Ball Bearings and Parts Thereof from Japan: Initiation and Preliminary Results of Changed-Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a petition for an expedited changed-circumstances review from Koyo Seiko Co., Ltd., and Koyo Corporation of U.S.A., the Department of Commerce is initiating a changed-circumstances review of the antidumping duty order on ball bearings and parts thereof from Japan. We have preliminarily concluded that JTEKT Corporation is the successor-in-interest to Koyo Seiko Co., Ltd., and, as a result, should be accorded the same treatment previously accorded to Koyo Seiko Co., Ltd., with regard to the antidumping duty order on ball bearings and parts thereof from Japan. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

March 23, 2006.

FOR FURTHER INFORMATION CONTACT:

Edythe Artman at (202) 482-3931 or Richard Rimlinger at (202) 482-4477, AD/CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

The Department of Commerce (the Department) published antidumping duty orders on ball bearings, cylindrical roller bearings, and spherical plain bearings and parts thereof from Japan on May 15, 1989. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof from Japan, 54 FR 20904 (May 15, 1989). The orders on cylindrical roller bearings and spherical plain bearings and parts thereof from Japan were revoked, effective January 1, 2000. See Revocation of Antidumping Duty Orders on Certain Bearings From Hungary, Japan, Romania, Sweden, France, Germany, Italy, and the United Kingdom, 65 FR 42667 (July 11, 2000). Koyo Seiko Co., Ltd., and Koyo Corporation of U.S.A. (collectively Koyo) have participated in numerous administrative reviews of the order on ball bearings and parts thereof from Japan. On February 3, 2006, Koyo informed the Department that Koyo Seiko Co., Ltd. (Koyo Seiko), had changed its name to JTEKT Corporation (JTEKT) and petitioned the Department to conduct a changed-circumstances review to confirm that JTEKT is the successor-in-interest to Koyo Seiko for purposes of determining antidumping-duty liabilities subject to this order.¹ Koyo also requested that the Department conduct a changed-circumstances review on an expedited basis, pursuant to 19 CFR 351.221(c)(3)(ii). We did not receive any other comments.

Scope of the Order

For a listing of scope determinations which pertain to the order on ball bearings and parts thereof, see the Scope Determination Memorandum (Scope Memorandum) from the Antifriction Bearings Team to Laurie Parkhill, dated March 2, 2006. The Scope Memorandum is on file in the Central Records Unit (CRU), main Commerce building, Room B-099, in the General Issues record (A-100-001) for the 2004/2005 administrative reviews of the orders on antifriction bearings.

Initiation of Changed-Circumstances Review

Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.216 (2005), the Department will conduct a changed-circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. The information submitted by Koyo claiming that JTEKT is the successor-in-interest to Koyo Seiko demonstrates changed circumstances sufficient to warrant such a review. See 19 CFR 351.216(d).

In accordance with the above-referenced regulation, the Department is initiating a changed-circumstances review to determine whether JTEKT is the successor-in-interest to Koyo Seiko. In determining whether one company is the successor to another for purposes of applying the antidumping duty law, the Department examines a number of factors including, but not limited to, changes in management, production facilities, supplier relationships, and customer base. See Industrial Phosphoric Acid From Israel: Final Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944 (February 14, 1994). Although no single or even several of these factors will necessarily provide a dispositive indication of succession, generally the Department will consider one company to be a successor to another company if its resulting operation is similar to that of its predecessor. See Brass Sheet and Strip from Canada; Notice of Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992), at Comment 1 (“generally, in the case of an asset acquisition, the Department will consider the acquiring company to be a successor to the company covered by the antidumping duty order, and thus subject to its duty deposit rate, if the resulting operation is essentially similar to that existing before the acquisition”). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the prior company, the Department will assign the new company the cash-deposit rate of its predecessor. Id.; Notice of Final Results of Changed Circumstances Antidumping Administrative Review: Polychloroprene Rubber from Japan, 67 FR 58 (January 2, 2002); see also Circular Welded Non-Alloy Steel Pipe from Korea; Final Results of Antidumping Duty Changed Circumstances Review, 63 FR 20572 (April 27, 1998), where the Department found successorship where the company only changed its name and did not change its operations.In its February 3, 2006, submission, Koyo provided information to demonstrate that JTEKT is the successor-in-interest to Koyo Seiko. Koyo submitted a press release announcing the start of JTEKT due to the merger of Koyo Seiko and another company, Toyoda Machine Works, Ltd. (Toyoda), on January 1, 2006. See exhibit A of Koyo's February 3, 2006, submission. Koyo also submitted the certification of JTEKT's history that is recorded in the registration book maintained by the local government authority and shows the merger between Koyo Seiko and Toyoda. See exhibit B of the February 3, 2006, submission.

Additional information in Koyo's February 3, 2006, submission shows that JTEKT's management, production facilities, suppliers, and customer base are consistent with those of Koyo Seiko. With respect to management prior to and following the name change, the press release discloses that 21 of Koyo Seiko's 28 officers and directors have retained their positions in the new company. The press release also shows that Koyo Seiko's production facilities have been placed within a distinct bearings division of JTEKT and JTEKT's corporate guide, that appears in exhibit D of the February 3, 2006, submission, lists the four primary product lines of JTEKT, one of which is bearings. Furthermore, Koyo submitted information from JTEKT's website that shows that Koyo Seiko's production facilities are listed as domestic plants of JTEKT. See exhibit E of Koyo's February 3, 2006, submission. Thus, based on the documentation provided by Koyo, we find that the use of Koyo Seiko's production facilities has remained the same since the name change.

Koyo stated in its February 3, 2006, submission that, because Toyoda had not produced or sold bearing products, production and sale of subject merchandise would continue under JTEKT in the same manner as performed by Koyo Seiko and Koyo did not anticipate any changes in supplier relationships or customer base from that of Koyo Seiko. In exhibit F of its submission, Koyo provided copies of the letters that it sent to its customers at the time of the merger in order to document JTEKT's intent to retain Koyo Seiko's customers. In addition, Koyo submitted photographs of JTEKT's packaging in order to show that Koyo's trademark will continue to figure prominently in sales of bearings formerly produced by Koyo Seiko because of the strong reputation and goodwill associated with the Koyo brand. See exhibit G of the February 3, 2006, submission. Koyo observed that its trademark also appears in JTEKT's corporate guide, as can be seen in exhibit D. Thus, based on the information provided in Koyo's submission, we find that it is JTEKT's intent to maintain the suppliers and customer base of Koyo Seiko.

Therefore, we conclude that Koyo's petition for a changed-circumstances review demonstrates that no major changes have occurred with respect to Koyo Seiko's management, production facilities, suppliers, or customer base as a result of its merger with Toyoda and name change to JTEKT.

When it concludes that expedited action is warranted, the Department may publish the notice of initiation and preliminary results for a changed-circumstances review concurrently. See 19 CFR 351.221(c)(3)(ii). See also Canned Pineapple Fruit from Thailand; Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review, 69 FR 30878 (June 1, 2004). Based on the information on the record, we have determined that expedition of this changed-circumstances review is warranted. In this case, we preliminarily find that JTEKT is the successor-in-interest to Koyo Seiko and, as such, is entitled to Koyo Seiko's cash-deposit rate with respect to entries of subject merchandise.

Should our final results remain the same as these preliminary results, effective the date of publication of the final results we will instruct U.S. Customs and Border Protection to assign entries of merchandise produced or exported by JTEKT the antidumping duty cash-deposit rate applicable to Koyo Seiko.

Public Comment

Any interested party may request a hearing within 14 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held 28 days after the date of publication of this notice or the first working day thereafter. Interested parties may submit case briefs and/or written comments not later than 14 days after the date of publication of this notice. Rebuttal briefs and rebuttals to written comments, which must be limited to issues raised in such briefs or comments, may be filed not later than 21 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this changed-circumstances review are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument with an electronic version included. Consistent with 19 CFR 351.216(e), we will issue the final results of this changed-circumstances review no later than 270 days after the date on which this review was initiated or within 45 days of publication of these preliminary results if all parties agree to our preliminary finding.

We are issuing and publishing this initiation and preliminary results notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 351.216 and 351.221(c)(3).