Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Timken Company (the petitioner) has filed a request for the Department of Commerce (the Department) to initiate a changed circumstances review of the antidumping duty order on tapered roller bearings (TRBs) and parts thereof from the People's Republic of China (PRC). The petitioner alleges that Shanghai General Bearing Co., Ltd. (SGBC/SKF), a PRC TRBs producer previously revoked from the antidumping duty order, has resumed sales at prices below normal value (NV). Therefore, the petitioner requests that the Department conduct a review to determine whether to reinstate the antidumping duty order with respect to SGBC/SKF.
In accordance with section 751(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.216(b), the Department finds the information submitted by the petitioner sufficient to warrant initiation of a changed circumstances review of the antidumping duty order on TRBs from the PRC with respect to SGBC/SKF. The period of review (POR) is June 1, 2014, through May 31, 2015.
In this changed circumstances review, we will determine whether SGBC/SKF sold TRBs at less than NV subsequent to its revocation from the order. If we determine in this changed circumstances review that SGBC/SKF sold TRBs at less than NV and resumed dumping, effective on the date of publication of our final results, we will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of TRBs manufactured and exported by SGBC/SKF.
Effective date: August 13, 2015.
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FOR FURTHER INFORMATION CONTACT:
Alice Maldonado, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-4682.
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On June 15, 1987, the Department published the antidumping duty order on TRBs from Start Printed Page 48494the PRC.
On February 11, 1997, the Department conditionally revoked the TRBs Order with respect to merchandise produced and exported by SGBC/SKF,
based on a finding of three years of no dumping.
On February 20, 2013, the petitioner alleged that, since its conditional revocation from the TRBs Order, there is evidence that SGBC/SKF has resumed dumping TRBs in the United States. The petitioner notes that SGBC/SKF agreed in writing to reinstatement in the antidumping duty order if it were found to have resumed dumping and it requests that, because SGBC/SKF violated this agreement, the Department initiate a changed circumstances review to determine whether to reinstate SGBC/SKF into the TRBs Order.
In its February 2013, submission, the petitioner provided evidence supporting its allegation. Specifically, the petitioner compared invoice prices to an unaffiliated U.S. customer submitted by SGBC/SKF as part of an application for a separate rate in the 2011-2012 administrative review on TRBs from the PRC to NVs computed using data from the same segment of the proceeding related to another company, Changshan Peer Bearing Co., Ltd. (CPZ/SKF).
In March 2013, the Department requested further information from the petitioner regarding the basis of its allegation, which the petitioner supplied in July 2013. Also in July 2013, SGBC/SKF objected to the petitioner's request for a changed circumstances review, and the petitioner responded to those comments in August 2013.
From August through November 2013, the Department requested that the petitioner provide additional information to support and/or clarify its allegation. The petitioner responded to these requests during the same time period.
In January 2014, the Department deferred the decision of whether to initiate the changed circumstances review requested by the petitioner, pending a determination in another changed circumstances review (i.e., where the Department was examining whether SGBC/SKF was the successor in interest to the company that existed at the time of revocation from the antidumping duty order).
The Department completed that successor-in-interest changed circumstances review in April 2015, finding SGBC/SKF to be the successor to the revoked company.
In May and June 2015, the Department requested additional information from the petitioner regarding its request for a changed circumstances review. The petitioner responded to these requests in the same months, and SGBC/SKF submitted comments related to the former of these submissions in June 2015.
Scope of the Review
Imports covered by the 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, 8708.70.6060, 8708.99.2300, 8708.99.4850, 8708.99.6890, 8708.99.8115, and 8708.99.8180. Although the HTSUS item numbers are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.
Allegation of Resumed Dumping
In its February 2013 submission, the petitioner provided an invoice to an unaffiliated U.S. customer of SGBC/SKF as the basis for U.S. price, and it provided factors of production (FOPs) reported by CPZ/SKF in another segment of this proceeding and surrogate value (SV) information as the basis for NV. Specifically, the petitioner's information was obtained from the 2011-2012 administrative review on TRBs from the PRC,
and the petitioner used this information to argue that SGBC/SKF sold TRBs at less than NV during that review period.
The petitioner provided an alternative allegation in August 2013 to take into account certain objections raised by SGBC/SKF.
In May and June 2015, at the Department's request, the petitioner provided additional calculations, based on data contained in the same source document used to make the initial allegation, to demonstrate that its initial allegation was representative of SGBC/SKF's broader overall selling practices during the period covered by the 2011-2012 administrative review.
The allegation of resumed dumping upon which the Department has based its decision to initiate a changed circumstances review is detailed below. The sources of data for the adjustments that the petitioner calculated relating to NV and U.S. price are discussed in greater detail in the Changed Circumstances Review Initiation Checklist, dated concurrently with this notice. Should the need arise to use any of this information as facts available under section 776 of the Act, we may reexamine the information and revise the margin calculation, if appropriate.Start Printed Page 48495
1. Export Price (EP)
The petitioner based U.S. price upon sales documents submitted by SGBC/SKF in a separate rate application, dated October 15, 2012, in the 2011-2012 administrative review on TRBs from the PRC. The invoice identifies prices for three TRB models sold by SGBC/SKF to an unaffiliated U.S. customer.
The petitioner subsequently revised its allegation to remove one of these models from its calculations because it was unable to provide contemporaneous NV information for this product.
In May and June 2015, to demonstrate that the prices upon which the petitioner based its allegation were representative of SGBC/SKF's broader selling activity during the 2011-2012 review period, the petitioner provided three sets of additional margin calculations based on sales contained in SGBC/SKF's separate rate application that were made by SGBC/SKF to an affiliated U.S. importer.
In accordance with section 773(c)(1) of the Act, to determine NV, the petitioner used the FOPs submitted by CPZ/SKF, the sole respondent in the 2011-2012 administrative review on TRBs from the PRC, and it valued those FOPs using SV data and surrogate financial statements taken from the same segment of the proceeding.
In addition, on August 9, 2013, the petitioner provided an alternative calculation of NV in order to address comments made by SGBC/SKF.
For further discussion, see below.
3. Alleged Margins of Dumping
Based upon the information summarized above, the petitioner alleges that there is evidence that SGBC/SKF has resumed dumping TRBs in the United States that is sufficient to warrant initiation of a changed circumstances review to determine whether SGBC/SKF should be reinstated into the antidumping duty order. The petitioner estimated a margin of 26 percent. To demonstrate that this margin is representative of SGBC/SKF's broader selling experience, the petitioner also calculated several additional non-de minimis margins using the data in its May 22, 2015, submission.
Comments by Interested Parties
As noted above, on July 23, 2013, SGBC/SKF submitted comments on the petitioner's request that the Department initiate a changed circumstances review.
In these comments, SGBC/SKF contended that the evidence provided by the petitioner fails to provide a reasonable indication that SGBC/SKF has resumed dumping because: (1) The petitioner's allegation is based on a miniscule sample of U.S. sales, rendering the U.S. price data in the allegation unrepresentative of SGBC/SKF's broader selling experience; (2) the petitioner's calculations are not based on SGBC/SKF's own FOP data, but rather are based on the FOPs provided by CPZ/SKF, an entirely different company, and the petitioner provided no factual basis to demonstrate that CPZ/SKF's FOPs provide an accurate estimate of SGBC/SKF's own FOPs or that CPZ/SKF's and SGBC/SKF's product mixes during the POR were similar; and (3) the petitioner's calculations fail to use the market economy steel prices deemed by the Department to be the best information to value CPZ/SKF's steel bar purchases during the 2011-2011 administrative review.
Further, SGBC/SKF argued that, even if the small number of U.S. sales covered by petitioner's allegation represented sales below NV, this alone does not provide an indication of overall dumping because it does not take into account the fact that the Department's current practice is to offset lower-priced sales with higher prices on other products.
According to SGBC/SKF, initiating a changed circumstances review with such flaws would be unreasonable.
On August 9, 2013, the petitioner responded to these comments.
The petitioner noted that the U.S. price data in its allegation were taken from an actual sale made by SGBC/SKF, and thus it is reasonably likely that the sale of the products at issue is representative not only of other sales of the same part numbers (as these products fall within SGBC/SKF's U.S. product line) but also of SGBC/SKF's other products in general.
Moreover, the petitioner stated that these data were the only information reasonably available to it and, therefore, they provide reasonable grounds for the Department to initiate a changed circumstances review.
Similarly, the petitioner disagreed that use of CPZ/SKF's FOP information yields an inaccurate picture of SGBC/SKF's production costs. The petitioner noted that, in 2008, CPZ/SKF was acquired by SKF, the world's largest bearing company.
Consequently, the petitioner argued that not only is SKF an efficient producer of TRBs, but also as owner of CPZ/SKF, it has improved the efficiency of CPZ/SKF's production facilities. Therefore, the petitioner claims that CPZ/SKF's FOPs likely provide a conservative estimate of SGBC/SKFs FOP experience.
Furthermore, in its September 2013 submission, the petitioner placed its TRB product coding system on the record of this proceeding; 
the petitioner claims that this coding system demonstrates that certain of the TRBs sold by SGBC/SKF to the United States are the same as TRBs produced by CPZ/SKF (because they have the same part numbers),
and, thus, the CPZ/SKF FOPs used in the allegation are for products with identical specifications.
With respect to SGBC/SKF's final argument that the petitioner should have used CPZ/SKF's market economy input price submitted in the 2011-2012 administrative review, the petitioner stated that there is no information on the record indicating that SGBC/SKF purchased its steel from a market-economy source, so there is no basis to use anything other than SV data.
Nonetheless, in order to demonstrate that the facts of this record support the proposition that SGBC/SKF has likely resumed dumping, the petitioner took the margin program used by the Department in the 2011-2012 administrative review on TRBs from the Start Printed Page 48496PRC and tailored it to account for the facts of this case. Specifically, The petitioner: (1) Lowered the FOP usage rates by 10 percent in order to account for the possibility that SGBC/SKF is an even more efficient producer of TRBs than CPZ/SKF; and (2) used CPZ/SKF's market-economy steel price. The petitioner notes that, even after incorporating these conservative assumptions, the results still indicate that SGBC/SKF has resumed dumping.
As noted above, in May and June 2015, the petitioner responded to the Department's requests for additional information regarding its request for a changed circumstances review. In these submissions, the petitioner explained why it considered the sale covered by its allegation to be representative of SGBC/SKF's broader U.S. sales activity and it provided additional calculations supporting this conclusion. On June 5, 2015, SGBC/SKF submitted comments on the petitioner's May 22, 2015 filing; in these comments; SGBC/SKF contends that, despite its claim to the contrary, the petitioner failed to establish that the sale at issue is, in fact, representative. Moreover, SGBC/SKF maintains that the petitioner's additional calculations are not valid because: (1) They are based on “irrelevant” U.S. transactions between affiliated parties without accompanying evidence that a sale to an unaffiliated party took place; and (2) a “markup” used in these calculations is based, in part, on sales of non-subject products. According to SGBC/SKF, the standard for initiation of reinstatement changed circumstances reviews should be higher than the comparatively lower standard that exists for investigations, considering the costs associated with such reviews and the fact that a revoked company has already proven that it was not engaged in dumping for three consecutive years. As a result, SGBC/SKF submits that the single sale on which the petitioner's allegation is based is not sufficiently indicative of resumed dumping for purposes of initiating a changed circumstances review.
Initiation of Changed Circumstances Review
Pursuant to section 751(b) of the Act, the Department will conduct a changed circumstances review upon receipt of a request “from an interested party for review of an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order.” After examining the petitioner's allegation and supporting documentation, we find that the petitioner has provided evidence of changed circumstances sufficient to initiate a review to determine whether SGBC/SKF has resumed dumping and should be reinstated in the TRBs Order.
The Department's authority to reinstate a revoked company into an antidumping duty order by means of a changed circumstances review derives from sections 751(b) and (d) of the Act.
In particular, the Department's authority to revoke an order is expressed in section 751(d) of the Act. The statute, however, provides no detailed description of the criteria, procedures, or conditions relating to the Department's exercise of this authority. Accordingly, the Department issued regulations setting forth in detail how the Department will exercise the authority granted to it under the statute. At the time of SGBC/SKF's revocation from the TRBs Order, a Department regulation authorized the partial and conditional revocation of orders as to companies that were determined not to have made sales at less than NV for the equivalent of three consecutive years and that certified to the immediate reinstatement into an order if they resumed dumping.
Although the regulatory provision for partial and conditional revocation of companies from orders has since been revoked, we have clarified that all conditionally revoked companies remain subject to their certified agreements to be reinstated into the order from which they were revoked if the Department finds that the company has resumed dumping.
For these reasons, conducting a changed circumstances review pursuant to section 751(b) of the Act to determine whether to reinstate SGBC/SKF into the TRBs Order is consistent with the statute and with the certification that SGBC/SKF signed as a precondition to its conditional revocation.
With respect to SGBC/SKF's comments regarding the representativeness of the U.S. price and NV data proffered by the petitioner, on December 18, 2013, the Department placed information on the record of this segment of the proceeding which was submitted in an ongoing successor-in-interest changed circumstances review involving SGBC/SKF.
This information relates to the product mix of both SGBC/SKF and CPZ/SKF, and it demonstrates that the type of products shown on SGBC/SKF's invoice represents a significant proportion of SGBC/SKF's product line. We also find SGBC/SKF's concerns relating to the use of CPZ/SKF's FOPs to be misplaced.
With respect to the question of whether the size of the allegation is sufficiently representative of SGBC/SKF's sales activity, we note that, in response to the Department's supplemental questionnaires, the petitioner provided additional information regarding representativeness of the U.S. price data on May 22, 2015, and June 24, 2015. In these submissions, the petitioner used affiliated-party pricing for a substantial quantity of TRBs shipped between SGBC/SKF and its U.S. affiliate.
Adjusting the prices to approximate the prices to an unaffiliated U.S. customer and using the same NV methodology, the petitioner calculated dumping margins.
We disagree with SGBC/SKF that these alternative calculations are invalid simply because the petitioner constructed an export price using a markup which may contain profit rates for both TRBs and other products not subject to the TRBs Order. We find that Start Printed Page 48497the petitioner's methodology yields a reasonable approximation of SGBC/SKF's U.S. pricing behavior. Moreover, given that the petitioner made no adjustments for numerous selling expenses, we find that the petitioner's methodology is likely conservative.
Further, with respect to NV, the petitioner maintains that its TRB product coding system demonstrates that the FOPs in its allegation are for the same basic products as CPZ/SKF's because they have the same cone and bore width.
Thus, while the FOP data are not specific to SGBC/SKF, we find that the FOP data submitted are publicly available and the product coding system information submitted by the petitioner provides a reasonable basis to conclude that NV is for substantially similar or identical products. Finally, with respect to SGBC/SKF's argument that the petitioner should have used CPZ/SKF's market-economy steel purchase prices in its calculations, we note that the petitioner provided alternative calculations which incorporated these prices and provided the dumping margins resulting from these calculations.
With respect to SGBC/SKF's comments regarding zeroing or offsets, we note that the issue raised by SGBC/SKF is implicated only when the comparison results (i.e., individual dumping margins) are aggregated to calculate the weighted-average dumping margin. In this instance, we have examples provided by the petitioner to demonstrate, on an individual comparison basis, that SGBC/SKF has sold subject merchandise at less than NV.
As previously noted, we find, consistent with section 751(b) of the Act, that this information provided by the petitioner constitutes evidence of changed circumstances sufficient to initiate a review to determine whether SGBC/SKF has resumed dumping and should be reinstated in the TRBs Order. We note that initiation of this review does not constitute a conclusive determination that SGBC/SKF has resumed dumping on an aggregate basis. During the course of this review, the Department will apply its established methodologies regarding offsets.
Finally, with respect to SGBC/SKF's argument that the Department should apply a heightened standard when determining whether to initiate this review, the Department notes that the applicable standard is whether there is information “which shows changed circumstances sufficient to warrant a review” under section 751(b)(1) of the Act. In the context of a reinstatement changed circumstances review, the pertinent question is whether there is sufficient evidence of resumed dumping. Based on the foregoing, we find that the petitioner has provided sufficient evidence to initiate a changed circumstances review to examine SGBC/SKF's pricing and determine whether SGBC/SKF has resumed dumping sufficient to reinstate the company within the TRBs Order. If we determine in this changed circumstances review that SGBC/SKF resumed dumping, effective on the date of publication of our final results, we will direct CBP to suspend liquidation of all entries of TRBs manufactured in the PRC and exported by SGBC/SKF.
Period of Changed Circumstances Review
The Department intends to request data from SGBC/SKF for the June 1, 2014, through May 31, 2015, period in order to determine whether SGBC/SKF has resumed dumping sufficient to warrant reinstatement within the TRBs Order.
The Department will publish in the Federal Register a notice of preliminary results of changed circumstances review in accordance with 19 CFR 351.221(b)(4) and 351.221(c)(3)(i), which will set forth the Department's preliminary factual and legal conclusions. Pursuant to 19 CFR 351.221(b)(4)(ii), interested parties will have an opportunity to comment on the preliminary results. Unless otherwise extended, the Department intends to issue its final results of review in accordance with the time limits set forth in 19 CFR 351.216(e).
This notice is published in accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b) of the Department's regulations.
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Dated: August 7, 2015.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2015-19985 Filed 8-12-15; 8:45 am]
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