99-26592. Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, From Japan: Preliminary Results of Antidumping Duty Administrative Reviews  

  • [Federal Register Volume 64, Number 196 (Tuesday, October 12, 1999)]
    [Notices]
    [Pages 55243-55248]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-26592]
    
    
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    DEPARTMENT OF COMMERCE
    
    International Trade Administration
    [A-588-837]
    
    
    Large Newspaper Printing Presses and Components Thereof, Whether 
    Assembled or Unassembled, From Japan: Preliminary Results of 
    Antidumping Duty Administrative Reviews
    
    AGENCY: Import Administration, International Trade Administration, 
    Department of Commerce.
    
    ACTION: Notice of preliminary results of antidumping duty 
    administrative reviews.
    
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    SUMMARY: In response to a request by the respondents, Tokyo Kikai 
    Seisakusho, Ltd. and Mitsubishi Heavy Industries, Ltd., the Department 
    of Commerce is conducting administrative reviews of the antidumping 
    duty order on large newspaper printing presses and components thereof, 
    whether assembled or unassembled, from Japan. These reviews cover 
    Mitsubishi Heavy Industries, Ltd. and Tokyo Kikai Seisakusho, Ltd., 
    manufacturers/exporters of the subject merchandise to the United 
    States. The periods of review for Mitsubishi Heavy Industries, Ltd. are 
    September 5, 1996, through August 31, 1997, and September 1, 1997, 
    through August 31, 1998. The period of review for Tokyo Kikai 
    Seisakusho is September 1, 1997, through August 31, 1998.
        We preliminarily determine that sales have been made below normal 
    value for Mitsubishi Heavy Industries. If these preliminary results are 
    adopted in our final results of administrative review, we will instruct 
    the Customs Service to assess antidumping duties on all appropriate 
    entries. For Tokyo Kikai Seisakusho, we have preliminarily determined 
    that sales have not been made below normal value. If these preliminary 
    results are adopted in our final results of administrative review, we 
    will instruct the Customs Service not to assess antidumping duties on 
    entries subject to this review. Interested parties are invited to 
    comment on these preliminary results.
    
    EFFECTIVE DATE: October 12, 1999.
    
    FOR FURTHER INFORMATION CONTACT: Dinah McDougall, Kate Johnson, or 
    David J. Goldberger, Office 2, AD/CVD Enforcement Group I, Import 
    Administration--Room B099, International Trade Administration, U.S. 
    Department of Commerce, 14th Street and Constitution Avenue, NW., 
    Washington, DC 20230; telephone: (202)
    
    [[Page 55244]]
    
    482-3773, 482-4929, or 482-4136, respectively.
    
    SUPPLEMENTARY INFORMATION:
    
    The Applicable Statute
    
        Unless otherwise indicated, all citations to the Tariff Act of 
    1930, as amended (the Act), are references to the provisions effective 
    January 1, 1995, the effective date of the amendments made to the Act 
    by the Uruguay Round Agreements Act (URAA). In addition, unless 
    otherwise indicated, all citations to the Department of Commerce's (the 
    Department's) regulations are to the regulations at 19 CFR Part 351 
    (April 1998).
    
    Background
    
        On July 23, 1996, the Department published in the Federal Register, 
    61 FR 38139, the final affirmative antidumping duty determination on 
    large newspaper printing presses and components thereof, whether 
    assembled or unassembled (LNPP), from Japan. We published an 
    antidumping duty order on September 4, 1996 (61 FR 46621).
        On September 30, 1997, Mitsubishi Heavy Industries, Ltd. (MHI) 
    requested that the Department defer for one year the initiation of its 
    review of entries subject to the above-referenced order covering the 
    period September 5, 1996, to August 31, 1997. See Initiation of 
    Antidumping Duty and Countervailing Duty Administrative Reviews, 
    Request for Revocation in Part, and Deferral of Administrative Review, 
    62 FR 58705 (October 30, 1997).
        On September 16, 1998, the Department published in the Federal 
    Register a notice advising of the opportunity to request an 
    administrative review of this order for the period September 1, 1997, 
    through August 31, 1998 (63 FR 49543). The Department received a 
    request for an administrative review of MHI and Tokyo Kikai Seisakusho, 
    Ltd. (TKS) by MHI and TKS, respectively. We published a notice of 
    initiation of the MHI reviews on October 29, 1998 (63 FR 58009). With 
    respect to MHI's sale to the United States, we extended the period of 
    review (POR) to reflect the extended period of time over which the 
    entries and production processes occurred. The initiation of the TKS 
    review was published on November 30, 1998 (63 FR 65748).
        On November 17, 1998, and January 21, 1999, Goss Graphic Systems, 
    Inc. (the petitioner) requested that the Department determine whether 
    antidumping duties have been absorbed during the POR. On February 5, 
    1999, the Department requested proof that unaffiliated purchasers will 
    ultimately pay the antidumping duties to be assessed on entries during 
    the review periods.
        On March 4, 1999, the Department extended the time limit for the 
    preliminary results in these reviews until September 30, 1999. See 
    Postponement of Preliminary Results of the First and Second 
    Administrative Reviews of the Antidumping Duty Order, 64 FR 10444.
        On July 20, 1999, the Department published a Notice of Initiation 
    of Changed Circumstances Review of the Antidumping Duty Order pursuant 
    to a request by the petitioner to partially revoke the antidumping duty 
    order on the subject merchandise for LNPPs that meet a specific set of 
    criteria; namely, imports of the elements and components of LNPP 
    systems, and additions thereto, imported to fulfill a contract for one 
    or more complete LNPP systems which feature a 22 inch cut-off, 50 inch 
    web width and a rated speed no greater than 75,000 copies per hour, 
    utilizing exclusively the type of printing unit and color keyless 
    inking system detailed in the petitioner's request, in a tower 
    configuration coupled with folder, reel tension paster, conveyance and 
    access apparatus, and computerized control system meeting all of the 
    specifications described in Goss' request (see 64 FR 38888). The 
    changed circumstances review is currently underway as a separate 
    proceeding and the Department will make its preliminary determination 
    in that proceeding after these preliminary results.
        The Department is conducting these reviews in accordance with 
    section 751(a) of the Act.
    
    Scope of the Reviews
    
        The products covered by these reviews are large newspaper printing 
    presses, including press systems, press additions and press components, 
    whether assembled or unassembled, whether complete or incomplete, that 
    are capable of printing or otherwise manipulating a roll of paper more 
    than two pages across. A page is defined as a newspaper broadsheet page 
    in which the lines of type are printed perpendicular to the running of 
    the direction of the paper or a newspaper tabloid page with lines of 
    type parallel to the running of the direction of the paper.
        In addition to press systems, the scope of these reviews includes 
    the five press system components. They are: (1) A printing unit, which 
    is any component that prints in monocolor, spot color and/or process 
    (full) color; (2) a reel tension paster, which is any component that 
    feeds a roll of paper more than two newspaper broadsheet pages in width 
    into a subject printing unit; (3) a folder, which is a module or 
    combination of modules capable of cutting, folding, and/or delivering 
    the paper from a roll or rolls of newspaper broadsheet paper more than 
    two pages in width into a newspaper format; (4) conveyance and access 
    apparatus capable of manipulating a roll of paper more than two 
    newspaper broadsheet pages across through the production process and 
    which provides structural support and access; and (5) a computerized 
    control system, which is any computer equipment and/or software 
    designed specifically to control, monitor, adjust, and coordinate the 
    functions and operations of large newspaper printing presses or press 
    components.
        A press addition is comprised of a union of one or more of the 
    press components defined above and the equipment necessary to integrate 
    such components into an existing press system.
        Because of their size, large newspaper printing press systems, 
    press additions, and press components are typically shipped either 
    partially assembled or unassembled, complete or incomplete, and are 
    assembled and/or completed prior to and/or during the installation 
    process in the United States. Any of the five components, or collection 
    of components, the use of which is to fulfill a contract for large 
    newspaper printing press systems, press additions, or press components, 
    regardless of degree of assembly and/or degree of combination with non-
    subject elements before or after importation, is included in the scope 
    of these reviews. Also included in the scope are elements of a LNPP 
    system, addition or component, which taken altogether, constitute at 
    least 50 percent of the cost of manufacture of any of the five major 
    LNPP components of which they are a part.
        For purposes of these reviews, the following definitions apply 
    irrespective of any different definition that may be found in Customs 
    rulings, U.S. Customs law or the Harmonized Tariff Schedule of the 
    United States (HTSUS): (1) The term ``unassembled'' means fully or 
    partially unassembled or disassembled; and (2) the term ``incomplete'' 
    means lacking one or more elements with which the LNPP is intended to 
    be equipped in order to fulfill a contract for a LNPP system, addition 
    or component.
        This scope does not cover spare or replacement parts. Spare or 
    replacement parts imported pursuant to a LNPP contract, which are not 
    integral to the
    
    [[Page 55245]]
    
    original start-up and operation of the LNPP, and are separately 
    identified and valued in a LNPP contract, whether or not shipped in 
    combination with covered merchandise, are excluded from the scope of 
    these reviews. Used presses are also not subject to this scope. Used 
    presses are those that have been previously sold in an arm's-length 
    transaction to a purchaser that used them to produce newspapers in the 
    ordinary course of business.
        Further, these reviews cover all current and future printing 
    technologies capable of printing newspapers, including, but not limited 
    to, lithographic (offset or direct), flexographic, and letterpress 
    systems. The products covered by these reviews are imported into the 
    United States under subheadings 8443.11.10, 8443.11.50, 8443.30.00, 
    8443.59.50, 8443.60.00, and 8443.90.50 of the HTSUS. Large newspaper 
    printing presses may also enter under HTSUS subheadings 8443.21.00 and 
    8443.40.00. Large newspaper printing press computerized control systems 
    may enter under HTSUS subheadings 8471.49.10, 8471.49.21, 8471.49.26, 
    8471.50.40, 8471.50.80, and 8537.10.90. Although the HTSUS subheadings 
    are provided for convenience and customs purposes, our written 
    description of the scope of these reviews is dispositive.
    
    Duty Absorption
    
        On November 17, 1998, and on January 21, 1999, the petitioner 
    requested that the Department determine whether antidumping duties had 
    been absorbed during the POR. Section 751(a)(4) of the Act provides for 
    the Department, if requested, to determine during an administrative 
    review initiated two or four years after the publication of the order, 
    whether antidumping duties have been absorbed by a foreign producer or 
    exporter, if the subject merchandise is sold in the United States 
    through an affiliated importer. In this case, both MHI and TKS sold to 
    the United States through an importer that is affiliated within the 
    meaning of section 751(a)(4) of the Act.
        Section 351.213(j)(1) of the Department's regulations provides that 
    during any administrative review covering all or part of a period 
    falling between the first and second or third and fourth anniversary of 
    the publication of an antidumping order, the Department will conduct a 
    duty absorption review, if requested. Because these reviews were 
    initiated two years after the publication of the order, we are making a 
    duty absorption determination in this segment of the proceeding.
        The Department's February 5, 1999, antidumping questionnaire 
    requested proof that unaffiliated purchasers will ultimately pay the 
    antidumping duties to be assessed on entries during the review periods. 
    On March 8, 1999, MHI, instead of providing the requested data, argued 
    that the object of a duty absorption inquiry--to ascertain whether a 
    respondent changed its conduct after an antidumping duty order was 
    imposed--is inapplicable in MHI's case because the sole U.S. sale under 
    review in this segment of the proceeding, the Washington Post sale, was 
    made prior to the imposition of an antidumping duty order. However, the 
    fact that the date of sale occurred prior to the imposition of the 
    order is not relevant in this case, where entries pursuant to this sale 
    occurred during the POR. Moreover, based on MHI's contractual 
    information on the record (see Memo to the File from the Team dated 
    September 30, 1999), we cannot conclude that the unaffiliated purchaser 
    in the United States will pay the ultimately assessed duty. 
    Furthermore, because we have preliminarily determined that there is a 
    dumping margin on MHI's U.S. sale entered during the POR, we 
    preliminarily find that antidumping duties have been absorbed by MHI on 
    its single U.S. sale. With respect to TKS, we preliminarily find that 
    there is no duty absorption, as we have preliminarily determined that 
    there is no dumping margin with respect to its U.S. sales.
    
    Date of Sale
    
        While the Department normally will use the date of invoice as the 
    date of sale, we have determined in this case that the contract date 
    better reflects the date on which the producer/exporter established the 
    material terms of sale. Where the record demonstrates that the contract 
    established the material terms of sale, we used the contract date as 
    the date of sale for the transactions examined in this proceeding.
        In the case of MHI's sale to the Washington Post, we used the April 
    26, 1996, revised contract date, rather than the May 16, 1995, date of 
    the original contract, as the date of sale for currency conversion 
    purposes. The Department has a longstanding practice which bases the 
    date of sale on the date when all the essential terms (usually price 
    and quantity) are firmly established and no longer within the control 
    of the parties. See, e.g., Final Determination of Sales at Less than 
    Fair Value: Polyvinyl Alcohol from Taiwan, 61 FR 14064, 14067 (March 
    29, 1996). Based on our analysis of the information submitted for the 
    record, we have determined that the essential terms of the sale were 
    not established until the April 1996 contract date. In particular, the 
    April 1996 contract made the following significant changes from the May 
    1995 contract: (a) Revised the contract price, (b) substantially 
    altered the payment schedule, and (c) revised other terms, such as 
    service agreements, that affected the net price to the customer.
        With regard to TKS, we used the contract date as the date of sale. 
    We determined that the contract date is more appropriate than the 
    invoice date in this instance because the contract date reflects the 
    date when the essential terms of the sale were established.
    
    Product Comparisons
    
        Although the home market was viable for both respondents, in 
    accordance with section 773 of the Act, we based normal value (NV) on 
    constructed value (CV) because we determined that the unique, custom-
    built nature of each LNPP sold does not permit proper price-to-price 
    comparisons. (See September 30, 1999, Memorandum to Louis Apple from 
    The Team Re: Determining the Appropriate Basis for Normal Value.)
    
    Normal Value Comparisons
    
        To determine whether MHI's and TKS's sales of LNPPs to the United 
    States were made at less than normal value, we compared constructed 
    export price (CEP) to the NV, as described in the ``Constructed Export 
    Price'' and ``Normal Value'' sections of this notice.
    
    Constructed Export Price and Further Manufacturing
    
    MHI
    
        We calculated CEP, in accordance with sections 772(b) and (d) of 
    the Act, for MHI's POR sale because MHI's affiliated U.S. sales agent 
    engaged in a broad range of activities including coordination of 
    installation, which we have classified as further manufacturing.
        We calculated CEP based on the packed, installed price to an 
    unaffiliated customer in the United States. We made deductions for the 
    following charges: net trade-in allowance; foreign inland freight 
    charges; foreign brokerage and handling charges; bonded warehouse 
    expenses; international freight expenses; combined foreign inland, U.S. 
    inland, and marine insurance expenses; Japanese export insurance and 
    U.S. inland insurance expenses; combined U.S. brokerage and handling 
    and inland freight charges; and U.S. Customs duty. We also made 
    deductions for commissions, imputed credit, and direct training 
    expenses.
    
    [[Page 55246]]
    
        We deducted those indirect selling expenses that related to 
    economic activity in the United States, including indirect training 
    expenses.
        As in the less-than-fair-value (LTFV) investigation, we calculated 
    an imputed credit expense by multiplying an interest rate by the net 
    balance of production costs incurred and progress payments made during 
    the construction period. MHI reported this expense using a Japanese 
    yen-denominated, short-term interest rate for the portion of imputed 
    credit expenses incurred prior to shipment. We recalculated MHI's 
    reported imputed credit expense to reflect MHI's U.S.-dollar-
    denominated, short-term interest rate for the entire balance, 
    consistent with our imputed credit expense methodology that relies on 
    the interest rate applicable to the currency in which the sale is made. 
    We also corrected the imputed credit expense calculation by converting 
    the yen-denominated production costs into U.S. dollars based on the 
    exchange rate in effect on the date of the MHI sale.
        In addition, we deducted the cost of further manufacturing or 
    assembly, including installation expenses. We classified installation 
    charges as part of further manufacturing, because the U.S. installation 
    process involves extensive technical activities on the part of 
    engineers and installation supervisors. See Mitsubishi Heavy Industries 
    v. United States, 15 F. Supp. 2d 807, 815-16 (CIT 1998) (Mitsubishi). 
    As for the further manufacturing cost, we relied on MHI's reported 
    amount with the exception that we recalculated the general and 
    administrative (G&A) and interest expense rates based on the entire POR 
    and not just part of the period as reported.
        Further, we made an adjustment for CEP profit in accordance with 
    section 772(d)(3) of the Act.
    
    TKS
    
        We calculated CEP, in accordance with sections 772 (b) and (d) of 
    the Act, for TKS's POR sale because this sale took place after 
    importation by a seller affiliated with the producer/exporter and 
    because the sale involved further manufacturing in the United States.
        We calculated the CEP sale based on the packed price to an 
    unaffiliated customer in the United States. We made deductions for the 
    following charges: foreign inland freight to port in Japan; foreign 
    brokerage and handling; international freight; combined marine and 
    foreign insurance; U.S. brokerage and handling; U.S. Customs duty; 
    unloading expenses; and cargo survey fees. We also deducted those 
    selling expenses that related to economic activity in the United States 
    1.
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        \1\ Since TKS's calculated imputed credit amount reflected 
    revenue rather than an expense, we appropriately added to CEP the 
    amount that related to the economic activity in the United States
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        We also deducted the cost of any further manufacturing or assembly, 
    including testing and technical service expenses. We classified testing 
    and technical service expenses as part of further manufacturing, 
    because the U.S. installation process involves extensive technical 
    activities on the part of engineers and installation supervisors (see 
    Mitsubishi). In accordance with section 772(d)(3) of the Act, we made 
    an adjustment for CEP profit.
    
    Cost of Production Analysis
    
        The Department disregarded certain sales made by MHI and TKS during 
    the LTFV investigation pursuant to a finding that sales were made below 
    cost. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, 
    there are reasonable grounds to believe or suspect that respondents MHI 
    and TKS made sales in the home market at prices below the cost of 
    producing the merchandise in the current review periods. As a result, 
    the Department initiated investigations to determine whether the 
    respondents made home market sales during the POR at prices below their 
    COP within the meaning of section 773(b) of the Act.
        We compared the COP figures to home market sales of the foreign 
    like product as required under section 773(b) of the Act, in order to 
    determine whether these sales were made at prices below the COP. In 
    determining whether to disregard home market sales made at prices below 
    the COP, we examined whether: (1) Within an extended period of time, 
    such sales were made in substantial quantities; and (2) such sales were 
    made at prices which permitted the recovery of all costs within a 
    reasonable period of time.
        The results of our cost tests for both MHI and TKS indicated that 
    certain home market sales were at prices below COP, and would not 
    permit the full recovery of all costs within a reasonable period of 
    time. In accordance with section 773(b)(1) of the Act, we therefore 
    excluded the below-cost sales from our analysis and used the remaining 
    above-cost sales as the basis for determining selling expenses and 
    profit.
    
    Constructed Value
    
    MHI
    
        In accordance with section 773(e)(1) of the Act, we calculated CV 
    based on the sum of the respondent's cost of materials, fabrication, 
    selling, general and administrative (SG&A) expenses and U.S. packing 
    costs as reported in the U.S. sales database. In accordance with 
    section 773(e)(2)(A), we based SG&A and profit on the amounts incurred 
    and realized by the respondent in connection with the production and 
    sale of the foreign like product in the ordinary course of trade, for 
    consumption in the foreign country.
        We relied on MHI's reported CV amounts with the following 
    exception. We recalculated the G&A and interest expense rate, applied 
    to the cost of manufacturing (COM) and included in the cost of 
    production (COP) and CV, to include G&A and interest for all three 
    years of production.
        For selling expenses, we used the weighted-average home market 
    selling and commission expense rate, calculated based on sales of the 
    foreign like product made in the ordinary course of trade, and applied 
    this rate to the U.S. COM. We excluded from this analysis a sale made 
    to an affiliated party.
        In accordance with section 773(a)(6)(A) of the Act, we added the 
    U.S. packing costs to a CV net of packing.
    
    TKS
    
        In accordance with section 773(e)(1) of the Act, we calculated CV 
    based on the sum of the respondent's cost of materials, fabrication, 
    SG&A and U.S. packing costs as reported in the U.S. sales database. In 
    accordance with section 773(e)(2)(A), we based SG&A and profit on the 
    amounts incurred and realized by the respondent in connection with the 
    production and sale of the foreign like product in the ordinary course 
    of trade, for consumption in the foreign country.
        We relied on the reported CV amounts with the following exceptions. 
    We recalculated the G&A rate applied to COM in the calculation of COP 
    and CV to include additional operating income and expenses. We also 
    recalculated the G&A and interest expense rate to include G&A and 
    interest for all fiscal years of the production period.
        For selling expenses, we used the weighted-average home market 
    direct and indirect selling expense rates, calculated based on sales of 
    the foreign like product made in the ordinary course of trade, and 
    applied these rates to the U.S. COM.
        In accordance with section 773(a)(6)(A) of the Act, we added U.S. 
    packing costs to a CV net of packing.
    
    [[Page 55247]]
    
    Price-to-CV Comparisons
    
        For CEP to CV comparisons, we deducted from CV the weighted-average 
    home market direct selling expenses, including imputed credit, pursuant 
    to section 773(a)(8) of the Act. We calculated imputed credit for CV 
    purposes in accordance with the methodology explained in the 
    ``Constructed Export Price'' section of this notice. We imputed credit 
    expenses for CV using the weighted-average, yen-based, short-term 
    interest rate reported for the POR, since home market sales were 
    denominated in yen.
    
    Level of Trade and CEP Offset
    
        In accordance with section 773(a)(1)(B) of the Act, to the extent 
    practicable, we determine NV based on sales in the comparison market at 
    the same level of trade (LOT) as the export price (EP) or CEP 
    transaction. The NV LOT is that of the starting-price sales in the 
    comparison market or, when NV is based on CV as is the case in these 
    reviews, that of the sales from which we derive SG&A expenses and 
    profit. For EP, the U.S. LOT is also the level of the starting-price 
    sale, which is usually from the exporter to an unaffiliated U.S. 
    customer. For CEP, it is the level of the constructed sale from the 
    exporter to an affiliated importer, after the deductions required under 
    section 772(d) of the Act.
        To determine whether NV sales are at a different LOT than EP or CEP 
    sales, we examine stages in the marketing process and selling functions 
    along the chain of distribution between the producer and the 
    unaffiliated customer. If the comparison-market sales are at a 
    different LOT, and the difference affects price comparability, as 
    manifested in a pattern of consistent price differences between the 
    sales on which NV is based and comparison-market sales at the LOT of 
    the export transaction, we make an LOT adjustment under section 
    773(a)(7)(A) of the Act. See Notice of Final Determination of Sales at 
    Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
    South Africa, 62 FR 61731, 61732 (November 19, 1997).
        For CEP sales, if the NV level is more remote from the factory than 
    the CEP level and there is no basis for determining whether the 
    difference in the levels between NV and CEP affects price 
    comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
    CEP offset provision). The CEP offset is calculated as the lesser of 
    the following:
        1. The indirect selling expenses on the comparison market sale, or
        2. The indirect selling expenses deducted from the starting price 
    in calculating CEP.
        In their respective questionnaire responses, MHI and TKS each 
    reported two different LOTs--one for the U.S. market and another for 
    the comparison market--and both reported that comparison-market sales 
    are made at a more advanced LOT than U.S. sales. Both respondents 
    requested that the Department perform a CEP offset in lieu of a LOT 
    adjustment, as they were unable to quantify the price differences 
    related to sales made at the different LOTs. To determine whether a CEP 
    offset was warranted, we compared the distribution systems used by the 
    respondents for their comparison market and U.S. sales, including 
    selling functions and class of customer, for each claimed LOT, after 
    making the appropriate deductions under section 772(d) of the Act. Both 
    respondents reported that they sold through one channel of distribution 
    in the comparison market, and through a different channel in the United 
    States. In the comparison market, MHI and TKS sold subject merchandise 
    directly to unaffiliated customers, while in the United States, they 
    both sold the subject merchandise through their affiliates, MLP U.S.A., 
    Inc. and TKS (U.S.A), respectively, who then sold the subject 
    merchandise directly to unaffiliated purchasers. For MHI, we compared 
    the selling functions and the level of activity in each distribution 
    channel, and found that several of the functions performed in the 
    comparison-market either were not performed in connection with the U.S. 
    sale at the export LOT, or were performed at a significantly lower 
    level of activity on the part of MHI. These selling functions include: 
    pre-sale consultations, advertising, market research and identifying 
    potential customers, arranging for transportation of merchandise, 
    receipt of proposal requests, customer invoicing, payment collection, 
    and post-sale services.
        For TKS, we compared the selling functions and the level of 
    activity in each distribution channel, and found that several of the 
    functions performed in the comparison-market either were not performed 
    in connection with the U.S. sale at the export LOT, or were performed 
    only by the affiliated company, TKS (U.S.A.). These selling functions 
    included: contract negotiations, plant layout and design, after-sale 
    service, parts inventory maintenance, and operator training.
        As we have determined that installation expenses incurred on the 
    U.S. sales should be treated as further manufacturing expenses (rather 
    than movement expenses, as claimed by MHI, or direct selling expenses, 
    as claimed by TKS), the CEP after deduction for all expenses under 
    section 772(d) of the Act reflects an uninstalled LNPP. Supporting this 
    contention is the fact that many of the same selling functions that are 
    performed at the comparison-market LOT are performed not at the export 
    LOT, but by the respondents' U.S. affiliates. Based on this analysis, 
    we conclude that the comparison-market and U.S. channels of 
    distribution and the sales functions associated with each are 
    sufficiently different so as to constitute two different levels of 
    trade, and we find that the comparison-market sales are made at a more 
    advanced LOT than are CEP sales. As there is no comparison-market LOT 
    that is comparable to that in the United States, we have no basis for 
    determining the extent to which the difference in LOTs affects price 
    comparability. Therefore, we performed a CEP offset to NV in accordance 
    with section 773(a)(7)(B) of the Act by deducting the lesser of home 
    market indirect selling expenses or the sum of the U.S. indirect 
    selling expenses.
    
    Currency Conversion
    
        We made currency conversions, in accordance with section 773(A)(a) 
    of the Act, based on the official exchange rates in effect on the dates 
    of the U.S. sales as certified by the Federal Reserve Bank of New York.
    
    Preliminary Results of Review
    
        As a result of these reviews, we preliminarily determine that the 
    weighted-average dumping margins for the respective PORs are as 
    follows:
    
    ------------------------------------------------------------------------
             Manufacturer/exporter                 Period           Margin
    ------------------------------------------------------------------------
    Mitsubishi Heavy Industries, Ltd.......      9/5/96-8/31/98        55.28
    Tokyo Kikai Seisakusho.................      9/1/97-8/31/98         0.00
    ------------------------------------------------------------------------
    
    
    [[Page 55248]]
    
        We will disclose the calculations used in our analysis to parties 
    to this proceeding within five days of the publication date of this 
    notice. See 19 CFR 351.224(b). Any interested party may request a 
    hearing within 30 days of publication. See 19 CFR 351.310(c). If 
    requested, a hearing will be held 44 days after the publication of this 
    notice, or the first workday thereafter.
        Issues raised in the hearing will be limited to those raised in the 
    respective case briefs and rebuttal briefs. Case briefs from interested 
    parties and rebuttal briefs, limited to the issues raised in the 
    respective case briefs, may be submitted not later than 30 days and 37 
    days, respectively, from the date of publication of these preliminary 
    results. See 19 CFR 351.309(c) and (d). Parties who submit case briefs 
    or rebuttal briefs in this proceeding are requested to submit with each 
    argument: (1) A statement of the issue and (2) a brief summary of the 
    argument. Parties are also encouraged to provide a summary of the 
    arguments not to exceed five pages and a table of statutes, 
    regulations, and cases cited.
        The Department will issue the final results of these administrative 
    reviews, including the results of its analysis of issues raised in any 
    written briefs or at the hearing, if held, not later than 120 days 
    after the date of publication of this notice.
        Interested parties who wish to request a hearing or to participate 
    if one is requested, must submit a written request to the Assistant 
    Secretary for Import Administration, Room B-099, within 30 days of the 
    date of publication of this notice. Requests should contain: (1) The 
    party's name, address and telephone number; (2) the number of 
    participants; and (3) a list of issues to be discussed. See 19 CFR 
    351.310(c).
    
    Assessment Rates
    
        The Department shall determine, and the Customs Service shall 
    assess, antidumping duties on all appropriate entries. The Department 
    will issue appropriate appraisement instructions directly to the 
    Customs Service upon completion of these reviews. The final results of 
    these reviews shall be the basis for the assessment of antidumping 
    duties on entries of merchandise covered by the final results of these 
    reviews and for future deposits of estimated duties. We will instruct 
    the Customs Service to assess antidumping duties on all appropriate 
    entries covered by these reviews if any importer-specific assessment 
    rate calculated in the final results of these reviews is above de 
    minimis. For assessment purposes, we intend to calculate importer-
    specific assessment rates for the subject merchandise by aggregating 
    the dumping margins calculated for all U.S. sales examined and dividing 
    this amount by the total entered value of the sales examined.
        This notice also serves as a preliminary reminder to importers of 
    their responsibility under 19 CFR 351.402(f) to file a certificate 
    regarding the reimbursement of antidumping duties prior to liquidation 
    of the relevant entries during these review periods. Failure to comply 
    with this requirement could result in the Secretary's presumption that 
    reimbursement of antidumping duties occurred and the subsequent 
    assessment of double antidumping duties.
    
    Cash Deposit Requirements
    
        The following cash deposit requirements will be effective for all 
    shipments of the subject merchandise entered, or withdrawn from 
    warehouse, for consumption on or after the publication date of the 
    final results of these administrative reviews, as provided by section 
    751(a)(1) of the Act: (1) The cash deposit rates for the reviewed 
    companies will be those established in the final results of these 
    reviews, except if the rate is less than 0.50 percent, and therefore, 
    de minimis within the meaning of 19 CFR 351.106(d)(1), in which case 
    the cash deposit rate will be zero; (2) for previously reviewed or 
    investigated companies not listed above, the cash deposit rate will 
    continue to be the company-specific rate published for the most recent 
    period; (3) if the exporter is not a firm covered in these reviews, a 
    prior review, or the original LTFV investigation, but the manufacturer 
    is, the cash deposit rate will be the rate established for the most 
    recent period for the manufacturer of the merchandise; and (4) the cash 
    deposit rate for all other manufacturers or exporters will continue to 
    be 58.69 percent, the ``All Others'' rate made effective by the LTFV 
    investigation. These requirements, when imposed, shall remain in effect 
    until publication of the final results of the next administrative 
    review.
        These administrative reviews and notice are published in accordance 
    with sections 751(a)(1) and 777(i)(1) of the Act.
    
        Dated: September 30, 1999.
    Robert S. LaRussa,
    Assistant Secretary for Import Administration.
    [FR Doc. 99-26592 Filed 10-8-99; 8:45 am]
    BILLING CODE 3510-DS-P
    
    
    

Document Information

Effective Date:
10/12/1999
Published:
10/12/1999
Department:
International Trade Administration
Entry Type:
Notice
Action:
Notice of preliminary results of antidumping duty administrative reviews.
Document Number:
99-26592
Dates:
October 12, 1999.
Pages:
55243-55248 (6 pages)
Docket Numbers:
A-588-837
PDF File:
99-26592.pdf