May 18, 1999

Honorable Robert S. LaRussa
Assistant Secretary for Import Administration
Dockets Center, Room 1870
Pennsylvania Avenue & 14th Street, N.W.
Washington, DC 20230

Dear Mr. LaRussa:

This letter is filed on behalf of the American Bearings Manufacturers Association ("ABMA") in support of the Commerce Department's pending proposal to clarify the automatic liquidation of merchandise covered by an antidumping order where a reseller or other foreign intermediary has been involved in the chain of commerce for that merchandise. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 63 Fed. Reg. 55361-64 (Oct. 15, 1998).

Formed in 1917, the ABMA is a trade association representing 36 member companies representing more than 80% of the domestic bearing industry. A number of the ABMA's member companies are actively involved in the various bearings antidumping proceedings, including major domestic manufacturers and affiliates of the major non-domestic bearing manufacturers that are respondents in these proceedings. These firms have had extensive experience with the Department's antidumping duty assessment procedures, and more importantly, they bring diverse perspectives to this issue.

At a recent meeting, the ABMA board of directors discussed the proposed clarification of the automatic liquidation regulations outlined in the Federal Register notice published on October 15, 1998. After carefully considering this matter, the board voted unanimously to submit this letter in support of the agency's proposal.

In its notice of October 15, 1998, the Department sought to clarify its policy as to the automatic liquidation of entries in a situation where an intermediary exports the merchandise, liquidation of the entries is suspended at the producer’s cash deposit rate, and the Department conducts a review of the producer, but not the intermediary. The Department’s notice sets forth its position that the producer’s company-specific cash deposit rate would serve as an inappropriate basis upon which to assess final antidumping duties on entries under those circumstances. The ABMA agrees with that conclusion.

At the heart of the Department’s proposed clarification is the propriety of using a producer’s company-specific cash deposit rate to assess antidumping duties on an intermediary’s entries. The clarification would apply only in those instances when the producer has been subject to an administrative review, but the intermediary has not. If, during the course of the producer’s review, it was established that the producer did not know that the merchandise it sold to the intermediary was destined to the United States, the Department proposes to prohibit the use of the producer’s cash deposit rate for assessment purposes. Instead, the "all others" rate would be used.

It is the ABMA's position that this proposed clarification is a reasonable interpretation of the obligations stemming from the issuance of an antidumping duty order. Where a producer knows that its sales are destined to the United States, they are reported to the Department in the producer’s U.S. sales listing and margins are calculated on the transactions. The Department then has the basis upon which to utilize a producer-specific assessment rate in liquidating the entries. Absent such knowledge, the transaction would not be included in the U.S. sales listing and a margin would not be calculated. Having established through the review that the sale to the intermediary is not a U.S. sale, the Department has no basis to assess the entries utilizing the company-specific rate calculated for the producer of the merchandise. As the Department correctly points out, "since the evidence in the record of the administrative review shows that the producer did not set the price of those sales, the assessment of duties on merchandise exported by the resellers cannot be based on the producer’s rate." (63 Fed. Reg. 55361, 55363)

Similarly, there is no justification for liquidating the entries at the producer-specific cash deposit rate utilized at the time of entry. That historical rate bears no relationship to any dumping that may have occurred during the review period. And indeed, it bears no relationship whatsoever to the actual sales data of the foreign intermediary.

Under these circumstances, the Department's proposal to liquidate the entries at the "all others" rate is fully justified, and the ABMA urges the Department to adopt and finalize its proposed clarification as soon as possible.

David Rohn

President