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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Notices6177multiply the total weight of materials forSKF by the highest value of steel that ituses in the final results and shouldmultiply the total number of hoursworked at SKF by the IL&T India laborvalue it uses for the final results.Petitioner adds that this calculation ispreferable to the overhead, SG&A, andprofit denominators that the Departmentused in the preliminary results becauseit will result in a materials costexclusive of Indian import duties.Guizhou Machinery et al. respondthat it is irrelevant whether the SKFreport represents a single source forvaluing all FOP components and notethat the Department consistently usesmultiple sources of information forsurrogate data in NME cases, selectingthe best source for each element of theFOP. Guizhou Machinery et al. arguethat the fact that SKF India is a producerof TRBs in the surrogate country doesnot mean that its report is a propersource for all surrogate data, addingthat, in most NME cases, theDepartment uses multiple sources ofinformation for surrogate data, choosingthe best one for each element for thefactors of production. GuizhouMachinery et al. state that Petitioner’scitation to Timken is misplacedbecause, in that case, the Court ofInternational Trade (CIT) remanded thecase to the Department because therationale for selecting a particular valuefor steel scrap was inconsistent with therecord and the Department had notexplained the inconsistency. GuizhouMachinery et al. claim that theDepartment was not criticized inTimken for the use of different sourcesof surrogate data. East Sea adds that theSKF report, though audited, is notverified data and notes that theDepartment has a preference forverifiable, public information.With respect to Petitioner’s proposalthat the Department use SKF data todetermine the raw-material-factor value,East Sea and Guizhou Machinery et al.argue that the raw-material data in theSKF report is inferior to import statisticsdue to a lack of detail regarding thetypes of steel SKF used. GuizhouMachinery et al. state that, in thisreview, the raw-material-input value isthe critical factor in the analysis andthere is no evidence to indicate that SKFIndia used the same kind of steel as therespondents, whereas import statisticsallow the Department to pinpoint aparticular input. East Sea notes that theSKF report does not provide separateprices for bar, rod or steel sheet butinstead provides a single value for allsteel used in the factory, including steelused in the production of non-subjectmerchandise. East Sea submits thatPetitioner, Respondents, and theDepartment do not know what types ofsteel were included in SKF’s materialcostcalculation. East Sea suggests thatthe steel referenced in the SKF reportcould be tube steel (instead of bar steel),stainless steel (a much more expensiveproduct), already machined ‘‘greenparts’’ supplied by SKF’s many relatedcompanies, or innumerable other typesof steel. Guizhou Machinery et al. addthat Petitioner has provided noinformation demonstrating that the SKFreport covers the specific steel inputsrelevant to subject merchandise.With respect to Petitioner’s claim thatthe Department should calculate thelabor factor using SKF data, GuizhouMachinery et al. contend that Petitionerhas provided no evidence to support itsclaim that the labor costs of a subsidiaryof a Swedish company, SKF, are a bettersurrogate for labor costs than is anaverage for the surrogate country.Guizhou Machinery et al. state that it isthe Department’s practice to useindustry-wide data, not producerspecificdata, where possible, andsuggest that Petitioner’s proposal wouldrisk introducing abnormalities unique tothat producer. East Sea adds that,because the SKF report does notdifferentiate between administrative andmanufacturing personnel, theDepartment cannot use the SKF data tovalue labor. East Sea explains that themajority of workers producing subjectmerchandise in this review areunskilled laborers and, because theDepartment verified the Chinese bearingproducers, the Department has specificknowledge of the skill level in China.With respect to Petitioner’s argumentthat, if the Department continues tovalue the material and labor factorsusing non-SKF sources, the Departmentmust adjust the overhead, SG&A, andprofit rates to reflect the use of lowermaterials and labor values, GuizhouMachinery et al. respond that theDepartment’s use of data in SKF’sannual report to establish percentages orratios to be used for determination ofthe surrogate values for overhead andSG&A is fully consistent with theDepartment’s standard surrogatemethodology. Guizhou Machinery et al.state that the Department’s NME/surrogate-country methodology is basedupon the application of reliable andrepresentative ratios and input valuesfrom multiple sources and contend thatthe Department does not typically‘‘adjust’’ the component values used toderive SG&A and overhead ratios in themanner suggested by Petitioner.Consequently, Guizhou Machinery et al.argue, the Department should not adjustthe expenses taken from the SKF report,as suggested by Petitioner, to formulaterepresentative ratios for use indetermining actual amounts foroverhead and SG&A. In support of thiscontention, Guizhou Machinery et al.cite Final Determination of Sales at LessThan Fair Value: Coumarin From thePeople’s Republic of China, 59 FR 66895(December 28, 1994) (Coumarin), inwhich the Department calculatedmaterials costs from various sources andused the Reserve Bank of India Bulletin(RBI) data to calculate SG&A but did notadjust SG&A and overhead costs.East Sea adds that it would beillogical to adjust overhead and SG&Aas the Petitioner suggests for threereasons: (1) the Department has no ideawhat kind of steel SKF uses andreplacement of SKF’s material costs inthe overhead and SG&A denominatorswith Indian import costs does notimprove the reliability of the SKFoverhead or SG&A data; (2) SKF’soverhead rate reflects the experience ofa sophisticated bearing factory and theDepartment has long recognized thatindustrialized countries have higheroverhead rates than do companies inless industrialized countries, so that theoverhead rate should not be adjustedupward; and (3) SKF’s overhead costsreflect the unique experience of SKF,which is the leading producer in theworld and uses the finest raw materialsand state-of-the-art technology toproduce its bearings—as such, theDepartment would be mixing applesand oranges to substitute Indian importsteel prices for SKF’s own prices inorder to create a hybrid overhead orSG&A rate.Department’s Position:We agree with Respondents. Section773(c)(1) of the Act states that, forpurposes of determining NV in a NME,‘‘the valuation of the FOP shall be basedon the best available informationregarding the values of such factors.. . .’’ As we stated in TRBs IV–VI andTRBs VII, our preference is to valuefactors using published information (PI)that is closest in time with the specificPOR. See also Final Determination ofSales at Less Than Fair Value: CertainPartial-Extension Drawer Slides Fromthe People’s Republic of China, 60 FR54472, 54476 (October 24, 1995)(Drawer Slides). Based on the recordevidence we have determined thatsurrogate-country import statistics(Indonesian for valuing steel used toproduce cups and cones, Indian for steelused to produce rollers and cages),exclusive of import duties, comprise thebest available information for valuingraw-material costs. Our reasons forpreferring data for Indonesia, rather