FINAL RESULTS OF REDETERMINATION PURSUANT TO COURT REMAND

SUMMARY

The Department of Commerce has prepared these final results of redetermination pursuant to the remand order from the U.S. Court of International Trade in NTN Bearing Corporation of America, NTN Corporation, American NTN Bearings Manufacturing Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation; NSK Ltd. and NTN Corporation; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. v. United States, Consol. Court No. 97-10-01801, Slip Op. 00-64 (June 5, 2000). In accordance with the U.S. Court of International Trade's instructions, we have made changes to our calculations with respect to NTN Corporation that resulted in the following weighted-average margins for the period May 1, 1995, through April 30, 1996: 6.94 percent for ball bearings, 4.33 for cylindrical roller bearings, and 7.19 for spherical plain bearings. The remand did not result in a change in the margins for Koyo Seiko Co., Ltd., or NSK Ltd.

On August 18, 2000, the Department released draft results of redetermination pursuant to the remand order in Slip Op. 00-64 to all parties for comment. On August 25, 2000, we received comments from NTN Corporation and from the Torrington Company. We have addressed the party's comments in the "Discussion" section that follows.

BACKGROUND

On June 5, 2000, the U.S. Court of International Trade (The Court) issued an order in NTN Bearing Corporation of America, NTN Corporation, American NTN Bearings Manufacturing Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation; NSK Ltd. and NTN Corporation; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. v. United States, Consol. Court No. 97-10-01801, Slip Op. 00-64 (June 5, 2000) (NTN), remanding to the Department of Commerce (the Department) the final results in Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden and the United Kingdom; Final Results of Antidumping Duty Administrative Reviews, 62 FR 66472 (October 17, 1997), and Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore; Sweden and the United Kingdom; Amended Final Results of Antidumping Duty Administrative Reviews, 62 FR 61963 (November 20, 1997) (collectively, AFBs 7). In NTN, the Court remanded the final results to the Department to make the following changes to its determination in AFBs 7: 1) annul all findings and conclusions made pursuant to the duty-absorption inquiry conducted for this review; 2) make adjustments pursuant to section 772(c) of the Tariff Act of 1930, as amended (the Act), to section 772(a)'s starting price for determining export price (EP); 3) make adjustments pursuant to sections 772(c) and (d) of the Act to section 772(b)'s starting price for determining constructed export price (CEP); 4) articulate how the record supports its decision to recalculate NTN Corporation's (NTN) home-market indirect selling expenses without regard to level of trade; 5) clarify how it complied with sections 776 and 782 of the Act by using facts available and applying an adverse inference with respect to NTN's alleged zero-price sample sales and, if the Department determines that it conformed with the statutory framework, to include NTN's sample sales in its U.S. sales database or, if the Department determines that it did not adhere to all of the statutory prerequisite conditions, to give NTN the opportunity to remedy or explain any deficiency regarding its sample sales; and 6) clarify whether NTN was provided with notice and opportunity to respond pursuant to sections 776 and 782 of the Act with regard to its cost-of-production (COP) and constructed-value (CV) data. The remand affects NTN, Koyo Seiko Co., Ltd. (Koyo), and NSK Ltd. (NSK) with respect to the antidumping duty orders on ball bearings (BBs), cylindrical roller bearings (CRBs), and spherical plain bearings (SPBs) from Japan for the period May 1, 1995, through April 30, 1996.

On August 18, 2000, we released our draft results of redetermination pursuant to the remand order in Slip Op. 00-64 to all parties for comment. On August 25, 2000, we received comments from NTN and from the Torrington Company (Torrington). We have addressed the party's comments in the "Discussion" section that follows.

DISCUSSION

Duty Absorption

The Court remanded AFBs 7 to the Department to annul all findings and conclusions made pursuant to the duty-absorption inquiry it conducted in AFBs 7.

The Department hereby complies with the remand as directed by the Court with respect to Koyo, NSK, and NTN and annuls all findings and conclusions made pursuant to its duty-absorption inquiry conducted for the subject reviews with respect to Koyo, NSK, and NTN. Should the court affirm our remand determination, we will publish an amended final results of review to that effect. This change has no effect on the respondents' weighted-average margins or duty-assessment rates.

Comment: Torrington contends that the Department has inherent authority to conduct inquiries into the absorption of antidumping duties in any review apart from the specific requirement imposed by section 751(a)(4) of the Act. It contends further that the Court exceeded its power by directing the Department to annul all findings and conclusions made pursuant to its duty-absorption inquiry without permitting the agency to reach a determination consistent with the Court's order. In support of these arguments Torrington cites to the rehearing motion it filed in the related court proceeding, Ct. No. 99-08-00473, dated March 30, 2000, and the April 4, 2000, rehearing motion filed by the United States in the same proceeding. It provides copies of these motions as attachments to its August 25, 2000, comments on the Department's draft remand results. While acknowledging that the Court denied both motions in an Order of May 8, 2000, Torrington still urges the Department to state in the final remand results that it disagrees with the decision of the Court in Slip. Op. 00-64 and on the aforementioned rehearing motions. It also urges the Department to state that the Court exceeded its power on judicial review.

Department's Position: As noted by Torrington, on April 14, 2000, the Department presented a motion to the Court to modify its ruling in the related proceeding on the ground that the Court had erred as a matter of law. See Defendant's Motion for Rehearing and Modification of the Court's Decision, Slip Op. 00-28, and Accompanying Order of March 22, 2000, filed in Court No. 99-08-00473 (CIT April 14, 2000). That motion in the related proceeding set forth the Department's position on the matter and we continue to concur with that motion. As such, there is no need to repeat our position here.

Adjustments to Starting Price for EP and CEP Prior to a Level-of-Trade Analysis

The Court remanded our treatment of level of trade, finding that section 772 of the Act unambiguously requires us to take the following actions: 1) make subsection (c) adjustments to section 772(a)'s starting price to determine EP; 2) make subsections (c) and (d) adjustments to section 772(b)'s starting price to determine CEP⁽¹⁾.

When we conducted our level-of-trade analyses for the respondents in this case, we identified differences in levels of trade based upon the selling functions performed by each respondent for sales to the claimed levels of trade pursuant to section 773(a)(7) of the Act. When we conducted our analysis for AFBs 7, we, for the most part, did not consider differences in functions and their concomitant expenses which section 772(c) of the Act directs us to deduct. We did not consider expenses such as freight or import duties to be relevant to our analysis because they are not "selling functions."

When we conducted our level-of-trade analyses for AFBs 7, there were two functions whose expenses section 772(c) of the Act directs us to deduct that we did consider relevant. These expenses were packing for export and freight and delivery arrangments. Pursuant to the Court's order, we have deducted the expenses associated with these functions from the price we use in our level-of-trade analyses. However, our conclusions regarding the differences or similarities between the respondents' reported levels of trade have not changed with this modification because the level of trade of CEP sales is still less advanced than the level of trade of home-market sales after we deduct expenses pursuant to section 772(c) of the Act. Therefore, we do not find that any changes to our treatment of level of trade for any respondents are necessary.

We received no comments regarding this issue.

Allocation of NTN's Home-Market Selling Expenses

Pursuant to the Department's request, the Court remanded AFBs 7 to the Department to articulate how the record supports its decision to recalculate without regard to level of trade NTN's home-market indirect selling expenses. The Court upheld our decision to recalculate NTN's U.S. indirect selling expenses without regard to level of trade.

We recalculated without regard to level of trade NTN's home-market indirect selling expenses for the same reason we recalculated without regard to level of trade NTN's U.S. indirect selling expenses: NTN's allocation of home-market indirect selling expenses across its reported levels of trade does not reasonably quantify those expenses incurred at each level of trade because it does not bear any relationship to the manner in which NTN incurs the expenses in question at each of the levels of trade. NTN allocated its selling expenses to each level of trade based on the sales values. However, NTN did not demonstrate that its selling expenses are incurred at each level of trade as a function of sales value. Therefore, as with NTN's allocation of U.S. indirect selling expenses, we find that NTN's allocation methodology for home-market indirect selling expenses is distortive.

We received no comments regarding this issue.

NTN's Zero-Priced Sample Sales

The Court remanded AFBs 7 to the Department to clarify how it complied with the statutory framework for using facts available and applying an adverse inference concerning NTN's zero-priced sample sales. The Court ordered that, in the event the Department determines that it conformed with the statutory framework, the Department must include NTN's sample sales in its U.S. sales database. The Court ordered further that, in the event that the Department determines that it did not conform with the statutory framework, the Department must give NTN the opportunity to remedy or explain any deficiency regarding its alleged sample sales.

In its original responses during the administrative review, NTN did not answer our questions regarding the purchase history of parties receiving samples in the United States. NTN also did not answer our questions regarding the prices and quantities involved in sample sales. Because NTN did not answer these questions, we were unable to conclude that NTN received no consideration for these alleged samples.

Upon reviewing the record on remand, we have determined that we did not inform NTN of the nature of the deficiency or provide NTN with an adequate opportunity to remedy or explain the deficiency pursuant to section 782(d) of the Act. Thus, pursuant to the Court's order to give NTN the opportunity to remedy or explain the deficiencies we identified with regard to its alleged sample sales, we issued a supplemental questionnaire to NTN on June 14, 2000. NTN responded to our questionnaire on June 29, 2000. Based upon the answers we received, we find that NTN did not receive consideration on its zero-priced U.S. sample transactions. Therefore, because these transactions are not properly classified as "sales," we have removed these transactions from our analysis and recalculated NTN's margins accordingly.

We received no comments regarding this issue.

NTN's Affiliated-Party Inputs

The Court remanded AFBs 7 to the Department to clarify whether NTN was provided with notice and opportunity to respond pursuant to sections 776 and 782 of the Act with regard to the costs of affiliated-party inputs in its COP and CV data.

In its original responses submitted during the administrative proceeding, NTN provided the transfer price and the affiliate's COP for the components NTN used in the production of subject merchandise. However, because it was unclear from the record how to identify the models in which NTN Japan had used the purchased components, we were unable to restate NTN's costs on a model-specific basis. Therefore, we applied facts available to NTN's costs.

Upon reviewing the record on remand, we have determined that we did not inform NTN of the nature of the deficiency or provide NTN with an adequate opportunity to remedy or explain the deficiency pursuant to section 782(d) of the Act. Because we found it necessary to request new information pursuant to the Court's order with regard to zero-priced samples, we also provided NTN with the opportunity to remedy or explain the deficiency we identified with regard to its affiliated-party inputs in the supplemental questionnaire we sent to NTN on June 14, 2000.

NTN did not supply the requested information. Rather, in various submissions to the Department in June 2000, NTN argued that the Court did not order that the Department issue such a request for information. According to NTN, the Court ordered the Department to "clarify whether NTN was provided with notice and opportunity to respond... with regard to NTN's cost of production and constructed value data." NTN argued that, because the Department did not provide NTN with an indication that its information was insufficient, it should use NTN's data as reported. NTN contended that this is the Department's practice in remands of prior reviews. See letters from NTN dated June 19, 2000, June 26, 2000, and June 29, 2000.

As NTN states, the Court ordered us to "clarify whether NTN was provided with notice and opportunity to respond... with regard to NTN's cost of production and constructed value data." However, the Court provided no instruction as to what action to take if we found that we did not provide NTN with notice and opportunity to respond. In addition, the Court did not instruct the Department to use NTN's data as reported. Therefore, because we did not give NTN notice and opportunity to respond during the conduct of the review and because the Court ordered us to re-open the record with regard to sample sales, we provided NTN with notice and opportunity to respond with regard to the deficiency we had identified with regard to its affiliated-party inputs.

Because NTN did not respond to our requests for additional information, we are unable to use the information NTN reported. Therefore, we must use the facts available in order to adjust NTN's reported costs to use the higher of transfer prices or the affiliate's COP. As facts available, we have continued to rely on the facts available we used in AFBs 7 (i.e., calculating the average difference between the affiliate's COP and transfer prices and adjusting all of NTN's reported costs by this difference). We find this to be the best choice of facts available because the adjustment is based on data which NTN reported and is, therefore, the most reasonable estimate of what the adjustment would be if we were able to merge properly the affiliated-party input data with NTN's COP data.

The record demonstrates that the affiliate's COP is higher than the transfer price for some affiliated-party inputs. Further, the Court has upheld our methodology of using the highest of the transfer price, the market price, or the affiliate's COP to state the cost of affiliated-party inputs in its decision in NTN. Accordingly, we have applied the facts available by calculating the average difference between the affiliate's COP and transfer prices and adjusting all of NTN's reported costs by this difference.

We received no comments regarding this issue.

Clerical Errors

Comment: NTN alleges that the Department inadvertently transcribed incorrect figures in its draft analysis memorandum. NTN also alleges the Department inadvertently quoted the prior margin rate for BBs rather than the recalculated remand rate.

Department's Position: We agree with NTN. We have corrected these errors for the final results of this remand redetermination.

FINAL RESULTS OF REDETERMINATION

In accordance with the remand order, we have recalculated the antidumping duty margins for NTN as directed by the Court. We made no changes to our margin calculations for either NSK or Koyo.

The recalculated weighted-average percentage dumping margins for the period May 1, 1995, through April 30, 1996, for BBs, CRBs, and SPBs are as follows:

Company BBs CRBs SPBs

Koyo Seiko 14.20 15.38 (1)

NSK Ltd. 6.65 7.16 (2)

NTN Corporation 6.94 4.33 7.19

(1) No shipments or sales subject to this review. Rate is from the last relevant segment of the proceeding in which the firm had shipments/sales.

(2) No shipments or sales subject to this review. The firm has no individual rate from any segment of this proceeding.

This redetermination is pursuant to the order of the Court in NTN Bearing Corporation of America, NTN Corporation, American NTN Bearings Manufacturing Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation; NSK Ltd. and NTN Corporation; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. v. United States, Consol. Court No. 97-10-01801, Slip Op. 00-64 (June 5, 2000).

Troy H. Cribb
Acting Assistant Secretary
for Import Administration

September 5, 2000

1. We have made this change pursuant to the Court's order. However, we respectfully disagree with the Court's finding that we must deduct expenses pursuant to section 772(c) of the Act prior to determining the level of trade of the U.S. sale. We believe this deduction may create distortions when we attempt to compare the levels of trade of U.S. sales to the levels of trade of comparison-market sales. Specifically, because we do not deduct the same type of expenses from the comparison-market price before determining the level of trade which we deduct pursuant to section 772(c) of the Act (e.g., packing and movement), this deduction could create an imbalance in our analysis that might result in our not finding the same levels of trade in the U.S. and comparison markets in cases where, but for this deduction, we would have found them.