is corroborated for the purposes 
of this administrative review and may reasonably be applied to the PRC-
wide entity as AFA.
    Because these are preliminary results of review, the Department 
will consider all margins on the record at the time of

[[Page 41037]]

the final results of review for the purpose of determining the most 
appropriate final margin for the PRC-wide entity. See Notice of Final 
Determination of Sales at Less Than Fair Value: Solid Fertilizer Grade 
Ammonium Nitrate From the Russian Federation, 65 FR 42669 (July 11, 
2000).

Fair Value Comparisons

    To determine whether sales of TRBs to the United States by CPZ were 
made at LTFV, we compared constructed export price (``CEP'') to NV, as 
described in the ``Constructed Export Price'' and ``Normal Value'' 
sections of this notice, below.

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) of the Act. In accordance with section 772(b) of the Act, we used 
CEP for CPZ's sales where CPZ sold subject merchandise to its 
affiliated company in the United States, which in turn sold subject 
merchandise to unaffiliated U.S. customers. We calculated CEP for CPZ 
based on delivered prices to unaffiliated purchasers in the United 
States. We made deductions from the U.S. sales 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, other U.S. 
transportation, 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 
772(d)(1)(D) of the Act, we calculated CPZ'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 CPZ Preliminary Results of 
Administrative Review: Program Analysis Memorandum, dated June 30, 
2008. In its first supplemental Section D questionnaire response, dated 
April 29, 2008, CPZ requested that the Department compare NV to CEP on 
a Product Code (``PRODCOD'') basis, claiming that calculating dumping 
margins using Control Number (``CONNUM'') is distortive. We have 
determined not to use PRODCOD as a basis for comparing NV to CEP 
because CPZ has not provided an explanation or data to demonstrate why 
using CONNUM is distortive. Therefore, for the preliminary results, we 
have continued to use CONNUM to compare NV to CEP.

Normal Value

    We compared NV to individual CEP transactions in accordance with 
section 777A(d)(2) of the Act. Section 773(c)(1) of the Act provides 
that the Department shall determine NV using an FOP methodology if: (1) 
the merchandise is exported from an NME country; and (2) 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. When determining NV in an NME context, 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. 
Under section 773(c)(3) of the Act, FOPs include but are not limited 
to: (1) hours of labor required; (2) quantities of raw materials 
employed; (3) amounts of energy and other utilities consumed; and (4) 
representative capital costs. The Department used FOPs reported by the 
respondent for materials, energy, labor and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to find an appropriate SV 
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 Shakeproof Assembly Components Div of Ill v. 
United States, 268 F.3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming the 
Department's use of market-based prices to value certain FOPs).
    With regard to both import-based SVs, and market-economy import 
values, it is the Department's consistent practice that, where the 
facts developed in the United States or third country countervailing 
duty findings include the existence of subsidies that appear to be used 
generally (in particular, broadly available, non-industry-specific 
export subsidies), it is reasonable for the Department to find that it 
has particular and objective evidence to support a reason to believe or 
suspect that prices of the inputs from the country granting the 
subsidies may be subsidized. See China National Machinery Imp. & Exp. 
Corp. v. United States, 293 F. Supp. 2d 1334, 1338-39 (CIT 2003).
    In avoiding the use of prices that may be subsidized, the 
Department does not conduct a formal investigation to ensure that such 
prices are not subsidized, but rather relies on information that is 
generally available at the time of its determination. See H.R. Rep. 
100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24. 
The Department has reason to believe or suspect that prices of inputs 
from Indonesia, South Korea, and Thailand may have been subsidized. 
Through other proceedings, the Department has learned that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, preliminarily finds it reasonable to infer 
that all exports to all markets from these countries may be subsidized. 
See Brake Rotors From the People's Republic of China: Final Results of 
Antidumping Duty Administrative and New Shipper Reviews and Partial 
Rescission of the 2005-2006 Administrative Review, 72 FR 42386 (August 
2, 2007), and accompanying Issues and Decision Memorandum at Comment 1. 
Accordingly, the Department has disregarded prices from Indonesia, 
South Korea and Thailand in calculating NV.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOPs reported by CPZ for the POR. To calculate NV, the 
reported per-unit factor quantities were multiplied by publicly 
available Indian SVs (except as noted below). Unless indicated 
otherwise, we valued direct materials and packing materials using 
publicly available import data reported in the World Trade Atlas, 
published by Global Trade Information Services, Inc. (``WTA''). In 
selecting the SVs, 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 SVs 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

[[Page 41038]]

decision of the Circuit in FederalSigma Corp. v. United States, 117 
F.3d 1401 (Fed. Cir. 1997). CPZ reported that it sourced the steel that 
it used to produce cages within the PRC. Therefore, the Department used 
contemporaneous Indian import data from WTA online, published by the 
Directorate General of Commercial Intelligence and Statistics, Ministry 
of Commerce of India, to calculate SVs for the reported FOPs purchased 
from NME sources. Among the FOPs for which the Department calculated 
SVs using Indian import statistics are steel, steel scrap, and anti-
rust oil. For a detailed description of all SVs used for respondents, 
see Factor Valuation Memorandum.
    On June 3, 2008, CPZ submitted comments regarding SV selection for 
roller quality steel. CPZ argued that the SV data submitted by 
Petitioner is aberrational because the proposed HTS category does not 
specifically include bearing quality steel and the data is not 
contemporaneous with the POR. For the preliminary results, we have 
determined to use contemporaneous Indian import data from HTS category 
7228.3029, as proposed by Petitioner, to calculate an SV for roller 
quality steel. We have preliminarily determined that, while the HTS 
category proposed by CPZ may have represented ``other'' types of 
bearing quality steel in the past, because the Indian HTS categories 
were revised in 2003, the HTS category proposed by Petitioner now 
represents ``other'' types of bearing quality steel. See Factor 
Valuation Memorandum.
    The Department has instituted a rebuttable presumption that market 
economy input prices are the best available information for valuing an 
input when the total volume of the input purchased from all market 
economy sources during the POR exceeds 33 percent of the total volume 
of the input purchased from all sources during the same period. In 
these cases, unless case-specific facts provide adequate grounds to 
rebut the Department's presumption, the Department will use the 
weighted-average market economy purchase price to value the input. 
Alternatively, when the volume of an NME firm's purchases of an input 
from market economy suppliers during the period is equal to or below 33 
percent of its total volume of purchases of the input during the 
period, but where these purchases are otherwise valid and there is no 
reason to disregard the prices, the Department will weight average the 
weighted-average market economy purchase price with an appropriate SV 
according to their respective shares of the total volume of purchases, 
unless case-specific facts provide adequate grounds to rebut the 
presumption. When a firm has made market economy input purchases that 
may have been dumped or subsidized, are not bona fide, or are otherwise 
not acceptable for use in a dumping calculation, the Department will 
exclude them from the numerator of the ratio to ensure a fair 
determination of whether valid market economy purchases meet the 33-
percent threshold. See Antidumping Methodologies: Market Economy 
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request 
for Comments, 71 FR 61716, 61717-19 (October 19, 2006). Also, 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. Id. During 
the POR, CPZ did not purchase any inputs from a market economy 
supplier.
    Where the Department could not obtain information contemporaneous 
with the POR with which to value FOPs, the Department adjusted the SVs 
using, where appropriate, the Indian Wholesale Price Index available at 
the website of the Office of the Economic Adviser, Ministry of Commerce 
and Industry, Government of India, https://eaindustry.nic.in/. See 
Factor Valuation Memorandum.
    To value electricity, the Department used data from the 
International Energy Agency Key World Energy Statistics (2003 edition). 
See Factor Valuation Memorandum. Because the value was not 
contemporaneous with the POR, the Department adjusted the rate for 
inflation. For direct labor, indirect labor, and packing labor, 
consistent with 19 CFR 351.408(c)(3), the Department used the PRC 
regression-based wage rate as reported on Import Administration's 
website, Import Library, Expected Wages of Selected NME Countries, 
revised in May 2008, using 2005 data, https://ia.ita.doc.gov/wages/
05wages/05wages-051608.htmltable1. The source of these wage-
rate data is the International Labour Organization, Geneva, Labour 
Statistics Database, Copyright International Labour Organization, 1998-
2007 Yearbook, Selection: years: 2004-2005, Chapter 5B: Wages in 
Manufacturing. Because this regression-based wage rate does not 
separate the labor rates into different skill levels or types of labor, 
the Department has applied the same wage rate to all skill levels and 
types of labor reported by CPZ. See Factor Valuation Memorandum. The 
Department used Indian transport information to value the freight-in 
cost of the raw materials. The Department determined the best available 
information for valuing truck and rail freight to be from the website 
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 of origin to each destination and averaged the data 
accordingly. See Factor Valuation Memorandum.
    To value factory overhead, depreciation, selling, general and 
administrative expenses and profit, the Department used an audited 
financial statement for the year ended December 31, 2006, for an Indian 
producer of bearings, SKF India Limited (``SKF''). We did not rely upon 
one company's financial statement that was placed on the record, namely 
the financial statement of Timken India Ltd., because Timken India 
Ltd.'s financial statements identify the receipt of ``export 
incentives'' (i.e., DEPB Premium) in ``Other Income.'' India's DEPB 
Schemes have been found by the Department to provide a countervailable 
subsidy. See, e.g., Certain Iron-Metal Castings From India: Preliminary 
Results and Partial Rescission of Countervailing Duty Administrative 
Review, 64 FR 61592, 61597 (November 12, 1999) (unchanged in Certain 
Iron-Metal Castings from India: Final Results of Countervailing Duty 
Administrative Review, 65 FR 31515 (May 18, 2000)); see also https://
ia.ita.doc.gov/esel/eselframes.html and Notice of Final Affirmative 
Countervailing Duty Determination and Final Negative Critical 
Circumstances Determination: Certain Lined Paper Products from India, 
71 FR 45034 (August 8, 2006), and accompanying Issues and Decision 
Memorandum at Comments 4 and 8. In Crawfish from the PRC, the 
Department noted that where it has reason to believe or suspect that a 
company may have received subsidies previously found by the Department 
to provide a countervailable subsidy, financial ratios derived from 
that company's financial statements do not constitute the best 
available information. See Freshwater Crawfish Tail Meat from the 
People's Republic of China: Notice of Final Results And Rescission, In 
Part, of 2004/2005 Antidumping Duty Administrative and New Shipper 
Reviews, 72 FR 19174 (April 17, 2007) (``Crawfish from the PRC''), and 
accompanying Issues and Decision Memorandum at Comment 1. Given the 
record information regarding Timken India Ltd.'s use of the DEPB

[[Page 41039]]

program, and the fact that we have another acceptable financial 
statement to use as a surrogate, consistent with the Department's 
decision in Crawfish from the PRC, we have not used Timken India Ltd.'s 
financial data in our surrogate ratio calculations. See Factor 
Valuation Memorandum for a full discussion of the calculation of SKF's 
ratios.
    The Department used three sources to calculate an SV for domestic 
brokerage expenses: (1) data from the January 9, 2006, public version 
of the Section C questionnaire response from Kejriwal Paper Ltd. 
(``Kejriwal'') in the investigation of certain lined paper products 
from India; (2) data from Agro Dutch Industries Ltd. in the 
administrative review of certain preserved mushrooms from India; and 
(3) data from the February 28, 2005, public version of the Section C 
questionnaire response from Essar Steel in the administrative review of 
hot-rolled carbon steel flat products from India. Because these values 
were not concurrent with the POR of this review, we adjusted these 
rates for inflation using the WPI, and then calculated a simple average 
of the three companies' brokerage expense data. See, e.g., Helical 
Spring Lock Washers From the People's Republic of China: Final Results 
of Antidumping Duty Administrative Review, 73 FR 4175 (January 24, 
2008); see also Factor Valuation Memorandum.
    CPZ reported it recovered steel scrap from the production of cups, 
cones, rollers and cages for resale. However, CPZ did not claim an 
offset and its response is not clear regarding quantities generated and 
quantities sold. Therefore, for the preliminary results, we are not 
including a scrap offset in our margin calculation. We will issue a 
supplemental questionnaire regarding this issue and consider CPZ's 
response for the final results.
    Finally, we used POR Indian import statistics to value material 
inputs for packing which, for CPZ, are plastic film, plastic bags, 
plastic strip, plastic pad, paper box, carton, iron knot, iron sheet, 
iron strip, and pallet cover. See Factor Valuation Memorandum.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773(A)(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, 2006, through May 31, 
2007:

                            TRBs from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                  Producer/Exporter                    Margin (Percent)
------------------------------------------------------------------------
Peer Bearing Company Changshan......................               59.41
PRC-wide entity*....................................               60.95
------------------------------------------------------------------------
*including Yantai Timken

Disclosure and Public Comment

    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). 
Interested parties may submit written comments no later than 30 days 
after the date of publication of these preliminary results of review. 
See 19 CFR 351.309(c). Rebuttals to written comments may be filed no 
later than five days after the written comments are filed. See 19 CFR 
351.309(d). Further, parties submitting written comments and rebuttal 
comments are requested to provide the Department with an additional 
copy of those comments on diskette. Any interested party may request a 
hearing within 30 days of publication of these preliminary results. See 
19 CFR 351.310(c). If requested, a hearing normally will be held seven 
days after the scheduled date for submission of rebuttal comments. See 
19 CFR 351.310(d).
    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.

Deadline for Submission of Publicly Available Surrogate Value 
Information

    In accordance with 19 CFR 351.301(c)(3), the deadline for 
submission of publicly available information to value FOPs under 19 CFR 
351.408(c) is 20 days after the date of publication of the preliminary 
results. In accordance with 19 CFR 351.301(c)(1), if an interested 
party submits factual information less than ten days before, on, or 
after (if the Department has extended the deadline) the applicable 
deadline for submission of such factual information, an interested 
party may submit factual information to rebut, clarify, or correct the 
factual information no later than ten days after such factual 
information is served on the interested party. However, pursuant to 19 
CFR 351.301(c)(1), the Department generally will not accept in the 
rebuttal submission additional, alternative SV information not 
previously on the record if the deadline for submission of such 
information has passed. See Glycine from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review and 
Final Rescission, in Part, 72 FR 58809 (October 17, 2007), and 
accompanying Issues and Decision Memorandum at Comment 2. Furthermore, 
the Department generally will not accept business proprietary 
information in either the SV submissions or the rebuttals thereto, as 
the regulation regarding the submission of SVs allows only for the 
submission of publicly available information.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department intends to issue 
assessment instructions to CBP 15 days after the date of publication of 
the final results of review. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer- or customer-specific ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. To determine whether the duty assessment rates are de 
minimis (i.e., less than 0.50 percent), in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we will calculate 
customer-specific ad valorem ratios based on export prices.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer- or 
customer-specific assessment rate calculated in the final results of 
this review is above de minimis.
    For entries of the subject merchandise during the POR from 
companies not subject to this review, we will instruct CBP to liquidate 
them at the cash deposit rate in effect at the time of entry. The final 
results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the final 
results of this review and for future deposits of estimated duties, 
where applicable.
    Additionally, the Department will instruct CBP to assess 
antidumping duties for the PRC-wide entity (including Yantai Timken) 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).

[[Page 41040]]

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 CPZ, the cash 
deposit rate will be that established in the final results of this 
review, 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 
further notice.

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, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-16376 Filed 7-16-08; 8:45 am]
BILLING CODE 3510-DS-S