66 FR 1953, January 10, 2001 A-570-601 ARP: 6/1/98-5/31/99 PUBLIC DOCUMENT IA, DAS I, Office 1;GWC, ext. 2239 MEMORANDUM TO: Troy H. Cribb Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary for Import Administration SUBJECT: Issues and Decision Memo for the 1998-99 Administrative Review of Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results _________________________________________________________________________ SUMMARY We have analyzed the briefs and rebuttal briefs of interested parties in the 1998-99 administrative review of the antidumping duty order covering tapered roller bearings and parts thereof, finished and unfinished, from the People's Republic of China (PRC). As a result of our analysis, we have made changes, including corrections of certain inadvertent programming and clerical errors, in margin calculations. We recommend that you approve the positions we have developed in the Discussion of Issues section of this memorandum. Below is a complete list of the issues in this administrative review for which we received comments and rebuttals by parties: Comment 1: Market Economy Steel Values Comment 2: Insignificant Imports from Market Economy Sources Comment 3: Weight-Averaging Market Economy with Surrogate Steel Values Comment 4: Cage Surrogate Steel Values Comment 5: Roller Surrogate Steel Values Comment 6: Excluding Certain Data from Surrogate Source Data Comment 7: Labor Costs Comment 8: Surrogate Calculations for Overhead, SG&A and Profit Comment 9: Inclusion of Traded Goods in Overhead, SG&A and Profit Comment 10: Surrogate Values for Pallets and Wooden Cases Comment 11: Ocean Freight Expenses Comment 12: Adjusting Surrogate Export Values for Duties Comment 13: Adding Ocean Freight and Insurance to FOB Export Values Comment 14: Sigma Cap and PRC Freight Expenses Comment 15: Exchange Rates Comment 16: Separate Rates Analysis of Suppliers Comment 17: U.S. Credit Expenses for EP Sales Comment 18: The Department Should Grant Revocations Comment 19: Limiting Revocation to Certain Trading Companies Comment 20: Limiting Revocation to Particular Models Comment 21: Revocation with Respect to Wanxiang Comment 22: CMC's Market Economy Steel Values Comment 23: Accounting for CMC's Rejects Comment 24: CMC's Negative Inventory Carrying Costs Comment 25: Applying Adverse Facts Available to ZMC Comment 26: Wanxiang's Surrogate Steel Values Comment 27: Wafangdian's Price Adjustments Comment 28: Wafangdian's Normal Value for Non-Specification Parts Comment 29: Wafangdian's Labor Inputs Comment 30: Application of the PRC-wide Rate to Premier Comment 31: Application of Total Adverse Facts Available to Premier Comment 32: Department's Choice of FOP Data for Each of Premier's Inputs Comment 33: Premier's Foreign Inland Freight Comment 34: Deducting Premier's U.S. Credit Expenses in CEP Sales Situations Comment 35: Adjusting Luoyang's Normal Value for U.S. Credit Expenses for EP Sales Comment 36: Use of Liaoning's Correct Database Comment 37: Adjusting Liaoning's normal value for U.S. Credit Expenses for EP Sales Comment 38: Surrogate Steel Valuation for Weihai Comment 39: Torch's Affiliated Sales and Transshipped TRBs BACKGROUND On July 7, 2000, the Department of Commerce (Department) published the preliminary results and partial rescission of this administrative review of tapered roller bearings (TRBs). (1) The period of review (POR) is June 1, 1998, through May 31, 1999. We invited parties to comment on the Preliminary Results. At the request of certain interested parties, we held a public hearing on August 31, 2000. DISCUSSION OF ISSUES Common Issues Comment 1: Market Economy Steel Values Petitioner's Argument: The petitioner argues that the Department should not use the prices paid by PRC producers to market economy suppliers for valuing steel inputs because those prices are likely unfair. Instead, according to the petitioner, the Department should use surrogate values. The petitioner first contends that the market economy steel prices used in the Preliminary Results were unfair because they were possibly based on either subsidized or dumped steel. The petitioner lists a number of antidumping (AD) and countervailing duty (CVD) findings to support its claim. (These findings cannot be described here because they identify the supplier country(ies), information which is proprietary.) The petitioner also claims that when these prices are compared to other import prices into the PRC, they are lower. In support of its position that the Department should not use dumped or subsidized prices to value the steel input, the petitioner points to the legislative history of the Omnibus Trade and Competitiveness Act of 1988 regarding the current nonmarket economy provision, § 1677b(c) , as cited in Kerr-McGee Chemical Corp. v. United States, 985 F. Supp. 1166, 1177 (CIT 1997): "in valuing such (nonmarket economy) factors, Commerce shall avoid using any prices which it has reason to believe or suspect may be dumped or subsidized prices." Moreover, the petitioner contends, the Department followed this rule in Certain Partial-Extension Steel Drawer Slides with Rollers from the People's Republic of China (60 FR 29574) (June 5, 1995) (Drawer Slides), when it declined to use market economy prices paid by PRC producers for steel imported from the Republic of Korea because of U.S. antidumping and countervailing duty orders on Korean steel. Similarly, in developing its list of surrogate countries to be used in nonmarket economy proceedings, the Department typically includes in its recommendation language to the effect that there are no known direct subsidies on the production of inputs used in the subject merchandise in the suggested surrogates. The petitioner argues that it is immaterial that the products subject to the AD and CVD orders it cited differ from the inputs used in this particular case. Specifically, the petitioner notes that, in Tehnoimportexport, UCF America, Inc. v United States, 783 F. Supp. 1401, 1405 (CIT 1992) (Tehnoimportexport), the Department rejected certain values for steel in Yugoslavia "because of export subsidies in the Yugoslavian steel market and several AD proceedings in the European Community." The petitioner claims that the findings relied upon in that case involved products other than the particular steel used by those respondents. Therefore, the exclusion of market economy prices from nonmarket economy normal value calculations is not limited to instances involving the exact same product. Respondents' Arguments: China National Machinery Import & Export Corporation, Liaoning MEC Group Co. Ltd., Wanxiang Group Corporation, Tianshui Hailin Import and Export Corporation, Weihai Machinery Holding (Group) Co., and Premier Bearing & Equipment Ltd. (collectively, CMC et al.) (2) contend that the Department properly followed the statutory mandate, its regulations, and practice when it used the reported market economy steel values in the Preliminary Results. According to CMC et al., use of actual import prices when an NME producer purchases an input from a market economy supplier and pays for it in a market economy currency has been upheld by the Federal Circuit in such cases as Lasko Metal Products v. U.S., 43 F.3d 1442, 1446 (Fed. Cir. 1994) (Lasko), and was defended by the Department as recently as the last review in this proceeding, TRBs-XI. (3) CMC et al. contend that the petitioner's claim that the market economy steel values used in the Preliminary Results are "likely unfair" is based on vague "patterns" and possibilities. Zhejiang Machinery Import & Export Corp. (ZMC) and CMC et al. point out that similar arguments were rejected by the Department in the past. The petitioner has presented no evidence, according to ZMC and CMC et al., that there are any AD or CVD orders on the particular steel used to manufacture TRBs or on any of the market economy steel suppliers. ZMC notes that the petitioner does not contest that the prices charged were arm's-length and otherwise satisfied the requirements set forth in section 351.408 of the Department's regulations. Moreover, CMC et al. note that the "believe or suspect" standard the petitioner cites from the legislative history of the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act) does not apply when actual import prices, as opposed to surrogate values, are available. Even if this standard is appropriate, it has not been met here, according to CMC et al. Pointing to Certain Helical Spring Lock Washers From the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 61 FR 66255 (December 17, 1996), CMC et al. state that before rejecting a potential surrogate value, the surrogate country itself must find that the goods are dumped or subsidized. Moreover, under China Nat'l Arts and Crafts Import and Export Corp., Tianjin Branch v. United States, 771 F. Supp, 407 (1991) (CNART), the Department cannot reject surrogates on the basis of mere possibility, such as a preliminary finding of subsidization. CMC et al. argue that the petitioner's contention that it is "immaterial" that the AD and CVD cases relate to different products from the inputs used to manufacture TRBs is simply wrong. They note that the case cited by the petitioner to support its claim in this respect, Tehnoimportexport, has since been further refined in Nation Ford Chem. Co. v. United States, 985 F. Supp. 133, 138 (1997), in which the court said regarding exclusion of possible surrogate countries, that "subsidy findings are fact-specific, and circumstances often change." Department's Position: We agree, in part, with both the petitioner and the respondents. Section 351.408(c)(1) of the Department's regulations stipulates that "where a factor is purchased from a market economy supplier and paid for in a market economy currency, the Secretary normally will use the price paid to the market economy supplier" to value the factors of production. The Department has consistently utilized reported market economy input prices and this practice has been affirmed by the CIT and the Federal Circuit. (4) We agree with the respondents that a market economy import price paid by an NME producer will normally be the best available information to value a factor of production. However, the legislative history the 1988 Act, which provided the current method for determining normal value in nonmarket economy cases, states that "in valuing such (nonmarket economy) factors, Commerce shall avoid using any prices which it has reason to believe or suspect may be dumped or subsidized prices." (5) This legislative history further states that "the conferees do not intend for Commerce to conduct a formal investigation to ensure that such prices are not dumped or subsidized, but rather intend that Commerce base its decision on information generally available to it at the time." (6) The Department has consistently recognized the directive to avoid using any prices that it has reason to believe or suspect may be dumped or subsidized. While the CNART and Tehnoimportexport decisions referenced above have informed our practice, both of those decisions involved administrative reviews which were initiated prior to the effective date of the 1988 Act. Therefore, we turn to post-1988 Act cases to describe our practice. This practice has evolved over time, with Certain Helical Spring Lock Washers from the People's Republic of China; Final Results of Administrative Review; 61 FR 66255, 66257 (December 17, 1996) (Lockwashers- II), providing the most recent statement. In Lockwashers-II, the Department declined to reject Indian import statistics for valuing the wire rod input: The facts do not establish a reasonable basis to "believe or suspect" the imports of wire rod (the input in question) into India are dumped or subsidized. The Indian government has not determined that steel imports into India are dumped or subsidized. As stated in the (prior) Lock Washers Review, the fact that the Department has made determinations of sales at less than fair value into the United States is not a sufficient basis for a belief or suspicion that those countries also dumped imports into India.. Further, there is no evidence that any general subsidies applied to production and exports of carbon steel wire rod to India. As Lockwashers-II indicates, the believe or suspect standard is met when the importing surrogate country has a dumping or subsidy finding on the input in question. Moreover, because dumping analyses typically compare the prices of imports in the investigating country with the home market prices in the country being investigated, dumping findings are market specific. Thus, we do not agree that U.S. (or other third country) antidumping findings provide a basis to believe or suspect that import prices into the surrogate country are dumped. (7) As discussed further below, when ruling out dumped or subsidized prices for purposes of valuing an NME input, we also believe it is appropriate to apply the believe or suspect standard in situations where we are using actual import prices into the NME in question. Thus, where the NME producer is importing an input from a market economy country, if the NME has a dumping or subsidies finding in place against the input, that finding would lead us to believe or suspect that the input price was dumped or subsidized. While AD findings by their nature are narrowly focused, CVD findings can provide information beyond the specific conclusion that a particular product shipped to a particular market is subsidized. The Department recognized this in Lockwashers-II when we referred to "general subsidies." This means that even if the importing surrogate country or NME does not have a subsidies finding, it may be possible to infer that the prices of the input in question are subsidized. For example, if a U.S. CVD finding includes subsidies that would appear to be used generally, such as a broadly available export subsidy, then it might be reasonable to infer that exports from the investigated country to all export markets are subsidized. When the facts developed in U.S. or third country CVD findings are sufficient to allow the Department to infer that there are broadly available subsidies, the Department will consider that it has reason to believe or suspect that prices of the input from that country are subsidized. The petitioner has argued that the prices of the imported steel are subsidized, and has supported its claim by citing to several CVD orders on various steel products from the exporting country in question. Based upon our analysis of these CVD findings cited by the petitioner, we have found a basis to believe or suspect that certain prices paid by PRC producers of TRBs for their steel inputs are subsidized. (Our analysis supporting this decision is necessarily proprietary. See Memorandum to Richard W. Moreland regarding Allegation of Unfair Steel Prices, dated January 3, 2001 (Market Economy Steel Memo).) We have not used these subsidized prices to value the PRC producers' factors of production. Instead, we have relied on surrogate values. We acknowledge the respondents' concerns that many of the cases cited above, and the legislative history itself, relate specifically to the valuation of factors of production, and not to situations where the Department is using actual import prices paid by the NME producer. We agree that these market economy import prices are not, per se, surrogate values. However, we believe that it is reasonable to interpret the legislative history and the case precedent as applying to these situations as well. Just as in the case of a surrogate value, it would be inappropriate for the Department to use a market economy import price if it has reason to believe or suspect that the import price was dumped or subsidized. Thus, although a market economy price will normally be the best available information to accurately value a factor of production in a nonmarket economy case, if there is reason to believe or suspect that the market economy price is dumped or subsidized, then we will rely on surrogate values instead. Comment 2: Insignificant Imports from Market Economy Sources Petitioner's Arguments: The petitioner also argues that the Department should not use the reported market economy steel prices because the quantities imported were likely insignificant when compared to the importing respondent's total production of TRBs. While section 351.408(c)(1) of the Department's regulations permits use of import prices to value inputs, the preamble to this section further states that the Department will not rely on a price paid by an NME producer if the quantity of the input purchased was insignificant. According to the petitioner, in a case involving a fungible input (such as steel), the relative significance should be measured by the total production of the subject "class or kind" and not by the absolute amounts imported. The petitioner argues that there is potential for manipulation unless the Department looks at total production, because NME producers can import minuscule amounts of steel to produce only those models made for the United States. They further argue that, permitting NME producers to assign the imported steel to specific models runs contrary to the Department's practice of requiring respondents calculate weighted-average costs. Third, the petitioner claims that allowing NME producers to distinguish an input based on the source of the input undermines the Department's goal of seeking to value the factors of production accurately. This occurs because the lower input costs achieved through imported inputs will incorrectly result in lower G&A expenses. Finally, the petitioner contends that by allowing insignificant import quantities, the administrative burden faced by the Department is increased due to the complexity of verification. Respondents' Arguments: ZMC argues that the petitioner's argument is contrary to section 351.408 of the Department's regulations, which provides that the price of the imported input will be used even if it accounts for only a portion of the factor used. CMC et al. argue that the Department has consistently applied its market economy steel usage practice, a practice which has been affirmed in recent judicial decisions, such as Lasko. As 100 percent of the steel used to manufacture certain components of the TRBs was imported from a market economy country, CMC et al. argue that it is evident that a significant and meaningful amount of market economy steel was used in the manufacture of the subject merchandise. The petitioner's request to weight-average the application of the imported values across a respondent's entire production of TRBs is inappropriate, according to CMC et al., as there is nothing in the Act or the Department's regulations that would require this type of further analysis. Moreover, CMC et al. contend that the petitioner has relied on pure conjecture in order to even make its above argument. There is no evidence of any manipulation by the respondents on this record or on any previous record. CMC et al. point out that the market economy steel used by the respondents in the production of the TRBs exported to the United States has been traced and verified by the Department in this and in previous reviews. Department's Position: We disagree with the petitioner's contention that the significance of the imported market economy imports should be judged by reference to the production of the entire class or kind of merchandise. As we stated in Final Results of Redetermination On Remand Pursuant to Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, Court No. 97-12-02066 (September 9, 1999) (aff'd __ F. Supp. 2d __, Slip Op. 00-67 (June 9, 2000), when inputs are imported in "meaningful"quantities, we can conclude that the price paid is a reliable market economy indicator of the value of the input. (8) Thus, it has not been our practice to require the imported inputs to be significant in relation to total production of the product. We disagree more generally with the petitioner's contentions that this practice violates important aspects of AD and NME policy. In a NME case, we need to value the inputs used by respondents to produce the subject merchandise. When meaningful amounts of a particular input are imported from a market economy country and paid for in a market economy currency, those import transactions provide a reliable market indicator of the very value we need. Whether the imported input is also used for production of other (including home market) merchandise, is not relevant. While the petitioner correctly points out that the Department's practice is to require responses from all factories producing the subject merchandise, the purpose of that requirement is to obtain weighted average factor usage, not weighted average factor costs (which are not relevant). Similarly, the petitioner objects that G&A expenses will be too low if low import prices are used. While we do not agree that this is a problem, it arises because we are forced to derive SG&A expenses as a percentage of material costs. We note that if the actual import prices paid by the NME producer were higher than the surrogate value, then SG&A would be, in petitioner's view, too high. Finally, we disagree that use of actual import prices creates an undue administrative burden on the Department. To the contrary, when an NME producer imports market economy inputs, we do not have to develop surrogate values. Comment 3: Weight-Averaging Market Economy with Surrogate Steel Values Petitioner's Argument: The petitioner argues that, if the Department decides to use the market economy steel prices, then it should weight- average these prices with proportional amounts of surrogate values to arrive at representative values. The petitioner claims that, because the price structure of China's domestic market is distorted by rigid government controls over steel imports, the reported market economy values are skewed in comparison with the surrogate values. According to the petitioner, because there is no basis for the Department to assume that these market economy prices are similar for all products in the same class or kind, the Department should weight-average the market economy prices with the surrogate values to derive a value that is representative of all production of merchandise of the subject class or kind. Respondents' Arguments: CMC et al. argue that the petitioner's argument is unfounded. CMC et al. contend that the Department must follow the regulatory, case law, and administrative precedents which direct the Department to apply the prices for imported market economy steel to value the input. Any other course would contradict the Department's recently codified regulation at section 351.408(c)(1), which instructs the Department "in those instances where a portion of the factor is purchased from a market economy supplier" to value the factor using the price paid to the market economy supplier. ZMC concurs with CMC et al., arguing that both the Department and the Courts have rejected proposals that the Department should weight-average imported steel with surrogate values based on their respective usages. ZMC argues that in Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, Slip Op. 00-67 (June 9, 2000), the Court denied the plaintiff's request for weight averaging, and instead agreed that the price of the imported material should be used to value all of the inputs of that particular material. Thus, ZMC argues that the imported steel price should be used to value 100 percent of the steel used for the subject merchandise. Department's Position: Nothing in the statute or the Department's practice indicates that a market-economy price that is otherwise acceptable should be weight-averaged with a surrogate value to ensure that it is more representative of all production of the merchandise. As noted by the respondents, section 351.408(c)(1) of the Department's regulations instructs the Department "in those instances where a portion of the factor is purchased from a market economy supplier" to value the factor using the price paid to the market economy supplier. In the preamble to those regulations, the Department supported its rule by reference to Lasko, stating that "we believe that the Court's emphasis on 'accuracy, fairness and predictability' provides us with the ability to rely on prices paid by NME producers to market-economy suppliers in lieu of using surrogate values." Moreover, as we stated in TRBs-XI, although we agree that Lasko does not allow us to use distorted prices, we disagree with the petitioner that imports into China are unreliable indicators of market values because China's domestic market is distorted by government intervention. There is no evidence that domestic distortions impact the price at which market- economy suppliers would offer products for sale to Chinese producers. We have no reason to assume that, when dealing with Chinese importers, market- economy suppliers ignore rules of supply, demand, and profit-seeking behavior within a competitive world market. Thus, petitioner has not provided us with a basis to deviate from our regulation, and we have continued to use import values to value the steel inputs. Comment 4: Cage Surrogate Steel Values Respondents' Arguments: CMC et al. argue that Harmonized Schedule (HS) subcategory 7209.2600 is the appropriate category for valuing steel used to manufacture cages as opposed to HS 7209.1600, the category the Department used to value cages in the Preliminary Results. According to these respondents, the descriptive provision of HS subcategory 7209.2600 states that it covers the same type of steel covered under HS 7209.42, the category used by the Department in previous reviews to value cages. Moreover, CMC et al. argue that 7209.1600 includes high-strength steel, which is not used in the manufacture of cages. Petitioner's Argument: The petitioner argues that the respondents neither claim that they actually purchase flat sheet (which is covered by HS category 7209.2600), nor do they point to anything on the record indicating that they do not purchase sheet in coils (which is covered by HS category 7209.1600). Furthermore, the petitioner argues that, in actuality, both categories include high-strength steel, and it is not possible to identify it separately at the six-digit level. As such, HS category 7209.2600 is not a better category to use to value steel for cages. As an alternative, the petitioner proposes the use of HS category 7211.2300, which identifies low-carbon steel, the type of steel which the petitioner claims is used to manufacture cages. The petitioner admits that the values in this category would likely be higher than the price paid for the steel sheet used to manufacture cages because the steel included in this category has different physical dimensions than the steel actually used by the respondents. However, the petitioner argues that the values in this category can be easily adjusted to conform to the types of steel actually used. Thus, if the Department uses different data in the final results than it used in the Preliminary Results, HS category 7211.2300 would be a more accurate classification than HS category 7209.2600. Department's Position: For the Preliminary Results, we changed the category we had used in the past several TRBs reviews to value the cold- rolled steel sheet used to manufacture cages. As we explained in the Steel and Surrogate Country Memo, (9) we did so because the category we had been using to value cage steel, HS category 7209.42, was eliminated from the Harmonized Schedule and replaced with HS category 7209.2600. Based on the information on the record and discussions with the International Trade Commission, we determined that HS category 7209.1600, a category with only a slightly different description than HS category 7209.2600, best reflects the type of steel used to manufacture cages in this review. We disagree with CMC et al. that HS category 7209.2600 is a more appropriate category than HS category 7209.1600. The respondents contend that HS category 7206.1600 includes high-strength steel, which is not used by the respondents to manufacture cages. In fact, we have found that both HS category 7209.2600 and HS category 7209.1600 contain high-strength steel. (10) Therefore, there is no difference in the categories with respect to this issue. Moreover, according to information placed on the record of this proceeding by these same respondents with respect to market economy steel purchases, the steel contained in HS category 7209.1600 more closely approximates the type of steel used by the respondents to manufacture cages. Thus, based on the information on the record of this proceeding, there is no reason for the Department to reconsider its use of HS category 7209.1600 in favor of HS category 7209.2600 to value steel used to manufacture cages. As an alternative to HS category 7209.1600, the petitioner argues that the Department should use a different category, HS category 7211.2300, to value the type of steel used to manufacture cages. In analyzing the descriptions of each category, we note that one of the primary differences between HS category 7209.1600 and HS category 7211.2300 is that HS category 7209.1600 contains steel of a width more than 600 millimeters, whereas HS category 7211.2300 contains steel of a width of less than 600 millimeters. According to the information on the record of the instant review, the respondents use steel of a width falling in HS category 7209.1600. In Timken Company v. United States, Court No. 97-03-00394, Public Version of the Final Results of Redetermination Pursuant to Court Remand (December 13, 1999), the Department determined that a category including steel of the same physical dimensions as the steel used by the respondents (HS category 7209) was more appropriate in valuing cage steel than was a category which contained steel of different physical dimensions than the steel used by the respondents (HS category 7211, specifically 7211.41). The same situation applies in this review. The petitioner contends, however, that it is more important to use HS category 7211.2300 (formerly HS category 7211.41) because it includes low carbon steel, which the petitioner alleges is used to manufacture cages. Though, as noted above, the petitioner admits that the values in this category would likely be skewed because steel in this category is physically different from the type of steel used to manufacture cages, the petitioner argues that the values in this category can be adjusted. According to the information on the record of the instant review, although several of the respondents report that they use steel with carbon as one of the chemical components, the respondents also list several other chemicals that are included in the steel of which the petitioner makes no mention. There is no information on the record indicating that the level of carbon included in the cage steel is any more or less important than the level of any of the other chemicals included in the cage steel chemical make-up. Further, none of these other chemicals are included in any of the HS descriptions. Finally, there is no information on the record which indicates that HS category 7209.1600 does not actually include "low carbon" steel that is of the same physical dimensions as that steel actually used to manufacture TRBs. Because there is no evidence on the record that either the respondents' or the petitioner's proposed cage categories provide a more accurate value, we are continuing to use HS category 7209.1600 to value the steel used to manufacture cages. Comment 5: Roller Surrogate Steel Values Respondents' Arguments: Luoyang Bearing Corp. Group (Luoyang), Wafangdian Bearing Group Corp. Import & Export Company (Wafangdian), and CMC et al. argue that, in valuing rollers used in the production of TRBs, the Department should utilize more current Indian import data which was placed on the record subsequent to the Preliminary Results. CMC et al. contend that, although the Department rejected Indian import values for the Preliminary Results, the more current Indian import data should be utilized because it is not aberrational when compared to the U.S. benchmark and because it is more contemporaneous with the POR than the Indonesian import data in the Preliminary Results. Additionally, CMC et al. argue that the new Indian import data for rollers should be utilized because India is the primary surrogate country in this review. Luoyang, Wafangdian, and CMC et al. add that the surrogate value from the new Indian import data is also in line with the surrogate values for rollers utilized in TRBs-X (11) and TRBs-XI. Petitioner's Argument: The petitioner argues that the Department should generally avoid using U.S. values as benchmarks, and should specifically refrain from doing so for roller steel. Accordingly, the Department should reject the respondents' request and continue using Indonesian values. In this regard, the petitioner makes several points. First, the petitioner argues that, in using U.S. values as benchmarks for the purposes of factor valuation, the Department risks transforming the United States into the surrogate country even though the record does not support the use of the United States as the appropriate surrogate country. Therefore, the Department should reject the respondents' argument that any sort of U.S. benchmark be used as a judge of the appropriate surrogate value for rollers. Second, according to the petitioner the Department has already found that the Indonesian data is an appropriate surrogate for the PRC. Moreover, the recently submitted value from India is further away from the U.S. benchmark than the Indonesian value. Thus, the petitioner concludes that inasmuch as the value for rollers used by the Department in the Preliminary Results is a value from an appropriate surrogate country, Indonesia, and because the respondents have shown no reason why the Department should use a different surrogate value from the one utilized in the Preliminary Results, there is no reason to change the surrogate roller value for the final results. Department's Position: To determine the best available information for valuing each of the TRB components (e.g. cups, cones, rollers, and cages), we first looked at data from the primary surrogate country, India. As noted in the Preliminary Results, as well as in the Steel and Surrogate Country Memo, the Indian import data for HS category 7228.5009 (12) that was available at the time of the Preliminary Results was unreliable when compared to the U.S. benchmark. Thus, we turned to import data from Indonesia, our secondary surrogate country. We used this data in the Preliminary Results to value steel used to manufacture rollers because it was more consistent with the U.S. data. We used U.S. import data as a benchmark for determining proper values for the TRB inputs, including steel used in the production of rollers. This was consistent with past reviews. (13) As noted in those reviews, we used U.S. import data as a benchmark because the U.S. Harmonized Tariff Schedule (HTS) is sufficiently detailed to provide a category for bearing quality steel. This is in contrast to other official government trade statistics, where the HS categories are broader. Due to the breadth of these categories, and because the values can vary widely from one source to another, use of the more precise U.S. value as a benchmark permits us to identify the most accurate surrogate value. Moreover, as noted in the Preliminary Results, the use of such a benchmark has been upheld by the Court of International Trade. (14) Thus, we disagree with the petitioner that U.S. values should not be used as a benchmark. For the final results, we examined the newer, more contemporaneous data from India that was placed on the record of this review by the respondents following the publication of the Preliminary Results. (15) Our analysis of this data indicates that the new Indian value is consistent with the U.S. benchmark. As this new data submitted for the final results yields a value that is reliable when compared to our U.S. benchmark category value, and is from our primary surrogate country, India, for the final results, we are using this import data from India to value the type of steel used in the manufacture of rollers. Comment 6: Excluding Certain Data from Surrogate Source Data Respondents' Arguments: Luoyang, Wafangdian, and CMC et al. argue that the Department should exclude all source data that is aberrational or small in quantity from its surrogate steel value calculations. Specifically, these respondents argue that, in its derivation of a surrogate value for cups and cones, the Department should eliminate from its calculations Japanese export data to India for October 1998 and May 1999 because the data from these two months is aberrational or small when compared with imports from other months reported. Petitioner's Argument: The petitioner argues that the Department should reject the respondents' request to exclude Japanese export data which were "aberrational or small." The petitioner notes that, as part of their argument, the respondents cite the Notice of Final Results of Administrative Review: TRBs from Romania, 62 FR 37194, 37195 (July 11, 1997) as an example of Department practice of rejecting aberrational data. The petitioner points out that this example related to the exclusion of aberrational data from specific countries, not for specific periods of time from a single country. The petitioner argues that it is reasonable to exclude small quantities when they represent total imports from an entire country over a period of several months or an entire year because the quantities are insignificant relative to those of a sizable producer. However, the petitioner argues, small shipments from a certain country during one or two months are not necessarily aberrational. Because the respondents have not demonstrated that this monthly data is aberrational, and there is no Department practice on this particular issue, this data should not be excluded from the Department's calculations. Department's Position: We agree, in part, with the respondents, and have excluded data for particular months from our cup and cone surrogate value calculations when the values for those months were inconsistent with the other data in that category. Both the petitioner and the respondents are correct in pointing out that it is the Department's practice to "disregard small-quantity import data when the per-unit value is substantially different from the per-unit values of the larger-quantity imports of that product from other countries." (16) Though, in this instance, we are not determining whether to exclude data from a particular country, per se, as noted above our practice has been to exclude unreliable data from our calculations in order to ensure that our calculations are not skewed. We disagree in this instance that we should exclude certain monthly Japanese export data from our calculations--specifically October 1998 and May 1999 data--based solely on the fact that it is small in quantity, as all of the data is from the same country. We do agree, however, that we should exclude data that is unreliable when compared to the other data in the calculation and the benchmark we are using for comparison purposes. Our examination of the monthly Japanese export data shows that the unit values of the data from October 1998 and May 1999 differ substantially from the unit values of the other months, from the U.S. data used as comparison purposes, and also from the monthly value data from the top three countries within our U.S. benchmark category. Specifically, the unit values of Japanese exports to India for October 1998 and May 1999 are $3347/MT and $5321/MT, respectively. (17) While the monthly values during the POR in the two months with the greatest quantities are $709/MT and $891/MT, with respect to the U.S. benchmark, import values from the two countries (Japan and Sweden) which account for the majority of imports into the United States from the corresponding U.S. import category (HTS category 7228.30.2000), and for the same time period, range from $600/MT to $873/MT. We further examined the monthly imports from these two countries to see if there were any variances by month during the POR that were similar to those seen in the Japanese exports to India in October 1998 and May 1999. We noted that, for Japan, the range of prices for all months was $527/MT to $625/MT; for Sweden, the range of prices for all months was $726 to $972. There were no significant monthly variations for the values in either of these countries as was seen in October 1998 and May 1999 for the Japanese exports to India data. Thus, because the values of the data from these two months appear to be unreliable when compared to the other data, as described above, we are excluding the data from those two months from our surrogate value calculations for steel used to manufacture cups and cones. Comment 7: Labor Costs Petitioner's Argument: The petitioner argues that normal value should be adjusted upwards to include additional labor costs. The petitioner contests the Department's use of the Chapter 5 ("Wages") data of the International Labor Office's 1999 Yearbook of Labour Statistics (YLS) to value PRC labor costs. The petitioner argues that the wage data in Chapter 5 do not include all labor costs and suggests that the Department use the Chapter 6 ("Labour Cost") data. The petitioner contends that the Labour Cost data are often significantly higher than the Wages data as the former includes items such as welfare fund payments, unemployment taxes, health care costs and other expenses incurred by employers for employees. Therefore, the petitioner recommends that the Department either include these missing expenses (described above) in SG&A or, preferably, use data from Chapter 6 of the YLS in its regression analysis methodology. Respondent's Arguments: CMC et al. counter that the Department analyzed similar arguments by the petitioners in previous TRBs reviews, and the Department has continually rejected these arguments. Wafangdian and Luoyang point out that the petitioner did not allege that anything has changed since TRBs-XI that would require the Department to alter its calculations. They also add that the Department's methodology is consistent with its regulations. Finally, CMC et al. argue that the petitioner cannot double-count provident funds and other welfare expenses - once under SG&A and overhead and once again through the application of "Labour Costs" to calculate the regression-based wage rate - particularly when many of these expenses are not incurred by manufacturers in the PRC. Therefore, Wafangdian, Luoyang and CMC et al. believe the Department correctly calculated its labor regression using wage rates and should continue to use this methodology and data in the final results. Department's Position: Our regulations at section 351.408(c)(3) state that "the Secretary will use regression-based wage rates reflective of the observed relationship between wages and national income in market economy countries." These same regulations also require the Department to determine this "wage rate to be applied in nonmarket economy proceedings each year" and make it publicly available. Therefore, to value the labor inputs in this review, we applied the PRC regression-based wage rate established by the Department and published by the Import Administration on its website, which was last revised in May 2000. With respect to the petitioner's argument to use the labor data in chapter 6 of the YLS, we disagree. The Chapter 5 data from the YLS is the most applicable data from which to derive the regressed wage rate because it is appropriately comprehensive, including overtime, bonuses and gratuities, holiday pay, incentive pay, pay for piecework, and cost-of- living allowances. We find Chapter 6 data, on the other hand, to be overly inclusive in that it encompasses not only wage costs, provident fund and welfare expenses, but also other expenses such as employee housing, education, cultural, and recreational facilities, grants to credit unions, the cost of employee recruitment and other miscellaneous items (such as work clothes, travel between the home and place of work). Therefore, we believe that Chapter 6 data to be an inappropriate basis for the regressed wage rate. We note that in TRBs-XI, we did not make any adjustments to the Chapter 5 data to account for any additional labor expenses. However, for the purposes of this administrative review, we agree with the petitioner that employer welfare and provident fund expenses should be reflected in the normal value calculation. This is because information in this review clearly shows that these expenses are incurred by the Indian bearings producers whose financial statements we are relying upon for SG&A and because these expenses were not reflected in our regressed wage rate or in any other component of the normal value calculation for the Preliminary Results. To account for these expenses, we have added them to our calculation of the surrogate SG&A ratio. (18) Thus, for the final results we have included all appropriate labor-related expenses in normal value, capturing them either in the wage rate or in the SG&A expenses. With respect to the concerns raised by CMC et al., we disagree that this adjustment results in double-counting expenses for provident and welfare funds. These two types of expenses are expressly not included in the Chapter 5 data. Moreover, in valuing labor, we are not looking for the types of expenses incurred by employers in the PRC. Instead, we are attempting to calculate the costs that the PRC producer would incur if its factory were located in India. The financial statements of the Indian producers of TRBs clearly indicate that these labor costs would be incurred in addition to wages. Comment 8: Surrogate Calculations for Overhead, SG&A and Profit Respondents' Arguments: CMC et al. argue that it is the Department's longstanding practice not to use surrogate data that is aberrational, inconsistent with generally accepted accounting principles or irregular in any way that would skew results. Therefore, these respondents argue, the Department should recalculate overhead, SG&A and profit ratios excluding information from SKF Bearings India Ltd. (SKF), the Antifriction Bearings Corporation Ltd. (ABC) and NRB Bearings Ltd. (NRB), companies that were included in the ratio calculations for the Preliminary Results. They contend that the financial data for SKF and ABC should be excluded from the surrogate ratios because both companies reported negative profits. NRB should be excluded because less than 0.5 percent of NRB's production is comparable to the subject merchandise and, therefore, its overall cost structure does not reasonably reflect that of a PRC TRBs producer. Petitioner's Arguments: The petitioner argues that the Department should reject the respondents' request that the financial data for SKF, ABC, and NRB be excluded. Regarding SKF and ABC, the petitioner contends that mere losses are not a basis for excluding a company's surrogate information as losses do not reflect aberrational data but, rather, are a result of occasional downturns which are common experience in business cycles. The petitioner further notes that in Freshwater Crawfish Tail Meat from the People's Republic of China, 64 FR 27961, 27965 (May 24, 1999) (Freshwater Crawfish), the Department used companies with negative profit for purposes of surrogate calculations. Rather than reject these companies' data, the Department treated losses as zero profit. The petitioner further notes that SKF and ABC were used as surrogates in past reviews of this proceeding. Once selected, the petitioner argues, surrogates should be presumptively usable in subsequent reviews absent dramatic changes or reasons. Furthermore, neither SKF nor ABC fits the Indian legal definition of a "sick industrial company" as the companies were profitable in nine of the last ten reporting years. Thus, there is no basis for rejecting their data. With regard to NRB, the petitioner asserts that the 19 U.S.C. § 1677b(c)(4) standard for surrogate selection is that the surrogate must produce "identical or comparable" merchandise. According to the petitioner, "comparable" is a broad category and, in this case, the production of NRB qualifies. Moreover, the petitioner contends that the respondents' arguments in this regard lack credibility given that one respondent had proposed, as a basis for the surrogate ratios, the use of the data of an Indonesian steel company that did not produce a comparable product. Department's Position: We agree with the petitioner that there are no grounds for rejecting the data for SKF and ABC on the basis that they are aberrational. Losses can be a not-infrequent occurrence in the normal course of business. In past TRBs reviews, we have excluded from the calculation of overhead, SG&A and profit ratios the financial data of certain Indian companies on the basis that their financial data were not reported in accordance with the generally accepted accounting principles of India, or because they had been deemed "sick companies" under Indian law. (19) These characterizations do not apply to SKF or ABC in this review, however. Consistent with Freshwater Crawfish, we have continued to include the data for these companies in the final results, and have treated any reported negative profits as zero profits in calculating a surrogate profit rate. Likewise, we find no reason to exclude the data for NRB from the surrogate profit rate calculation. We have used the data for NRB in previous reviews, and the respondents have cited no evidence of a significant change in NRB's operations that would prompt us to re-evaluate the reasonableness of this data. Accordingly, we have made no revision to the surrogate profit ratio calculation for these final results. Comment 9: Inclusion of Traded Goods in Overhead, SG&A and Profit Petitioner's Arguments: The petitioner argues that the Department's inclusion of the "traded goods" as a direct input cost when calculating surrogate overhead, SG&A and profit ratios is in violation of the holding of the CIT in Timken Co. v. United States, 59 F. Supp. 2d 1371 (1999) (Timken). The petitioner cites the CIT as holding that "Commerce failed to demonstrate 'how these already manufactured goods constitute a material cost incurred in manufacturing the subject merchandise.'" Therefore, the petitioner argues, the Department should exclude traded goods from the surrogate calculations. Respondents' Arguments: CMC et al. argue that if SKF is excluded from the surrogate overhead, SG&A and profit ratio calculations, as they request in Comment 8 above, then this issue is moot. Otherwise, the respondents suggest that the Department should continue to include traded goods in its surrogate calculations until this issue is fully examined by the court in Luoyang Bearing Factory v. United States, Cons. Court No. 99-12-00743. Wafangdian and Luoyang add that there is no way to exclude traded goods without distorting the other categories as well. Therefore, these respondents argue, as the Department has done in the past the Department should continue to reject the petitioner's argument. Department's Position: We agree with the petitioner. Following the ruling in Timken, we excluded traded goods from our calculation in our remand determination. That determination was affirmed, and we did not appeal the traded goods issue. In Luoyang, we agreed that the Timken ruling required us to change our calculations in that review as well, and in our case brief we requested a partial remand solely to make that change. Therefore, there is no reason to wait for a ruling in Luoyang. Accordingly, we have excluded traded goods from the direct input costs in our calculation of surrogate overhead, SG&A and profit ratios for the final results. Comment 10: Surrogate Values for Pallets and Wooden Cases Respondent's Argument: Wafangdian argues that the Department incorrectly calculated surrogate values for pallets and wooden cases by using Indian import statistics that reported pallets and wooden cases on a total piece basis as opposed to on a kilogram basis. As a result, Wafangdian claims the value for pallets is 288.26 Rs. per pallet and not per kilogram of pallet. Likewise, for wooden cases, Wafangdian claims that the value is 147.05 Rs. per wooden case and not per kilogram of wooden case. Alternatively, Wafangdian suggests that the Department could use the surrogate values used in TRBs-X, which were also taken from Indian import statistics, but were reported on a kilogram basis, rather than a total piece basis. Wafangdian states that this was the approach taken in Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, From the People's Republic of China; Preliminary Results and Partial Recission of Antidumping Duty Administrative Reviews, 64 FR 5770 (Feb. 5, 1999). Finally, should the Department use the TRBs-X data, Wafangdian requests that certain shipments from Germany not be included in averaging costs. Wafangdian believes that these shipments are aberrational due to the size of the shipments and the high unit values,. Petitioner's Argument: The petitioner argues that, in TRBs-X, the Department stated that each pallet and wooden case weighs 10 kilograms, and that Wafangdian has provided no evidence that this measurement is incorrect. For pallets, the petitioner states that the Department, in using the Indian import statistics reported on a total piece basis, first divided the total value by the total number of pieces to arrive at a per piece value, and then divided this per piece value by 10 kilograms to arrive at a per kilogram amount. Since there has been no argument that 10 kilograms per pallet is unreasonable or that the average weight of pallets imported to India is different than 10 kilograms, the petitioner requests that the Department continue to use the values used in the Preliminary Results. For wooden cases, the petitioner states that the Department did not indicate that it had converted the per piece value to a per kilogram value. Therefore, the petitioner suggests that the Department should either divide the per piece amount by the weight reported by Wafangdian for its wooden cases or use the per kilogram weight from a prior review. Since there is no evidence that the weight of Wafangdian's wooden cases equals that of the average Indian import, the petitioner requests that the Department use the latter approach. Department's Position: Contrary to Wafangdian's arguments, the Department did account for the fact that the Indian import statistics reported pallets and wooden cases on a total piece basis rather than on a per kilogram basis in the Preliminary Results. To calculate per kilogram amounts, we first divided the total value by the total number of pieces imported to arrive at a per piece value. We then divided the per piece value by 10 kilograms, the weight per pallet, to arrive at a per kilogram value. (20) The same methodology was used for wooden cases, except that we did not explicitly show the calculation converting the per piece value to per kilogram value; nonetheless, the per piece value for wooden cases was divided by 10 kilograms, the weight per wooden case. Furthermore, no arguments were made on the record in this review that the 10 kilograms used in TRBs-X is inappropriate as an average weight of pallets and wooden cases. Therefore, we find that the calculations in the Preliminary Results for pallets and wooden cases were correct. Accordingly, we disagree with Wafangdian that the values of 288.26 Rs. and 147.05 Rs. per kilogram of pallet and wooden case, respectively, are actually per piece amounts. We also disagree with Wafangdian that we could alternatively use the same surrogate values for pallets and wooden cases used in TRBs-X. The data we used in the Preliminary Results was data from the POR, which is more contemporaneous than the data from a previous review. Absent the showing of error in the data or in our underlying assumptions (i.e., that each pallet or wooden case weighs an average of 10 kilograms), we used the more contemporaneous data. However, for the final results we have examined whether the data in the Indian import statistics is aberrational and, therefore, should be disregarded. The Department has, in past cases, disregarded surrogate values that are aberrational. (21) In this case, for pallets, the per kilogram amount derived from the Indian import statistics is $6.79. On the other hand, the per kilogram amounts derived from Indonesian import statistics and U.S. import statistics for the same period for pallets are approximately $0.27 and $0.28, respectively. With the Indian import statistics showing prices for pallets as much as 2400 percent higher than Indonesian or U.S. import data, we find that the Indian data is aberrational. As a result, we find that the amount used in the Preliminary Results for pallets is unreliable as a surrogate value. Instead, we are using an amount derived from the Indonesian import statistics because the Indonesian rates are consistent with the benchmark U.S. import data. (22) Although India is the primary surrogate in this review, it is our practice to use data from a secondary surrogate when data from the primary surrogate is found to be unreliable. (23) We have used Indonesia as a secondary surrogate in several cases involving the PRC where, as here, Indian data for certain TRB components were found to be unreliable, even though India was the primary surrogate. See TRBs-X. Therefore, for the final results, we have recalculated surrogate values for pallets using Indonesian rates. (24) Regarding wooden cases, the amount derived from the Indian import statistics is $3.46 per kilogram. This value is not substantially different from the rate based on the Indian import statistics used in TRBs- X ($2.07 per kilogram). Since we have no Indonesian data to rely upon for wooden cases, we will, for the final results, continue to value wooden cases using the Indian import statistics. We are, however, using a different amount as the average weight per wooden case. In the Preliminary Results, we stated that the average weight per wooden case is 10 kg, an amount taken from the TRBs-X. However, in TRBs-X, we stated only that pallets weighed an average of 10 kg, not wooden cases. To determine the average weight of wooden cases for the final results, we have taken a simple average of the weights per wooden case as reported by Wafangdian in its Section D Response. (25) Comment 11: Ocean Freight Expenses. Petitioner's Argument: The petitioner argues that the Department's reliance on surrogate values from TRBs-IX to value ocean freight is inappropriate because those values are outdated and should be replaced with published, official, product-specific information available for the POR. The petitioner does not agree with the Department's use of prices from a single carrier in place of published, average data reflecting prices charged by all carriers of subject merchandise. Specifically, the petitioner suggests that the Department use U.S. Bureau of Census (Census) data on CIF and FAS import values to compute an amount for freight. The petitioner asks the Department to look at TRB exports from Japan to the United States, since Japan is the largest exporter of TRBs to the United States and is of similar distance from the United States as the PRC. The petitioner also counters Wafangdian's claim, stated infra, that actual ocean freight charges should be used when shipments are made using a market economy carrier and charges are paid in a market economy currency. The petitioner first claims that there is no record evidence that Wafangdian's shipments were made on a market economy carrier or paid for using market economy currency. Second, the petitioner argues the verification report and Wafangdian's own submissions indicate that Wafangdian paid a PRC freight forwarder and not a market economy carrier. The petitioner cites past cases where the Department used surrogate values for ocean freight despite the fact that a market economy currency was paid to a freight forwarder because there was no record evidence of the amount the market economy carrier actually charged the freight forwarder. (26) The petitioner argues that, because there is no record evidence of payment directly to a market economy shipper in this case, the Department should continue to use surrogate values for ocean freight. Respondents' Argument: CMC et al. argue that it would be improper to use U.S. trade data reporting values of imports of TRBs from Japan to the United States as surrogate values since neither Japan nor the United States was selected as a potential surrogate country. In addition, these respondents argue that, because the per kilogram values derived using this data vary greatly, with no correlation between the charge, distance, or time, this data should be rejected. Wafangdian and Luoyang argue further that there is no indication from the import data whether the carriers used were market or non-market economy carriers. Instead, they argue that the rate quote used in the Preliminary Results specifically showed the cost of shipping subject merchandise from China to the United States and on U.S. vessels. Wafangdian also argues that, in its case, the Department should have used the actual ocean freight charges incurred by Wafangdian instead of surrogate values. According to Wafangdian, shipments are made on a market economy carrier and payment is made in a market economy currency, through a Chinese freight forwarder, to the carrier. Citing Notice of Final Results and Partial Rescissions of Antidumping Duty Administrative Reviews: Heavy Forged Hand Tools From the People's Republic of China, 65 Fed. Reg. 43290 (July 13, 2000) for the proposition that the Department will use the price paid to a market economy shipper when paid in a market economy currency, Wafangdian requests that the Department recalculate freight costs accordingly for these shipments made using a market economy carrier and paid for using market economy currency. Finally, Wafangdian states that it explained its allocation methodology for ocean freight and that this methodology is both consistent with generally accepted accounting principles and has been accepted by the Department. Department's Position: We agree with the petitioner that surrogate values from TRBs-IX to value ocean freight for this review are less preferable than publicly available, averaged data contemporaneous with the POR. However, we find serious flaws with the petitioner's suggested solution. The petitioners request that we use U.S. import data and subtract the FAS values from the CIF values to arrive at the cost of ocean freight and insurance. When examining this data, however, we found that there was no correlation, as would be expected, between the rate and either distance or time. For example, freight and insurance for similarly-sized shipments from Japan to certain east coast U.S. ports cost less than to certain west coast U.S. ports. Similarly, for shipments from Japan to the same U.S. ports, the average rates for two different time periods were sometimes vastly different. These anomalies have led us to reject the use of this data. Therefore, for the final results, we have continued to use the same rate as in the Preliminary Results. Regarding whether to use actual or surrogate values to value Wafangdian's ocean freight, we agree with the petitioner. In two recent cases, Apple Juice and Bulk Aspirin, we have stated that when shipping charges are paid through a PRC freight forwarder and there is no evidence on the record of the amount the carrier actually charged the freight forwarder, we will value the transaction using surrogate values, regardless of whether the shipment was made on a market economy carrier or the PRC freight forwarder used a market economy currency to pay the carrier. (27) In this case, Wafangdian paid its shipping charges to a PRC freight forwarder. While we do not dispute Wafangdian's claim that it paid the PRC freight forwarder in a market economy currency or that the goods were shipped on a market economy carrier, there is no documentation on the record regarding the charges made by the carrier to the PRC freight forwarder (i.e., an invoice between the market economy supplier and either the PRC freight forwarder or the respondent). Without such documentation, there is no evidence linking the amount the respondent claims to have paid for these services to the amount charged by the market economy supplier. Therefore, for the final results and consistent with our decisions in Apple Juice and Bulk Aspirin, we have continued to use surrogate values to value those ocean freight charges Wafangdian incurred using a PRC freight forwarder. Comment 12: Adjusting Surrogate Export Values for Duties Petitioner's Argument: The petitioner argues that the Japanese export values (to India) and Indian import values that we have used as surrogates for valuing steel should be adjusted by adding Indian import duties. First, the petitioner argues, the purpose of the Department's NME methodology is to determine proxy values for inputs as though the inputs were produced and obtained in the NME country in question. India has been chosen as the surrogate country in this case. Therefore, the petitioner reasons, the surrogates in this review must be based on a "landed price" in India because it is on this landed basis that the Japanese export or Indian import prices compete in the local Indian market. The petitioner further asserts that the landed price is more than the price paid at the port - it must include applicable import duties because imports must be entered for consumption before they can reach the local market. The petitioner notes that the Department has considered and rejected this argument in the past, (28) but the petitioner believes the Department's reasoning is incorrect and represents a mis-application of its overall NME methodology. Specifically, as proxy values for inputs, surrogates are meant to be valued as though they were produced and obtained in the NME country in question and as though these inputs were purchased on a local market. This is counter to the Department's reasoning in the past, where it found that Indian import duties on these inputs ought to be disregarded because the inputs are used in manufacturing products that, when exported, are eligible for duty drawback. The petitioner disagrees, arguing that duty drawback is legally irrelevant because these proxy values of the inputs must be valued in the proxy market (in this case, India) and valued as if they were for domestic (Indian) consumption. Respondents' Argument: CMC et al. counter the petitioner's argument by noting that, under the Department's NME methodology, the steel imported into India should be valued as though it were used to manufacture merchandise for export, not for the domestic market. Moreover, consistent with the Department's previous findings, the Department's methodology recognizes that the Indian government effectively suspends collection of import duties on steel when the same company later exports the finished goods containing an equivalent amount of steel. This likewise reflects, according to the respondents, the situation in the PRC where imports of steel that are used in manufacturing goods that are subsequently exported are entitled to a full duty rebate. Thus, the respondents contend, the flaw in the petitioner's argument is that it ignores the fact that the surrogate imported steel is not used, in the Department's calculations, for manufacturing and further sale in India, but rather for sale to export markets. The Department's methodology, therefore, is fully consistent with the NME provisions of the statute which authorize the calculation of accurate surrogate costs that appropriately reflect the costs of inputs for a TRBs manufacturer for the export market. Similarly, Luoyang and Wafangdian contend that the petitioner's argument ignores commercial reality in India in that the Indian manufacturer is aware at the time of the purchase of imported steel that its cost of steel will be reduced by the amount of the import duty upon export of the manufactured good. Citing Lockwashers Investigation, these respondents note that the Department has expressly rejected the petitioner's argument in the past, and the petitioner has not provided any new arguments that would merit a reconsideration of the Department's prior findings in this regard. Department's Position: We disagree with the petitioner and have not adjusted these surrogate values for import duties in the final results. In the past we have considered and rejected this argument that the surrogate price must be a landed price and reflect the price paid for consumption in the domestic market. For instance, in Sulfanilic Acid from the PRC; Final Results of Antidumping Duty Administrative Review, 63 FR 63838, 638390 (November 17, 1998), we explained that because the costs constructed using the surrogate methodology are the costs for Chinese production for the export market, the costs incurred by Indian producers manufacturing sulfanilic acid for the export market are a better surrogate than are the costs incurred by Indian producers in manufacturing sulfanilic acid for their domestic market. Thus, the unadjusted prices obtained from trade statistics are an appropriate source for surrogate values. Moreover, the statute at section 773(c)(1)(B)(2) states that "the valuation of the factors of production shall be based on the best available information regarding the values of such factors in a market economy country," and that, in constructing the value of the cost of materials, "the cost of materials shall be determined without regard to any internal tax in the exporting country imposed on such materials or their disposition which are remitted or refunded upon exportation of the subject merchandise produced from such materials." Section 773(e)(3). Therefore, consistent with our position in Certain Cased Pencils from the PRC; Final Less than Fair Value Determination, 59 FR 55625, 55633 (November 8, 1994) (Cased Pencils), "{w}e are constructing the value of the exported merchandise {and}, therefore, it is appropriate to use the costs the surrogate producer would face in producing exported merchandise." Comment 13: Adding Ocean Freight and Insurance to FOB Export Values Petitioner's Argument: The petitioner argues that the Department has chosen India as the primary surrogate country for this review. Therefore, in order to correctly determine the value of imported steel in India, adjustments must be made to the Japanese export value data (which, the petitioner maintains, is reported on an FOB basis) to reflect the cost of ocean freight and insurance. The petitioner contends that by not adjusting the values, the Department would in essence be using Japan as a surrogate market for the PRC, which is in direct violation of section 773(c)(4)(A) of the Act because Japan has not been shown to be at a comparable level of economic development. Finally, the petitioner cites to TRBs V, (29) where the Department made a similar adjustment to FOB export values used as surrogates. Respondents' Argument: CMC et al. contend that, for reasons similar to those they note in Comment 12, it is inappropriate to adjust export values, in the manner the petitioner suggests, in order to reflect the prices of steel in India. In particular, the respondents argue, the Department's stated preference is to use the costs in the surrogate country of manufacturing the product for export as surrogates. (30) Moreover, the respondents note, the Department did not make such adjustments in TRBs-XI, where it also used Japanese export data as a surrogate for steel. The respondents further argue that there is insufficient support for the petitioner's contention that the Japanese export data are, in fact, reported on an FOB basis. However, even if it could be assumed they were on an FOB basis, CMC et al. contend that there would be no reasonable means with which to fairly determine the proper distances and rates between the various ports of Japan and India. Luoyang and Wafangdian likewise disagree with the petitioner's proposed adjustment, and suggest that the Department has two options. First, these respondents argue, the Department has the authority to determine what constitutes "best available information" and, therefore, can choose to use the reported data without adjustment. Alternatively, these respondents contend, the Department should confirm the delivery basis of the export values. If the Department determines that the basis is not CIF, but that CIF data is the only appropriate data to use, these respondents state that the Department must collect the official reported CIF data rather than use a constructed CIF value. Department's Position: We agree with the petitioner and have adjusted the Japanese export values to account for marine insurance and freight costs. The petitioner provided documentation supporting its contention that the Japanese export statistics relied upon in the Preliminary Results are, indeed, based on FOB values. (31) The respondents have not presented any information to suggest that the delivery basis was otherwise. Moreover, the restatement by CMC et al. of the Department's preference for basing surrogates on the cost of a product for export is irrelevant. Unlike the issue of rebated import duties, regardless of whether an Indian manufacturer is purchasing the steel for use in domestically sold products or exported products, the cost of all movement charges in getting the Japanese steel to India will be reflected in the price of imported steel. Finally, with respect to respondents' argument that there is no way of meaningfully calculating an appropriate adjustment, the use of surrogates is, by its nature, an inexact but necessary practice. Although we lack information on the cost of shipping from Japan to India, we have used as best available information the cost of freight and insurance from the PRC to the U.S. West coast. Of the available freight cost data on the record, the PRC to U.S. West coast data most closely approximates the shipping distance between Japan and India. Comment 14: Sigma Cap and PRC Freight Expenses Petitioner's Argument: The petitioner argues that, if the Department rejects its argument in Comment 13 to adjust Japanese export statistics used to value steel, then the Department should not apply the "Sigma" cap in valuing the inland freight expenses of inputs. (32) The petitioner claims that the purpose of the Sigma ruling was to avoid double-counting when import prices, used as surrogate values, are reported on a CIF basis. The petitioner argues that Collated Roofing Nails (33) clarified that the Sigma cap applies when CIF export values are used. In this case, however, according to the petitioner, steel inputs for cups and cones are valued using Japanese exports reported on an FOB basis. Therefore, the petitioner argues that the Sigma cap should not be applied to these steel inputs used to make cups and cones, but only to those inputs that are reported on a CIF basis. Respondent's Argument: CMC et al. argue that the Department did not misapply Sigma. According to CMC et al., the Federal Circuit in Sigma was concerned with the overstating of inland freight of any surrogate, and not just those inputs based on CIF values. CMC et al. claim that the reason for the concern was that a rational producer in a market economy, in order to minimize inland freight costs, would choose between domestic and imported steel based on whether the factory is closer to the port or to the domestic steel producer. CMC et al argue further that the petitioner inappropriately relies on Collated Roofing Nails for the proposition that the Sigma cap does not apply when FOB values are used. They claim that this case does not stand for this proposition; instead, in that case the Department was merely acting on the facts of the case, which happened to involve material inputs based on CIF values. CMC et al. state that the case did not, however, limit the application of the Sigma cap to only those instances in which CIF values are used. Similarly, Wafangdian and Luoyang argue that the Sigma decision was not limited to ocean freight in CIF situations; instead the Sigma cap applies whenever the surrogate value includes domestic inland freight before the items were exported. Wafangdian also argues that, in its case, the Department incorrectly used the actual distances between the factory and the suppliers in calculating its freight expenses for raw materials. Instead, according to Wafangdian, the Department should have used the shorter of the distance between the closest PRC port and the factory, or the distance between the supplier and the factory. By not capping the distances, Wafangdian argues that the Department did not follow its revised methodology following Sigma. Department's Position: In Comment 13, we found that the Japanese export prices used as surrogate values for steel cups and cones should be adjusted to include ocean freight and insurance from Japan to the Indian port. The adjusted values are, therefore, on a CIF basis. Thus, the petitioner's arguments regarding our application in the Preliminary Results of the Sigma cap are moot and, accordingly, we have continued to apply the Sigma cap in the final results. In Wafangdian's case, consistent with our prior practice, we agree that the Sigma cap should have been applied to the inland freight expenses of Wafangdian's suppliers, and have made this change for the final results. Comment 15: Exchange Rates Petitioner's Argument: The petitioner argues that the Department should use monthly exchange rates in converting foreign currencies. According to petitioner, the Department erred in using an average POR rate to convert input values from Japanese Yen and that average monthly rates would correlate more closely to the dates of purchase. The petitioner argues that the current situation differs from that in TRBs-VIII where the Department correctly rejected the respondents' contention that the Department should convert factor values using the date of each respective U.S. sale exchange rate. (34) The petitioner argues that sale dates do not sufficiently correlate to input purchase dates, but that monthly rates for input values do correlate to the times the inputs are obtained. Respondents' Arguments: CMC et al. assert that the Department applied the correct methodology in using an average POR exchange rate. These respondents argue that the Department should continue to adhere to its practice from prior reviews and that the petitioner has not supplied any reason to support its claim that the Department should use monthly exchange rates. Likewise, Luoyang and Wafangdian argue that the Department should reject the petitioner's proposal that monthly exchange rates be used instead of an average exchange rate for the entire review period. Luoyang and Wafangdian claim that such a change would increase the unit value for the steel exported from Japan and that the petitioner did not cite any statutory provisions or Departmental regulations to support its assertion. According to respondents, the petitioner offered only one example from TRBs-VIII where the Department valued factor inputs using the rate of exchange on the "date of sale" of the subject merchandise. Respondents claim that the petitioner opposed the change in TRBs-VIII and is now reversing its position in order to increase the surrogate value. Department's Position: We disagree with the petitioner that average monthly exchange rates should be used to convert surrogate values from Yen. It has been the Department's practice to convert surrogate values using average POI/POR exchange rates, and consistent with prior reviews, we have continued to use an average POR exchange rate. (35) This practice reflects the premise that inputs will normally be purchased throughout the year. The petitioner has not presented any information that would lead use to conclude that this premise was invalid for bearing-quality steel purchased from Japan. Comment 16: Separate Rates Analysis of Suppliers Petitioner's Argument: The petitioner argues that in applying its separate rates analysis only to the PRC exporter of subject merchandise, the Department creates the potential for non-exporting suppliers to escape the discipline of the dumping order. Rather, according to the petitioner, the Department should apply its separate rates analysis also to the PRC supplier of the exporter, thereby preventing the supplier from funneling merchandise through trading companies with dumping margins lower than the PRC rate. The petitioner further argues that no NME producer is entitled to a separate rate but, rather, must positively demonstrate lack of government control. At a minimum, the petitioner urges, the Department should assign as facts available the PRC wide rate to any supplier which failed to respond to the questionnaire the Department sent to it on the basis of non-cooperation. Respondents' Argument: CMC et al. counter by first noting that the Department has consistently found the respondents to be free from de jure and de facto government control in past TRBs reviews. Now, the respondents continue, the petitioner argues that the Department should institute a "sweeping change" to its existing practice by adopting a "dual control test" in analyzing both the exporters and their suppliers. According to the respondents, this would deviate from the Department's practice of limiting its separate rates analysis to the exporter of the merchandise. Moreover, the de facto portion of the analysis determines whether the companies' export prices are subject to government control and whether the companies retain the proceeds of their export sales. The respondents note that the Department explicitly declined to adopt such a dual control test during the process of revising its regulation. (36) ZMC makes similar arguments, noting that the purpose of the Department's separate rate test is to determine whether the export company is free from government control. (37) Since the producer factories are not involved in the export transactions, ZMC continues, there is no reason to make an additional determination regarding their status as free from government control. ZMC and CMC et al. further argue that requiring a separate rates determination for the suppliers would not affect the outcome of an antidumping determination because regardless of whether the supplier is government controlled, its FOP data will be used to calculate the normal value of the exporter's sales. The respondents thus conclude that the U.S. industry is sufficiently protected. Finally, CMC et al. note that in the Final Regulations, the Department refrained from codifying a procedure regarding separate rates, citing the changing conditions of government control in NME countries. In fact, the respondents suggest, the "separate rates determination is becoming largely irrelevant, and clearly there is no need to extend it further at this time." Moreover, the respondents note, at least with regard to Premier's suppliers, the questionnaire sent by the Department did not solicit information regarding separate rates and, therefore, these suppliers cannot be punished for not providing this information. Department's Position: We find that a revision to our existing application of the separate rates test is not necessary at this time. (38) The essence of the petitioner's argument is that a state controlled producer might sell to a PRC trading company at artificially low prices, thereby allowing the latter to resell to the United States at unfair prices without the discipline of the dumping order. The petitioner's fear is unfounded, however. If the PRC trading company reselling the supplier's TRBs in the United States had a separate rate, we would compare its U.S. prices to normal value based on the supplier's FOP data, and determine a dumping margin as appropriate. If the trading company did not have a separate rate, then its sales to the United States would be subject to the PRC-wide rate. Either way, the TRBs produced by the supplier and resold through the trading company are subject to the discipline of the dumping order. Any "unfair" prices would be offset by the appropriate amount of antidumping duty. Moreover, as the respondents noted, we previously considered "loophole" arguments similar to the petitioner's while drafting the Final Regulations (39) and, nevertheless, chose not to adopt a dual control test. The petitioner has presented no substantively new argument or fact pattern that would prompt us to reconsider that decision here. Moreover, because it is not our practice to analyze government control of producers that do not export directly to the United States, the petitioner's arguments regarding the use of the PRC-wide rate as facts available are irrelevant. Comment 17: U.S. Credit Expenses for Export Price (EP) Sales Petitioner's Argument: The petitioner argues that the Department should add U.S. credit expenses to normal value for all EP sales. To support this assertion, the petitioner cites to 19 U.S.C. § 1677b(a)(C)(iii) and 19 C.F.R. § 351.410(a) & (c) as providing that "normal value should be 'increased or decreased' by the amount of any 'differences in the circumstances of sale,' such as credit expenses." The petitioner also cites to TRBs-IX (62 FR at 61277) in which, it claims, the Department made this adjustment to normal value for EP sales. Respondents' Argument: CMC et al. argue that the statute and regulations do not support any modification to the methodology the Department employed in the Preliminary Results. Likewise, Luoyang, Wafangdian and ZMC contend that the Department's longstanding practice is to not make adjustments for credit expenses. Luoyang, Wafangdian and ZMC argue that in Lockwashers Investigation, the Department expressly stated that in an NME EP situation, the Department "does not make circumstance of sale adjustments in the margin calculations using NME factors of production analysis." Luoyang, Wafangdian and ZMC suggest that the reference in TRBs-IX to circumstance-of-sale adjustments is probably an error. Therefore, Luoyang, Wafangdian and ZMC conclude, there is no basis for the Department to make any credit expense adjustment to normal value for EP sales in the instant case. Department's Position: According to the Department's standard practice, for NME cases we generally do not adjust for differences in circumstances of sale in EP situations because we usually do not know enough about the selling expenses included in the surrogate SG&A to make an adjustment. (40) Accordingly, we have made no revisions in this regard to the final results. Revocation Comment 18: The Department Should Grant Revocations Petitioner's Arguments: The petitioner argues that the Department should reverse its preliminary determination of intention to revoke the antidumping duty order in part with respect to CMC, Wanxiang, and ZMC, even if the Department calculates zero or de minimis margins in this review. Noting that the revocation determination is a discretionary decision, the petitioner contends that an evaluation of evidence related to "information concerning trends in prices and costs, currency movement, and other market and economic factors that may be relevant" will demonstrate that the continued application of an order is necessary to offset dumping, pursuant to 782(d) of the Act and 19 CFR 222(b)(2)(i)(C). First, the petitioner alleges that the zero margins were largely attributable to the recent Asian financial crisis, which caused steel prices to be depressed during the POR. With the end of the financial crisis, economic recovery and growth in demand will cause factor values (particularly the prices of steel, the major input of TRBs) to rise. This will cause normal value to increase and, consequently, dumping margins to recur. Thus, because the zero or de minimis margins for the companies requesting revocation were based on depressed prices, and in light of expected increases in the costs of production, the continued application of the order is necessary to offset dumping. Second, the petitioner claims that China's institution of domestic programs (including import restrictions) designed to reduce Chinese producers' reliance on imported steel will result in increased normal values, inasmuch as domestic sourcing will result in increased use of surrogate values for factor valuations instead of the artificially low values of imported steel. Third, the petitioner argues that import prices of Chinese TRBs have significantly declined over the last two years, indicating a likely recurrence of dumping in the future, despite the calculation of zero or de minimis dumping margins in the instant review. Finally, the petitioner argues that the Department should not revoke the order because the Department found in the corresponding sunset review that dumping was likely to continue if the order was revoked. See Tapered Roller Bearings from the People's Republic of China, Final Results of Sunset Review, 65 FR 11550 (March 3, 2000). In sum, because the calculated zero or de minimis margins were the result of artificially low steel values that are likely to disappear in the near future, the petitioner urges the Department to reverse its preliminary revocation determinations. Respondents' Arguments: CMC et al. argue that revocation is appropriate for CMC and Wanxiang as both companies have satisfied the regulatory and statutory standards for revocations, in part, of the antidumping duty order. Both companies have (A) made sales above normal value for three consecutive years in commercial quantities, (B) provided certification that they have not sold merchandise at less than normal value during the current period of review and would not do so in the future, and (C) agreed to immediate reinstatement of the antidumping duty order if the companies sell at less than normal value subsequent to revocation. Under the Department's regulations, at 19 CFR 351.222(b)(2)(i), CMC et al. continue, the Department does not have significant discretion in evaluating revocation requests and must revoke the antidumping duty order with respect to CMC and Wanxiang given that both companies have satisfied the requirements of that regulation. In particular, CMC and Wanxiang both received a zero or de minimis duty margin in each of the last four (Wanxiang) to six (CMC) administrative reviews (including the three-year period forming the basis of the revocation request). Given that both companies have agreed to the reinstatement of the order in the event future dumping is found, and since three consecutive years of sales above normal value gives rise to the presumption that the order is no longer necessary to offset dumping with regard to specific producers, CMC et al. claim that the Department was correct when it preliminarily decided to revoke the order with respect to CMC and Wanxiang. Furthermore, CMC et al. contend that the petitioner has not satisfied its burden of demonstrating with "substantial, positive evidence" that the continued imposition of duties is necessary with respect to CMC and Wanxiang. First, CMC et al. rebut the petitioner's argument that the possibility of higher steel prices justifies continuance of the order for CMC and Wanxiang because both companies received zero margins prior to the Asian financial crisis and, therefore, neither company was found to be dumping during that period of higher steel prices. Moreover, if steel prices rise, the companies would logically adjust their sales prices to account for the higher input prices. Second, CMC et al. argue that there is no direct evidence that CMC and Wanxiang are likely to use less imported steel in the future but, even if that were the case, the substitution would not necessarily result in dumping. The domestic programs do not create such significant disincentives against using imported steel as to predict CMC and Wanxiang will likely not use imported steel in the future. Moreover, the import substitution programs were in full effect during the POR, yet CMC and Wanxiang were not compelled to rely upon domestic steel. Additionally, given China's likely accession to the WTO, any non-tariff barriers, including import substitution measures, import quotas, and non-automatic import licensing and import registration requirements, would be eliminated. Finally, CMC et al. claim that even if the companies substituted domestic steel for TRBs production and normal value were to increase, dumping would not necessarily result because the companies would adjust their sales prices to take into account the higher steel input prices and costs. Third, the fact that some U.S. import prices for some TRBs models have declined does not constitute substantial, positive evidence that continuation of the order is necessary with respect to CMC and Wanxiang. Finally, the outcome of the sunset review provides further support for revocation for CMC and Wanxiang, as the sunset review found that both CMC and Wanxiang had zero margins in the sunset review, thus indicating that even though the revocation of the order would lead to a continuation or recurrence of dumping as to all companies, dumping would not continue or recur as to these companies (i.e., CMC and Wanxiang). Wafangdian argues that if its final antidumping duty margin is zero or de minimis for this review, the Department should revoke the order with respect to Wafangdian as it will have met all of the requirements for revocation pursuant to 19 CFR 351.222. ZMC argues that nothing in the statute, the regulations, or prior Department practice supports the petitioner's assertion that revocation should be related to the condition of future steel prices. It would be an unreasonable use of discretion by the Department to condition revocation on predictions about future steel prices. Department's Position: Because we have determined that CMC, Wafangdian, and ZMC are not eligible for revocation, based on the fact that they did not make sales above normal value in the instant review, and Wanxiang is not eligible for revocation based on the fact that it did not make sales in commercial quantities during the three year period being analyzed, we do not reach the likelihood of future dumping issue. Comment 19: Limiting Revocation to Certain Trading Companies Petitioner's Arguments: The petitioner argues that if CMC, Wanxiang, and ZMC continue to qualify for revocation, then revocation should be limited to those exporter/producer combinations that have been reviewed in the instant review period, as well as the prior two review periods, i.e., the period forming the basis of the revocation request. See 19 CFR 351.222(b)(3). Citing 19 C.F.R. 351.107(b)(i), the petitioner contends that where an exporter or trading company receives a zero margin, the Department will establish a combination exporter/producer rate in order to avoid the "redirection of exports {from a producer subject to the order} through an excluded trading company." Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27295, 27303 (May 19, 1997). Such a decision would be consistent with the Department's past practice of excluding only specific producer/exporter combinations from antidumping duty orders. See, e.g., Creatine Monohydrate from the People's Republic of China, 64 FR 71104, 71110 (December 20, 1999); Brake Drums and Brake Rotors from the People's Republic of China, 64 FR 61581, 61589 (November 12, 1999). Alternatively, if the Department revokes the orders in part with respect to specific producers, the petitioner contends that the Department should follow its past practice of limiting the revocation to products actually produced and sold by that producer, thus excluding from revocation products manufactured by other suppliers and sold by that producer in its capacity as a Chinese trading company. See, e.g., Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of Antidumping Duty Administrative Review and Revocation in Part of Antidumping Duty Order, 62 FR 6189 (February 11, 1997). Respondents' Arguments: CMC et al. contend that, in accordance with 19 CFR 351.222(b)(3), the Department should extend revocation to those suppliers of subject merchandise identified in the three review periods forming the basis of CMC's and Wanxiang's revocation requests, in which the two respondents received zero or de minimis margins. ZMC concedes that the petitioner is correct in that if there is a revocation of an order with respect to a trading company, the revocation should tie that exporter with the producer. Department's Position: Because we have determined that CMC, Wafangdian, Wanxiang, and ZMC are not eligible for revocation, this issue is moot. Comment 20: Limiting Revocation to Particular Models Petitioner's Arguments: Assuming arguendo that the Department uses imported steel for any company's factor valuations without weight- averaging these values with surrogate values and decides to revoke the antidumping duty order in part for qualifying companies, the petitioner argues that the revocation should be limited to only those models actually using the imported steel. Without such limitation, the petitioner argues, a company-specific revocation would apply to the entire class or kind of TRBs, allowing respondents to export other models not made with the imported steel at prices below normal value. Moreover, if the Department bases its margin calculations on only imported steel values, the petitioner argues that, in accordance with 19 CFR 351.222(b)(2)(i)(C), the determination as to whether the continued application of an antidumping order is necessary to offset dumping should be made on a model-specific basis in order to continue offsetting dumping of models not using such steel. Respondents' Arguments: CMC et al. contend that the Department should not limit revocation to TRBs models for which the requesting respondents used imported steel. The Department's regulations, at 19 CFR 351.222(b)(2)(i), clearly direct the Department to revoke orders as to companies meeting the revocation standard. There is no authority within the Department's regulations to revoke orders as to particular models of subject merchandise. Once an exporter is excluded from an order, it is no longer subject to administrative review, but under the petitioner's arguments, excluded respondents would remain subject to administrative reviews in order to assign margins to unexcluded models, thus negating the purpose of the revocation provisions. ZMC argues that the petitioner's concerns involving the use of imported steel are unfounded. ZMC has provided written assurances that it will not sell below normal value in the future and, given that ZMC has met the condition of making sales at prices above normal value for three consecutive years, it should be trusted to keep those assurances. Furthermore, ZMC argues that it is unclear whether the petitioner's proposal to limit revocation "solely to models actually using {imported} steel" would cover only models previously reviewed that were made with imported steel or would cover only models produced using imported steel. Regardless, ZMC argues the proposal would essentially establish a system of managed trade that would require extensive and continuous monitoring, and that any shipper seeking revocation would be required to establish unreasonable conditions. Such conditions would place companies at competitive disadvantages because they would be required to use the same material supplier when seeking revocation even if steel prices in other parts of the world were declining. Department's Position: Because we have determined that CMC, Wafangdian, Wanxiang, and ZMC are not eligible for revocation, this issue is moot. Comment 21: Revocation with Respect to Wanxiang Petitioner's Arguments: The petitioner argues that the Department should not revoke the antidumping order with respect to Wanxiang because although Wanxiang has not made sales at less than normal value for the three years forming the basis of the revocation request, Wanxiang failed to make sales in commercial quantities in each of those years. The petitioner notes that the Department has stated that satisfaction of the commercial quantities provision is a "threshold requirement that must be met by parties seeking revocation." In this review, the petitioner continues, the record demonstrates that Wanxiang has not satisfied the commercial quantities threshold. Using TRBs-IX as a benchmark, which covered the review period immediately preceding the review in which Wanxiang received its own separate rate, the petitioner notes that Wanxiang's sales volume in the three years forming the basis of Wanxiang's revocation request were much smaller as a percentage than its TRBs-IX sales volume. Due to the proprietary nature of Wanxiang's quantity and value of sales, these percentages can be found at Memorandum from Team to the File, "Final Results Calculation Memorandum for Wanxiang Group Corporation," dated January 3, 2001 (Wanxiang Calculation Memorandum). Thus, the petitioner argues that these small percentages cannot be considered representative of Wanxiang's normal commercial activity. Accordingly, the petitioner urges the Department to deny Wanxiang's revocation request. Furthermore, the petitioner argues that continued application of the antidumping duty order is otherwise necessary to offset dumping. After TRBs-IX, U.S. customers allegedly required Wanxiang sales contracts to include indemnity clauses to protect against the risk of dumping margins. The petitioner argues that the U.S. customers' concern that Wanxiang might be found to be dumping, combined with Wanxiang's decision to forgo sales rather than agreeing to indemnity clauses (which demonstrates that Wanxiang itself was concerned about dumping liability such that it refused to grant such agreements), prevents the Department from concluding that application of the order is not otherwise necessary to offset dumping. Respondent's Arguments: CMC et al. contend that the determination that a company is entitled to revocation only if it sold the subject merchandise in commercial quantities in one or more of the periods of review on which revocation is based is not required by the statute, the regulations, or by Article 11.2 of the WTO Antidumping Agreement. However, CMC et al. claim that Wanxiang sold the subject merchandise in commercial quantities for the relevant period. Furthermore, CMC et al. argue that Wanxiang's decision to forgo sales was a conservative and rational business decision that reflected its uncertainty about the antidumping duty administrative review process, i.e., Wanxiang was unable to estimate what its duty rate would be, and consequently it reduced its sales volume. Department's Position: Although no precise standard for evaluating commercial quantities is prescribed in the statute or the Department's regulations, our application of the commercial quantities analysis is consistent with the statute, regulations, and Article 11.2 of the WTO Antidumping Agreement. 19 CFR § 351.222 requires a company requesting revocation to submit a certification that the company sold the subject merchandise in commercial quantities in each of the three years forming the basis of the request. Therefore, in accordance with our regulations, we must determine, as a threshold matter, whether the company requesting revocation sold the subject merchandise in commercial quantities in each of the three years forming the basis of the request. The "commercial quantities" standard is evaluated with the goal of basing our revocation determination on a sufficiently broad base of information regarding a company's normal commercial practice. In other words, if a company is found to have sold subject merchandise in the United States for three consecutive years at not less than normal value, the Department must be satisfied that the respondent's participation in the U.S. market was meaningful. Sales during the POR which, in the aggregate, represent an abnormally small quantity do not provide a reasonable basis for establishing the rebuttable presumption that dumping is not likely to recur in the future in the absence of an order. See, e.g., Pure Magnesium From Canada; Final Results of Antidumping Duty Administrative Review and Determination Not To Revoke the Antidumping Duty Order in Part, 65 FR 55502, 55503 (September 14, 2000) ("Pure Magnesium from Canada"); Notice of Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke the Antidumping Duty Order: Brass Sheet and Strip from the Netherlands, 65 FR742 (January 6, 2000); Professional Electric Cutting Tools from Japan: Final Results of the Fifth Antidumping Duty Administrative Review and Revocation of the Antidumping Duty Order, in Part, 64 FR 71411 (December 21, 1999) (explaining that, absent a substantial and unusual change in business practice since the imposition of the order that would cause the Department to consider other measures of commercial quantities, it has been the Department's practice to examine the aggregate volume of total sales to the United States (in absolute terms or in comparison with the period of investigation or another appropriate benchmark period) in determining whether sales have been made in commercial quantities). (41) When determining whether a company's sales have been made in commercial quantities, we must look at each case on a case-by-case basis, examining the unique facts of each proceeding. See section 751(d) of the Act; 19 CFR § 351.222. In this case, Wanxiang did not provide any information on the record of this review regarding its level of shipments during the period of investigation. Since Wanxiang did not receive its own separate rate until TRBs-VIII and was not reviewed by the Department until TRBs-IX, we only have information on the record concerning Wanxiang's level of imports dating back to TRBS-IX. Due to the proprietary nature of Wanxiang's sales volumes, a comparison of Wanxiang's sales volumes in each of the three years forming the basis of the company's revocation request to its level of sales in TRBs-IX, the earliest time period for which we have on the record volume data for Wanxiang, is included in Wanxiang Calculation Memorandum. (42) We note that, based on this comparison, these sales volume figures during the period forming the basis of Wanxiang's revocation request are so small in absolute and relative terms that we cannot reasonably conclude that the zero margins Wanxiang received are reflective of the company's normal commercial experience, nor do they provide a reasonable basis for determining that Wanxiang is not likely to makes sales below normal value in the future. Moreover, we note that Wanxiang's shipments are not reflective of the commercial behavior of other companies in this review, in terms of sales volume figures, shipping similar products to the United States. Furthermore, Wanxiang has offered no compelling evidence showing the type of unusual occurrence that we would consider in our commercial quantities determination. We do not find persuasive CMC et al.'s argument that Wanxiang's decision to forgo sales was reflective of normal commercial activity. As we noted in the sales verification report, "Officials stated that they made many more sales in the 9th review than in subsequent reviews to the United States because after the 9th review, U.S. customers started requiring indemnity clauses in the sales contract to protect against the risks of dumping margins." This indicates that Wanxiang's low sales volume is not intended to be long-term or permanent in light of CMC et al.'s statement that the decision to forgo sales reflected Wanxiang's uncertainty about what the antidumping duty rates would be. While a company seeking revocation need not necessarily prove that it is selling at the same levels at which it sold during the benchmark period, a company's aggregate sales volume in the three years forming the basis of the revocation request should be reflective of that company's normal commercial activity. Wanxiang has failed to satisfy this evidentiary threshold and, accordingly, Wanxiang does not qualify for revocation of the antidumping duty order. Company-Specific Issues Comment 22: CMC's Market Economy Steel Values Petitioner's Argument: The petitioner argues that the Department should reject CMC's claimed values for market economy steel for two reasons: 1) the market economy steel values were likely unfair and 2) the values are inextricably intertwined with Chinese domestic transactions and China's non-convertible currency. Regarding the latter argument, the petitioner contends that, even if the Department decides generally to use market economy steel prices, it should reject CMC's market economy steel values. In the petitioner's view, the "tolling agreements" submitted by CMC are suspect because it is not clear that these types of agreements have meaning in a non market economy where "all of the people" own many inputs. Furthermore, the petitioner contends that CMC's statements that it retains ownership of the market economy steel throughout the manufacturing process are directly contradicted by the tolling agreements themselves and are unverified. Thus, the petitioner contends that all of the market economy steel prices reported by CMC are inextricably intertwined with Chinese domestic transactions and China's non-convertible currency and cannot be used in the final results. Respondent's Argument: CMC argues that it has consistently stated, and the Department has verified, that CMC at all times retained ownership of the market economy steel used to manufacture the subject merchandise. CMC states that the petitioner is simply trying to create a domestic transaction where no domestic transaction, in fact, exists. CMC contends that the portions of the tolling agreements to which the petitioner refers which discuss steel prices and transactions have to do with prices negotiated between CMC and the market economy supplier and not negotiations or transactions between CMC and its domestic suppliers. Furthermore, other pricing discussions in the tolling agreements refer to liquidated damages clauses and discussions of VAT taxes. CMC notes that all of this information was verified by the Department. Thus, the Department should continue to use CMC's reported market economy steel values for the final results. Department's Position: We have already addressed the petitioner's first argument in Comments 1 through 3 above. With regard to the petitioner's second argument, we disagree that the Department should not utilize CMC's reported market economy steel values because they are "inextricably intertwined with Chinese domestic transactions and China's non-convertible currency." At verification, we exhaustively examined CMC's market economy steel transactions and its tolling agreements. We found no information with regard to any of the tolling agreements or arrangements with the subcontractors and unaffiliated manufacturers that contradicts any of the information reported by the respondents. Based on the information we saw at verification, we were satisfied that there were no discrepancies in CMC's reported market economy steel purchases, transactions, or usage. Thus, because we are satisfied that CMC used market economy steel to manufacture the subject merchandise and paid for this steel in a market economy currency, and that no intervening domestic transactions took place during the manufacturing process that would nullify this market-economy transaction, we are continuing to use CMC's reported market economy steel values for the final results. Comment 23: Accounting for CMC's Rejects Petitioner's Argument: The petitioner argues that the Department should make an adjustment to the Preliminary Results calculations for CMC to take into account any material losses incurred during the production process. For cages, for which no yield loss data was provided, facts available should be used. A reasonable facts available approach, according to the petitioner, would be to derive a percentage for yield loss based on yield loss as reported by other respondents. Respondent's Argument: CMC disagrees with the petitioner, stating that the factors data supplied in this review already accounts for rejects. Specifically for cages, CMC argues that, because CMC subcontracted out 100 percent of the production of its cages, it did not have monthly yield data. However, the steel input factors data for cages accurately accounts for rejects because it includes the gross steel input used to produce all TRBs, including rejects. Thus, the information was submitted, it was just not broken out as it was with the other inputs. Any further adjustments for rejects would, in CMC's view, amount to double-counting of rejects for CMC. Department's Position: We disagree with the petitioner that we should make an adjustment to CMC's calculations to take into account material losses incurred during the production process. Based on the information we examined at verification, we were satisfied that the raw material information reported by CMC did take into account material losses incurred during the production process. Thus, no further adjustments need to be made to CMC's calculations. Comment 24: CMC's Negative Inventory Carrying Costs Respondent's Argument: CMC argues that the Department should adjust CMC's calculations for the final results to include negative inventory carrying costs that were reported in CMC's U.S. sales database. CMC argues that, because negative carrying costs reflect transactions where payments were received in advance of the full estimated time for shipping, CMC actually had full use of such monies. Thus, the Department is actually applying adverse inferences to CMC by excluding negative inventory carrying costs. Petitioner's Argument: The petitioner argues that the Department should not change its Preliminary Results calculations to take into account negative inventory carrying costs reported by CMC in its U.S. sales database. The petitioner argues that an inventory carrying cost is an imputed expense for CEP sales which a company does or does not incur. However, a company cannot incur a negative inventory carrying cost. Moreover, CMC's negative inventory cost claim is not factually supported by the record. Thus, the Department should not allow any negative inventory carrying cost adjustments in the final results. Department's Position: We agree with the petitioner that negative inventory carrying costs should not be taken into account in making price adjustments and are not changing our calculations for CMC in this respect for the final results. As noted by the petitioner, an inventory carrying cost is the unit opportunity cost incurred from the time a product arrives in the United States until the time of shipment from the warehouse or other intermediate location in the United States to the first unaffiliated customer. Unlike an imputed credit expense, where a payment can be made prior to the arrival of a shipment, a shipment cannot physically be in the warehouse and recorded into inventory prior to its actual arrival. Thus, we are not allowing for any adjustments for negative inventory carrying costs for CMC for the final results. Comment 25: Applying Adverse Facts Available to ZMC Petitioner's Argument: The petitioner contends that ZMC's verification report indicates that some of ZMC's imported steel was obtained as part of a tolling agreement with another company. Because ZMC had not revealed this tolling agreement in any of its questionnaire responses, the petitioner argues, the Department should reject ZMC's responses in toto and, instead, use total adverse facts available. Alternatively, if the Department chooses to accept ZMC's responses, the petitioner suggests that the Department should nevertheless reject the imported steel values reported by ZMC's TRB supplier for several reasons. First, this imported steel, the petitioner maintains, has been sold at unfair prices. (43) Second, at verification the Department confirmed that ZMC's supplier paid for the steel in PRC currency and, therefore, the price cannot be used. Third, none of the documentation for these purported imports submitted on the record or examined at verification clearly indicates the manufacturer or the country of origin of the steel, or establishes a conclusive link between the imports of steel into the PRC and the purchases of steel by ZMC's supplier. Furthermore, the petitioner argues, there are significant unresolved questions regarding the tolling agreement of ZMC's supplier. In particular, it is not clear from the verification report whether this tolling agreement has been properly characterized as such and who owned the steel at each stage of the process. These questions are complicated, the petitioner continues, by the fact that ZMC has not put the text of the agreement on the record nor did the Department take it as an exhibit at verification. In sum, the petitioner contends, the record documentation and the verification report do not provide an adequate basis to support the use of actual market economy steel values and, therefore, the Department should rely on surrogate values. Respondent's Arguments: In reply, ZMC argues that it has provided complete and timely information, which the Department has verified. With regard to the fact that the text of the tolling agreement was not taken as an exhibit on the record, ZMC notes that the Department has broad latitude in conducting verifications and collecting information. ZMC further argues that the steel used by its supplier in manufacturing TRBs was not part of a tolling arrangement and, therefore, ZMC's questionnaire responses were correct. Moreover, ZMC argues, the payment for the steel in PRC currency did not affect the value of the steel. Department's Position: For these final results we have used surrogate values rather than the reported market economy import values to value all of the steel inputs of ZMC's producer. The Department will value the FOP data of a PRC producer using the actual amounts paid only if that factor was supplied by a market economy supplier and paid for in a market economy currency. (44) At verification, the Department found that the purchases by ZMC's supplier of imported steel were all paid for in PRC currency. (45) Using surrogates to value the steel inputs of ZMC's supplier is also consistent with our approach in TRBs-XI (at Comment 16). We disagree with the petitioner's proposed use of total adverse facts available in this instance. Neither the verification report nor the case record generally indicates that the steel used to produce the TRBs sold by ZMC was obtained through any tolling agreement. Moreover, that Department has not found ZMC to be uncooperative or to have in any other way impeded this review. Comment 26: Wanxiang's Surrogate Steel Values Petitioner's Argument: The petitioner argues that the Department should use surrogate values for all steel used by Wanxiang to make cups and cones, rather than actual market economy purchase prices. First, the Department should reject all market economy values because these prices are likely unfair and do not represent a significant amount of steel compared to total TRB production. Second, Wanxiang failed to show that the market economy steel was actually used to produce the reviewed products. Finally, the sales verification report failed to trace directly and completely the imported steel to the products exported to the United States and, therefore, Wanxiang cannot claim validly that only imported steel was actually used to make the cups and cones of the models exported to the United States. Respondent's Argument: Wanxiang argues that the Department should continue to use the actual prices it paid for imported steel, as the Department has verified that imported steel is used to manufacture the subject merchandise sold to the United States. In particular, the Department verified the procedures used to track the processing of imported steel in Wanxiang's production processes. Wanxiang emphasizes that the steel tracking process, which tracks the physical movement of steel, is independent of invoicing, and the fact that invoices may not relate to a particular TRB type in no way impedes the steel tracking process. Thus, Wanxiang urges the Department to continue valuing imported steel inputs using actual market-based prices. Department's Position: We have already addressed the petitioner's first argument in Comments 1, 2 and 3 above. Based on the discussion in these comments and the analysis contained in the Market Economy Steel Memo, we are not relying upon Wanxiang's reported market economy steel values for the final results. Accordingly, this issue is moot. Comment 27: Wafangdian's Price Adjustments Respondent's Argument: Wafangdian argues that the Department should add to gross unit price a post-sale price adjustment (PSPA) granted to a U.S. customer to account for a previous shipment of defective merchandise. Wafangdian claims that the defective merchandise was non-subject merchandise, while the PSPA was made on subject merchandise. Wafangdian agreed to compensate the customer for this defective merchandise on a future shipment and provided the Department with copies of the PSPA agreement and the underlying purchase order. Wafangdian argues that the Department has previously accepted similar PSPAs in Corrosion-Resistant Carbon Steel Flat Products and Certain Cut to Length Carbon Steel Plate from Canada, 61 FR 13815 (March 28, 1996), 64 FR 2173 (January 13, 1999) and Antifriction Bearings and Parts Thereof from France et al, 62 FR 54043 (October 17, 1997). Wafangdian argues that the PSPA in this case met the Department's requirements in 19 C.F.R. § 351.102(b) and that the final results, therefore, should be corrected accordingly. Petitioner's Argument: The petitioner argues that Wafangdian's claimed ministerial error that the Department failed to include applicable credit on sales with margins is erroneous and must be rejected. The petitioner refutes Wafangdian's claim that the PSPA should be added to the selling price before calculating net export price. Instead, according to the petitioner, Wafangdian's Section C response stated that the credit was compensation for defective merchandise and, as such, the credit is essentially a rebate or refund that must be subtracted from the gross price rather than added. Alternatively, the petitioner argues, the Department could view the credit as a warranty expense which would also be deducted from the U.S. price. Regardless of whether the Department views the adjustment as a "rebate," "refund," "warranty expense," or "post-sale price adjustment," the petitioner argues, the effect of the agreement between Wafangdian's U.S. customer and Wafangdian is to reduce the ultimate price. Therefore, the petitioner requests that the Department deduct the amount of the rebate from the initial price in the final results. Department's Position: We agree with Wafangdian. Price adjustments are defined as any change in the price charged for subject merchandise, such as discounts, rebates, and PSPAs, that are reflected in the purchaser's net outlay. 19 CFR § 351.102(b). To calculate export price, the Department will use a price that is net of any price adjustment, as defined in 19 CFR § 351.102(b), that is reasonably attributable to the subject merchandise. 19 CFR § 351.401(c). While we agree with the petitioner that the effect of the agreement between the U.S. customer and Wafangdian was to reduce the ultimate price, we do not agree that a price reduction intended to compensate for defective non-subject merchandise should be attributed to a shipment of subject merchandise. Wafangdian has provided a copy of the agreement between itself and its U.S. customer agreeing to a reduction in price of a future shipment. There is no indication that any relationship exists between the price reduction and the shipment of subject merchandise. Indeed, according to the agreement, the amount of the price reduction depended solely upon the amount of defective non-subject merchandise from a previous shipment. A price reduction of this sort cannot be reasonably attributable to the subject merchandise. In addition, in examining the actual sales data for those sales for which the PSPA was granted, we found that the total amount of the price reduction equaled the agreed reimbursement amount. We, therefore, find that the price adjustments provided to the U.S. customer for defective non-subject merchandise should be added to the gross price to reflect the actual amount the U.S. customer paid for the subject merchandise. Comment 28: Wafangdian's Normal Value for Production of Non-Specification Parts Petitioner's Argument: The petitioner argues that the Department should adjust Wafangdian's normal value to account for the production of defective (or non-specification) parts. According to the petitioner, Wafangdian reported that a certain percentage of steel is consumed in the production of non-specification merchandise that cannot be sold. Because all factors of production, including energy, labor, factory overhead and general expenses are used to produce this merchandise, the petitioner requests that the Department add to normal value an appropriate percentage to each of these factors to account for defective part production. Respondent's Argument: Wafangdian argues that non-specification parts are either sold in the local market or reworked and sold as a different part, and are not sold as scrap. Furthermore, since there were no out-of- specification production for the subject merchandise sold in the U.S. market, Wafangdian claims that there is no basis to make any adjustment to normal value to account for defective part production. Department's Position: While we agree with the petitioner that the Department should, in general, account for the production of non- specification parts, we do not have sufficient information on the record in this case to determine whether an adjustment should properly be made, and, even if an adjustment should be made, to make the required adjustment. At verification, the Department noted that the generation of non-specification production was not included in the reported figures for steel usage and scrap and we included in the verification report the percentage of steel used in the production of these parts. However, we also noted that some of these parts may be re-worked. Therefore, it would be improper, as the petitioner suggests, to simply increase all factors by the percentage of steel used in the production of non-specification parts without either simultaneously adjusting for the quantity of non- specification parts produced or crediting Wafangdian with the revenue generated from the sale of non-specification parts. Since neither the number of non-specification parts produced nor the revenue figures from the sale of these parts are on the record, we will not making any adjustments for the production of non-specification parts. Comment 29: Wafangdian's Labor Inputs Respondent's Argument: Wafangdian claims that, in addition to reporting assembly labor hours separately, it also included assembly labor hours in its reporting of direct unskilled labor hours. This double-reporting, according to Wafangdian, was shown at verification. To avoid double- counting assembly labor hours, Wafangdian requests that the Department subtract the reported assembly labor hours from the reported unskilled labor hours. Wafangdian further argues that since downtime is already included in the reported labor hours, any addition of time to adjust for downtime would also be double-counting. According to Wafangdian, records are kept based on a target production per eight hours and this target already takes into account downtime during those eight hours. Therefore, the respondent argues, there should be no adjustment to account for downtime. Petitioner's Argument: Regarding the double-counting of assembly labor hours, the petitioner first states that the Department's questionnaire requests that assembly and direct labor hours be reported separately. The petitioner claims that because Wafangdian reported these amounts separately, we must assume that there was no double-counting. Second, according to the petitioner, although Wafangdian claims that it showed at verification that it included assembly labor hours in its reporting of direct labor hours, there is no documentation on the record actually showing this double-counting. Therefore, the petitioner argues that the Department cannot deduct assembly labor hours from direct labor hours. Regarding the addition of downtime to labor hours, the petitioner argues that at verification the Department found that downtime was not included in the labor hours reported. In addition, the petitioner claims that target pieces per hour are irrelevant in light of the Department's finding that downtime was not reported. The petitioner argues that Wafangdian cannot now attempt to explain an issue that was settled at verification. As a result, the petitioner requests that the Department add downtime to Wafangdian's reported labor hours. Department's Position: We agree with the petitioner that there is no evidence on the record either submitted by Wafangdian or presented at verification, other then assertions by Wafangdian, that indicate assembly labor hours were included in the reporting of direct labor hours. At verification, Wafangdian did present these corrections as minor changes. However, while assembly labor hours are, percentage-wise, only a small part of unskilled labor hours, we do not find this to be a minor correction. The correction Wafangdian requests is not, for example, merely to make minor changes to individual data corresponding to a specific sale; rather Wafangdian requests a wholesale revision of an entire category of data, without sufficient explanation. Therefore, we have not made any deductions from direct labor hours to account for assembly labor hours. Regarding the issue of downtime, we again agree with the petitioner. We found at verification that downtime labor hours were not included in the reported labor figures. Therefore, for the final results, we have added downtime to labor hours. (46) Comment 30: Application of the PRC-Wide Rate to Premier Petitioner's Argument: The petitioner argues that the Department should apply the PRC-wide rate to all of Premier's U.S. sales, for two reasons: (1) none of Premier's suppliers have established that they are free from government control and, therefore, the suppliers should be considered as part of the "PRC entity" and (2) there is no substantive evidence on the record to support Premier's statement that its suppliers did not know the ultimate U.S. destination of their TRB sales to Premier. Premier is a Hong Kong-based reseller of subject merchandise that sources its TRBs from PRC suppliers. In the Preliminary Results, where the information was available for a particular TRB model sold by Premier, the Department used FOP data provided by manufacturers on behalf of other respondents in this review to derive the constructed value for that model. For models where no FOP data were available in this review, the Department applied the adverse facts available rate of 25.56 percent (the highest rated ever calculated for Premier in any segment of this proceeding) to Premier's corresponding U.S. sales. Respondent's Arguments: Premier made no response to this specific argument by the petitioner. Department's Position: We address the petitioner's first point (i.e., alleged government control of Premier's suppliers) in our response to comment 16 above. With regard to the petitioner's second point, in the Preliminary Results, we found that Premier's suppliers do not know the destination of the merchandise they sell to Premier. (47) This finding was based, inter alia, on Premier's questionnaire response. (48) No subsequent information on the record disputes this finding. This finding is also consistent with our findings in previous administrative reviews regarding the knowledge of Premier's suppliers. (49) Therefore, for these final results we have not applied the PRC-wide rate to Premier's sales. Comment 31: Application of Total Adverse Facts Available to Premier Petitioner's Argument: The petitioner argues that, if the Department does not elect to apply the PRC-wide rate to Premier (see Comment 30), then the Department should alternatively apply the total adverse facts available rate of 25.56 percent to all of Premier's U.S. sales. Total, adverse facts available is justified, the petitioner maintains, because Premier's response was "incomplete, inadequate, unverifiable, unusable, and unreliable." The petitioner suggests that applying total facts available to all of Premier's U.S. sales would be consistent with the Department's approach in TRBs-VII. (50) The petitioner moreover objects to the Department's substitution of other manufacturers' FOP data for the incomplete data submitted by Premier. The petitioner argues that the Department's justification for doing this-that there is little variation in factor utilization rates among TRB producers- is problematic for several reasons. (51) First, the petitioner argues that different producers, whether in market or nonmarket economies, produce at significantly different levels of efficiency. This is the very reason why the Department requests FOP data from each supplier of subject merchandise. Second, there is a substantial number of PRC producers of TRBs who have never participated in this proceeding and, therefore, there is no basis to assume any similarity in the FOP data of the few responsive producers and the numerous unresponsive producers, some of whom may supply Premier. To make such an assumption, the petitioner contends, is to reward producers who fail to respond. The petitioner also makes a third related argument on this point which is proprietary in its entirety. (52) The petitioner further argues that if, in place of data which Premier or its suppliers failed to supply, the Department uses FOP data from other producers who did not supply Premier, then the Department is allowing Premier or its suppliers to control which data they choose to supply, exposing the dumping margin to possible manipulation. The petitioner cites to TRBs-VIII (62 FR at 6210) where the Department, expressly to prevent this possibility, did not use FOP data from other producers. (53) As a final reason for not substituting other suppliers' FOP data for Premier's, the petitioner argues that none of these other TRB producers have consented to the use of their proprietary FOP data for the purpose of calculating Premier's dumping margin. The petitioner notes that in TRBs- VIII (62 FR at 6210), the Department explicitly refused to use other producers' proprietary FOP data in this manner. Absent the express agreement of these other suppliers, the petitioner contends that the Department should not use other respondents' FOP data where Premier and its suppliers have failed to respond. Respondent's Argument: Premier argues that it has acted to the best of its ability in responding to the Department's requests for information and, therefore, the application of adverse facts available is inappropriate. Premier suggests that its suppliers' reluctance to provide their confidential FOP data can be explained by the fact that these suppliers are independent of Premier and directly compete with Premier in selling TRBs. This reluctance on the part of its competitors to cooperate, therefore, should not be viewed as non-cooperation by Premier. Moreover, Premier contends that its conduct in this review is consistent with that of prior reviews in which the Department deemed Premier to be cooperative and, accordingly, the Department found the use of adverse facts available to be inappropriate. (54) In response to the petitioner's arguments, Premier contends that the Department's practice in this case has been to apply as facts available other respondents' FOP data to Premier as if it were Premier's own suppliers' data. (55) Moreover, contrary to the petitioner's warnings about margin manipulation, Premier maintains that it has neither the ability nor the resources to anticipate which of its suppliers' or other respondents' data will contribute to favorable results. Given its cooperation in this review, Premier argues, the Department should apply a weighted-average margin calculated from the U.S. sales for which acceptable data were provided by Premier. Alternatively, Premier argues that the Department should apply the margin calculated for the other respondents in this review under the methodology used in TRBs-VIII. Department's Position: In determining normal value in these final results for Premier's sales, we have continued the methodology from the Preliminary Results. Specifically, we are using, as facts available, model- specific FOP data on the record to construct normal value for Premier's U.S. sales of corresponding models. We also apply, as partial adverse facts available, a dumping margin of 25.56 percent to those sales of models with no corresponding FOP data. The lack of complete and usable FOP data for all of the TRBs models sold by Premier has been a persistent and controversial issue throughout several reviews in this proceeding. In an attempt to resolve this problem, in this review the Department took the additional step of soliciting FOP data from Premier's suppliers directly. (56) However, none of these suppliers responded to our request for information. Premier, as in previous reviews, has sought FOP data from its suppliers as the Department requested. The petitioner suggests that these circumstances justify the application of total adverse facts available to all of Premier's U.S. sales. We disagree, for several reasons. First, in determining the extent to which adverse inferences are appropriate when choosing facts available for Premier, we took into consideration the fact that Premier's suppliers may be direct competitors of Premier and, therefore, may be understandably reluctant to provide proprietary information to Premier. Premier has shown that it has taken earnest steps to solicit this information from its suppliers, (57) but has met with only limited success. Second, Premier's failure or inability to report full FOP data for all its models has been a source of controversy in several of the past administrative reviews. The Department has applied partial adverse facts available since at least TRBs-X and during that time Premier's dumping rate has been among the highest of any respondent in those reviews. Thus, the Department has given Premier ample incentive in previous reviews to improve its responsiveness to our requests for FOP data, and yet the completeness of its FOP reporting has not improved significantly. This provides some support for Premier's contention that there is no more room for improvement-it is doing the best it can under the circumstances. It is not clear, therefore, that applying total adverse facts available in this review would, as the petitioner implies, induce any greater cooperation from Premier or its suppliers. Third, when determining whether adverse inferences are appropriate, the Department considers the extent to which the respondent stands to gain from not cooperating. Specifically, the SAA states that Where a party has not cooperated, {the Department} may employ adverse inferences about the missing information to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. In employing adverse inferences, one factor the {Department} will consider is the extent to which a party may benefit from its own lack of cooperation. Statement of Administrative Action at 200. There is no indication that Premier benefits from submitting incomplete FOP data. One reason is that there is little variation in factor utilization rates among the TRB producers from which we have received FOP data. (58) Contrary to its claim, the petitioner has provided no persuasive evidence suggesting that the missing FOP data would differ considerably from the data available. Moreover, while certain of Premier's suppliers have not cooperated, we do not have evidence that Premier has withheld information available to it. Nor has the petitioner provided any evidence that Premier is not cooperating with our requests for data to the best of its ability. Fourth, while certain FOP data have not been provided, Premier's response is not so incomplete as to merit the use of total facts available. Substantial useable information is available, although we must use facts available for the missing data. Turning to specific points of the petitioner's position, we disagree with the argument that applying total adverse facts available to Premier would be consistent with our position in TRBs-VII. The circumstances of this review are different from those in TRBs-VII in at least two significant respects. First, in TRBs-VII the Department clearly stated that we applied a total best-information-available (BIA) rate to Premier "due to multiple failures on its part to supply information, including the failure to provide, at verification, certain information which was within Premier's control." 62 FR at 6210. We have found no "multiple failures" of this sort on the part of Premier in the instant review. We likewise disagree with the petitioner's arguments regarding our finding of little variation in factor utilization rates among certain suppliers. The petitioner's arguments on this point are largely the same as those it made in TRBs-XI (64 FR at 61846), which the Department considered and rejected. (59) We find that the petitioner has provided no substantively new argument or evidence that would necessitate a reconsideration of this issue. With regard to the petitioner's point that none of these other TRB producers has consented to the use of their proprietary FOP data for the purpose of calculating Premier's dumping margin, we note that Premier provided a copy of the explicit consent to use FOP data by at least one producer, CMC, and has generally received widespread consent in previous reviews. We, however, also disagree with Premier's argument that, consistent with TRBs-VIII, the Department should apply as (non-adverse) facts available, the weighted-average margin calculated from those U.S. sales for which acceptable data were available. Premier's arguments are not new; the Department considered these in TRBs-XI (64 FR at 61846) and used partial adverse facts available nonetheless. The facts in this review do not merit a different finding. In support of its argument, Premier points to our application of (cooperative) facts available to Premier in TRBs-VIII. However, our selection of facts available in that review was based inter alia on Premier's provision of considerably more data than what has been provided in this review. In TRBs-VIII we stated Given the level of cooperation evidenced by Premier in this review, including the submission of responsive initial and supplemental questionnaire responses as well as its participation in a complete verification of its data, and the amount of usable information provided, Premier's inability to provide certain FOP data does not warrant the use of adverse facts available in calculating a margin in this case. Premier provided enough information to allow us to calculate an accurate margin, and we used our discretion appropriately to determine how to apply facts available to account for the missing data. . . . Premier was able to provide factors data from its suppliers for models that represented most of Premier's sales by value. 62 FR at 6186. It is clear that the amount of available and usable information in TRBs-VIII on the FOP data of Premier's suppliers is very different from the factual record in this review. In TRBs-VIII, the record contained actual FOP data "for most of Premier's sales." In the instant review, Premier supplied FOP data for only three of its producers and, as is clear from the Preliminary Calculation Memo, (60) the Department found even this data to be so incomplete that it was unusable. While the record contains useable FOP data for a substantial portion of Premier's sales, FOP data are not available for most of its sales. Therefore, in weighing all of the facts of this review, consistent with our treatment of Premier in previous reviews, and guided by the statutory intent of the use of facts available, we find that our methodology for applying facts available to Premier, as detailed in the Preliminary Results, is appropriate. Comment 32: The Department's Choice of FOP Data for Each of Premier's Inputs Petitioner's Argument: The petitioner argues that if, as facts available to determine the normal value for certain of Premier's U.S. sales, the Department continues to use FOP data from non-Premier suppliers, it should use the highest value reported in this review for each factor. This is appropriate, the petitioner argues, because Premier's suppliers provided no usable information and, consequently, the Department must assume that each of their factors was obtained from the most expensive source. In particular, with respect to steel values, the petitioner urges the Department to use the highest reported value, regardless of whether that value is based on an import price or a surrogate price. Furthermore, the petitioner argues, the Department should account for Premier's rejects by adding to the cost of raw materials, energy and labor the highest percentage reported by any other respondent for each component. Respondent's Argument: Premier had no response to this specific argument by the petitioner. Department's Position: We disagree with the petitioner that, for models where we have used the FOP data of non-Premier suppliers to value Premier sales, we should use the highest value reported on the record for that factor. This would constitute the use of an adverse inference. As is clear in the Preliminary Results (65 FR, at 41946), we have found no basis for using an adverse inference in calculating normal value for those Premier sales for which FOP data are available. We likewise reject, on the same grounds, the petitioner's argument regarding accounting for Premier's rejects. Comment 33: Premier's Foreign Inland Freight Petitioner's Argument: The petitioner argues that there is inconsistency between the narrative in Premier's questionnaire response regarding its foreign inland freight and the data reported in its U.S. sales databases. (61) Given that Premier has not explained this seeming inconsistency, the petitioner argues, the Department should apply as facts available the highest reported inland freight expenses to any transaction with this apparent discrepancy. Respondent's Argument: Premier had no response to this specific argument by the petitioner. Department's Position: We find that there is reasonable support for the conclusion that these apparent inconsistencies represent an error in the data and, therefore, the application of partial facts available to fill these data gaps is appropriate. However, we do not find that Premier has intentionally withheld this data or has otherwise not cooperated with the Department's requests for information regarding U.S. sales. Thus, when selecting from among facts available, we have used the average of the unit expenses across those sales for which such expenses were reported. (62) Comment 34: Deducting Premier's U.S. Credit Expenses in CEP Sales Situations Petitioner's Argument: The petitioner argues that Premier reported credit expenses for CEP sales but that the Department failed to deduct such expenses in the Preliminary Results for Premier. The petitioner argues that the Department should correct this omission in the final results. Respondent's Argument: Premier suggests that if the Department does deduct these CEP credit expenses, it should balance any positive credit expenses with the negative credit expenses Premier has reported for some CEP sales. Department's Position: We agree that Premier's reported CEP credit expenses should be deducted from U.S. price, and have revised Premier's final margin calculation accordingly. For those CEP sales where Premier reported a negative expense, we added the absolute value of that amount to U.S. price. Comment 35: Adjusting Luoyang's Normal Value for U.S. Credit Expenses for EP Sales Petitioner's Argument: The petitioner argues that Luoyang should have reported credit expenses for all U.S. sales because credit is an imputed expense based on the difference between the date of sale and date of payment, and the applicable interest rate. Therefore, according to the petitioner, in the final results the Department should correct these omissions by adding U.S. credit expenses to normal value for Luoyang's EP sales. Because Luoyang did not report a per unit credit expense, the petitioner argues that the Department should calculate, as facts available, a per unit credit expense based on Luoyang's reported dates of sale and payment and apply an appropriate interest rate such as the U.S. prime interest rate during the period of review. Respondents' Argument: Luoyang rejects the petitioner's contention that the Department should add U.S. credit expenses to normal value in EP situations, asserting that there is no basis for the Department to make any credit expense adjustments. According to Luoyang, the Department should continue its practice of not making adjustments for credit expenses. Department's Position: As explained in Comment 17 above, in NME cases we generally do not adjust for differences in circumstances of sale for EP sales. Accordingly, we have made no adjustment for Luoyang's imputed credit expenses on EP sales in these final results. Comment 36: Use of Liaoning's Correct Database Petitioner's Argument: The petitioner argues that the preliminary margin calculations for Liaoning contain major errors which require the Department to recalculate the margins entirely or use facts available in the final results. The petitioner points to several transactions in the sales database that have normal values of zero. Respondent's Argument: Liaoning states that the error in the normal values was due to the Department's incorrect use of the first sales database submitted, which contained an error. Liaoning resubmitted a corrected database along with its March 20, 2000 supplemental response. Department's Position: We agree with Liaoning that the Department inadvertently used the incorrect database in the Preliminary Results. For the final results, we have used the corrected database submitted along with Liaoning's March 20, 2000 supplemental response. Comment 37: Adjusting Liaoning Normal Value for U.S. Credit Expenses for EP Sales Petitioner's Argument: The petitioner argues that the Department should account for Liaoning's U.S. credit expenses by adding these expenses to normal value. The petitioner points to Liaoning's questionnaire response in which Liaoning states that it does not borrow in U.S. dollars and provides shipment and payment dates for the purpose of calculating credit expenses. The petitioner requests that the Department calculate a U.S. credit expense using the reported data and, for those sales which do not show a payment date, assign a payment date no later than the date of Liaoning's last response. Respondent's Argument: Liaoning claims that the petitioner's argument to adjust normal value by adding imputed U.S. credit expenses amounts to a circumstance of sale (COS) adjustment. According to Liaoning, any COS adjustment is appropriate only for those factors and conditions that have a reasonably direct bearing on or relationship to the sales under consideration. (63) Since there is no substantiation to make the requested adjustment to normal value in this case, Liaoning suggests that the Department reject the Petitioner's argument. Department's Position: As explained in Comment 17 above, in NME cases we generally do not adjust for differences in circumstances of sale for EP sales. Accordingly, we have made no adjustment for Liaoning's imputed credit expenses on EP sales in these final results. Comment 38: Surrogate Steel Valuation for Weihai Petitioner's Argument: The petitioner repeats its general arguments against using import prices to value steel. The petitioner also claims that Weihai has not shown that its imported steel was actually used to produce the reviewed TRBs. Finally, the petitioner argues that purchases by Weihai's supplier of parts from Chinese subcontractors fails to satisfy the Department's regulations, which provide for the valuation of factors based on price paid to market-economy suppliers. The petitioner argues that the Department may only use market-economy prices when the manufacturer purchases the input directly from a market economy in a convertible currency. Therefore, the petitioner believes that for the final results the Department should use surrogate values for steel. Respondents' Argument: CMC et al. disagree with the petitioner's argument that the imported steel prices were "likely unfair." The respondents argue that there is no evidence that these imports of bearing quality steel were dumped in the PRC or elsewhere, and there are no antidumping or countervailing duty orders in the period of review covering imports used by the respondents to produce TRBs, thereby rendering the petitioner's argument meritless. The respondents oppose the petitioner's request that the Department weight-average the imported prices with surrogate values. First, CMC et al. contend that 100 percent of imported steel used in the production of cups and cones, and as for CMC and Weihai this includes cages, of subject merchandise came from a market-economy. Second, the respondents argue that there is no basis for such action and that it is not supported by logic or law. Finally, the respondents state that it is easy to track the physical inventory of imported steel. Therefore, unlike labor, electricity, and other costs that are not segregated by product type in the normal course of the producer's business, it is not appropriate to allocate costs by weight-averaging them across an entire "class or kind" of bearings. Department's Position: The Department addresses the petitioner's general comments regarding the imported steel values in Comments 1 and 2 above. With regard to the Weihai's purchases of imported steel from a PRC producer of the subject merchandise, the Department has determined that these steel purchases by Weihai should not be used to value the steel inputs. Weihai has not demonstrated that it paid for the steel inputs in a market economy currency or that it purchased the input from a market economy supplier. Instead, Weihai stated that it made payment for its purchases of steel from a PRC supplier in PRC currency. (64) Comment 39: Torch's Affiliated Sales and Transshipped TRBs Respondent's Argument: Zhuzhou Torch Spark Plug Co., Ltd. (Torch) agrees with the Department's preliminary finding that it would be inappropriate to impose antidumping duties when no sale has occurred and the merchandise has been exported from the United States. See 19 CFR 351.402(a) and (b). Torch has submitted documentation to the Department demonstrating the circumstances of its importation of TRBs, namely that during the POR, Torch sold TRBs to a Canadian company, DGI Lighting & Safety Products, Inc. (DGI) and then exported the TRBs to the United States. Although the TRBs were to be transshipped through "in bond" procedures, DGI inadvertently made consumption entries for them in the port of importation. Torch states that the TRBs imported under consumption entries were not sold to unaffiliated persons in the United States, and that Torch, DGI, and Undercar Canada, Inc. (Undercar) (DGI's successor in interest) anticipated exporting the TRBs from the United States before selling them to unaffiliated parties. In the absence of a sale to an unaffiliated person in the United States, Torch argues that there is no basis for calculating or imposing antidumping duties on imported merchandise. Petitioner's Arguments: The petitioner made no arguments to this specific point. Department's Position: As we noted in the Preliminary Results, in situations where an affiliated importer enters merchandise during a review period, but does not sell that merchandise during the POR, our normal practice is to liquidate the entries based on other sales of the merchandise made by the affiliated importer during the POR. See Silicon Metal from Brazil; Final Results of Antidumping Duty Administration {sic} Review, 61 FR 46763 (September 5, 1996). In this case, however, the company indicated that it did not intend to sell this merchandise in the United States. Thus, we stated our intent to liquidate Torch's merchandise in question without regard to any dumping liability if certain requirements were met. In a June 29, 1999, memorandum, "Review of Zhuzhou Torch Spark Plug Company, Ltd.," we specified the proof required before we could reach a final determination of whether to liquidate the merchandise in question without regard to dumping liability. Inasmuch as Undercar has submitted the requisite information in letters dated May 15, September 8, and October 17, 2000, we determine that Torch did not sell the merchandise in the United States, nor do we have a basis to calculate a dumping margin for this merchandise. Accordingly, we are instructing the Customs Service to liquidate the merchandise in question without regard to any dumping liability. RECOMMENDATION Based on our analysis of the comments received, we recommend adopting all of the above positions and adjusting all related margin calculations accordingly. If these recommendations are accepted, we will publish the final results of review and the final weighted-average dumping margins for all reviewed firms in the Federal Register. AGREE ____________ DISAGREE _________ Troy H. Cribb Assistant Secretary for Import Administration January 3, 2001 ________________________________________________________________________ footnotes: 1. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Preliminary Results of 1998-99 Administrative Review, Partial Rescission of Review, and Notice of Intent to Revoke order in Part, 65 FR 41944 (July 7, 2000) (Preliminary Results). 2. A single brief was filed by counsel for these companies which includes both general and company-specific sections. 3. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results of 1997-1998 Antidumping Duty Administrative Review and Final Results of New Shipper Review, 64 FR 61837 (November 15, 1999) (TRBs-XI) 4. See, e.g., TRB's XI, Lasko, and the Final Results of Redetermination On Remand Pursuant to Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, Court No. 97-12-02066 (September 9, 1999) (aff'd __ F. Supp. 2d __, Slip Op. 00-67 (June 9, 2000). 5. See H.R. Rep. 100-576 at 590-591 (1988). Although this section of the Act has been revised since this 1988 legislative history was written, there were no changes made to Section 773(c) of the Act in the 1995 Uruguay Round Agreement Act (URAA). See, e.g., the Senate Joint Committee report accompanying the URAA, which states that "the Committee intends no substantive changes" to Section 773(c) of the Act. 6. Id., at 590-591. 7. This analytical framework differs from the position taken in Drawer Slides, where we rejected certain valuations relying, inter alia, on U.S. AD findings. The inconsistency was acknowledged in Lockwashers-II, and we are now following the practice articulated in Lockwashers-II. 8. In the same Redetermination on Remand, we go on to give the example that if a particular input is usually bought and sold in 1000 unit lots, but the NME producer makes a single importation from a market economy of 20 units, we would not likely find that importation "meaningful" for valuation purposes. 9. Memorandum to Susan Kuhbach, dated June 29, 2000, "Selection of a Surrogate Country and Steel Values Sources" ("Steel and Surrogate Country Memo"). 10. See Memorandum to File; Factors of Production Values Used for the Final Results (January 3, 2001) (Final Results FOP Memo). 11. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results of 1996-1997 Antidumping Duty Administrative Review and New Shipper Review and Determination Not To Revoke in Part, 63 FR 63842 (November 17, 1998) (TRBs- X). 12. This HS category has been identified in prior TRBs reviews as the only Indian import category containing the bearing quality steel used to manufacture rollers. 13. See, e.g., TRBs-XI. 14. See, e.g., Timken Company v. United States, Slip Op. 99-73, at 13. 15. See Final Results FOP Memo for a further discussion of this data. 16. See e.g., Shakeproof Assembly Components Division of Illinois Tool Works, Inc. v. United States, Slip Op. 00-67 (June 9, 2000). 17. The values noted here reflect the adjustments made to the cup and cone data noted in Comment 13, below. 18. See Final Results FOP Memo. 19. See TRBs-X, 63 FR at 63851. 20. See Memorandum to Susan Kuhbach; Factors of Production Values Used for the Preliminary Results (June 29, 2000) at Attachment 8. 21. See Final Regulations, 62 FR at 27366; Cased Pencils, 59 FR at 55630. See also Heavy Forged Hand Tools From the People's Republic of China; Final Results of Antidumping Duty Administrative Reviews, 62 FR 11813, 11851 (March 13, 1997). 22. For the Indonesian import statistics, we have relied on data placed on the record by certain respondents. See Submission by CMC et al., dated March 10, 2000. 23. See, e.g., Drawer Slides, 60 FR at 54475-76, and Chrome-Plated Lug Nuts from the PRC; Final Results of Antidumping Duty Administrative Review, 61 FR 58514, 58517-18 (November 15, 1996). 24. For a detailed analysis, see Final Results FOP Memo. 25. See Wafandian Section D Response, dated October 29, 1999 at D-13. 26. See Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China, "Issues and Decision Memorandum," April 6, 2000, at Comment 3 (Apple Juice); Bulk Aspirin from the People's Republic of China, "Issues and Decision Memorandum," May 17, 2000, at Comment 8 (Bulk Aspirin). 27. See Apple Juice at Comment 3; Bulk Aspirin at Comment 8. 28. The petitioner cites to the following cases, inter alia: Tapered Roller Bearings and Parts Thereof from the People's Republic of China, 56 FR 67590, 67593 (December 31, 1991) (TRBs-V); Certain Helical Spring Lockwashers from the People's Republic of China, 58 FR 48833, 48842 (September 20, 1993) (Lockwashers Investigation). 29. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results of Administrative Review, 56 FR 67590, 67593 (December 31, 1991) (TRBs-V). 30. See TRBs XI, 64 FR at 61840. 31. See Petitioner's Second Factual Submission (August 11, 2000) at Ex. 7- A. 32. Sigma Corporation v. United States, 117 F.3d 1401 (Fed. Cir. 1997) (Sigma). 33. Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails From the People's Republic of China, 62 FR 51710 (October 1, 1997) (Collated Roofing Nails). 34. Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results and Partial Termination of Antidumping Duty Administrative Review, 62 FR 6173 (February 11, 1997) (TRBs-VIII). 35. See TRBs-X at 63855. 36. Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27304 (May 19, 1997) (Final Regulations). 37. ZMC cites to Preliminary Results, 63 FR at 41945. 38. For a detailed discussion of our separate rates analysis, see Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), as 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). 39. See Final Regulations, 62 FR at 27304 40. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Manganese Metal from the People's Republic of China, 60 FR 56045, 56052 (November 6, 1995); Final Determination of Sales at Less Than Fair Value: Bicycles from the People's Republic of China, 61 FR 19031 (April 30, 1996), and Preliminary Results of Antidumping Duty Administrative review: Tapered Roller Bearings and Parts Thereof from the People's Republic of China, 61 FR 40613 (August 5, 1996) (final results (TRBs- VIII)). 41. Our analysis in this revocation review properly focuses on aggregate sales to the United States rather than the size of individual shipments because in order to determine whether the absence of margins is meaningful, we must be satisfied that the margins were calculated on a suitable aggregate quantity. A producer or exporter cannot be said to be making sales in commercial quantities where the current overall level of sales are so small just because the handful of shipments made were in the same lot sizes as those during prior periods. See Pure Magnesium from Canada, 65 FR 55502, and accompanying Decision Memorandum at Comment 6: Benchmarks Used to Determine Commercial Quantities. 42. See Wanxiang Calculation Memorandum, which contains the company's volume of shipments to the United States in TRBs-IX, the first review in which Wanxiang participated as a respondent, as well as in TRBs-X, TRBs- XI, and TRBs-XII, the three subsequent review periods that formed the basis of Wanxiang's revocation request. 43. See Comments 1 and 2 above. 44. See Final Regulations, 62 FR at 27413; see also, Final Determination of Sales at Less Than Fair Value: Oscillating Fans and Ceiling Fans from the People's Republic of China, 56 FR 55271 (Oct. 25, 1991). 45. Memorandum to Susan H. Kuhbach; Zhejiang Machinery Import & Export Corporation Verification Report (ZMC Verification Report) at 8. 46. For details regarding our calculation methodology, see Memorandum to the Case File; Calculation for Final Results for Wafangdian (January 3, 2001). 47. 65 FR at 41946. 48. See Letter to the Secretary of Commerce from Venable (October 15, 1999) at A-19 (Section A Response). 49. See e.g., TRBs-IX, 62 FR at 61292. 50. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of Antidumping Duty Administrative Review and Revocation in Part of Antidumping Duty Order , 62 FR 6189, 6210 (February 11, 1997) (TRBs-VII). 51. Preliminary Results, 64 FR at 41946. 52. For a discussion of this and other proprietary arguments raised in the parties' briefs and rebuttals, see Memorandum to the Case File; Calculations for Final Results for Premier (January 3, 2001) (Premier's Calculations Memo). 53. As further support of its position, the petitioner also cites to Tungsten Ore Concentrates from the People's Republic of China, 56 FR 47738, 47739 (September 20, 1991). 54. Premier cites to TRBs-VIII, 62 FR at 6186. 55. Premier cites to TRBs-X. 56. Preliminary Results, FR 65 at 41946. 57. See, e.g., Letter to the Secretary of Commerce from Venable (November 5, 1999), Exhibit 5. 58. See Premier's Calculations Memo. 59. For a detailed discussion of the petitioner's proprietary argument on this issue, see Premier's Calculations Memo. 60. Memorandum to the File from Team; Calculation Memorandum for Premier Bearing and Equipment Ltd. (June 29, 2000). 61. The precise nature of the purported inconsistency is proprietary. See Premier's Calculations Memo. 62. See Premier's Calculations Memo. 63. Liaoning cites to F.W. Meyers & Co., Inc. v. United States, 376 F. Supp. 860, 872 (Cust. Ct. 1974) for this proposition. 64. See Weihai's response to Section A of the Department's Questionnaire submitted on October 15, 1999 at A-23 - A-24.