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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Notices6189[A–570–601]Tapered Roller Bearings and PartsThereof, Finished and Unfinished,From the People’s Republic of China;Final Results of Antidumping DutyAdministrative Review and Revocationin Part of Antidumping Duty OrderAGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Final results of antidumpingduty administrative review andrevocation in part of antidumping dutyorder on tapered roller bearings andparts thereof, finished and unfinished,from the People’s Republic of China.SUMMARY: On September 26, 1995, theDepartment of Commerce (theDepartment) published the preliminaryresults of its administrative review ofthe antidumping duty order on taperedroller bearings (TRBs) and parts thereof,finished and unfinished, from thePeople’s Republic of China (PRC). Theperiod of review (POR) is June 1, 1993,through May 31, 1994.Based on our analysis of commentsreceived, we have made changes to themargin calculations, includingcorrections of certain clerical errors.Therefore, the final results differ fromthe preliminary results. The finalweighted-average dumping margins arelisted below in the section entitled‘‘Final Results of Review.’’We have determined that sales havebeen made below foreign market value(FMV) during the period of review.Accordingly, we will instruct the U.S.Customs Service to assess antidumpingduties on all appropriate entries.We have also determined that onecompany has demonstrated that it hasmade sales at not less than fair value forthree consecutive review periods.Therefore, we are revoking the order inpart with respect to this firm.EFFECTIVE DATE: February 11, 1997.FOR FURTHER INFORMATION CONTACT:Charles Riggle, Hermes Pinilla, AndreaChu, Kristie Strecker, or Kris Campbell,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution, Avenue N.W.,Washington, D.C. 20230; telephone(202) 482–4733.APPLICABLE STATUTE AND REGULATIONS:Unless otherwise indicated, all citationsto the statute and to the Department’sregulations are references to theprovisions as they existed on December31, 1994.SUPPLEMENTARY INFORMATION:BackgroundOn September 26, 1995, theDepartment published in the FederalRegister the preliminary results of itsadministrative review of theantidumping duty order on TRBs fromthe PRC. See Tapered Roller Bearingsand Parts Thereof, Finished andUnfinished, From the People’s Republicof China; Preliminary Results ofAntidumping Duty AdministrativeReviews, 60 FR 49572 (September 26,1995) (Preliminary Results). We gaveinterested parties an opportunity tocomment on our preliminary results andheld a public hearing on November 29,1995. The following parties submittedcomments: The Timken Company(Petitioner); Shanghai General BearingCompany, Limited (Shanghai); GuizhouMachinery Import and ExportCorporation (Guizhou Machinery),Henan Machinery and EquipmentImport and Export Corporation (Henan),Jilin Province Machinery Import andExport Corporation (Jilin), LiaoningMEC Group Company Limited(Liaoning), China National MachineryImport and Export Corporation (CMC),and Wafangdian Bearing IndustryCorporation (Wafangdian) (collectivelyreferred to as Guizhou Machinery et al.);Premier Bearing and Equipment Limited(Premier); Peer Bearing Company/ChinJun Industrial Limited (Chin Jun);Transcom, Incorporated (Transcom);and L&S Bearing Company/LSBIndustries (L&S).On June 30, 1994, Shanghai submitteda request, in accordance with 19 CFR353.25(b), that the antidumping dutyorder be revoked with respect toShanghai’s sales of this merchandise. Inaccordance with 19 CFR353.25(a)(2)(iii), this request wasaccompanied by certifications from thefirm that it had sold subjectmerchandise at not less than FMV for athree-year period, including this reviewperiod, and would not do so in thefuture. Shanghai also agreed to itsimmediate reinstatement in theantidumping duty order, as long as anyfirm is subject to this order, if theDepartment concludes under 19 CFR353.22(f) that, subsequent to revocation,it sold the subject merchandise at lessthan FMV.On March 13, 1996, we published inthe Federal Register our notice of intentto revoke the order in part. See TaperedRoller Bearings and Parts Thereof,Finished and Unfinished, From thePeople’s Republic of China; Intent toRevoke the Order (In Part), 61 FR 10314(March 13, 1996). We gave interestedparties an opportunity to comment onour intent to revoke in part. Petitionersubmitted comments; Shanghaisubmitted rebuttal comments.We have conducted thisadministrative review in accordancewith section 751(a)(1) of the Tariff Actof 1930, as amended (the Act), and 19CFR 353.22.Scope of ReviewsImports covered by these reviews areshipments of TRBs and parts thereof,finished and unfinished, from the PRC.This merchandise is classifiable underthe Harmonized Tariff Schedule (HTS)item numbers 8482.20.00,8482.91.00.60, 8482.99.30, 8483.20.40,8483.20.80, 8483.30.80, 8483.90.20,8483.90.30 and 8483.90.80. Althoughthe HTS item numbers are provided forconvenience and customs purposes, ourwritten description of the scope of thisproceeding is dispositive.Best Information AvailableIn accordance with section 776(c) ofthe Act, we have determined that theuse of the best information available(BIA) is appropriate for a number offirms. For certain firms, total BIA wasnecessary, while for other firms onlypartial BIA was applied. Ourapplication of BIA is discussed furtherin the Analysis of Comments Receivedsection of this notice.Analysis of Comments ReceivedComment 1Petitioner argues that theDepartment’s preliminary finding thatthere are 11 independent Chinese TRBproducers entitled to separateantidumping duty rates is inconsistentwith the preliminary determination thatthe TRB industry is not sufficientlymarket-oriented to allow for the use ofhome market prices. Petitioner statesthat, where the government retainssignificant control over an entireindustry, there is sufficient direct, orindirect, control to warrant treating allof the producers as ‘‘related’’ forpurposes of section 773(e)(4)(F) of theAct and also to calculate only a singlemargin for these companies. Petitionernotes that, in analyzing de facto statecontrol, the Department considerswhether the plants have independentauthority to set prices and the ability toretain profits. However, Petitionerinsists, where input and factor pricesare established by state control andwhere ownership of the company andthe concept of profits are unclear, thereis no truly independent authority to setprices and retain profits. Petitioner citesthe April 25, 1995 public version ofJilin’s supplemental questionnaire
6190 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Noticesresponse which states, at 3, that Jilin’sprofits may be used, inter alia, ‘‘foremployee bonuses and welfare.’’Petitioner claims that, in marketorientedcompanies, employee bonusesand welfare would be regarded asexpenses, not profits (citing CompactDuctile Iron Waterworks Fittings andAccessories from the People’s Republicof China, 58 FR 37908, 37910 (July 14,1993) (CDIW)).Petitioner contends that, if theDepartment calculates separate rates,there is a strong incentive to channelU.S. exports through exporters with thelowest margins, and that the recordestablishes that various TRB producersnot only market their own bearings butalso perform sales and marketingfunctions with respect to TRB modelsproduced by other companies.Petitioner argues that new importationswill inevitably be channeled throughcompanies with the lowest margins,adding that such behavior is amanifestation of the state control thatpermeates the industry and theeconomy.Petitioner contends further that theDepartment’s de jure and de factoseparate-rates analysis places animpossible burden of proof on domesticinterested parties due to the fact that astate-controlled economy can amend itslaws and regulations without in factrelinquishing control. Petitioner claimsthat the state can simply delete anyevidence of de jure control from laws,regulations, corporate charters and otherdocuments. That being the case,Petitioner argues, the domestic industry,as well as the Department itself, areconfronted with the requirement thatthey prove a negative without havingaccess to information that wouldindicate continuing control overproduction and pricing decisions by thestate. Thus, Petitioner states, claimsmade by plant managers, themselvesinterested in obtaining separate rates,become the basis for the Department’sde facto analysis. Finally, Petitionerargues that domestic interested partiesdo not have access to information thatmight allow them to rebut the claims ofde facto independence, causingirrational results and defeating thepurpose of the statute (citing RhonePoulenc (page cite omitted) and TheTimken Co. v. United States, 11 CIT786, 804, 673 F. Supp. 495, 513 (1987)).Guizhou Machinery et al.acknowledge that in CDIW theDepartment determined that it wouldnot consider a request for separate ratesfor any state-owned company on thebasis that no state-owned companycould be independent enough of statecontrol to be entitled to separate rates.However, Guizhou Machinery et al.note, citing Final Determination of Salesat Less Than Fair Value: Silicon CarbideFrom the People’s Republic of China, 59FR 22585 (May 2, 1994) (SiliconCarbide), that the Departmentsubsequently departed from the CDIWdecision and returned to its formerpractice, with some modifications, andargue that, in the preliminary results,the Department properly employed itsmore recent separate-rates analysismethodology from Silicon Carbide.Guizhou Machinery et al. add that theDepartment has rejected Petitioner’sclaim that separate rates should only beapplied to companies which are alsofound to be part of a market-orientedindustry. Guizhou Machinery et al. notethat the Department has previouslystated that the separate-rates analysisand the market-oriented-industry (MOI)test should not be linked in the mannerPetitioner appears to be suggesting(citing Final Determination of Sales atLess Than Fair Value: Disposable PocketLighters From the People’s Republic ofChina, 60 FR 22359, 22363 (May 5,1995) (Disposable Lighters)).Shanghai concurs with GuizhouMachinery et al. that an MOIdetermination and the separate-ratesmethodology are not synonymous andthat a negative determination withrespect to the former cannot rationallydictate a negative determination withrespect to the latter. Shanghai assertsthat the Department properlydetermined that Shanghai was entitledto a separate rate notwithstanding thedetermination that the TRB industry inthe PRC is not an MOI. Shanghai statesthat the separate-rates analysis involvesan assessment different from thedetermination of whether an MOI existsand that to prove an industry in the PRCis market-oriented would require proofnegating the existence of any stateinfluence over any factor of productionthroughout all segments of an industry,potentially involving hundreds ofbusiness units. Shanghai argues thatsuch a task would be virtuallyimpossible to achieve—even for the U.S.TRB industry.Shanghai claims that this isparticularly true with respect to itself, ajoint-venture company created under alaw guaranteeing that it operates as amarket-oriented producer. Shanghaistates that record evidence shows itoperates according to market influences,with all input-purchase decisions basedon its own assessment of productionand quality requirements and with allprice negotiations conducted at arm’slength. Shanghai states that the PRCgovernment exercises no control overthe prices of inputs, the type or volumeof production, product prices ordistribution of profits. Shanghai addsthat there are no restrictions on its usesof revenues and profits, it has exclusivecontrol over and access to its bankaccounts, and it can earn foreigncurrency and retain as much of theforeign currency as it desires. Therefore,Shanghai asserts that, regardless of theDepartment’s conclusion that the TRBindustry in China is not marketoriented,it is entitled to a separate rate.Department’s PositionWe agree with respondents that MOIdeterminations and separate-ratedeterminations differ with respect toboth the analysis we perform and thepact of the decision. We also agree withGuizhou Machinery et al. that we havedeparted, where appropriate, from theCDIW decision. In CDIW, we took theposition that state ownership (i.e.,‘‘ownership by all the people’’)‘‘provides the central government theopportunity to manipulate theexporter’s prices, whether or not it hastaken advantage of that opportunityduring the period of investigation.’’Thus, we concluded in CDIW that stateownedenterprises would not be eligiblefor separate rates.However, we have modified ourseparate-rates policy as set forth inCDIW. We subsequently determined thatownership ‘‘by all the people’’ in and ofitself cannot be considered asdispositive in establishing whether acompany can receive a separate rate. SeeSilicon Carbide at 22585. It is our policythat a PRC-based respondent is entitledto a separate rate if it demonstrates ona de jure and a de facto basis that thereis an absence of government controlover its export activities.A separate-rate determination doesnot presume to speak to more than anindividual company’s independence inits export activities. The analysis isnarrowly focused and the result, ifindependence is found, is resultinglynarrow—the Department analyzes thatsingle company’s U.S. sales separatelyand calculates a company-specificantidumping rate. Thus, for purposes ofcalculating margins, we analyzewhether specific exporters are free ofgovernment control over their exportactivities, using the criteria set forth inSilicon Carbide at 22585. Thoseexporters who establish theirindependence from government controlare entitled to a separate margincalculation.Thus, a finding that a company isentitled to a separate rate indicates thatthe company has sufficient control overits export activities to prevent themanipulation of such activities by a
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