federal register - U.S. Government Printing Office

6204 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Noticesallowed for the 20-foot and the 40-footcontainers were 48,000 pounds and60,000 pounds, respectively. Weconverted the pounds to kilograms anddivided the total cost of shipping thefully loaded container by the maximumpayload weight in kilograms to derive aper-kilogram freight rate. We multipliedthat rate by the net bearing weight inorder to value ocean freight expenses.Comment 17Petitioner states that the Departmenterroneously used the Indian wholesalepriceindex (WPI) to adjust for inflationof ocean-freight cost. As the oceanfreightcosts were based on U.S. rates inU.S. dollars, Petitioner contends thatany adjustment for inflation should bebased on dollar inflation. Petitionersuggests that the Department adjustocean-freight costs using the U.S.producer-price index for finished goods,the U.S. equivalent of a WPI, from thesame source used to derive the IndianWPI.Department’s PositionWe agree with Petitioner that weshould adjust ocean-freight costs usingthe U.S. producer-price index becauseocean-freight costs are based on U.S.rates in U.S. dollars. For the finalresults, we deflated the July 1996 oceanfreight-ratequotes from Maersk Inc.using the U.S. producer-price index toreflect the POR costs.Comment 18Petitioner contends that theDepartment has understated the marineinsuranceexpense by applying aninsurance rate per ton applicable tosulfur dyes from India. Petitioner arguesthat, absent any evidence that one tonof sulfur dyes would have a value evenclose to the value of one ton of bearings,there is no rational basis for theDepartment’s approach, i.e., applyinginsurance on the basis of weight ratherthan of value. Petitioner asserts that, ifa container of bearings were lost at sea,there is no basis to suppose thatpayment for the loss of one ton of sulfurdyes would have any relationship to thevalue of the bearings.Petitioner recommends that theDepartment calculate a marineinsurancefactor based on the ratio ofthe insurance charge per ton of sulfurdye divided by the value of sulfur dyeper ton (based on U.S. Customs value)and apply this factor to the price ofTRBs sold in the United States.Petitioner contends further that tocorrect the ocean-freight distance uponwhich it based the marine-insurancerate, the Department should recalculatemarine insurance. However, Petitionernotes that the source the Departmentused deleted the destination in thepublic version and, therefore, the onlyinformation on the record is that theinsurance covered shipments fromsomewhere in China to somewhere inthe United States, which provides nobasis for differentiating amongshipments on the basis of distance.Guizhou Machinery et al. respondthat it is not reasonable to assume thatthe difference in Indian marineinsurancerates applicable to sulfur dyesand TRBs can be measured accuratelysimply by comparing the difference inproduct values. Guizhou Machinery etal. assert further that Petitioner’sargument is based on customs valuesobtained from the Sulfur Dyes petition,information which has not beenpreviously submitted on the record forthe current review (citing 19 CFR353.31). Guizhou Machinery et al. statethat the Department’s approach of usingthe marine-insurance rates from thesulfur-dyes investigation is consistentwith its calculations in other NMEcases, citing Coumarin, Sebacic Acidand Saccharin. Finally, GuizhouMachinery et al. argue that theDepartment did not understate but,rather, overstated the marine-insuranceexpenses due to ministerial errors in theDepartment’s calculation. GuizhouMachinery et al. claim that the errorsmade by the Department include thefailure to convert nautical miles intostatute miles and then to kilometers incalculating per-unit marine-insurancerate and the failure to convert the perunitamounts from rupees into U.S.dollars before deducting the marineinsuranceexpense from USP.Respondents urge the Department toreject Petitioner’s request to make anupward adjustment to the marineinsurancecalculations and to correct theconversion errors.Department’s PositionWe disagree with Petitioner withrespect to our use of the sulfur dyesdata. We have relied on the publicinformation on marine insurance forsulfur dyes that we used for thepreliminary results, and we have usedthe same rate repeatedly for other PRCanalyses. See Final Results ofAdministrative Review: Certain HelicalSpring Lock Washers from the PRC, 61FR 41994 (August 13, 1996) (LockWashers), and TRBs IV–VI at 65537.We agree with Petitioner that there isno basis for differentiating amongshipments based on distance. Thesource we used for valuing marineinsurance provides only a cost per ton.For the final results, we have appliedmarine insurance based on net weight,without making any allowance fordistance shipped. Therefore, we are notcorrecting the clerical error alleged byGuizhou Machinery et al. with respectto the failure to convert nautical milesinto statute miles and then intokilometers. We do agree, however, thatwe failed to convert marine insurancefrom rupees into dollars beforededucting the expense from USP. Forthe final results, we converted themarine insurance into dollars using theexchange rate in effect on the date ofsale.Comment 19Petitioner states that Shanghai’sbearing weights and scrap weights wereunverifiable and that the Departmentshould therefore resort to partial BIA byadjusting the reported amounts to reflectthe highest actual materials or lowestactual scrap costs.Shanghai argues that the Departmentweighed actual bearings and scrapsamples at verification and determinedthat any discrepancies found atverification were insignificant. Shanghaistates that the Department haspreviously found no cause to resort toBIA on the basis of insignificantdiscrepancies (citing Silicon Carbide at19749).Department’s PositionWe disagree with Petitioner. Althoughat verification we did find discrepanciesin the reported weights, we determinedthese discrepancies to be insignificant.Therefore, they did not undermine thevalidity of Shanghai’s responses. Inaddition, we found some discrepanciesto be above reported weights and othersto be below; we found no pattern ofunder-reporting.Comment 20Petitioner argues that the Departmentreported that it was unable to verify thenumber of Shanghai’s employeesassigned to the production of TRBs,citing the verification report for thiscompany. Petitioner claims that, as aresult, the Department could not verifyreported indirect labor nor was it ableto determine the extent to which laborcosts were understated by the omissionof trained-employee hours from thedirect-labor costs reported. Petitionerfurther argues that, given that overheadcosts, SG&A and profit are all derivedon the basis of materials and labor costs,the inability to verify labor hours is fatalto Shanghai’s entire questionnaireresponse.Petitioner argues that, if theDepartment uses the partial informationsubmitted by Shanghai, labor hours