E4-3925. Notice of Final Determination of Sales at Less Than Fair Value: Outboard Engines From Japan

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

January 4, 2005.

FOR FURTHER INFORMATION CONTACT:

James Kemp or Shane Subler at [phone] or [phone], respectively; AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW., Washington, DC 20230.

Final Determination

We determine that outboard engines from Japan are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Tariff Act of 1930, as amended (the Act). The estimated margins of sales at LTFV are shown in the Continuation of Suspension of Liquidation section of this notice.

Case History

The preliminary determination in this investigation was published on August 12, 2004. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Outboard Engines from Japan, 69 FR 49863 (August 12, 2004) (Preliminary Determination). Since the publication of the preliminary determination, the following events have occurred:

In September and October 2004, the Department of Commerce (the Department) verified the questionnaire responses submitted by Yamaha Motor Company, Ltd., Yamaha Marine Company, Ltd., and Yamaha Motor Corporation, U.S.A. (collectively Yamaha). The sales and cost verification reports were issued on November 1, 2004. On November 10, 2004, we received case briefs from (1) the petitioner; ^[1] (2) BRP U.S. Inc. and Bombardier Recreational Products Inc. (collectively, BRP), a domestic interested party; (3) American Honda Motor Co., Inc., and Honda Motor Co., Ltd., American Suzuki Motor Corporation and Suzuki Motor Corporation, Tohatsu Corporation, Tohatsu Marine Corporation, and Tohatsu America Corporation, Nissan Marine Co., Ltd. (collectively, the Other Japanese Parties); and (4) Yamaha.^[2] On November 17, 2004, we received rebuttal briefs from the petitioner, BRP, and Yamaha. Since no request was made for a public hearing, a public hearing was not held.

Scope of Investigation

For the purpose of this investigation, the products covered are outboard engines (also referred to as outboard motors), whether assembled or unassembled; and powerheads, whether assembled or unassembled. The subject engines are gasoline-powered spark-ignition, internal combustion engines designed and used principally for marine propulsion for all types of light recreational and commercial boats, including, but not limited to, canoes, rafts, inflatable, sail and pontoon boats. Specifically included in this scope are two-stroke, direct injection two-stroke, and four-stroke outboard engines.

Outboard engines are comprised of (1) a powerhead assembly, or an internal combustion engine, (2) a midsection assembly, by which the outboard engine is attached to the vehicle it propels, and (3) a gearcase assembly, which typically includes a transmission and propeller shaft, and may or may not include a propeller. To the extent that these components are imported together, but unassembled, they collectively are covered within the scope of this investigation. An “unassembled” outboard engine consists of a powerhead as defined below, and any other parts imported with the powerhead that may be used in the assembly of an outboard engine.

Powerheads are comprised of, at a minimum, (1) a cylinder block, (2) pistons, (3) connecting rods, and (4) a crankshaft. Importation of these four components together, whether assembled or unassembled, and whether or not accompanied by additional components, constitute a powerhead for purposes of this investigation. An “unassembled” powerhead consists of, at a minimum, the four powerhead components listed above, and any other parts imported with it that may be used in the assembly of a powerhead.

The scope does not include parts or components (other than powerheads) imported separately.

The outboard engines and powerheads subject to this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings 8407.21.0040 and 8407.21.0080. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

Excluded from the scope of the investigation are five specific models of powerheads.

The specific characteristics for each excluded powehead are described below.

1. 75 Horsepower Carbureted Powerhead: the engine type is four-stroke inline four cylinder internal combustion engine; the valve train consists of sixteen valves and twin cam with timing belt and tensioner; the crankcase is of high-pressure die-cast aluminum; the block is of high-pressure die-cast aluminum with iron cylinder liners; displacement 1.596 liters; bore and stroke 79 mm x 81.4 mm; compression ratio 9.6: 1; fuel supplied by four individual carburetors fitted to left side (as viewed from rear) of engine; power output 55.9 kW at 5000 RPM; fuel consumption 28.0 L/H Max at 6000 RPM; maximum height 539 mm; maximum width 435 mm; maximum length 646 mm; and weight (dry) 180.5 lbs./81.6 kg.

2. 90 Horsepower Carbureted Powerhead: the engine type is four-stroke inline four cylinder internal combustion engine; the valve train consists of sixteen valves and twin cam with timing belt and tensioner; the crankcase is of high-pressure die-cast aluminum; the block is of high-pressure die-cast aluminum with iron cylinder liners; displacement 1.596 liters; bore and stroke 79 mm x 81.4 mm; compression ratio 9.6: 1; fuel supplied by four individual carburetors fitted to left side (as viewed from rear) of engine; power output 67.1 kW at 5500 RPM; fuel consumption 31.5 L/H Max at 6000 RPM; maximum height 539 mm; maximum width 435 mm; maximum length 646 mm; and weight (dry) 180.5 lbs./81.6 kg.

3. 75 Horsepower Electronic Fuel Injection Powerhead: the engine type is four-stroke inline four cylinder internal combustion engine; the valve train consists of sixteen valves and twin cam with timing belt and tensioner; the crankcase is of high-pressure die-cast aluminum; the block is of high-pressure die-cast aluminum with iron cylinder liners; displacement 1.596 liters; bore and stroke 79 mm x 81.4 mm; compression ratio 9.6: 1; fuel supplied by single throttle body multi-point electronic fuel injection; power output 55.9 kW at 5000 RPM; fuel consumption 29.0 L/H Max at 6000 RPM; maximum height 539 mm; maximum width 435 mm; maximum length 646 mm; and weight (dry) 183.0 lbs./83.0 kg.

4. 90 Horsepower Electronic Fuel Injection Powerhead: the engine type is four-stroke inline four cylinder internal combustion engine; the valve train consists of sixteen valves and twin cam with timing belt and tensioner; the crankcase is of high-pressure die-cast aluminum; the block is of high-pressure die-cast aluminum with iron cylinder liners; displacement 1.596 liters; bore and stroke 79 mm x 81.4 mm; compression ratio 9.6: 1; fuel supplied by single throttle body multi-point electronic fuel injection; power output 67.1 kW at 5500 RPM; fuel consumption 33.0 L/H Max at 6000 RPM; maximum height 539 mm; maximum width 435 mm; maximum length 646 mm; and weight (dry) 183.0 lbs./83.0 kg.

5. 115 Horsepower Electronic Fuel Injection Powerhead: the engine type is four-stroke inline four cylinder internal combustion engine; the valve train consists of sixteen valves and twin cam with timing belt and tensioner; the crankcase is of high-pressure die-cast aluminum; the block is of high-pressure die-cast aluminum with iron cylinder liners; displacement 1.741 liters; bore and stroke 79 mm x 89 mm; compression ratio 9.7: 1; fuel supplied by multi-point electronic fuel injection with four individual throttle bodies; power output 85.8 kW at 5500 RPM; fuel consumption 38.0 L/H Max at 5500 RPM; maximum height 539 mm; maximum width 444 mm; maximum length 637 mm; and weight (dry) 189.0 lbs./85.7 kg.

Period of Investigation

The period of investigation (POI) is January 1, 2003, through December 31, 2003. This period corresponds to the four most recent fiscal quarters prior to the month of filing of the petition (i.e., January 2004) involving imports from a market economy, and is in accordance with our regulations. See 19 CFR 351.204(b)(1).

Scope Issues

Outboard Engines Under 25 Horsepower

In the preliminary determination, we analyzed parties' comments regarding the appropriateness of including engines of 25 horsepower or less in the scope of investigation and determined that the engines were within the scope. See Preliminary Determination at 49864. For the final determination, we affirm our decision in the preliminary determination and continue to find that these engines are included in the scope of the investigation. No parties commented on this issue for the final determination.

Powerheads Imported as Replacement Parts

In the preliminary determination, we found that engines imported for the purpose of repairing outboard engines previously sold are properly included in the scope of the investigation. See Preliminary Determination at 49865. The Other Japanese Parties submitted a case brief arguing that the Department should exclude these engines from the scope for the final determination. The petitioner and BRP submitted rebuttal briefs on this issue. After analyzing the parties' arguments, we continue to find that engines imported for the purpose of repair are properly included in the scope of the investigation for the reasons outlined at Comment 2 of the Memorandum from Barbara E. Tillman, Acting Deputy Assistant Secretary, to James J. Jochum, Assistant Secretary for Import Administration, RE: Issues and Decision Memorandum for the Final Determination of the Investigation of Outboard Engines from Japan (Decision Memorandum), dated December 27, 2004.

Treatment of Powerheads as a Separate Class or Kind

In the preliminary determination, we found that completed engines and powerheads constituted the same class or kind of merchandise. See Preliminary Determination at 49865. Yamaha and the Other Japanese Parties submitted case briefs arguing that the Department should find that powerheads are a separate class or kind from completed outboard engines. The petitioner and BRP submitted a rebuttal brief on this issue. After analyzing the parties' arguments, we continue to find that completed engines and powerheads constitute the same class or kind of merchandise for the reasons outlined at Comment 1 of the Decision Memorandum.

Amendment to the Scope of Investigation

In a separate November 17, 2004, submission, the petitioner requested that the Department exclude certain models of powerheads from the scope of the investigation. On November 23, 2004, Yamaha submitted comments on the petitioner's request.^[3] The petitioner submitted a response to these comments on November 30, 2004. After analyzing the parties' arguments, we accepted the petitioner's proposed scope amendment to exclude certain powerhead models for the reasons outlined at Comment 17 of the Decision Memorandum. For a description of the excluded powerheads, see the Scope of Investigation section of this notice.

Verification

As provided in section 782(i) of the Act, we conducted verification of the cost and sales information submitted by Yamaha. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondent.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs submitted by parties to this proceeding are listed in the appendix to this notice and addressed in the Decision Memorandum hereby adopted by this notice. The Decision Memorandum is on file in room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the World Wide Web at http://www.ita.doc.gov/​frn. The paper and electronic versions of the Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

Based on our findings at verification and our analysis of comments received, we have made adjustments to the preliminary determination calculation methodologies in calculating the final dumping margin for Yamaha. These adjustments are discussed in the Decision Memorandum and the Memorandum from James Kemp and Shane Subler, International Trade Compliance Analysts, through Constance Handley, Program Manager, RE: Final Determination Analysis Memorandum for Yamaha Motor Company, Ltd., Yamaha Marine Company, Ltd., and Yamaha Motor Corporation, USA, dated December 27, 2004.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of outboard engines exported from Japan, that are entered, or withdrawn from warehouse, for consumption on or after the date of the preliminary determination. CBP shall continue to require a cash deposit or the posting of a bond based on the estimated weighted-average dumping margins shown below. The suspension of liquidation instructions will remain in effect until further notice.

We determine that the following weighted-average dumping margin exists for Japan:

Manufacturer/exporter	Margin (percent)
Yamaha	18.98
All others	18.98

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. The ITC will determine, within 45 days, whether imports of subject merchandise from Japan are causing material injury, or threaten material injury, to an industry in the United States. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP officials to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse for consumption on or after the effective date of the suspension of liquidation.

This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: December 27, 2004.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Appendix

Issues Covered in Decision Memorandum

1. Class or Kind.

2. Powerheads Imported for Repair Purposes.

3. Treatment of Non-Dumped Sales.

4. Level of Trade (LOT) Adjustment for Yamaha's Sales to Original Equipment Manufacturer (OEM) Customers.

5. Surrogate Prices for Yamaha's CEP Sales to Its Affiliated Boat Builders.

6. Per-Unit Cap on the CEP Offset.

7. Home Market Levels of Trade.

8. Adjustments to U.S. Price.

9. Reported Home Market Payment Dates.

10. Certain Home Market Sales within the Ordinary Course of Trade.

11. Credit Expenses for Export Price Sales.

12. Reporting of the REBATE4U Field.

13. Minor Corrections Submitted at Verification.

14. Application of LOT Adjustment.

15. Home Market Consignment Sales.

16. Packing Costs.

17. Amendment to Scope.

18. Yamaha's Standard Cost System.

19. Certain Excluded Costs.

20. Parent Company G&A Expenses.

21. Affiliated Supplier Inputs.

Footnotes

1.  The petitioner in this investigation is Mercury Marine, a division of Brunswick Corporation.

2.  On December 6, 2004, we rejected the case briefs submitted by Yamaha and the Other Japanese Parties because they contained new factual information. After making the revisions requested by the Department, Yamaha and the Other Japanese Parties resubmitted the briefs on December 7, 2004.

3.  On December 6, 2004, we rejected Yamaha's comments because they contained new factual information submitted after the Department's regulatory deadline. The date of Yamaha's revised submission is December 7, 2004.