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Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Initiation of Antidumping Duty Investigation


American Government Cars in China

Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China: Initiation of Antidumping Duty Investigation

Paul Piquado
Department of Commerce
July 21, 2014


[Federal Register Volume 79, Number 139 (Monday, July 21, 2014)]
[Notices]
[Pages 42292-42298]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17111]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-016]


Certain Passenger Vehicle and Light Truck Tires From the People's 
Republic of China: Initiation of Antidumping Duty Investigation

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

DATES: Effective: July 21, 2014.

FOR FURTHER INFORMATION CONTACT: Toni Page and Emily Halle, Office VII, 
AD/CVD Operations, Enforcement and Compliance, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
1398 and (202) 482-0176, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On June 3, 2014, the Department of Commerce (Department) received 
an antidumping duty (AD) petition concerning imports of certain 
passenger vehicle and light truck tires (certain passenger tires) from 
the People's

[[Page 42293]]

Republic of China (PRC), officially filed in proper form on behalf of 
the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, 
Allied Industrial and Service Workers International Union, AFL-CIO-CLC 
(Petitioner).\1\ The AD Petition was accompanied by a countervailing 
duty (CVD) petition concerning imports of certain passenger tires from 
the PRC. Petitioner is a recognized union, which represents the 
domestic industry engaged in the manufacture of passenger vehicle tires 
in the United States. On June 6, 2014, the Department requested 
additional information and clarification of certain areas of the 
Petition,\2\ and on June 10, 2014, Petitioner filed responses to these 
requests.\3\ On June 23 and July 7, 2014, Petitioner filed supplemental 
submissions to clarify the scope of the investigation.\4\ Because it 
was not clear from the Petitions whether the industry support criteria 
had been met, the Department extended the time for initiating this 
investigation in order to further examine the issue of industry support 
by 20 additional days.\5\ The extended initiation determination date of 
July 13, 2014, falls on a Sunday, a non-business day, so the 
Department's initiation determination is due no later than July 14, 
2014, the next business day.\6\
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    \1\ See ``Petition for the Imposition of Antidumping Duties on 
Imports of Certain Passenger Vehicle and Light Truck Tires from the 
People's Republic of China,'' (June 3, 2014) (Petition).
    \2\ See Letter to Petitioner, ``Petitions for the Imposition of 
Antidumping and Countervailing Duties on Imports of Certain 
Passenger Vehicle and Light Truck Tires from the People's Republic 
of China: Supplemental Questions,'' June 6, 2014 (General Issues 
Supplemental Questions).
    \3\ See Letter from Petitioner ``Certain Passenger Vehicle and 
Light Truck Tires from the People's Republic of China--Petitioner's 
Response to the Department's June 6, 2014 Supplemental Questions--
Antidumping,'' June 10, 2014 (AD Supplement); see also ``Certain 
Passenger Vehicle and Light Truck Tires from the People's Republic 
of China--Petitioner's Response to the Department's June 6, 2014 
Supplemental Questions regarding General Issues,'' June 10, 2014 
(General Issues Supplement).
    \4\ See Letter from Petitioner, ``Certain Passenger Vehicle and 
Light Truck Tires from the People's Republic of China--Petitioner's 
Scope Clarification Request,'' June 23, 2014 (Scope Supplement); see 
also Petitioner's filing ``Certain Passenger Vehicle and Light Truck 
Tires from the People's Republic of China--Petitioner's Second Scope 
Clarification Request,'' July 7, 2014 (Second Scope Supplement).
    \5\ See Notice of Extension of the Deadline for Determining the 
Adequacy of the Antidumping and Countervailing Duty Petitions: 
Certain Passenger Vehicle and Light Truck Tires from the People's 
Republic of China, 79 FR 35725 (June 24, 2014).
    \6\ See Notice of Clarification: Application of ``Next Business 
Day'' Rule for Administrative Determination Deadlines Pursuant to 
the Tariff Act of 1930, As Amended, 70 FR 24533 (May 10, 2005) (Next 
Business Day Rule).
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    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), Petitioner alleges that imports of certain passenger 
tires from the PRC are being, or are likely to be, sold in the United 
States at less than fair value within the meaning of section 731 of the 
Act, and that such imports are materially injuring, or threatening 
material injury to, an industry in the United States. Also, consistent 
with section 732(b)(1) of the Act, the Petition is accompanied by 
information reasonably available to Petitioner in support of its 
allegations.
    The Department finds that Petitioner filed the Petition on behalf 
of the domestic industry because Petitioner is an interested party as 
defined in section 771(9)(D) of the Act, and has demonstrated 
sufficient industry support with respect to the initiation of the AD 
investigation that it is requesting.\7\
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    \7\ See ``Determination of Industry Support for the Petition'' 
section, below.
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Period of Investigation

    Because the Petition was filed on June 3, 2014, the period of 
investigation (POI) is October 1, 2013, through March 31, 2014.\8\
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    \8\ See 19 CFR 351.204(b)(1).
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Scope of the Investigation

    The product covered by this investigation is certain passenger 
tires from the PRC. For a full description of the scope of the 
investigation, see the ``Scope of the Investigation'' at the Appendix 
of this notice.

Comments on the Scope of the Investigation

    During our review of the Petition, the Department issued questions 
to, and received responses from, Petitioner pertaining to the proposed 
scope in order to ensure that the language of the scope is an accurate 
reflection of the products for which the domestic industry is seeking 
relief.\9\ As discussed in the Preamble to the Department's 
regulations, we are setting aside a period for interested parties to 
raise issues regarding product coverage (scope).\10\ The period for 
scope comments is intended to provide the Department with ample 
opportunity to consider all comments and to consult with parties prior 
to the issuance of the preliminary determination. If scope comments 
include factual information,\11\ all such factual information should be 
limited to public information. All such comments must be filed by 5:00 
p.m. Eastern Time (EDT) on August 4, 2014, which is 20 calendar days 
from the signature date of this notice.\12\ Any rebuttal comments, 
which may include factual information, must be filed by 5:00 p.m. ET on 
August 14, 2014, which is 10 calendar days after the initial comments. 
The Department requests that any factual information the parties 
consider relevant to the scope of the investigation be submitted during 
this time period. However, if a party subsequently finds that 
additional factual information pertaining to the scope of the 
investigation may be relevant, the party may contact the Department and 
request permission to submit the additional information. All such 
comments must be filed on the records of the AD investigation, as well 
as the concurrent CVD investigation.
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    \9\ See General Issues Supplemental Questionnaire; see also 
General Issues Supplement at 2-5 and Exhibits I-SQ-2 through I-SQ-6; 
Scope Supplement at 2-3 and Exhibit 1; see also Second Scope 
Supplement at 2 and Exhibit 1.
    \10\ See Antidumping Duties; Countervailing Duties (Final Rule); 
62 FR 27296, 27323 (May 19, 1997).
    \11\ See 19 CFR 351.102(b)(21).
    \12\ As 20 days from the signature date will be Saturday August 
2, 2014, the next business day for filing comments will be Monday 
August 4, 2014. See Next Business Day Rule.
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Filing Requirements

    All submissions to the Department must be filed electronically 
using Enforcement and Compliance's Antidumping and Countervailing Duty 
Centralized Electronic Service System (IA ACCESS). An electronically 
filed document must be received successfully in its entirety by 5:00 
p.m. ET on the date specified by the Department. Documents excepted 
from the electronic submission requirements must be filed manually 
(i.e., in paper form) with Enforcement and Compliance's APO/Dockets 
Unit, Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230, and stamped with the 
date and time of receipt by the applicable deadline.\13\
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    \13\ See 19 CFR 351.303(b)(1); see also Antidumping and 
Countervailing Duty Proceedings: Electronic Filing Procedures; 
Administrative Protective Order Procedures, 76 FR 39263 (July 6, 
2011) for details of the Department's electronic filing 
requirements, which went into effect on August 5, 2011. Information 
on help using IA ACCESS can be found at https://iaaccess.trade.gov/help.aspx and a handbook can be found at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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Comments on the Product Characteristics for the AD Questionnaire

    The Department requests comments from interested parties regarding 
the appropriate physical characteristics of certain passenger tires to 
be reported in response to the Department's AD questionnaire. This 
information will be used to identify the key physical

[[Page 42294]]

characteristics of the subject merchandise in order to report the 
relevant factors of production accurately, as well as to develop 
appropriate product-comparison criteria.
    Interested parties may provide any information or comments that 
they believe are relevant to the development of an accurate list of 
physical characteristics. Specifically, interested parties may provide 
comments as to which characteristics are appropriate to use as: (1) 
General product characteristics and (2) product-comparison criteria. We 
note that it is not always appropriate to use all product 
characteristics as product-comparison criteria. We base product-
comparison criteria on meaningful commercial differences among 
products. In other words, while there may be some physical product 
characteristics utilized by manufacturers to describe certain passenger 
tires, it may be that only a select few product characteristics take 
into account commercially meaningful physical characteristics. In 
addition, interested parties may comment on the order in which the 
physical characteristics should be used in matching products. 
Generally, the Department attempts to list the most important physical 
characteristics first and the least important characteristics last.
    In order to consider the suggestions of interested parties in 
developing and issuing the AD questionnaire, we must receive comments 
on product characteristics no later than August 4, 2014. Rebuttal 
comments must be received no later than August 14, 2014. All comments 
and submissions to the Department must be filed electronically using IA 
ACCESS, as referenced above.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method to poll the industry.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The U.S. International Trade Commission (ITC), 
which is responsible for determining whether ``the domestic industry'' 
has been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product,\14\ they do so for different purposes and pursuant to a 
separate and distinct authority. In addition, the Department's 
determination is subject to limitations of time and information. 
Although this may result in different definitions of the like product, 
such differences do not render the decision of either agency contrary 
to law.\15\
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    \14\ See section 771(10) of the Act.
    \15\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. 
Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).
---------------------------------------------------------------------------

    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
Petition).
    With regard to the domestic like product, Petitioner does not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we determine that certain passenger vehicle and light truck 
tires, as defined in the scope of the investigation, constitute a 
single domestic like product and we analyzed industry support in terms 
of that domestic like product.\16\
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    \16\ See Antidumping Duty Investigation Initiation Checklist: 
Certain Passenger Vehicle and Light Truck Tires from the People's 
Republic of China (AD Initiation Checklist), at Attachment II, 
Analysis of Industry Support for the Antidumping and Countervailing 
Duty Petitions Covering Certain Passenger Vehicle and Light Truck 
Tires from the People's Republic of China (Attachment II). This 
checklist is dated concurrently with this notice and on file 
electronically via IA ACCESS. Access to documents filed via IA 
ACCESS is also available in the Central Records Unit (CRU), Room 
7046 of the main Department of Commerce building.
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    On June 12, 2014, we received comments on industry support from the 
Sub-Committee of Tire Producers of the China Chamber of Commerce of 
Metals, Minerals & Chemical Importers and the China Rubber Industry 
Association.\17\ Petitioner responded to these comments on June 16 and 
17, 2014.\18\ In a meeting on July 8, 2014, the Government of the PRC 
also commented on industry support for the Petition.\19\
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    \17\ See Letter, ``Request to Poll the Domestic Industry to 
Determine Petitioner Standing: Certain Passenger Vehicle and Light 
Truck Tires from China,'' June 12, 2014.
    \18\ See Letter from Petitioner, ``Certain Passenger Vehicle and 
Light Truck Tires from the People's Republic of China--Petitioner's 
Response to CCCMC and CRIA's Request to Poll the Industry,'' June 
16, 2014; see also Letter from Petitioner, ``Certain Passenger 
Vehicle and Light Truck Tires from the People's Republic of China--
Additional Information in Response to CCCMC and CRIA's Request to 
Poll the Industry,'' June 17, 2014.
    \19\ See Memorandum, ``Antidumping Duty Investigation of 
1,1,1,2-Tetrafluoroethane from the People's Republic of China and 
the Antidumping Duty and Countervailing Duty Petitions for Certain 
Passenger Vehicle and Light Truck Tires from the People's Republic 
of China: Meeting with Officials from the Government of the People's 
Republic of China,'' July 9, 2014.
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    On June 17, 2014, the Department extended the initiation deadline 
by 20 days to poll the domestic industry in accordance with section 
732(c)(4)(D) of the Act, because it was ``not clear from the Petitions 
whether the industry support criteria have been met. . . .'' \20\
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    \20\ See Notice of Extension of the Deadline for Determining the 
Adequacy of the Antidumping Duty and Countervailing Duty Petitions: 
Certain Passenger Vehicle and Light Truck Tires from the People's 
Republic of China, 79 FR 35725, 35726 (June 24, 2014).
---------------------------------------------------------------------------

    On June 20, 2014, we issued polling questionnaires to all known 
producers of certain passenger vehicle and light truck tires in the 
United States, identified in the Petition and by the ITC, as well as 
all known unions, employee organizations, or ad hoc groups of 
workers.\21\ We requested that the companies/workers complete the 
polling questionnaire and certify their responses by the due date 
specified in the cover letter to the questionnaire.\22\ Petitioner 
provided comments on the polling questionnaire responses on July 8, 
2014.\23\
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    \21\ See Memorandum, ``Certain Passenger Vehicle and Light Truck 
Tires from the People's Republic of China: Polling Questionnaire,'' 
June 20, 2014.
    \22\ For a detailed discussion of the responses received, see AD 
Initiation Checklist at Attachment II. The polling questionnaire and 
questionnaire responses are on file electronically via IA ACCESS and 
can also be accessed through the CRU.
    \23\ See Letter from Petitioner, ``Certain Passenger Vehicle and 
Light Truck Tires from the People's Republic of China--Petitioner's 
Comments on Polling Responses,'' July 8, 2014.

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[[Page 42295]]

    Our analysis of the data we received in the polling questionnaire 
responses indicates that the domestic producers and workers that 
support the Petition account for at least 25 percent of the total 
production of the domestic like product and more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the Petition.\24\ 
Accordingly, the Department determines that the industry support 
requirements of section 732(c)(4)(A) of the Act have been met. 
Therefore, the Department determines that Petitioner filed this 
Petition on behalf of the domestic industry in accordance with section 
732(b)(1) of the Act because it is an interested party as defined in 
section 771(9)(D) of the Act and it demonstrated sufficient industry 
support with respect to the AD investigation that it is requesting the 
Department initiate.\25\
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    \24\ See AD Initiation Checklist, at Attachment II.
    \25\ Id.
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Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than normal value (NV). In addition, Petitioner alleges 
that subject imports exceed the negligibility threshold provided for 
under section 771(24)(A) of the Act.\26\
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    \26\ See Volume I of the Petition at I-18 and Exhibit I-12.
---------------------------------------------------------------------------

    Petitioner contends that the industry's injured condition is 
illustrated by reduced market share; underselling and price depression 
or suppression; lost sales and revenues; direct replacement of domestic 
shipments by subject imports; decline in shipments, reduced sales 
volumes, and production curtailments; decline in capacity utilization 
and reduced capacity allocated to U.S. production of certain passenger 
tires; decline in employment; adverse impact on union contract 
negotiations; and adverse impact on financial performance.\27\ We 
assessed the allegations and supporting evidence regarding material 
injury, threat of material injury, and causation, and we determined 
that these allegations are properly supported by adequate evidence and 
meet the statutory requirements for initiation.\28\
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    \27\ See Volume I of the Petition, at I-15 through I-57 and 
Exhibits I-2, I-3, and I-12 through I-53; see also General Issues 
Supplement at 1 and Exhibit I-SQ-1.
    \28\ See AD Initiation Checklist at Attachment III, Analysis of 
Allegations and Evidence of Material Injury and Causation for the 
Antidumping and Countervailing Duty Petitions Covering Certain 
Passenger Vehicle and Light Truck Tires from the People's Republic 
of China.
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Allegation of Sales at Less Than Fair Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate an investigation of imports of certain passenger tires from 
the PRC. The sources of data for the deductions and adjustments 
relating to U.S. price and NV are discussed in greater detail in the AD 
Initiation Checklist.

Export Price

    Petitioner based export price (EP) on import data obtained from the 
U.S. Department of Commerce's Foreign Trade Division Merchandise 
Imports database (Imports database) for certain passenger tires. 
Petitioner calculated the average unit values (AUVs) per kilogram for 
U.S. imports of certain passenger tires from the PRC entered during the 
POI under ten Harmonized Tariff Schedule of the United States (HTSUS) 
subheadings that cover certain passenger tires. As the Import database 
import values reflect customs values and therefore exclude U.S. import 
duties, freight, and insurance, Petitioner made adjustments to deduct 
unrebated value added tax, foreign inland freight, and brokerage and 
handling at port of exportation to derive a U.S. net price.\29\
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    \29\ See Volume II of the Petition at II-6 through II-7; AD 
Supplement at Exhibit II-SQ-16; and AD Initiation Checklist.
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Normal Value

    Petitioner states that the Department has treated the PRC as a non-
market economy (NME) country in every proceeding in which the PRC has 
been involved.\30\ The presumption of NME status for the PRC has not 
been revoked by the Department and, therefore, in accordance with 
section 771(18)(C)(i) of the Act, remains in effect for purposes of the 
initiation of this investigation. Accordingly, the NV of the product 
for the investigation is appropriately based on factors of production 
(FOPs) valued in a surrogate market-economy country in accordance with 
section 773(c) of the Act. In the course of this investigation, all 
parties will have the opportunity to provide relevant information 
related to the issues of the PRC's NME status and granting of separate 
rates to individual exporters.
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    \30\ See Volume II of the Petition at II-2.
---------------------------------------------------------------------------

    Petitioner contends that Thailand is the appropriate surrogate 
country for the PRC because: (1) It is at a level of economic 
development comparable to that of the PRC; (2) it is a significant 
producer of comparable merchandise; and (3) the data for Thailand for 
valuing factors of production are available and reliable.\31\ Based on 
the information provided by Petitioner, we conclude that it is 
appropriate to use Thailand as a surrogate country for initiation 
purposes.\32\ After initiation of this investigation, interested 
parties will have the opportunity to submit comments regarding 
surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), 
will be provided an opportunity to submit publicly available 
information to value FOPs within 30 days before the scheduled date of 
the preliminary determination.\33\
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    \31\ Id. at II-2 through II-6 and Exhibits II-1 through II-4.
    \32\ See AD Initiation Checklist.
    \33\ See 19 CFR 351.301(c)(3)(i). Note that this is the revised 
regulation published on April 10, 2013. See http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt.
---------------------------------------------------------------------------

    Petitioner calculated NV using the Department's NME methodology as 
required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. As 
Petitioner is a union representing workers in the domestic industry 
producing certain passenger tires and is not a domestic producer, 
Petitioner contends it does not have access to the proprietary 
information on the factors of production necessary to make certain 
passenger tires. Therefore, Petitioner based NV on publicly available 
information regarding the standard direct materials used to manufacture 
certain passenger tires from a number of publications.\34\ Petitioner 
asserts that the publicly available raw material models it provided are 
representative, to the best of its knowledge, of the average makeup of 
certain passenger tires.\35\ Using this information, Petitioner 
calculated the average percentage of total tire weight represented by 
each direct material for passenger car tires and for light truck tires. 
The information regarding the percentages of direct materials used to 
make a subject tire were applied to the average tire weight for each of 
the ten HTSUS categories of certain passenger tires obtained from the 
Imports database to calculate the average amount of each

[[Page 42296]]

direct material used in the manufacture of the subject merchandise.\36\
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    \34\ See Volume II of the Petition at II-8 through II-10 and 
Exhibits II-10 through II-21; see also AD Supplement at 3-5.
    \35\ Id.
    \36\ Id.
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    Petitioner valued the FOPs using reasonably available, public 
surrogate country data, specifically, Thai import data from the Global 
Trade Atlas (GTA) for the period October 2013 through March 2014.\37\ 
Petitioner excluded from these GTA import statistics imports from 
countries previously determined by the Department to be NME countries, 
countries previously determined by the Department to maintain broadly 
available, non-industry-specific export subsidies, and, in accordance 
with the Department's practice, any imports that were labeled as 
originating from an ``unspecified'' country.\38\ Petitioner valued most 
of the direct material inputs (synthetic rubber, fillers, compounding 
ingredients, reinforcing materials, scrap, and alternative materials) 
using GTA Thai import data.\39\ Petitioner valued natural rubber using 
information from the Rubber Research Institute of Thailand. \40\ The 
Department determines that the surrogate values used by Petitioner are 
reasonably available and, thus, are acceptable for purposes of 
initiation.
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    \37\ See Volume II of the Petition at II-10 and Exhibit II-23.
    \38\ Id. at II-10 through II-11.
    \39\ Id. at Exhibit II-23.
    \40\ Id. at Exhibit II-24.
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    Petitioner calculated the average labor hours required to make one 
tire using the employment and production information from the financial 
statements of three PRC tire manufacturers (GITI Tire, Doublestar Tyre, 
and Guizhou Tyre Co., Ltd.).\41\ Petitioner then used the weight-
averaged amount of the three labor rates to determine an overall 
average of labor hours required to make one subject tire. Petitioner 
calculated the average hourly labor rate for an employee producing 
tires using a 2007 Thailand wage rate from the National Statistics 
Office's 2007 Industrial Census, and adjusted this rate for inflation 
using the consumer price index (CPI) data for Thailand published by the 
International Financial Statistics (IFS) and converted it to USD using 
the POI average exchange rate.\42\
---------------------------------------------------------------------------

    \41\ Id. at II-14 and Exhibits II-25 through II-26; see also AD 
Supplement at 5-9 and Exhibits II-SQ-3, II-SQ-5, and II-SQ-6.
    \42\ See Volume II of the Petition at II-14 through II-15 and 
Exhibits II-27, II-32, and II-33; see also AD Supplement at 10 and 
Exhibit II-SQ-12.
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    Petitioner calculated financial ratios (i.e., factory overhead 
expenses, selling, general, and administrative expenses, and profit) 
based on the 2013 year-end financial statements of Goodyear (Thailand) 
Public Company Limited (Goodyear) and Hwa Fong Rubber (Thailand) Public 
Company Limited (Hwa Fong), Thai manufacturers of tires, for the year 
ending December 31, 2013.\43\ Because information provided by 
Petitioner indicates that Hwa Fong produces bicycle and motorcycle 
tires, which are not subject merchandise, while Goodyear produces 
certain passenger tires, we are only relying on Goodyear's financial 
statements for financial ratios.\44\
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    \43\ See Volume II of the Petition at II-15 through II-16 and 
Exhibits II-29 and II-30; see also AD Supplement at 10-13 and 
Exhibits II-SQ-13 through II-SQ-17.
    \44\ See AD Initiation Checklist under the ``Adjustments to 
Normal Value'' section.
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Fair Value Comparisons

    Based on the data provided by Petitioner, there is reason to 
believe that imports of certain passenger tires from the PRC are being, 
or are likely to be, sold in the United States at less than fair value. 
Based on the comparison of net U.S. price to NV for the same or similar 
passenger tires in accordance with section 773(c) of the Act, 
Petitioner's estimated margins for certain passenger tires ranged from 
45.80 to 87.99 percent.\45\
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    \45\ See AD Supplement at Exhibit II-SQ-17 (chart titled 
``Weighted average labor rate; original Goodyear financial ratios 
only (profit reduced)'').
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Initiation of AD Investigation

    Based on our examination of the Petition on certain passenger tires 
from the PRC, the Department finds that the Petition meets the 
requirements of section 732 of the Act. Therefore, we are initiating an 
AD investigation to determine whether imports of certain passenger 
tires from the PRC are being, or likely to be, sold in the United 
States at less than fair value. In accordance with section 733(b)(1)(A) 
of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our 
preliminary determination no later than 140 days after the date of this 
initiation. For a discussion of evidence supporting our initiation 
determination, see the AD Initiation Checklist which accompanies this 
notice.

Respondent Selection

    In accordance with our standard practice for respondent selection 
in AD investigations involving NME countries, we intend to issue 
quantity and value questionnaires to each potential respondent named in 
the Petition,\46\ and will base respondent selection on the responses 
received. In addition, the Department will post the quantity and value 
questionnaire along with the filing instructions on the Enforcement and 
Compliance Web site (http://trade.gov/enforcement/news.asp). Exporters 
and producers of certain passenger tires from the PRC that do not 
receive quantity and value questionnaires via mail may still submit a 
quantity and value response, and can obtain a copy from the Enforcement 
and Compliance Web site. The quantity and value questionnaire must be 
submitted by all PRC exporters/producers no later than August 1, 2014. 
All quantity and value questionnaires must be filed electronically 
using IA ACCESS.
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    \46\ See Volume I of the Petition at Exhibit I-9.
---------------------------------------------------------------------------

Separate Rates

    In order to obtain separate rate status in an NME AD investigation, 
exporters and producers must submit a separate rate application.\47\ 
The specific requirements for submitting the separate rate application 
in the PRC investigation are outlined in detail in the application 
itself, which will be available on the Department's Web site at http://trade.gov/enforcement/news.asp on the date of publication of this 
initiation notice in the Federal Register. The separate rate 
application will be due 60 days after the publication of this 
initiation notice. For exporters and producers who submit a separate 
rate status application and have been selected as mandatory 
respondents, these exporters and producers will no longer be eligible 
for consideration for separate rate status unless they respond to all 
parts of the Department's AD questionnaire as mandatory respondents. 
The Department requires that the PRC respondents submit a response to 
the separate rate application by the deadline referenced above in order 
to receive consideration for separate rate status.
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    \47\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigation 
involving Non-Market Economy Countries (April 5, 2005) (Separate 
Rates and Combination Rates Bulletin), available on the Department's 
Web site at http://enforcement.trade.gov/policy/).
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Use of Combination Rates

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in an NME 
investigation. The Separate Rates and Combination Rates Bulletin 
states:

{w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME investigations will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the

[[Page 42297]]

period of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.\48\
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    \48\ See Separate Rates and Combination Rates Bulletin at 6 
(emphasis added).
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Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, and 19 CFR 
351.202(f), copies of the public version of the Petition have been 
provided to the Government of the PRC. Because of the particularly 
large number of producers/exporters identified in the Petition, the 
Department considers the service of the public version of the Petition 
to the foreign producers/exporters to be satisfied by the provision of 
the public version of the Petition to the Government of the PRC, 
consistent with 19 CFR 351.203(c)(2).

ITC Notification

    We notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 25 days after the date 
on which the ITC receives notice from the Department of initiation of 
the investigation, whether there is a reasonable indication that 
imports of certain passenger tires from the PRC are materially 
injuring, or threatening material injury to, a U.S. industry.\49\ A 
negative ITC determination will result in the investigation being 
terminated.\50\ Otherwise, this investigation will proceed according to 
statutory and regulatory time limits.
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    \49\ See section 733(a) of the Act.
    \50\ Id.
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Submission of Factual Information

    On April 10, 2013, the Department published Definition of Factual 
Information and Time Limits for Submission of Factual Information: 
Final Rule, 78 FR 21246 (April 10, 2013), which modified two 
regulations related to AD and CVD proceedings: (1) The definition of 
factual information (19 CFR 351.102(b)(21)), and (2) the time limits 
for the submission of factual information (19 CFR 351.301). The final 
rule identifies five categories of factual information in 19 CFR 
351.102(b)(21), which are summarized as follows: (i) Evidence submitted 
in response to questionnaires; (ii) evidence submitted in support of 
allegations; (iii) publicly available information to value factors 
under 19 CFR 351.408(c) or to measure the adequacy of remuneration 
under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the 
Department; and (v) evidence other than factual information described 
in (i)-(iv). The final rule requires any party, when submitting factual 
information, to specify under which subsection of 19 CFR 351.102(b)(21) 
the information is being submitted and, if the information is submitted 
to rebut, clarify, or correct factual information already on the 
record, to provide an explanation identifying the information already 
on the record that the factual information seeks to rebut, clarify, or 
correct. The final rule also modified 19 CFR 351.301 so that, rather 
than providing general time limits, there are specific time limits 
based on the type of factual information being submitted. These 
modifications are effective for all proceeding segments initiated on or 
after May 10, 2013, and thus are applicable to this investigation. 
Please review the final rule, available at http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt, prior to 
submitting factual information for this investigation.

Extension of Time Limits

    On September 20, 2013, the Department published Extension of Time 
Limits, Final Rule,\51\ which modified one regulation related to AD and 
CVD proceedings regarding the extension of time limits for submissions 
in such proceedings (19 CFR 351.302(c)). These modifications are 
effective for all segments initiated on or after October 21, 2013, and 
thus are applicable to this investigation. Please review the final 
rule, available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm prior to requesting an extension.
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    \51\ See 78 FR 57790 (September 20, 2013).
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Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information.\52\ 
Parties are hereby reminded that the Department issued a final rule 
with respect to certification requirements, effective August 16, 2013 
and that the revised certification requirements are in effect for 
company/government officials as well as their representatives. All 
segments of any AD or CVD proceedings initiated on or after August 16, 
2013, including this investigation, should use the formats for the 
revised certifications provided at the end of the Final Rule.\53\ The 
Department intends to reject factual submissions if the submitting 
party does not comply with the applicable revised certification 
requirements.
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    \52\ See section 782(b) of the Act.
    \53\ See Certification of Factual Information To Import 
Administration During Antidumping and Countervailing Duty 
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also the 
frequently asked questions regarding the Final Rule, available at 
the following: http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
administrative protective order (APO) in accordance with 19 CFR 
351.305(b). Instructions for filing such applications may be found on 
the Department's Web site at http://enforcement.trade.gov/apo/index.html.
    This notice is issued and published pursuant to section 777(i) of 
the Act and 19 CFR 351.203(c).

    Dated: July 14, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.

Appendix--Scope of the Investigation

    The scope of this investigation is passenger vehicle and light 
truck tires. Passenger vehicle and light truck tires are new 
pneumatic tires, of rubber, with a passenger vehicle or light truck 
size designation. Tires covered by this investigation may be tube-
type, tubeless, radial, or non-radial, and they may be intended for 
sale to original equipment manufacturers or the replacement market.
    Subject tires have, at the time of importation, the symbol 
``DOT'' on the sidewall, certifying that the tire conforms to 
applicable motor vehicle safety standards. Subject tires may also 
have the following prefixes or suffix in their tire size 
designation, which also appears on the sidewall of the tire:
    Prefix designations:

    P--Identifies a tire intended primarily for service on passenger 
cars.
    LT--Identifies a tire intended primarily for service on light 
trucks.

    Suffix letter designations:

    LT--Identifies light truck tires for service on trucks, buses, 
trailers, and multipurpose passenger vehicles used in nominal 
highway service.
    All tires with a ``P'' or ``LT'' prefix, and all tires with an 
``LT'' suffix in their sidewall markings are covered by this 
investigation regardless of their intended use.
    In addition, all tires that lack a ``P'' or ``LT'' prefix or 
suffix in their sidewall markings, as well as all tires that include 
any other prefix or suffix in their sidewall markings, are included 
in the scope, regardless of their intended use, as long as the tire 
is of a size that is among the numerical size designations

[[Page 42298]]

listed in the passenger car section or light truck section of the 
Tire and Rim Association Year Book, as updated annually.
    Passenger vehicle and light truck tires, whether or not attached 
to wheels or rims, are included in the scope. However, if a subject 
tire is imported attached to a wheel or rim, only the tire is 
covered by the scope.
    Specifically excluded from the scope of this investigation are 
the following types of tires: (1) Racing car tires, defined as tires 
for use exclusively on a race track; such tires do not bear the 
symbol ``DOT'' on the sidewall; (2) new pneumatic tires, of rubber, 
of a size that is not listed in the passenger car section or light 
truck section of the Tire and Rim Association Year Book; (3) 
pneumatic tires, of rubber, that are not new, including recycled and 
retreaded tires; and (4) non-pneumatic tires, such as solid rubber 
tires.
    The products covered by the investigation are currently 
classified under the following Harmonized Tariff Schedule of the 
United States (HTSUS) subheadings: 4011.10.10.10, 4011.10.10.20, 
4011.10.10.30, 4011.10.10.40, 4011.10.10.50, 4011.10.10.60, 
4011.10.10.70, 4011.10.50.00, 4011.20.10.05, and 4011.20.50.10. 
Tires meeting the scope description may also enter under the 
following HTSUS subheadings: 4011.99.45.00, 4011.99.85.00, 
8708.70.45.45, 8708.70.45.60, 8708.70.60.30, 8708.70.60.45, and 
8708.70.60.60. While HTSUS subheadings are provided for convenience 
and for customs purposes, the written description of the subject 
merchandise is dispositive.

[FR Doc. 2014-17111 Filed 7-18-14; 8:45 am]
BILLING CODE 3510-DS-P




The Crittenden Automotive Library