[Federal Register Volume 74, Number 129 (Wednesday, July 8, 2009)]
[Notices]
[Pages 32539-32545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16096]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-601]


Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from the People's Republic of China: Preliminary Results of 
the 2007-2008 Administrative Review of the Antidumping Duty Order

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``Department'') is currently 
conducting the 2007-2008 administrative review of the antidumping duty 
order on tapered roller bearings and parts thereof, finished or 
unfinished (``TRBs''), from the People's Republic of China (``PRC''), 
covering the period June 1, 2007, through May 31, 2008. This 
administrative review covers one producer/exporter of the subject 
merchandise, i.e. Peer Bearing Company Changshan (``CPZ''). We 
preliminarily determine that CPZ made sales below normal value 
(``NV''). 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 will issue final results no later than 120 days from the 
date of publication of this notice.

EFFECTIVE DATE: July 8, 2009.

FOR FURTHER INFORMATION CONTACT: Frances Veith or Brendan Quinn, 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-
4295 or (202) 482-5848, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 15, 1987, the Department published in the Federal Register 
the antidumping duty order on TRBs from the PRC.\1\ On June 9, 2008, 
the Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on tapered roller 
bearings from the PRC. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 73 FR 32557 (June 9, 2008). On June 30, 2008, 
CPZ, an exporter of TRBs, requested that the Department conduct an 
administrative review of its sales. Additionally, on June 30, 2008, the 
Timken Company, of Canton, Ohio (``Petitioner'') requested that the 
Department conduct an administrative review of all entries of subject 
merchandise produced and/or exported by CPZ. On July 30, 2008, 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, 2007, through May 31, 2008, for CPZ. See Initiation 
of Antidumping and Countervailing Duty Administrative Reviews, Request 
for Revocation in Part, and Deferral of Administrative Review, 73 FR 
44220 (July 30, 2008).
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    \1\ See Notice of Antidumping Duty Order: Tapered Roller 
Bearings and Parts Thereof, Finished or Unfinished, From the 
People's Republic of China, 52 FR 22667 (June 15, 1987).
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    On September 9, 2008, the Department issued its antidumping duty 
questionnaire to CPZ. CPZ submitted its Section A questionnaire 
response on October 8, 2008, a supplement to its Section A submission 
on October 15, 2008, its Section C questionnaire response on October 
24, 2008, and its Section D questionnaire response on October 29, 2008. 
The Department issued CPZ a supplemental Section A questionnaire on 
January 29, 2009, a supplemental Section C questionnaire on February 
17, 2009, and a supplemental Section D questionnaire and second 
supplemental Section A questionnaire on March 11, 2009. CPZ submitted 
its supplemental Section A questionnaire response on February 20, 2009, 
its supplemental Section C response on March 12, 2009, its second 
supplemental Section A questionnaire response on March 26, 2009, the 
first part of the supplemental Section D response and a revised Section 
C database on April 2, 2009, and the second part of the supplemental 
Section D response on April 16, 2009.
    On February 19, 2009, the Department published a notice in the 
Federal Register extending the time limit for the preliminary results 
of review by 90 days until June 1, 2009. See Tapered Roller Bearings 
and Parts Thereof, Finished or Unfinished, from the People's Republic

[[Page 32540]]

of China: Extension of Time Limit for the Preliminary Results of the 
2007-2008 Administrative Review of the Antidumping Duty Order, 74 FR 
7661 (February 19, 2009). On April 27, 2009, the Department published a 
notice in the Federal Register extending the time limit for the 
preliminary results of review by an additional 30 days until June 30, 
2009. See Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from the People's Republic of China: Extension of Time 
Limit for the Preliminary Results of the 2007-2008 Administrative 
Review of the Antidumping Duty Order, 74 FR 19046 (April 27, 2009). The 
Department verified the accuracy of CPZ's submissions on April 29, 2009 
and April 30, 2009 in Waukegan, Illinois, at the offices of Peer 
Bearing Company, CPZ's U.S. affiliate, and on May 28, 2009, through 
June 5, 2009, at CPZ's offices in Changshan, China. At the conclusion 
of the aforementioned verification, the Department verbally requested 
that CPZ submit a corrected U.S. sales and FOP database to include 
changes resulting from both the U.S. and Chinese verifications. On June 
16, 2009, CPZ submitted the requested revised U.S. sales and FOP 
databases.

Period of Review

    The POR is June 1, 2007, through May 31, 2008.

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.\2\ 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, e.g., Brake Rotors from the People's Republic of China: 
Final Results and Partial Rescission of the 2004/2005 Administrative 
Review and Notice of Rescission of 2004/2005 New Shipper Review, 71 FR 
66304 (November 14, 2006). No party to this proceeding has contested 
such treatment. Accordingly, we calculated NV in accordance with 
section 773(c) of the Act, which applies to NME countries.
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    \2\ See, e.g., Tapered Roller Bearings and Parts Thereof, 
Finished or Unfinished, from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 74 FR 3987 
(January 22, 2009).
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Surrogate Country

    Section 773(c)(1) of the Act directs the Department to base NV on 
the NME producer's factors of production (``FOPs''), valued in a 
surrogate market economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4) of 
the Act, in valuing the FOPs, the Department shall use, to the extent 
possible, the prices or costs of the 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. The sources of the surrogate factor values are discussed 
under the ``Normal Value'' section below.\3\
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    \3\ See also the Department's memorandum entitled, ``Preliminary 
Results of the 2007-2008 Administrative Review of the Antidumping 
Duty Order on Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from the People's Republic of China: Surrogate Value 
Memorandum,'' dated June 30, 2009 (``Surrogate Value Memo'').
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    The Department's practice with respect to determining economic 
comparability is explained in Policy Bulletin 04.1,\4\ which states 
that ``OP {Office of Policy{time}  determines per capita economic 
comparability on the basis of per capita gross national income, as 
reported in the most current annual issue of the World Development 
Report (The World Bank).''
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    \4\ See the Department's Policy Bulletin No. 04.1, regarding, 
``Non-Market Economy Surrogate Country Selection Process,'' (March 
1, 2004) (``Policy Bulletin 04.1''), available on the Department's 
Website at http://ia.ita.doc.gov/policy/bull04-1.html.
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    On December 22, 2008, the Department identified six countries as 
being at a level of economic development comparable to the PRC for the 
specified POR: India, the Philippines, Indonesia, Colombia, Thailand, 
and Peru.\5\ The Department considers the six countries identified in 
the Surrogate Countries Memo as ``equally comparable in terms of 
economic development.'' See Policy Bulletin 04.1 at 2. Thus, we find 
that India, the Philippines, Indonesia, Colombia, Thailand, and Peru 
are all at an economic level of development equally comparable to that 
of the PRC.
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    \5\ See the Department's Memorandum from Carol Showers, Acting 
Director, Office of Policy, to Wendy Frankel, Office Director, AD/
CVD Operations, Office 8, regarding, ``Request for a List of 
Surrogate Countries for an Administrative Review of the Antidumping 
Duty Order on Tapered Roller Bearings (``TRB'') from the People's 
Republic of China (``PRC''),'' dated December 22, 2008 (``Surrogate 
Countries Memo'').
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    On December 22, 2008, the Department invited all interested parties 
to submit comments on the surrogate country selection.\6\ We also 
invited all interested parties to submit publicly available information 
to value factors of production for consideration in the Department's 
preliminary results of review.
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    \6\ See the Department's letter regarding, ``2007-2008 
Administrative Review of the Antidumping Duty Order on Tapered 
Roller Bearings from the People's Republic of China'' requesting all 
interested parties to provide comments on surrogate-country 
selection and provide surrogate FOP values from the potential 
surrogate countries (i.e., India, Indonesia, the Philippines, 
Thailand, Colombia, and Peru), dated December 22, 2008.
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    On January 9, 2009, both Petitioner and CPZ submitted comments 
regarding the Department's selection of a surrogate country for the 
preliminary results. Petitioner requested that India be considered as 
the primary surrogate country, while CPZ requested the Department also 
consider Indonesia as a potential surrogate. With regard to the 
valuation of individual factors, Petitioner submitted publicly 
available information for the Department to consider for the 
preliminary results on November 14, 2008, December 3, 2008, and January 
29, 2009. CPZ submitted publicly available information for the 
Department to consider on January 30, 2009, and on February 04, 2009. 
In its February 4, 2009, submission, CPZ requested that the Department 
also consider surrogate value data from Thailand.
    The Department's Policy Bulletin 04.1 provides guidance on 
identifying comparable merchandise and selecting a producer of 
comparable merchandise. The merchandise subject to the scope of the 
order is currently classifiable under subheadings 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 of the HTSUS.\7\ For

[[Page 32541]]

purposes of comparable merchandise analysis, the Department obtained 
world export data from World Trade Atlas, published by Global Trade 
Information Services, Inc. (``WTA'') for harmonized tariff schedule 
(``HTS'') subheadings 8482.20, 8482.20.00, 8482.91, 8482.91.00, 
8482.99, 8482.99.00, 8483.20, 8483.20.00, 8483.20.90, 8483.30, 
8483.30.00, 8483.30.90, 8483.90, 8483.90.00, 8708.99, 8708.99.99, 
8708.99.19,\8\ which show that India, the Philippines, Indonesia, 
Colombia, Thailand, and Peru are producers of comparable 
merchandise.\9\ Thus, all countries listed in the Surrogate Countries 
Memo are considered as appropriate surrogates because each exported 
comparable merchandise. The Department used export data in its 
comparable merchandise analysis because the Department was unable to 
find production data for the potential surrogate countries. Therefore, 
we relied on each country's WTA export data of TRBs as a substitute for 
overall production data in the comparable merchandise analysis.
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    \7\ See Harmonized Tariff Schedule of the United States (2007) 
(Rev. 2), available at www.usitc.gov.
    \8\ WTA export statistics for India, the Philippines, Indonesia, 
Colombia, Thailand, and Peru only offer a basket category for all 
categories other than 8482.20.00 ``Tapered roller bearings, 
including cone and tapered roller assemblies.'' In the case of the 
categories beginning with the four digit 8482 and 8483 heading, 
similar `NESOI' or `Other' subheadings were used in the alternative, 
though typically not as specific as that of the HTSUS category. 
However, in the case of the categories beginning with the four digit 
8708 heading, WTA export statistics for each of the potential 
surrogate country candidates could only be found to the broadly 
defined 8708.99 subheading. Furthermore, WTA data showed that the 
Philippines did not have any exports for HTS categories 8482.20 
(``Tapered roller bearings, including cone and tapered roller 
assemblies<gr-thn-eq>) or 8482.91 (``Balls needles and rollers for 
bearings'').
    \9\ See Surrogate Value Memo.
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    The Policy Bulletin 04.1 also provides some guidance on identifying 
significant producers of comparable merchandise and selecting a 
producer of comparable merchandise. Further analysis was required to 
determine whether any of the countries which produce comparable 
merchandise are significant producers of that comparable merchandise. 
The data we obtained show that, in 2007, worldwide exports for HTS 
8482.20 and 8482.20.00 ``Tapered roller bearings, including cone and 
roller assemblies'' from: India was approximately 10,073,266 units; 
Indonesia was approximately 6,631 Kg; Colombia was 683 units; the 
Philippines was 0 Kg; Thailand was approximately 570,362 units, and 
Peru was 719 units. From this analysis, only India and Thailand appear 
to be significant producers of comparable merchandise. Although CPZ 
submitted information on the record to demonstrate that Indonesia is a 
significant producer of comparable merchandise and should be considered 
for use as the primary surrogate country, we find that, while the 
information submitted by CPZ does show Indonesia to be a producer of 
comparable merchandise, the aforementioned WTA data shows that 
Indonesia is not a significant producer of said merchandise. CPZ also 
submitted production information to demonstrate that Thailand is a 
significant producer of comparable merchandise. However, CPZ submitted 
this Thai production data in support of its contention that the 
Department should consider Thai information to value certain FOPs (see 
``Factor Valuations'' section below), but did not request that Thailand 
be considered for use as the primary surrogate country.
    With respect to data considerations in selecting a surrogate 
country, it is the Department's practice that, ``if more than one 
country has survived the selection process to this point, the country 
with the best factors data is selected as the primary surrogate 
country.'' For the purpose of assessing data sources from potential 
surrogate countries, ``it is the Department's stated practice to use 
investigation or review period-wide price averages, prices specific to 
the input in question, prices that are net of taxes and import duties, 
prices that are contemporaneous with the period of investigation or 
review, and publicly available data.'' See Policy Bulletin 04.1 at 4. 
Currently, the record contains surrogate value information from India, 
Thailand, and Indonesia. At present, the Indian information submitted 
to the record contains the most complete set of surrogate value 
information, as surrogate Indian import values have been submitted for 
nearly all of the relevant FOPs, and surrogate financial statements are 
available from an Indian producer of identical merchandise. Thus, the 
Department is preliminarily selecting India as the surrogate country on 
the basis that: (1) it is at a similar level of economic development to 
the PRC, pursuant to 773(c)(4) of the Act; (2) it is a significant 
producer of comparable merchandise; and (3) we have reliable data from 
India that we can use to value the factors of production. Therefore, we 
have calculated normal value using Indian prices when available and 
appropriate to value CPZ's factors of production.\10\ In accordance 
with 19 CFR 351.301(c)(3)(ii), for the final results of an 
administrative review, interested parties may submit publicly available 
information to value the factors of production within 20 days after the 
date of publication of the preliminary results.\11\
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    \10\ See Surrogate Value Memo.
    \11\ In accordance with 19 CFR 351.301(c)(1), for the final 
results of this administrative review, interested parties may submit 
factual information to rebut, clarify, or correct factual 
information submitted by an interested party less than ten days 
before, on, or after, the applicable deadline for submission of such 
factual information. However, the Department notes that 19 CFR 
351.301(c)(1) permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. 
The Department generally will not accept the submission of 
additional, previously absent-from-the-record alternative surrogate 
value information pursuant to 19 CFR 351.301(c)(1). 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.
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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 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 respondent 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

[[Page 32542]]

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 
8, 2008.

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 8, 2008.
    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 exports of the merchandise under review, in accordance 
with the criteria identified in Sparklers and Silicon Carbide. 
Therefore, we are preliminarily granting CPZ a separate rate.

Fair Value Comparisons

    To determine whether sales of TRBs to the United States by CPZ were 
made at less than fair value (``LTFV''), we compared constructed export 
price (``CEP'') and export price (``EP'') to NV, as described in the 
``U.S. Price'' and ``Normal Value'' sections of this notice, below, and 
pursuant to section 771(35) of the Act.

U.S. Price

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 first 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, international 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. Finally, we deducted CEP 
profit, in accordance with sections 772(d)(3) and 772(f) of the 
Act.\12\
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    \12\ See the Department's memorandum entitled, ``2007-2008 
Administrative Review of the Antidumping Duty Order on Tapered 
Roller Bearings and Parts Thereof, Finished or Unfinished, from the 
People's Republic of China: Analysis of the Preliminary 
Determination Margin Calculation for Peer Bearing Company - 
Changshan,'' dated June 30, 2009 (``Program Analysis Memo'').
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    In section D of its questionnaire response, dated October 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. Consistent with our 
determination in the prior review,\13\ we have preliminarily determined 
to use PRODCOD as a basis for comparing NV to CEP.
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    \13\ See Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Final Results of 
the Administrative Review, 74 FR 3987 (January 22, 2009), and 
accompanying Issues and Decision Memorandum at Comment 3.
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    Additionally, we have preliminarily determined to exclude certain 
CEP sales transactions CPZ reported in its section C sales data file 
from CPZ's preliminary margin calculation. Due to the proprietary 
nature of the information pertaining to these sales transactions, see 
Program Analysis Memo.

Export Price

    Because CPZ also sold subject merchandise to unaffiliated 
purchasers in the United States prior to importation into the United 
States and use of a CEP methodology was not otherwise appropriate, we 
used EP for these transactions in accordance with section 772(a) of the 
Act.\14\ We calculated EP based on the delivery method reported to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
foreign inland freight and foreign brokerage and handling charges in 
the PRC, international freight, and U.S. customs duty, where 
applicable, pursuant to section 772(c)(2)(A) and (B) of the Act. Where 
foreign inland freight, foreign brokerage and handling fees, or marine 
insurance were provided by PRC service providers or paid for in 
renminbi, we based those charges on surrogate rates from India. See 
``Factor Valuations'' section below for further discussion of surrogate 
rates.
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    \14\ See Program Analysis Memo.

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[[Page 32543]]

Normal Value

    We compared NV to individual EP and 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.
    There are certain sales that were further manufactured or assembled 
in a third country. Because we preliminarily find that this further 
manufacture or assembly does not constitute a substantial 
transformation of the merchandise, the merchandise sold in this manner 
is subject merchandise. See Substantial Transformation Memo.\15\ 
Because CPZ knew at the time of sale that the merchandise was destined 
for exportation, we have determined normal value for such sales based 
on the country of origin (i.e., the PRC), pursuant to section 
773(a)(3)(A) of the Act. For such merchandise, normal value also 
includes the cost of further manufacturing or assembly in the third 
country and the expense of transporting the merchandise from the 
factory in the PRC to the further manufacturing processing plant in the 
third country. See Program Analysis Memo for further discussion of this 
issue.
---------------------------------------------------------------------------

    \15\ See The Department's memorandum entitled, ``Tapered Roller 
Bearings from the People's Republic of China, Country of Origin 
Decision for Tapered Roller Bearings Finished in a Third Country,'' 
dated June 30, 2009 (``Substantial Transformation Memo'').
---------------------------------------------------------------------------

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, energy, and packing materials 
purchased from NME sources using publicly available import data 
reported in WTA, utilizing data obtained from the Directorate General 
of Commercial Intelligence and Statistics, Ministry of Commerce of 
India. Among the FOPs for which the Department calculated SVs using 
Indian import statistics are cage steel, steel by-product, cone spacer, 
coal, anti-rust oil, and all packing materials. For a detailed 
description of all SVs used for respondents, see Surrogate Value Memo.
    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 decision of the Federal Circuit in Sigma Corp. v. United 
States, 117 F.3d 1401 (Fed. Cir. 1997).
    On May 21, 2009, CPZ submitted comments regarding SV selection for 
bearing quality steel bar, as well as roller quality wire rod. These 
comments reiterated CPZ's concerns that the SV data submitted by 
Petitioner for Indian HTS 7228.30.29 and 7228.50.90 are aberrational 
due to the relatively high value when benchmarked against similar 
bearing and roller quality steel HTS categories in both the U.S. and 
other potential surrogate country candidates. On June 9, 2009, 
Petitioner submitted a response to CPZ's comments. For the preliminary 
results, we have determined to use contemporaneous Indian import data 
from HTS category 7228.30.29 and contemporaneous Thai import data from 
HTS category 7228.50.90.00, to calculate an SV for bearing quality 
steel bar and roller quality wire rod, respectively. A review of the 
Indian import statistics for HTS category 7228.50.90 shows wide 
variations in the average unit values (``AUVs'') between the individual 
countries listed as exporters in the data. Alternatively, Thai import 
statistics, under Thai HTS category 7228.50.90.00, do not exhibit the 
wide level of AUV variance between individual exporters that is seen in 
the Indian data. Thus, we have determined to use comparable Thai data 
in the alternative. Using the same method of analysis, Indian import 
statistics for steel bar appear to be reasonably consistent. As it is 
our preference to use SVs from within the

[[Page 32544]]

primary surrogate country, we preliminarily determine to value steel 
bar from Indian HTS category 7228.30.29. For further analysis, see 
Surrogate Value Memo.
    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 purchased a certain quantity of steel from a market 
economy supplier in a market economy currency. Accordingly, the 
Department will weight average the market economy steel price with the 
appropriate surrogate value. For further analysis, see Surrogate Value 
Memo.
    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 (``WPI'') as 
published by the International Monetary Fund (``IMF'').\16\
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    \16\ See ``International Financial Statistics,'' by the 
International Monetary Fund (IMF), available at: http://www.imfstatistics.org/imf/output/067EDEA8-7166-48F5-B357-1462F20A0BEF/IFS_Table_38775.0625136.xls. See also Surrogate Value 
Memo for further discussion.
_____________________________________-

    We used the truck freight rates published by www.infobanc.com, 
``The Great Indian Bazaar, Gateway to Overseas Markets,'' to value 
truck freight. See Surrogate Value Memo. Since the truck freight rates 
are not contemporaneous with the POR, we deflated the rates using 
Indian WPI.
    We valued inland water freight using price data for barge freight 
reported in a March 19, 2007, article published in The Hindu Business 
Line. We inflated the inland water transportation rate using the 
appropriate WPI inflator. See Surrogate Value Memo.
    We valued brokerage and handling using a simple average of the 
brokerage and handling costs that were reported in public submissions 
that were filed in three antidumping duty cases. Specifically, we 
averaged the public brokerage and handling expenses reported by Navneet 
Publications (India) Ltd. in the 2007-2008 administrative review of 
certain lined paper products from India, Essar Steel Limited in the 
2006-2007 antidumping duty administrative review of hot-rolled carbon 
steel flat products from India, and Himalya International Ltd. in the 
2005-2006 administrative review of certain preserved mushrooms from 
India. We inflated the brokerage and handling rate using the 
appropriate WPI inflator. See Surrogate Value Memo.
    To value electricity, we used price data for small, medium, and 
large industries, as published by the Central Electricity Authority of 
the Government of India in its publication entitled ``Electricity 
Tariff & Duty and Average Rates of Electricity Supply in India,'' dated 
July 2006. These electricity rates represent actual country-wide, 
publicly-available information on tax-exclusive electricity rates 
charged to industries in India. See Surrogate Value Memo.
    For direct labor, indirect labor and packing labor, consistent with 
19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as 
reported on Import Administration's web site.\17\ Because this 
regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, we have applied the same wage 
rate to all skill levels and types of labor reported by each 
respondent. See Surrogate Value Memo.
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    \17\ See Expected Wages of Selected NME Countries (May 14, 2008) 
(available at http://ia.ita.doc.gov/wages). The source of these wage 
rate data on the Import Administration's web site is the Yearbook of 
Labour Statistics 2005, ILO, (Geneva: 2005), Chapter 5B: Wages in 
Manufacturing. The years of the reported wage rates range from 2004 
to 2005.
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    To value factory overhead, selling, general and administrative 
expenses and profit, the Department used audited financial statements 
for the years ending on December 31, 2007, for an Indian producer of 
bearings, SKF India Limited. See Surrogate Value Memo for a full 
discussion of the surrogate financial ratio calculations.
    CPZ reported it recovered steel scrap as a by-product of the 
production of subject merchandise. We found in this administrative 
review, as confirmed at verification, that CPZ has appropriately 
reported its by-products and, therefore, we have granted CPZ a by-
product offset for the quantities of these reported by-products, valued 
using Indian WTA data. See Surrogate Value Memo.

Currency Conversion

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

Preliminary Results of Review

    We preliminarily determine that the following weighted-average 
dumping margin exists for the period June 1, 2007, through May 31, 
2008:

                            TRBs from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                      Exporter                              Margin
------------------------------------------------------------------------
Peer Bearing Company Changshan......................       32.02 Percent
------------------------------------------------------------------------

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

[[Page 32545]]

additional copy of those comments on diskette.
    Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). Hearing requests 
should contain the following information: (1) the party's name, 
address, and telephone number; (2) the number of participants; and (3) 
a list of the issues to be discussed. Oral presentations will be 
limited to issues raised in the briefs. If a request for a hearing is 
made, parties will be notified of the time and date for the hearing to 
be held at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230. 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.

Assessment Rates

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries of subject merchandise in accordance 
with the final results of this review. For assessment purposes, we 
calculated exporter/importer- (or customer) -specific assessment rates 
for merchandise subject to this review. Where appropriate, we 
calculated an ad valorem rate for each importer (or customer) by 
dividing the total dumping margins for reviewed sales to that party by 
the total entered values associated with those transactions. For duty-
assessment rates calculated on this basis, we will direct CBP to assess 
the resulting ad valorem rate against the entered customs values for 
the subject merchandise. Where appropriate, we calculated a per-unit 
rate for each importer (or customer) by dividing the total dumping 
margins for reviewed sales to that party by the total sales quantity 
associated with those transactions. For duty-assessment rates 
calculated on this basis, we will direct CBP to assess the resulting 
per-unit rate against the entered quantity of the subject merchandise. 
Where an importer- (or customer) -specific assessment rate is de 
minimis (i.e., less than 0.50 percent), the Department will instruct 
CBP to assess that importer (or customer's) entries of subject 
merchandise without regard to antidumping duties. We intend to instruct 
CBP to liquidate entries containing subject merchandise exported by the 
PRC-wide entity at the PRC-wide rate we determine in the final results 
of this review. The Department intends to issue appropriate assessment 
instructions directly to CBP 15 days after publication of the final 
results of this review.

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 92.84 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, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing 
Duty Operations.
[FR Doc. E9-16096 Filed 7-7-09; 8:45 am]
BILLING CODE 3510-DS-S