FINAL RESULTS OF REDETERMINATION
PURSUANT TO COURT REMAND
Consolidated Bearings Company v. United States
Court No. 99-09-02799, Slip Op. 01-66 (June 5, 2001)

SUMMARY

The Department of Commerce has prepared these final results of redetermination pursuant to a remand order from the U.S. Court of International Trade in Consolidated Bearings Company v. United States, Court No. 99-09-02799, Slip Op. 01-66 (June 5, 2001). Upon issuance of a final and conclusive court decision, we will annul the liquidation instructions of August 4, 1998, message number 8216117, with respect to entries of antifriction bearings from Germany produced by FAG Kugelfischer and which Consolidated Bearing Company entered for consumption during the period November 9, 1988, through April 30, 1990. We will reissue instructions for those entries in accordance with the rates we have determined in response to the Court's order. The rates are listed in the section entitled "Final Results of Redetermination" below.

BACKGROUND

On June 5, 2001, the Court issued an order in Consolidated Bearings Company v. United States, Court No. 99-09-02799, Slip Op. 01-66 (June 5, 2001) (Consolidated), remanding to the Department of Commerce (the Department) certain liquidation instructions that the Department had issued pursuant to the Final Results of Antidumping Duty Administrative Review of Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of Germany, 56 FR 31692 (July 11, 1991) (AFBs 1), as amended by Amended Final Results of Antidumping Duty Administrative Reviews of Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Germany, 62 FR 32755 (June 17, 1997) (Amended AFBs 1). In Consolidated, the Court found that the Department had improperly instructed the Customs Service to liquidate certain entries of antifriction bearings (AFBs) at the rates required at the time of entry. Specifically, the Court ruled that the Department's August 4, 1998, liquidation instructions (which applied to entries of AFBs during the period November 9, 1988, through April 30, 1990, for which earlier manufacturer-specific instructions had not been applicable) were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law (Consolidated, Slip Op. 01-66, at page 32). The Court ordered the Department to annul the August 4, 1998, liquidation instructions and take further actions not inconsistent with its opinion.

The remand affects entries by Consolidated Bearings Company of merchandise subject to the antidumping duty orders on AFBs from Germany which covered bearings produced by FAG Kugelfischer (FAG) and which were entered during the period November 9, 1988, through April 30, 1990. There were three antidumping duty orders on AFBs from Germany in effect during the period of review; the orders covered ball bearings (BBs), cylindrical roller bearings (CRBs), and spherical plain bearings (SPBs). We reviewed sales by FAG to the United States of merchandise subject to all three antidumping duty orders. From the information before the Court in this proceeding we cannot determine, however, whether the entries at issue contain merchandise subject to one, two, or all three antidumping duty orders. Therefore, in responding to the Court's order, we have assumed that Consolidated's entries during the period November 9, 1988, through April 30, 1990, include merchandise produced in Germany by FAG which is subject to all three antidumping duty orders.

DISCUSSION

When we conducted the administrative review of the antidumping duty orders on AFBs from Germany for the period November 9, 1988, through April 30, 1990, we reviewed sales that FAG had made to the United States during that period. Based on those sales, we determined weighted-average dumping margins and then converted those dumping margins to assessment rates based on entered values or quantities. Because FAG did not report that it had sold bearings directly to Consolidated, we calculated neither dumping margins nor assessment rates for Consolidated's entries. Further, we have no information that suggests that FAG actually made direct sales to Consolidated in the United States during the period of review which it did not report. In order to respond to the Court's order, therefore, we have examined alternative means for determining rates to instruct the Customs Service to use in liquidating entries of FAG-produced merchandise which Consolidated entered during the period November 9, 1988, through April 30, 1990 (see discussion below). In its decision, the Court did not specify any alternative rates the Department should consider; rather, the Court remanded the case to the Department to determine the proper assessment rates to apply to Consolidated's entries of FAG-produced subject merchandise during the period November 9, 1988, through April 30, 1990. See Slip Op. 01-66 at pages 38-39.

1. Unadjusted Use of the September 9, 1997, FAG-specific instructions

In AFBs 1 and Amended AFBs 1, the Department did not make a determination concerning entries of subject merchandise produced by FAG and imported by Consolidated during the period November 9, 1988, through April 30, 1990. FAG did not report these sales because, presumably, FAG did not sell the merchandise directly for export to Consolidated. Rather, we surmise, from the information Consolidated presented in its brief to the Court and from the lack of any reference to Consolidated as a purchase-price customer in the information we received from FAG during the review, that Consolidated purchased the bearings from an intermediate party, Metallwaren, which had purchased the bearings from FAG (or perhaps even a second intermediate party) and then the intermediate party sold the bearings to Consolidated without FAG's knowledge. We have no information, since the review of FAG's U.S. sales practices did not include any sales it made for export directly to Consolidated, that indicates the specific facts of the transaction chain through which Consolidated purchased the bearings at issue which were produced by FAG.

Our September 9, 1997, liquidation instructions to the Customs Service reflected the results of our review of FAG's sales to the United States. In those instructions, we identified the importers FAG had reported to us and the importer-specific duty determinations we had made in Amended AFBs 1. The assessment rates for FAG's exporter's-sales-price (ESP) transactions were ad valorem rates which reflected the dumping duties due divided by the entered value of the ESP sales we analyzed (see explanation in AFBs 1, 56 FR at 31694) for FAG's affiliated importer. ⁽¹⁾ We calculated the assessment rates for FAG's purchase-price transactions on a per-unit basis using the importer-specific dumping duties due divided by the quantity of bearings FAG sold to that specific importer (Id.). Based on the review we conducted, FAG made ESP sales of BBs, CRBs, and SPBs and it made purchase-price sales of BBs and CRBs.

Because there was no information provided or analyzed during the administrative review concerning Consolidated's direct imports of subject merchandise, we find it inappropriate to instruct the Customs Service to apply to Consolidated's imports any of the importer-specific rates in the September 9, 1997, FAG-specific instructions. Further, such application would not result in the accurate collection of dumping duties. Specifically, our analysis of FAG's ESP sales did not reflect any of the transactions between the intermediate party, Metallwaren, and Consolidated. Further, with respect to the appropriateness of using the per-unit rates which we determined for FAG's purchase-price importers, we do not have per-unit amounts for sales by FAG to Consolidated because Consolidated's entries were not reviewed in the administrative review. We also do not have any information about the kinds of bearings Consolidated entered during the period which would allow us to determine whether another customer of FAG may have been similarly situated during the period of review. Moreover, a simple average of the per-unit amounts applicable to FAG's numerous purchase-price customers for BBs and CRBs would not result in the accurate assessment of dumping duties because the FAG-specific per-unit rates reflect a wide variety of bearings FAG had sold to its purchase-price customers in the United States during the period of review and would have no relationship to Consolidated's imports from the intermediate party.

For all of these reasons, we do not find it appropriate to apply any of the importer-specific rates in the FAG-specific September 9, 1997, instructions.

2. Use of FAG's Weighted-Average Margins as published in Amended AFBs 1

While the Court does not suggest rates to apply, three alternative rates to consider are the weighted-average margins of 11.45 percent (BBs), 3.59 percent (CRBs), and 12.24 percent (SPBs) which we published in Amended AFBs 1. As discussed during the review, however, and above, the Department never intended to use the weighted-average margins as assessment rates for any party (see AFBs 1, 56 FR at 31694). Rather, the rates reflect FAG's weighted-average selling practices during the period November 9, 1988, through April 30, 1990, based on the use of total net U.S. price ⁽²⁾ in the denominator. The Customs Service only has information on the entered value of entries, not on the net U.S. price we calculated in the administrative review. To apply rates based on total net U.S. price with no adjustment for the difference between total net U.S. price and entered value to Consolidated's entries, entries not covered by the administrative review, would give Consolidated assessment rates calculated on a more favorable basis than the assessment rates we calculated for entries subject to the administrative review. That is, because of the differences between entered value and total net U.S. price, use of the weighted-average margins we published in Amended AFBs 1 would produce an assessment of duties on Consolidated's entries at significantly lower ad valorem rates than the ad valorem assessment rates we calculated on the basis of entered value. Therefore, we do not find that applying to the entered value of Consolidated's entries the weighted-average margins, based on net U.S. price, will result in an assessment of dumping duties which reflects any party's selling practices.

3. Adjusted Use of the September 9, 1997, FAG-Specific Instructions

We have considered an alternative approach which arguably reflects assessment rates based on FAG's average selling experience but which is based on entered value, the value to which the Customs Service applies any ad valorem assessment rate we determine. As explained in alternative 1, above, we instructed the Customs Service to apply ad valorem assessment rates in our September 9, 1997, instructions to only one importer for which we calculated duties using FAG's ESP transactions during the period November 9, 1988, through April 30, 1990. While we did not apply the weighted-average margins specific to FAG's ESP transactions as either assessment rates or for cash-deposit purposes, we had determined FAG's order-specific, weighted-average margins for ESP sales (see memorandum to The File from Mark Ross, November 5, 1998). To be clear, to calculate the order-specific, weighted-average margins, we used the total net U.S. price of FAG's ESP transactions in the denominator; to calculate the order-specific assessment rates we used the total entered value of FAG's ESP transactions in the denominator. The numerator for both calculations is the dollar amount of dumping duties we found to be due on FAG's ESP transactions.

Because this is the only information we have about the relationship between net U.S. price and entered value, we have calculated a ratio for each antidumping duty order to reflect that relationship. Specifically, the Customs Service normally applies an assessment rate to the entered value of the affected entries, but the weighted-average margin indicative of FAG's general selling practices during the period of review is based on net U.S. price, a value which the Customs Service does not have on the entry documents. As a result of the difference between the information the Customs Service has in the documentation for the suspended entries (entered values) and the information we use to calculate a weighted-average margin (net U.S. price), the collection of duties will be more accurate if the Customs Service applies assessment rates which we have calculated using values similar to the values to which it will apply those rates. Therefore, we have devised a method, using information from the review, to estimate the relationships between the assessment rates and the weighted-average margins we calculated for the review.

To derive these estimates, we divided the assessment rates by the weighted-average margins, both of which used the same value for the amount of dumping duties due, and found numerical relationships between the three order-specific percentages. Then, in order to convert FAG's weighted-average margins we published in Amended AFBs 1 from a net U.S. price basis to an entered-value basis, we have applied the order-specific relationship figures to FAG's weighted-average margins. The following chart demonstrates the results of this estimation:

We find that the use of these rates, based on the FAG-specific weighted-average margins and assessment rates, are the best estimates of assessment rates based on entered values that we can derive for Consolidated's entries in response to the Court's order. We find it appropriate, even though the weighted-average margins and assessment rates we calculated for merchandise produced by FAG in Germany and sold to the United States during the period November 9, 1988, through April 30, 1990, did not reflect sales by the intermediate party to Consolidated, given the rejection by the Court of the application by the Customs Service of the August 4, 1998, instructions in message number 8216117 to Consolidated's entries during the period of review.

FINAL RESULTS OF REDETERMINATION

Upon issuance of a final and conclusive court decision, we will annul the August 4, 1998, liquidation instructions in message number 8216117 with respect to Consolidated's entries of merchandise produced by FAG and imported by Consolidated during the period November 9, 1988, through April 30, 1990. Because the September 9, 1997, FAG-specific instructions in message number 7252113 do not contain any information applicable to imports of AFBs by Consolidated, as explained above, we determine that it is appropriate to issue amended liquidation instructions specific to AFBs from Germany produced by FAG and imported by Consolidated during the period November 9, 1988, through April 30, 1990, originally subject to message number 8216117, August 4, 1998, at the following rates:

These final results of redetermination are pursuant to the remand order of the Court of International Trade in Consolidated Bearings Company v. United States, Court No. 99-09-02799, Slip Op. 01-66 (June 5, 2001).

1. [ * * * ]

2. Net U.S. price reflects the adjustment of the sale price for certain expenses under section 772 of the Tariff Act of 1930, as amended.