[Federal Register Volume 63, Number 44 (Friday, March 6, 1998)]
[Notices]
[Pages 11211-11214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5864]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-810]
Mechanical Transfer Presses From Japan; Preliminary Results of
Antidumping Duty Administrative Review, and Intent To Revoke Order in
Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review, and intent to revoke order in part; mechanical
transfer presses from Japan.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on mechanical
transfer presses (MTPs) from Japan in response to a request by
petitioners, Verson Division of Allied Products Corp., the United
Autoworkers of America, and the United Steelworkers of America (AFL-
CIO/CLC); and by respondent Aida Engineering, Ltd. (Aida). This review
covers shipments of this merchandise to the United States during the
period February 1, 1996 through January 31, 1997.
We have preliminarily determined that sales have not been made
below normal value (NV). If these preliminary results are adopted in
our final results, we will instruct U.S. Customs to liquidate entries
without regard to antidumping duties. Based on Aida's three consecutive
years of de minimis margins, we intend to revoke the order with respect
to Aida.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument are requested to submit with each
argument: (1) A statement of the issue, and (2) a brief summary of the
argument.
[[Page 11212]]
EFFECTIVE DATE: March 6, 1998.
FOR FURTHER INFORMATION CONTACT: Elisabeth Urfer or Maureen Flannery,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington D.C. 20230; telephone (202) 482-4733.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act. In addition, unless otherwise indicated,
all citations to the Department's regulations are to the provisions
codified at 19 CFR part 353, as they existed on April 1, 1996.
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register an antidumping
duty order on MTPs from Japan on February 16, 1990 (55 FR 5642). On
February 3, 1997, we published in the Federal Register (62 FR 4978) a
notice of opportunity to request an administrative review of the
antidumping duty order on MTPs from Japan covering the period February
1, 1996 through January 31, 1997.
In accordance with 19 CFR 353.25(b)(1) and (2), Aida requested
revocation of the antidumping duty order with respect to Aida, and
requested that the Department conduct an administrative review of the
antidumping order in accordance with Sec. 353.22(a)(2) and
Sec. 353.25(b) of the regulations. Petitioners requested that we
conduct a review of Hitachi Zosen Corporation (Hitachi Zosen) and
Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI). We published a
notice of initiation of this antidumping duty administrative review on
MTPs on March 18, 1997 (62 FR 12793).
Petitioners requested that the Department initiate an investigation
of sales below the cost of production (COP) with respect to Hitachi
Zosen. We concluded that an initiation of a COP investigation was not
warranted. (See memorandum from Maureen Flannery to Edward Yang,
``Mechanical Transfer Presses from Japan: Allegation of Sales Below
Cost for Hitachi Zosen Corp.,'' dated September 23, 1997.)
On June 16, 1997, the Petitioners withdrew their request for an
administrative review with respect to IHI. IHI likewise requested that
the Department terminate the administrative review on June 23, 1997. We
rescinded the review with respect to IHI on November 10, 1997, and
extended the preliminary results. See Mechanical Transfer Presses From
Japan: Extension of Time Limits for Preliminary Results of Antidumping
Duty Administrative Review, and Partial Recission of Administrative
Review, 62 FR 60471. The Department is conducting this administrative
review in accordance with section 751 of the Act.
Scope of Review
Imports covered by this review include MTPs currently classifiable
under Harmonized Tariff Schedule (HTS) item numbers 8462.99.0035 and
8466.94.5040. The HTS numbers are provided for convenience and for U.S.
Customs purposes. The written description remains dispositive of the
scope of the order.
The term mechanical transfer presses refers to automatic metal-
forming machine tools with multiple die stations in which the work
piece is moved from station to station by a transfer mechanism designed
as an integral part of the press and synchronized with the press
action, whether imported as machines or parts suitable for use solely
or principally with these machines. These presses may be imported
assembled or unassembled. This review does not cover certain parts and
accessories, which were determined to be outside the scope of the
order. (See ``Final Scope Ruling on Spare and Replacement Parts,'' U.S.
Department of Commerce, March 20, 1992; and ``Final Scope Ruling on the
Antidumping Duty Order on Mechanical Transfer Presses (MTPs) from
Japan: Request by Komatsu, Ltd.,'' U.S. Department of Commerce, October
1, 1996.)
This review covers two manufacturers of MTPs, and the period
February 1, 1996 through January 31, 1997.
Verification
As provided in section 782(i) of the Act, we verified information
provided by Aida by using standard verification procedures, including
on-site inspection of the manufacturer's facilities, the examination of
relevant sales and financial records, and the selection of original
documentation containing relevant information. Our verification results
are outlined in the public version of the verification report.
Intent To Revoke
On February 27, 1997, Aida submitted a request, in accordance with
19 CFR 353.25(b), to revoke the order covering MTPs from Japan with
respect to Aida's sales of this merchandise. Aida's request was
accompanied by the certification required under 19 CFR 353.25(b)(1) and
the agreement to immediate reinstatement in the relevant antidumping
order required under 19 CFR 353.25 (a)(2)(iii) and (b)(2).
In the two prior reviews of this order, we determined that Aida
sold MTPs from Japan at not less than NV. The Department conducted a
verification of Aida's response for this review and preliminarily
determines that Aida sold MTPs at not less than NV during the review
period. Based on Aida's three consecutive years of zero or de minimis
margins, the above-mentioned certification, and the absence of any
evidence to the contrary on the record of this review, we have
preliminarily determined that it is not likely that Aida will in the
future sell subject merchandise at less than NV. Therefore, if these
preliminary findings are affirmed in our final results, we intend to
revoke the order on MTPs from Japan with regard to Aida.
United States Price (USP)
Aida and Hitachi Zosen argue that we should use the contract prices
as our starting price for MTPs under review. However, contract prices
may include accessories and spare parts. Destack feeders, which are
accessories, and spare and replacement parts have been found to be
outside the scope of the order. Aida and Hitachi Zosen cite the Final
Determination of Sales at Less Than Fair Value: Mechanical Transfer
Presses from Japan, 55 FR 335, (January, 4, 1990), which states:
For purposes of the final determination, we have determined that
the prices charged for spare parts, tooling and other accessories
associated with the basic machine which are separately identified in
the contractual sales documentation should not be included in the
gross price of the MTP * * *.
Hitachi Zosen argues that, for its MTP sales to the United States,
the purchase order and the invoice evidence only the price for the
system or set, and not discrete prices for the components, and that the
parties intended to buy a press system rather than discrete machines.
Aida similarly argues that, for all but one of its MTPs sold to the
United States, the contracted price was a single price that included
all goods and services covered by the sale. Petitioners argue that it
is the Department's policy to use the price of the MTP and exclude
other items that were included in the sale from its analysis.
Petitioners claim that when sales documents are reviewed it appears
that the price is broken down into components. At verification of Aida
we found that, for one of its four sales which Aida claimed could not
be
[[Page 11213]]
broken out, the price of the components could, in fact, be broken out;
therefore, we have subtracted out the price of the destack feeder from
the starting price. We also made a corresponding adjustment to
constructed value (CV) to account for the cost of the destack feeder.
We found that, for another MTP, the price of the spare parts could be
broken out, but we could not break out the cost of the spare parts from
the CV; therefore, we did not make an adjustment for that sale.
A. Aida
For sales made by Aida we calculated an export price, in accordance
with section 772(a) of the Act, because the subject merchandise was
sold by Aida directly to the first unaffiliated purchasers in the
United States prior to importation into the United States, and
constructed export price was not otherwise indicated.
We calculated export price based on the delivered or f.o.b. price
to unaffiliated purchasers. We made deductions, where appropriate, for
rebates, inland insurance, brokerage and handling, foreign inland
freight, international freight, marine insurance, U.S. inland freight,
U.S. transportation expenses, and U.S. customs duty.
B. Hitachi Zosen
For sales made by Hitachi Zosen we calculated an export price, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold by Hitachi Zosen to unaffiliated purchasers in the
United States prior to importation into the United States, and
constructed export price was not otherwise indicated.
We calculated export price based on the delivered prices and ex-
godown prices to unaffiliated purchasers. We made deductions for
foreign inland freight and inland insurance, and, where appropriate,
brokerage and handling, international freight, installation,
supervision and U.S. duty in accordance with section 772(c) of the Act.
Normal Value (NV)
We preliminarily determine that the use of CV is warranted to
calculate NV for Aida and Hitachi Zosen, in accordance with section
773(a)(4) of the Act. While the home market is viable, the particular
market situation in this case, which requires that the subject
merchandise be built to each customer's specifications, does not permit
proper price-to-price comparisons in either the home market or third
countries.
Aida and Hitachi Zosen assert that home, third country, and U.S.
market products are distinguished by the many differences in
specifications between the various presses, and that no merchandise
sold in the home market or to a third country is identical to the
merchandise sold to the United States. Aida and Hitachi Zosen argue
that it is not possible to determine cost differences because (1) there
is no baseline specification for comparison purposes; (2) the design of
a press is dictated throughout by the combination of specifications
applicable to the press, and it is not possible to isolate the cost
effect of any single specification; and (3) differences in cost between
two presses result not only from differences in specifications, but
also from differences in material costs, processing costs, fiscal
periods, and production efficiency from press to press.
Petitioners argue that presses may be sufficiently similar to allow
for price-to-price comparisons because they are all automotive metal-
forming machine tools with multiple die stations. On June 12, 1997, the
Department requested additional cost information. In response to this
request, Aida and Hitachi Zosen put information on the record that
clearly indicated that the prices of home market and U.S. sales could
not be compared. See Memorandum from Elisabeth Urfer to Edward Yang,
dated March 2, 1998. We note that, in past proceedings involving large,
custom-built capital equipment, including prior reviews of this order,
we have normally resorted to CV. (See, e.g., Large Power Transformers
from France; Final Result of Antidumping Administrative Review, 61 FR
40403, August 2, 1996; Notice of Final Determination of Sales at Less
Than Fair Value: Large Newspaper Printing Presses and Components
Thereof, Whether Assembled or Unassembled, From Japan, 61 FR 38139,
July 23, 1996; and Mechanical Transfer Presses From Japan: Final
Results of Antidumping Duty Administrative Review, 62 FR 11820, March
13, 1997.)
For Aida and Hitachi Zosen, CV consists of the cost of materials
and fabrication, selling, general and administrative expenses (SG&A),
profit, and packing. For Aida's purchases of materials from affiliated
parties, we used the higher of the transfer price or the cost of
production, as provided for by Section 773(f)(3). Because the parts
used in the manufacture of MTPs are custom-built, no market values were
available. We calculated SG&A and profit based on home market sales of
MTPs in accordance with section 773(e)(2)(A) of the Act. We did not
include below cost sales in our calculation of profit (see below). We
used packing costs for merchandise exported to the United States. For
Aida, we made a circumstance-of-sale adjustment by deducting from CV
home market direct selling expenses (i.e., warranties, commissions, and
credit), and adding to CV U.S. direct selling expenses (i.e.,
warranties, commissions, and credit). For Hitachi Zosen, we made a
circumstance-of-sale adjustment by deducting from CV home market direct
selling expenses (i.e., warranties), and adding to CV U.S. direct
selling expenses (i.e., warranties and credit). To calculate imputed
U.S. credit expense, we used the dollar-denominated interest rates
submitted by Hitachi Zosen and Aida.
For Aida, we disregarded below cost home market sales in making the
CV profit calculation. Section 773(b)(1) provides that, whenever the
Department has reasonable grounds to believe or suspect that home
market sales under consideration for the determination of NV have been
made at below cost prices, it shall determine whether, in fact, there
were below cost sales. That provision further provides that, if below
cost sales were made within an extended period of time in substantial
quantities and not at prices that would recover costs within a
reasonable period of time, the Department may disregard the below cost
sales.
In the prior review of this order, pursuant to section 773(b)(1),
the Department disregarded below cost home market sales in calculating
CV profit, i.e., they were disregarded in the determination of NV.
Therefore, reasonable grounds exist to believe or suspect that Aida
made below cost home market sales in the current review period. Section
773(b)(2)(ii). Accordingly, we requested and obtained from Aida the
cost data necessary to determine whether below cost sales occurred
during the period of review.
Because each MTP is custom-built, differs significantly in
specifications, and is essentially a discrete model, we performed the
cost test on a sale-by-sale basis. We compared the cost of each model
sold in the home market to the home market price of that model. The
Department found that certain home market models were sold at prices
below the cost of production, and thus in substantial quantities,
within an extended period of time, and at prices that do not permit
recovery of cost within a reasonable period of time. Therefore, we have
disregarded the below cost sales in determining CV profit.
In calculating the profit value for Aida, we have used home market
sales submitted by Aida for the period encompassing the period of
review and
[[Page 11214]]
sales contemporaneous to the U.S. sales. This was done to account for
the relatively long period of time between the date when the MTP is
sold and the date when it is completed for shipment.
Preliminary Results of the Review
We preliminarily determine that the following dumping margins
exist:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Aida Engineering, Ltd...................... 2/1/96-1/31/97 0.00
Hitachi Zosen Corporation.................. 2/1/96-1/31/97 0.00
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. The Department will publish a notice of final results of
this administrative review, which will include the results of its
analysis of issues raised in any such comments, not later than 120 days
after the date of publication of this notice.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of MTPs from Japan entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for reviewed
companies will be the rate established in the final results of this
review; (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 this review, a prior review, or the original
less-than-fair-value 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) for all other
producers and/or exporters of this merchandise, the cash deposit rate
shall be the rate established in the investigation of sales at less
than fair value, which is 14.51 percent.
These deposit rates, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.25(b) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. 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.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: March 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5864 Filed 3-5-98; 8:45 am]
BILLING CODE 3510-DS-P
