[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Notices]
[Pages 62813-62816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29888]



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DEPARTMENT OF COMMERCE
[A-475-801]


Antifriction Bearings (Other Than Tapered Roller Bearings) and 
Parts Thereof From Italy; Preliminary Results of Antidumping Duty 
Administrative Reviews

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

ACTION: Notice of preliminary results of antidumping duty 
administrative reviews.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce (the Department) is conducting administrative 
reviews of the antidumping duty orders on antifriction bearings (other 
than tapered roller bearings) and parts thereof from Italy. The classes 
or kinds of merchandise covered by these orders are ball bearings and 
cylindrical roller bearings. The reviews cover 3 manufacturers/
exporters. The period of review (the POR) is May 1, 1993, through April 
30, 1994.
    We have preliminarily determined that sales have been made below 
foreign market value (FMV). If these preliminary results are adopted in 
our final results of the administrative review, we will instruct U.S. 
Customs to assess antidumping duties equal to the difference between 
the United States price (USP) and the FMV. We invite interested parties 
to comment on these preliminary results.

EFFECTIVE DATE: December 7, 1995.

FOR FURTHER INFORMATION CONTACT: The appropriate case analyst, for the 
various respondent firms listed below, at the Office of Antidumping 
Compliance, International Trade Administration, U.S. Department of 
Commerce, Washington, D.C. 20230; telephone: (202) 482-4733.
    Davina Hashmi (Meter), Michael Rausher (FAG), Thomas Schauer (SKF), 
Michael Rill, or Richard Rimlinger.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Background

    On May 15, 1989, the Department published in the Federal Register 
(54 FR 20909) the antidumping duty orders on ball bearings (BBs) and 
cylindrical roller bearings (CRBs) and parts thereof from Italy. On 
June 22, 1994, and July 15, 1994, in accordance with 19 CFR 353.22(c) 
(1994), we initiated administrative reviews of those orders for the 
period May 1, 1993, through April 30, 1994 (59 FR 32180 and 59 FR 
36160). The Department is now conducting these administrative reviews 
in accordance with section 751 of the Tariff Act of 1930, as amended 
(the Tariff Act).

Scope of Reviews

    The products covered by these reviews are antifriction bearings 
(other than tapered roller bearings) and parts thereof (AFBs), and 
constitute the following classes or kinds of merchandise:
    1. Ball Bearings and Parts Thereof: These products include all 
antifriction bearings that employ balls as the rolling element. Imports 
of these products are classified under the following categories: 
antifriction balls, ball bearings with integral shafts, ball bearings 
(including radial ball bearings) and parts thereof, and housed or 
mounted ball bearing units and parts thereof.
    Imports of these products are classified under the following 
Harmonized Tariff Schedules (HTS) subheadings: 3926.90.45, 4016.93.00, 
4016.93.10, 4016.93.50, 6909.19.5010, 8431.20.00, 8431.39.0010, 
8482.10.10, 8482.10.50, 8482.80.00, 8482.91.00, 8482.99.05, 8482.99.10, 
8482.99.35, 8482.99.6590, 8482.99.70, 8483.20.40, 8483.20.80, 
8483.50.8040, 8483.50.90, 8483.90.20, 8483.90.30, 8483.90.70, 
8708.50.50, 8708.60.50, 8708.60.80, 8708.70.6060, 8708.70.8050, 
8708.93.30, 8708.93.5000, 8708.93.6000, 8708.93.75, 8708.99.06, 
8708.99.31, 8708.99.4960, 8708.99.50, 8708.99.5800, 8708.99.8080, 
8803.10.00, 8803.20.00, 8803.30.00, 8803.90.30, 8803.90.90.
    2. Cylindrical Roller Bearings and Parts Thereof: These products 
include all AFBs that employ cylindrical rollers as the rolling 
element. Imports of these products are classified under the following 
categories: antifriction rollers, all cylindrical roller bearings 
(including split cylindrical roller bearings) and parts thereof, and 
housed or mounted cylindrical roller bearing units and parts thereof.
    Imports of these products are classified under the following HTS 
subheadings: 3926.90.45, 4016.93.00, 4016.93.10, 4016.93.50, 
6909.19.5010, 8431.20.00, 8431.39.0010, 8482.40.00, 8482.50.00, 
8482.80.00, 8482.91.00, 8482.99.25, 8482.99.35, 8482.99.6530, 
8482.99.6560, 8482.99.6590, 8482.99.70, 8483.20.40, 8483.20.80, 
8483.50.8040, 8483.90.20, 8483.90.30, 8483.90.70, 8708.50.50, 
8708.60.50, 8708.93.5000, 8708.99.4000, 8708.99.4960, 8708.99.50, 
8708.99.8080, 8803.10.00, 8803.20.00, 8803.30.00, 8803.90.30, 
8803.90.90.
    The size or precision grade of a bearing does not influence whether 
the bearing is covered by the order. For a further discussion of the 
scope of the orders being reviewed, including recent scope 
determinations, see Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from Italy; Final Results of Antidumping 
Duty Administrative Reviews and Revocation in Part of an Antidumping 
Duty Order, 60 FR 10959 (February 28, 1995). The HTS item numbers are 
provided for 

[[Page 62814]]
convenience and Customs purposes. The written descriptions remain 
dispositive.
    These reviews cover the following firms and classes or kinds of 
merchandise:

------------------------------------------------------------------------
               Name of firm                        Class or kind        
------------------------------------------------------------------------
FAG Italia S.p.A.........................  BBs, CRBs.                   
Meter, S.p.A.............................  BBs.                         
SKF Industrie S.p.A......................  BBs, CRBs.                   
------------------------------------------------------------------------

United States Price

    In calculating United States price (USP), the Department used 
purchase price or exporter's sales price (ESP), as defined in section 
772 of the Tariff Act, as appropriate.
    Due to the extremely large number of transactions that occurred 
during the POR and the resulting administrative burden involved in 
calculating individual margins for all of these transactions, we 
sampled sales to calculate USP, in accordance with section 777A of the 
Tariff Act. When a firm made more than 2,000 ESP sales transactions to 
the United States for a particular class or kind of merchandise, we 
reviewed ESP sales which occurred during sample weeks. We selected one 
week from each two-month period in the review period, for a total of 
six weeks, and analyzed each transaction made in those six weeks. The 
sample weeks included June 27-July 3, 1993, July 4-10, 1993, October 
10-16, 1993, November 7-13, 1993, February 13-19, 1994, and April 24-
30, 1994. We reviewed all purchase price sales transactions during the 
POR because there were few purchase price sales.
    USP was based on the packed f.o.b., c.i.f., or delivered price to 
unrelated purchasers in, or for exportation to, the United States. We 
made deductions, as appropriate, from purchase price and ESP for 
movement expenses, discounts and rebates.
    We made additional deductions from ESP for direct selling expenses, 
indirect selling expenses, and repacking in the United States.
    In light of the Federal Circuit's decision in Federal Mogul v. 
United States, CAFC No. 94-1097, the Department has changed its 
treatment of home market consumption taxes. Where merchandise exported 
to the United States is exempt from the consumption tax, the Department 
will add to the U.S. price the absolute amount of such taxes charged on 
the comparison sales in the home market. This is the same methodology 
that the Department adopted following the decision of the Federal 
Circuit in Zenith v. United States, 988 F. 2d 1573, 1582 (1993), and 
which was suggested by that court in footnote 4 of its decision. The 
Court of International Trade (CIT) overturned this methodology in 
Federal Mogul v. United States, 834 F. Supp. 1391 (1993), and the 
Department acquiesced in the CIT's decision. The Department then 
followed the CIT's preferred methodology, which was to calculate the 
tax to be added to U.S. price by multiplying the adjusted U.S. price by 
the foreign market tax rate; the Department made adjustments to this 
amount so that the tax adjustment would not alter a ``zero'' pre-tax 
dumping assessment.
    The foreign exporters in the Federal Mogul case, however, appealed 
that decision to the Federal Circuit, which reversed the CIT and held 
that the statute did not preclude the Department from using the 
``Zenith footnote 4'' methodology to calculate tax-neutral dumping 
assessments (i.e., assessments that are unaffected by the existence or 
amount of home market consumption taxes). Moreover, the Federal Circuit 
recognized that certain international agreements of the United States, 
in particular the General Agreement on Tariffs and Trade (GATT) and the 
Tokyo Round Antidumping Code, required the calculation of tax-neutral 
dumping assessments. The Federal Circuit remanded the case to the CIT 
with instructions to direct the Department to determine which tax 
methodology it will employ.
    The Department has determined that the ``Zenith footnote 4'' 
methodology should be used. First, as the Department has explained in 
numerous administrative determinations and court filings over the past 
decade, and as the Federal Circuit has now recognized, Article VI of 
the GATT and Article 2 of the Tokyo Round Antidumping Code required 
that dumping assessments be tax-neutral. This requirement continues 
under the new Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade. Second, the Uruguay Round Agreements 
Act (URAA) explicitly amended the antidumping law to remove consumption 
taxes from the home market price and to eliminate the addition of taxes 
to U.S. price, so that no consumption tax is included in the price in 
either market. The Statement of Administrative Action (p. 159) 
explicitly states that this change was intended to result in tax 
neutrality.
    While the ``Zenith footnote 4'' methodology is slightly different 
from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA 
law required that the tax be added to U.S. price rather than subtracted 
from home market price, it does result in tax-neutral duty assessments. 
In sum, the Department has elected to treat consumption taxes in a 
manner consistent with its longstanding policy of tax-neutrality and 
with the GATT.
    With respect to subject merchandise to which value was added in the 
United States prior to sale to unrelated U.S. customers, e.g., parts of 
bearings that were imported and further processed into finished 
bearings by U.S. affiliates of foreign exporters, we deducted any 
increased value in accordance with section 772(e)(3) of the Tariff Act.
    Those bearings which are otherwise subject to the order that are 
imported into the United States and incorporated into nonbearing 
products by or for the exporter, and which collectively comprise less 
than one percent of the value of the finished products sold to 
unrelated customers in the United States are not subject to the 
assessment of antidumping duties (see Antifriction Bearings (Other Than 
Tapered Roller Bearings) and Parts Thereof from the Federal Republic of 
Germany; Final Results of Antidumping Duty Administrative Review, 56 FR 
31694 (July 11, 1991). In Roller Chain, Other Than Bicycle, from Japan 
48 FR 51801 (November 14, 1983), roller chain, which was subject to an 
antidumping duty finding, was imported by a related party and 
incorporated into finished motorcycles. The finished motorcycles were 
the first products sold by the exporter to unrelated purchasers in the 
United States. Because the roller chain did not constitute a 
significant percentage of the value of the completed product, the 
Department found that a USP could not reasonably be determined for the 
roller chain. The Department, therefore, did not assess antidumping 
duties on these transactions. We have applied this same principle to 
these reviews.

Foreign Market Value

    The home markets were viable for all companies and all classes or 
kinds of merchandise pursuant to 19 C.F.R. 353.48. The Department used 
home market prices or constructed value (CV), as defined in section 773 
of the Tariff Act, as appropriate, to calculate foreign market value 
(FMV).
    Due to the extremely large number of transactions that occurred 
during the POR and the resulting administrative burden involved in 
examining all of these transactions, we sampled sales to calculate FMV, 
in accordance with section 777A of the Tariff Act. When a firm had more 
than 2,000 home market sales transactions for a particular class or 
kind of merchandise, we used sales 

[[Page 62815]]
from sample months that corresponded to the sample weeks selected for 
U.S. sales sampling plus one contemporaneous month prior to the POR and 
one following the POR. The sample months included April, June, July, 
October, and November of 1993, and February, April, and May of 1994.
    In general, the Department relies on monthly weighted-average 
prices in the calculation of FMV in administrative reviews. Because of 
the significant volume of home market sales involved in these reviews, 
we examined whether it was appropriate to average, in accordance with 
section 777A of the Tariff Act, all of each respondent's home market 
sales on an annual basis. In this case, the use of POR weighted-average 
prices results in significant time and resource savings for the 
Department. To determine whether a POR weighted-average price was 
representative of the transactions under consideration, we performed a 
three-step test.
    We first compared each monthly weighted-average home market price 
for each model with the weighted-average POR price of that model. We 
calculated the proportion of each model's sales whose POR weighted-
average price did not vary meaningfully (i.e., was within plus or minus 
10 percent) from the monthly weighted-average prices. We did this for 
each model within each class or kind of merchandise. We then compared 
the volume of sales of all models within each class or kind of 
merchandise whose POR weighted-average price did not vary meaningfully 
from the monthly weighted-average price with the total volume of sales 
of that class or kind of merchandise. If the POR weighted-average price 
of at least 90 percent of sales in each class or kind of merchandise 
did not vary meaningfully from the monthly weighted-average price, we 
considered the POR weighted-average prices to be representative of the 
transactions under consideration. Finally, we tested whether there was 
any correlation between fluctuations in price and time for the home 
market sales. Where the absolute value of the correlation coefficient 
was less than 0.05 (where a coefficient approaching 1.0 means a direct 
relation between price and time, i.e., that prices consistently rise 
from month to month, and a coefficient approaching zero means no 
relation between prices and time), we concluded that there was no 
significant relation between price and time. We calculated a weighted-
average POR FMV only for those classes or kinds that satisfied our 
three-step test for the factors of price, volume, and time.
    We compared U.S. sales with sales of such or similar merchandise in 
the home market. We considered all non-identical products within a 
bearing family to be equally similar. As defined in the questionnaire, 
a bearing family consists of all bearings within a class or kind of 
merchandise that are the same in the following physical 
characteristics: load direction, bearing design, number of rows of 
rolling elements, precision rating, dynamic load rating, outer 
diameter, inner diameter, and width.
    Home market prices were based on the packed, ex-factory or 
delivered prices to related or unrelated purchasers in the home market. 
Where applicable, we made adjustments for movement expenses, 
differences in cost attributable to differences in physical 
characteristics of the merchandise pursuant to 773(a)(4)(C) of the 
Tariff Act, and differences in packing. We also made adjustments for 
differences in circumstances of sale in accordance with 19 C.F.R. 
353.56. For comparisons to purchase price sales, we deducted home 
market direct selling expenses and added U.S. direct selling expenses. 
For comparisons to ESP sales, we deducted home market direct selling 
expenses. We also made adjustments, where applicable, for home market 
indirect selling expenses to offset U.S. commissions in purchase price 
and ESP calculations and to offset U.S. indirect selling expenses 
deducted in ESP calculations, but not exceeding the amount of the 
indirect U.S. expenses. For comparisons to both ESP and purchase price 
sales, we adjusted FMV for taxes consistent with our change in practice 
as stated above.
    We used sales to related customers only where we determined such 
sales were made at arm's-length prices, i.e., at prices comparable to 
prices at which the firm sold identical merchandise to unrelated 
customers.
    Where we found home market sales below the cost of production in 
the 1991-1992 administrative reviews, we concluded that reasonable 
grounds exist to believe or suspect that home market sales during the 
POR were made at prices below the cost of production, and we initiated 
cost investigations.
    In accordance with section 773(b) of the Tariff Act, in determining 
whether to disregard home market sales made at prices below the cost of 
production, we examined whether such sales were made in substantial 
quantities over an extended period of time. When less than 10 percent 
of the home market sales of a particular model were at prices below the 
cost of production, we found that there were not substantial quantities 
of that model sold below cost and did not disregard any sales of that 
model. When 10 percent or more, but not more than 90 percent, of the 
home market sales of a particular model were determined to be below 
cost, we determined that substantial quantities of that model were sold 
below cost and excluded the below-cost home market sales from our 
calculation of FMV, provided that these below-cost sales were made over 
an extended period of time. When more than 90 percent of the home 
market sales of a particular model were made below cost over an 
extended period of time, we disregarded all home market sales of that 
model from our calculation of FMV and used CV (see Polyethylene 
Terephthalate Film, Sheet, and Strip from Korea, 56 FR 16306 (1991)).
    To determine if sales below cost had been made over an extended 
period of time, we compared the number of months in which sales below 
cost had occurred for a particular model to the number of months in 
which the model was sold. If the model was sold in three or fewer 
months, we did not find that below-cost sales were made over an 
extended period of time unless there were sales below cost of that 
model in each month. If a model was sold in more than three months, we 
did not find that below-cost sales were made over an extended period of 
time unless there were sales below cost in at least three of the months 
in which the model was sold (see Final Results of Antidumping Duty 
Administrative Reviews; Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From Japan and Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Components Thereof, From Japan, 
58 FR 64729 (December 9, 1993)).
    Since none of the respondents has submitted information indicating 
that any of its sales below cost were at prices which would have 
permitted ``recovery of all costs within a reasonable period of time in 
the normal course of trade'' within the meaning of section 773(b)(2) of 
the Tariff Act, we were unable to conclude that the costs of production 
of such sales were recovered within a reasonable period of time. As a 
result, we disregarded below-cost sales when the conditions described 
above were met.
    In accordance with sections 773(a)(1) and 773(b)(2) of the Tariff 
Act, we used CV as the basis for FMV when there were no usable sales of 
such or similar merchandise for comparison.
    We calculated CV in accordance with section 773(e) of the Tariff 
Act. We included the cost of materials, fabrication, general expenses, 
profit, and packing. To calculate CV we used: (1) Actual general 
expenses or the statutory 

[[Page 62816]]
minimum of 10 percent of materials and fabrication, whichever was 
greater; (2) actual profit or the statutory minimum of 8 percent of 
materials, fabrication costs and general expenses, whichever was 
greater; and (3) packing costs for merchandise exported to the United 
States. Where appropriate, we made adjustments to CV in accordance with 
19 C.F.R. 353.56 for differences in circumstances of sale. For 
comparisons to purchase price sales, we deducted home market direct 
selling expenses and added U.S. direct selling expenses. For 
comparisons to ESP sales, we deducted home market direct selling 
expenses. We also made adjustments, where applicable, for home market 
indirect selling expenses to offset U.S. commissions in purchase price 
and ESP calculations. For comparisons involving ESP transactions, we 
made further deductions for CV for indirect selling expenses in the 
home market, capped by the indirect selling expenses incurred on ESP 
sales in accordance with 19 C.F.R. 353.56(b)(2).

Preliminary Results of Reviews

    As a result of our reviews, we preliminarily determine the 
weighted-average dumping margins (in percent) for the period May 1, 
1993, through April 30, 1994 to be:

------------------------------------------------------------------------
                        Company                           BBs      CRBs 
------------------------------------------------------------------------
FAG...................................................     2.23     0.00
Meter.................................................     3.75    (\1\)
SKF...................................................     3.26   (\2\) 
------------------------------------------------------------------------
\1\No review requested.                                                 
\2\Order partially revoked with respect to this company.                

    Parties to this proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of the date of publication of this 
notice. A general issues hearing, if requested, and any hearings 
regarding issues related solely to specific countries, if requested, 
will be held in accordance with the following schedule and at the 
indicated locations in the main Commerce building:

------------------------------------------------------------------------
                                       Date            Time     Room No.
------------------------------------------------------------------------
General issues................  Jan. 22, 1996....  10 a.m.....      1412
Italy.........................  Jan. 22, 1996....  2 p.m......      1412
------------------------------------------------------------------------

    Issues raised in hearings will be limited to those raised in the 
respective briefs or written comments, and rebuttal briefs or rebuttals 
to written comments. Briefs or written comments from interested 
parties, and rebuttal briefs or rebuttals to written comments, limited 
to the issues raised in the respective case briefs and comments, may be 
submitted not later than the dates shown below for general issues and 
the respective country-specific cases. The Department will subsequently 
publish the final results of these administrative reviews, including 
the results of its analysis of issues raised in any such written 
comments or hearings.

------------------------------------------------------------------------
                                    Briefs/comments                     
              Case                        due            Rebuttals due  
------------------------------------------------------------------------
General issues..................  Jan. 8, 1996......  Jan. 16, 1996     
Italy...........................  Jan. 8, 1996......  Jan. 16, 1996     
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Because sampling 
prevents calculation of duties on an entry-by-entry basis, we will 
calculate an importer-specific ad valorem duty assessment rate for each 
class or kind of merchandise based on the ratio of the total value of 
antidumping duties calculated for the examined sales made during the 
POR to the total customs value of the sales used to calculate those 
duties. This rate will be assessed uniformly on all entries of that 
particular importer made during the POR. (This is equivalent to 
dividing the total value of antidumping duties, which are calculated by 
taking the difference between statutory FMV and statutory USP, by the 
total statutory USP value of the sales compared, and adjusting the 
result by the average difference between USP and customs value for all 
merchandise examined during the POR.)
    In some cases such as purchase price situations, the respondent 
does not know the entered value of the merchandise. Then, we will 
either calculate an approximate entered value or we will calculate an 
average per-unit dollar amount of antidumping duty based on all sales 
examined during the POR. See AFBs I at 31694. The Department will issue 
appropriate appraisement instructions directly to the Customs Service 
upon completion of these reviews.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of these administrative reviews, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rates for the 
reviewed companies will be those rates established in the final results 
of these reviews (except that no deposit will be required for firms 
with zero or de minimis margins; i.e., margins less than 0.5 percent); 
(2) for previously reviewed or investigated companies not listed above, 
the cash deposit rate will continue to be the company-specific rate 
published for the most recent period; (3) if the exporter is not a firm 
covered in this review, a prior review, or the original LTFV 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (4) the cash deposit rate for all other 
manufacturers or exporters will continue to be the ``all others'' rate 
made effective by the final results of the 1991-92 administrative 
reviews of these orders (see Final Results of Antidumping Duty 
Administrative Reviews and Revocation in Part of an Antidumping Duty 
Order, 58 FR 39729 (July 26, 1993)). As noted in those previous final 
results, these rates are the ``all others'' rates from the relevant 
LTFV investigations. These deposit requirements, when imposed, shall 
remain in effect until publication of the final results of the next 
administrative reviews.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 C.F.R. 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative reviews and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 
C.F.R. 353.22(c)(5).

    Dated: November 30, 1995.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 95-29888 Filed 12-6-95; 8:45 am]
BILLING CODE 3510-DS-P