[Federal Register Volume 65, Number 224 (Monday, November 20, 2000)]
[Notices]
[Pages 69732-69734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29629]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-846]


Brake Rotors From the People's Republic of China: Initiation and 
Preliminary Results of Changed-Circumstances Antidumping Duty 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Initiation and Preliminary Results of Changed-
Circumstances Antidumping Duty Administrative Review.

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SUMMARY: The Department of Commerce has received information sufficient 
to warrant initiation of a changed-circumstances administrative review 
of the antidumping duty order on brake rotors from the People's 
Republic of China. Based on this information, we preliminarily 
determine that Laizhou Auto Brake Equipment Co., Ltd. is the successor-
in-interest to Laizhou Auto Brake Equipments Factory for purposes of 
determining antidumping liability. Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: November 20, 2000.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Terre Keaton, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-1766 or (202) 482-1280, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act. In addition, unless 
otherwise indicated, all citations to the Department of Commerce's 
(``the Department's'') regulations are to 19 CFR Part 351 (April 2000).

Background

    On April 17, 1997, the Department published in the Federal Register 
the antidumping duty order on brake rotors from the People's Republic 
of China (``PRC'') (62 FR 18740). On September 29, 2000, Laizhou Auto 
Brake Equipment Co., Ltd. (``LABEC'') submitted information and 
documentation in support of its claim that it is the successor-in-
interest to Laizhou Auto Brake Equipment Factory (``LABEF'') and 
requested that the Department conduct a changed-circumstances review to 
determine whether LABEC should receive the same antidumping duty 
treatment as is accorded to LABEF with respect to the subject 
merchandise.

Scope of Review

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

Separate Rates

    In order to determine whether to initiate a changed-circumstances 
review with respect to LABEC, the Department as a matter of practice 
first must conduct a separate rates analysis of the company. In 
proceedings involving non-market economy (``NME'') countries, the 
Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and thus should be 
assessed a single antidumping duty deposit rate.
    Based on information contained in its September 29, 2000, 
submission, LABEC is registered in the People's Republic of China 
(``PRC'') as a limited liability company owned by private individuals. 
Thus, a separate rates analysis is necessary to determine whether LABEC 
is independent from government control (see Notice of Final 
Determination of Sales at Less Than Fair Value: Bicycles From the 
People's Republic of China (``Bicycles'') 61 FR 19026 (April 30, 
1996)).
    To establish whether a firm is sufficiently independent from 
government control, and therefore 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) and 
amplified in the Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994) (``Silicon Carbide''). Under the separate rates criteria, the 
Department assigns separate rates in NME cases only if the respondent 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities.

1. De Jure Control

    LABEC has placed on the administrative record documentation to 
demonstrate absence of de jure governmental control, including the 1994 
``Foreign Trade Law of the People's Republic of China,'' and the 
``Administrative Regulations of the People's Republic of China 
Governing

[[Page 69733]]

the Registration of Legal Corporations,'' promulgated on June 3, 1988.
    As in prior cases, we have analyzed these laws and have found them 
to establish sufficiently an absence of de jure control of stock 
companies including limited liability companies. See, e.g., Final 
Determination of Sales at Less than Fair Value: Furfuryl Alcohol from 
the People's Republic of China (``Furfuryl Alcohol'') 60 FR 22544 (May 
8, 1995), and Preliminary Determination of Sales at Less Than Fair 
Value: Certain Partial-Extension Steel Drawer Slides with Rollers from 
the People's Republic of China 60 FR 29571 (June 5, 1995). We have no 
new information in this proceeding which would cause us to reconsider 
this determination with regard to LABEC.

2. De Facto Control

    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether the respondents are, in fact, subject to a degree 
of governmental control which would preclude the Department from 
assigning separate rates.
    The Department typically considers four factors in evaluating 
whether a respondent is subject to de facto governmental control of its 
export functions: (1) whether the export prices are set by, or subject 
to the approval of, a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding the disposition of profits or 
financing of losses. See Silicon Carbide and Furfuryl Alcohol.
    LABEC asserted the following: (1) it establishes its own export 
prices; (2) it negotiates contracts without guidance from any 
governmental entities or organizations; (3) it makes its own personnel 
decisions; and (4) it retains the proceeds of its export sales, uses 
profits according to its business needs, and has the authority to sell 
its assets and to obtain loans. Additionally, statements contained in 
LABEC's September 29, 2000, submission indicate that the company does 
not coordinate its prices with other exporters. This information 
supports a preliminary finding that there is de facto absence of 
governmental control of the export functions of LABEC. See Pure 
Magnesium from the People's Republic of China: Preliminary Results of 
Antidumping Duty New Shipper Administrative Review, 62 FR 55215 
(October 23, 1997). Consequently, we have preliminarily determined that 
LABEC has met the criteria for the application of a separate rate.

Initiation and Preliminary Results of the Review

    In its September 29, 2000, submission, LABEF advised the Department 
that, effective January 2000, its owners changed the name of the 
company to LABEC. The company's name change resulted when two of the 
original five owners sold their shares in the company and the remaining 
three original owners then changed the registration of the company from 
a collectively-owned company to a limited liability company with the 
Laizhou Industrial and Commercial Administration Bureau (``LICAB''). In 
its submission, LABEF states that all personnel, operations, and 
facilities remain essentially unchanged as a result of changing the 
name of the company to LABEC.
    Thus, in accordance with section 751(b) of the Act, the Department 
is initiating a changed-circumstances review to determine whether LABEC 
is the successor-in-interest to LABEF for purposes of determining 
antidumping duty liability with respect to the subject merchandise. In 
making such a successor-in-interest determination, the Department 
examines several factors including, but not limited to, changes in: (1) 
management; (2) production facilities; (3) supplier relationships; and 
(4) customer base. See, e.g., Brass Sheet and Strip from Canada: Final 
Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 
1992). While no single factor or combination of these factors will 
necessarily provide a dispositive indication of a successor-in-interest 
relationship, the Department will generally consider the new company to 
be the successor to the previous company if the new company's resulting 
operation is not materially dissimilar to that of its predecessor. See, 
e.g., Industrial Phosphoric Acid from Israel: Final Results of Changed 
Circumstances Review, 59 FR 6944 (February 14, 1994); Canadian Brass, 
and Fresh and Chilled Atlantic Salmon from Norway: Initiation and 
Preliminary Results of Changed Circumstances Antidumping Duty 
Administrative Review, 63 FR 50880 (September 23, 1998). Thus, if the 
evidence demonstrates that, with respect to the production and sale of 
the subject merchandise, the new company operates as the same business 
entity as the former company, the Department will accord the new 
company the same antidumping treatment as its predecessor.
    We preliminarily determine that LABEC is the successor-in-interest 
to LABEF, following LABEF's name change to LABEC and its change in 
company registration with LICAB as a result of decisions made by 
LABEF's original owners. LABEF has submitted documentation and 
statements in support of its claim that changing its name to LABEC has 
resulted in no significant changes in either production facilities, 
supplier relationships, customer base, or management. This 
documentation consisted of: (1) a letter to LICAB requesting its name 
to be changed to LABEC; (2) a letter from LICAB granting LABEF's 
proposed name change to LABEC; and (3) LABEC's business license issued 
by LICAB. Because LABEC has presented evidence to establish a prima 
facie case of its successorship status, we find it appropriate to issue 
the preliminary results in combination with the notice of initiation in 
accordance with 19 CFR 351.221(c)(3)(ii).
    Thus, we preliminarily determine that LABEC should receive the same 
antidumping duty treatment with respect to brake rotors as the former 
LABEF. If these preliminary results are adopted in our final results of 
this changed-circumstances review, we will instruct the Customs Service 
to suspend shipments of subject merchandise made by LABEC at LABEF's 
cash deposit rate (i.e., zero percent). The shipments of subject 
merchandise to be suspended are those which are entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this changed-circumstances review.
    Any interested party may request a hearing within 10 days of 
publication of this notice. Any hearing, if requested, will be held no 
later than 50 days after the date of publication of this notice, or the 
first workday thereafter. Case briefs from interested parties may be 
submitted not later than 57 days after the date of publication of this 
notice. Rebuttal briefs, limited to the issues raised in those 
comments, may be filed not later than 64 days after the date of 
publication of this notice. All written comments shall be submitted in 
accordance with 19 CFR 351.303. Persons interested in attending the 
hearing, if one is requested, should

[[Page 69734]]

contact the Department for the date and time of the hearing. The 
Department will publish the final results of this changed-circumstances 
review, including the results of its analysis of issues raised in any 
written comments, within 270 days after the date of this initiation or 
within 80 days if all parties agree to our preliminary results.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(b)(1) and 777(i)(1) of the Act and section 
351.216 of the Department's regulations.

    Dated: November 13, 2000.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-29629 Filed 11-17-00; 8:45 am]
BILLING CODE 3510-DS-P