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Notice

Brake Rotors From the People's Republic of China: Final Results of Changed-Circumstances Antidumping Duty Administrative Review

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of changed-circumstances antidumping duty administrative review.

SUMMARY:

On November 20, 2000, the Department of Commerce published a notice of initiation and preliminary results of changed-circumstances antidumping duty review of the antidumping duty order on brake rotors from the People's Republic of China, in which we preliminarily determined that Laizhou Auto Brake Equipment Co., Ltd. is the successor-in-interest to Laizhou Auto Brake Equipments Factory for purposes of determining antidumping liability. We are now affirming our preliminary results.

EFFECTIVE DATE:

July 17, 2001.

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FOR FURTHER INFORMATION CONTACT:

Brian Smith or Terre Keaton, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-1766 or (202) 482-1280, respectively.

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SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) regulations are to 19 CFR part 351 (April 2001).

Background

Since the Department published in the Federal Register on November 20, 2000, the initiation and preliminary results of this changed-circumstances review of the antidumping duty order on brake rotors from the PRC (65 FR 69732), the following events have occurred. Start Printed Page 37212

On January 16, 2001, the petitioner [1] submitted its case brief. In its case brief, the petitioner alleged that the information on the record was insufficient for purposes of demonstrating that Laizhou Auto Brake Equipment Co., Ltd. (“LABEC”) is the successor-in-interest to Laizhou Auto Brake Equipments Factory (“LABEF”). In addition, the petitioner requested that the Department verify the data contained in LABEC's response for purposes of establishing whether LABEC is the successor-in-interest to LABEF.

On January 26, 2001, the Department issued a supplemental questionnaire to LABEC, which addressed the petitioner's concerns raised in its case brief. On February 5, 2001, LABEC requested an extension of time until February 16, 2001, to file its response to the supplemental questionnaire, which the Department subsequently granted on February 7, 2001. On February 16, 2001, LABEC submitted its supplemental questionnaire response.

On January 31, 2001, the Department notified LABEC that it intended to conduct a verification of the data it submitted in support of its successor-in-interest claim and provided it with a sample verification outline for purposes of familiarizing LABEC with the verification process.

On February 23, 2001, the Department provided the complete verification outline to LABEC. On March 16, 2001, the Department conducted its verification of the information submitted by LABEC in accordance with 19 CFR 351.307.

On April 23, 2001, the Department issued its verification report. On June 7, 2001, we provided parties with an opportunity to submit comments on our verification findings for consideration in these final results. Neither party submitted comments.

Scope of Order

The products covered by this order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, ranging in diameter from 8 to 16 inches (20.32 to 40.64 centimeters) and in weight from 8 to 45 pounds (3.63 to 20.41 kilograms). The size parameters (weight and dimension) of the brake rotors limit their use to the following types of motor vehicles: automobiles, all-terrain vehicles, vans, recreational vehicles under “one ton and a half,” and light trucks designated as “one ton and a half.”

Finished brake rotors are those that are ready for sale and installation without any further operations. Semi-finished rotors are those rotors which have undergone some drilling and on which the surface is not entirely smooth. Unfinished rotors are those which have undergone some grinding or turning.

These brake rotors are for motor vehicles and do not contain in the casting a logo of an original equipment manufacturer (“OEM”) which produces vehicles sold in the United States (e.g., General Motors, Ford, Chrysler, Honda, Toyota, and Volvo). Brake rotors covered in this order are not certified by OEM producers of vehicles sold in the United States. The scope also includes composite brake rotors that are made of gray cast iron which contain a steel plate but otherwise meet the above criteria. Excluded from the scope of the order are brake rotors made of gray cast iron, whether finished, semifinished, or unfinished, with a diameter less than 8 inches or greater than 16 inches (less than 20.32 centimeters or greater than 40.64 centimeters) and a weight less than 8 pounds or greater than 45 pounds (less than 3.63 kilograms or greater than 20.41 kilograms).

Brake rotors are classifiable under subheading 8708.39.5010 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Separate Rates

Because LABEC is owned by individuals in the People's Republic of China (“PRC”), the Department as a matter of practice first must conduct a separate rates analysis of the company. In proceedings involving non-market economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty deposit rate.

Based on information contained in its September 29, 2000, submission, LABEC is registered in the PRC as a limited liability company owned by private individuals. Thus, a separate rates analysis is necessary to determine whether LABEC is independent from government control (see Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China (“Bicycles”) 61 FR 19026 (April 30, 1996)).

To establish whether a firm is sufficiently independent from government control, and therefore entitled to a separate rate, the Department analyzes each exporting entity under a test arising out of the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) and amplified 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”). Under the separate rates criteria, the Department assigns separate rates in NME cases only if the respondent can demonstrate the absence of both de jure and de facto governmental control over export activities.

1. De Jure Control

LABEC has placed on the administrative record documentation to demonstrate absence of de jure governmental control, including the 1994 “Foreign Trade Law of the People's Republic of China,” and the “Administrative Regulations of the People's Republic of China Governing the Registration of Legal Corporations,” promulgated on June 3, 1988.

As in prior cases, we have analyzed these laws and have found them to establish sufficiently an absence of de jure control of stock companies including limited liability companies. See, e.g., Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol from the People's Republic of China (“Furfuryl Alcohol”) 60 FR 22544 (May 8, 1995), and Preliminary Determination of Sales at Less Than Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers from the People's Republic of China 60 FR 29571 (June 5, 1995). We have no new information in this proceeding which would cause us to reconsider this determination with regard to LABEC.

2. De Facto Control

As stated in previous cases, there is some evidence that certain enactments of the PRC central government have not been implemented uniformly among different sectors and/or jurisdictions in the PRC. See Silicon Carbide and Furfuryl Alcohol. Therefore, the Department has determined that an analysis of de facto control is critical in determining whether the respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.

The Department typically considers four factors in evaluating whether a respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by, or subject to the approval of, Start Printed Page 37213a governmental authority; (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 the disposition of profits or financing of losses. See Silicon Carbide and Furfuryl Alcohol.

LABEC asserted the following: (1) It establishes its own export prices; (2) it negotiates contracts without guidance from any governmental entities or organizations; (3) it makes its own personnel decisions; and (4) it retains the proceeds of its export sales, uses profits according to its business needs, and has the authority to sell its assets and to obtain loans. Additionally, statements contained in LABEC's September 29, 2000, submission indicate that the company does not coordinate its prices with other exporters.

The Department conducted verification of LABEC's separate rate claim and found no evidence at verification of government involvement in LABEC's business operations. Specifically, Department officials examined sales documents that showed that LABEC negotiated its contracts and set its own sales prices with its customers. In addition, the Department reviewed sales payments, bank statements and accounting documentation that demonstrated that LABEC received payment from its U.S. customers via bank wire transfer, which was deposited into its own bank account without government intervention. Finally, the Department examined internal company memoranda, such as appointment notices and election results, which demonstrated that LABEC selected its own management. See Department verification report on LABEC at pages 3 through 6. This information, taken in its entirety, supports a finding that there is an absence of de facto governmental control of LABEC's export functions. Consequently, we have determined that LABEC has met the criteria for the application of a separate rate.

Final Results of the Review

We also verified data contained in LABEC's September 29, 2000, submission and February 16, 2001, supplemental submission as it pertained to the claim that LABEC is the successor-in-interest to LABEF.

In accordance with section 751(b) of the Act and in order to determine whether LABEC is the successor-in-interest to LABEF, we examined several factors including, but not limited to, changes in: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base. See, e.g., Brass Sheet and Strip from Canada: Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992) (“Brass from Canada”). While no single factor or combination of these factors will necessarily provide a dispositive indication of a successor-in-interest relationship, the Department will generally consider the new company to be the successor to the previous company if the new company's resulting operation is not materially dissimilar to that of its predecessor. See, e.g., Industrial Phosphoric Acid from Israel: Final Results of Changed Circumstances Review, 59 FR 6944 (February 14, 1994); Brass from Canada, and Fresh and Chilled Atlantic Salmon from Norway: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, 63 FR 50880 (September 23, 1998). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will accord the new company the same antidumping treatment as its predecessor.

Based on our verification findings, we determine that LABEC is the successor-in-interest to LABEF. Specifically, LABEF has demonstrated through registration and ownership documentation examined at verification that it changed its name to LABEC as a result of decisions made by LABEF's original owners. Moreover, LABEF has demonstrated through production and accounting records examined at verification that changing its name to LABEC has resulted in no significant changes in either production facilities, supplier relationships, customer base, or management. See Department verification report on LABEC at pages 7 through 10.

Thus, we determine that LABEC is the successor-in-interest to LABEF for purposes of determining antidumping duty liability, and should receive the same antidumping duty treatment with respect to brake rotors as the former LABEF.

We will instruct the Customs Service to suspend shipments of subject merchandise made by LABEC at LABEF's cash deposit rate (i.e., zero percent). The shipments of subject merchandise to be suspended are those which are entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this changed-circumstances review.

We are issuing and publishing this determination and notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 351.216.

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Dated: July 9, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

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Footnotes

1.  The petitioner is the Coalition for the Preservation of American Brake Drum and Rotor Aftermarket Manufacturers.

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[FR Doc. 01-17857 Filed 7-16-01; 8:45 am]

BILLING CODE 3510-DS-P