[Federal Register Volume 63, Number 89 (Friday, May 8, 1998)]
[Notices]
[Pages 25450-25460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12206]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-028]
Roller Chain, Other Than Bicycle From Japan: Preliminary Results
and Partial Recission of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results and partial recission of
antidumping duty administrative review.
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SUMMARY: In response to requests from the petitioner, the American
Chain Association, and three manufacturers/exporters, the Department of
Commerce has conducted an administrative review of the antidumping duty
finding on roller chain, other than bicycle from Japan. We have
preliminarily determined that sales of the subject merchandise have
been made below normal value. If these preliminary results are adopted
in our final results of administrative review, we will instruct the
Customs Service to assess antidumping duties based on the difference
between the export price or constructed export price and the normal
value.
Because one respondent did not permit verification of its
questionnaire responses and two other respondents failed verification,
we based the margins for these three companies on the facts available,
in accordance with 776(a)(2) of the Tariff Act of 1930, as amended.
Interested parties are invited to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with the argument: (1) A statement of the
[[Page 25451]]
issue, (2) a brief summary of the arguments not to exceed five pages,
and (3) a table of statutes, regulations, and cases cited.
EFFECTIVE DATE: May 8, 1998.
FOR FURTHER INFORMATION CONTACT: Cameron Werker at (202) 482-3874 or
Ron Trentham at (202) 482-4793, AD/CVD Enforcement, Group II, Office
Four, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230.
SUPPLEMENTARY INFORMATION:
The Applicable Statute and Regulations
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 provisions codified at 19 CFR Part
353 (April 1, 1997).
Background
On April 12, 1973, the Department published in the Federal Register
an antidumping finding on roller chain, other than bicycle from Japan
(roller chain) (38 FR 9926). On April 2, 1997, the Department published
a notice of ``Opportunity to Request an Administrative Review'' of this
antidumping finding for the period of review (POR), April 1, 1996,
through March 31, 1997 (62 FR 15655). On April 24, 1997, and April 29,
1997, we received requests for administrative review of this
antidumping finding from one reseller of roller chain from Japan to the
United States, Daido Tsusho Company Ltd./Daido Corporation (DT), and
three manufacturers/exporters of roller chain from Japan: (1) Daido
Kogyo Company Ltd. (DK); (2) Enuma Chain Mfg. Company (Enuma); and (3)
Izumi Chain Mfg. Company Ltd., (Izumi). On April 28, 1997, the
petitioner, the American Chain Association (ACA), requested an
administrative review of these same entities, as well as six other
manufacturers/exporters and five other resellers of roller chain from
Japan to the United States. The six other manufacturers/exporters are:
(1) Hitachi Metals Techno Ltd. (HMTL); (2) Pulton Chain Company Inc.
(Pulton); (3) R.K. Excel Company Ltd. (RK); (4) Kaga Chain Manufacturer
(Kaga); (5) Oriental Chain Company (OCM); and (6) Sugiyama Chain
Company, Ltd. (Sugiyama). The five other resellers are: (1) Alloy Tool
Steel Inc. (ATSI); (2) HMTL/Hitachi Maxco Ltd. (Hitachi Maxco); (3)
Nissho Iwai Corporation (NIC); (4) Peer Chain Company (Peer); and (5)
Tsubakimoto Chain Co./U.S.-Tsubaki (Tsubakimoto). On May 21, 1997, the
Department published a ``Notice of Initiation of Administrative
Review'' (62 FR 27720) covering the POR April 1, 1996, through March
31, 1997, for the above manufacturers/exporters/resellers
(collectively, the respondents).
On June 18, 1997, we issued antidumping questionnaires to the
respondents. The Department received questionnaire responses in July
1997, August 1997, and September 1997. We issued supplemental
questionnaires in August 1997, September 1997, and December 1997. We
received responses to these supplemental questionnaires in September
1997, October 1997, December 1997, January 1998, and February 1998.
Partial Recissions
As a result of facts examined during the course of the POR, we have
determined that Peer made no shipments of subject merchandise to the
United States during the POR. We confirmed with the United States
Customs Service that Peer did not have entries of subject roller chain
during the POR. Therefore, we are rescinding the review with respect to
this company.
HMTL is affiliated to a roller chain producer subject to this
annual review. During this POR, HMTL and HMTL/Hitachi Maxco made no
shipments of roller chain to the United States. We confirmed with the
United States Customs Service that HMTL and HMTL/Hitachi Maxco did not
have entries of subject roller chain during the POR. Consequently, the
issue of a separate review rate for HMTL or HMTL/Hitachi Maxco is moot
and we are rescinding the review for this purpose with respect to these
parties.
DT sold roller chain produced by Enuma and DK during the POR. We
examined the information on the record and have determined that, with
respect to sales of merchandise manufactured by Enuma, DT is not a
reseller as defined in 19 CFR 353.2(s) because Enuma had knowledge at
the time of sale to DT that the roller chain it produced was destined
for sale in the United States. Therefore, for sales by DT of Enuma-
manufactured products, we are using the prices between Enuma and DT as
United States prices and including these sales in the margin
calculations for Enuma. With regard to DT sales of DK-produced
merchandise, since DT is affiliated with DK pursuant to Section 771(33)
of the Act, we are including all sales of DK-produced merchandise by or
through DT in the margin calculations for DK. Under these
circumstances, we did not have a basis to consider DT for a separate
rate in this POR and are rescinding the review for this purpose with
respect to DT.
RK and NIC exported, and ATSI imported, roller chain produced by RK
during the POR. In selling roller chain to NIC (RK's affiliated trading
company in Japan), RK has knowledge that these roller chain sales are
destined for the United States. All of NIC's sales to the United States
of RK-produced merchandise are made through ATSI (NIC's affiliated U.S.
reseller). For purposes of these sales, we have treated RK, NIC, and
ATSI as affiliated parties pursuant to section 771(33) of the Act. We
used United States sales of RK-produced merchandise through NIC in our
margin analysis for RK. RK also sells its merchandise directly to ATSI
in the United States, who in turn sells the merchandise to unaffiliated
U.S. customers. We also used these transactions in our margin analysis
for RK. In the absence of other sales, we did not consider ATSI and NIC
for separate rates and are rescinding the reviews for this purpose for
these entities.
Preliminary Partial Rescission
Tsubakimoto received de minimis margins in three consecutive
administrative reviews covering the period 1979-1983 and in an
``update'' administrative review conducted for the period 1986-1987. In
the final results of the 1986-1987 review, the Department stated its
intent to revoke the finding with respect to Tsubakimoto. See Final
Results of Antidumping Duty Administrative Review and Intent to Revoke
in Part: Roller Chain, Other Than Bicycle, From Japan, 54 FR 3099
(January 23, 1989). At the time of publication of its intent to revoke
in part, the Department was ordered by the Court of International Trade
not to revoke the finding with respect to Tsubakimoto pending a
decision on a matter before the Court regarding one of the reviews for
the period 1979-1983. On May 15, 1989, the Court dismissed this case,
thereby allowing the Department to proceed with revocation in part,
with respect to Tsubakimoto. On August 14, 1989, the Department revoked
Tsubakimoto from the finding on roller chain. See Revocation in Part of
Antidumping Finding: Roller Chain, Other than Bicycle, From Japan, 54
FR 33259.
On April 28, 1997, the ACA requested that the Department conduct an
administrative review of the sales made
[[Page 25452]]
by Tsubakimoto to the United States. The ACA stated that it believes
Tsubakimoto is selling Japanese roller chain to U.S. customers that is
manufactured by companies that are covered by the roller chain finding.
The ACA stated that its request does not cover sales of roller chain
produced by Tsubakimoto itself but rather is limited to roller chain
manufactured by other Japanese producers. We solicited comments from
Tsubakimoto and the ACA concerning this issue.
In its submissions concerning this issue, the ACA stated that the
Department's revocation of Tsubakimoto applies only to merchandise that
has been both produced and exported by Tsubakimoto because the 1989
revocation notice regarding Tsubakimoto stated that ``[t]his partial
revocation applies to all unliquidated entries of this merchandise
manufactured and exported by Tsubakimoto and entered, or withdrawn from
warehouse, for consumption on or after September 1, 1983.'' (See 54 FR
33259 (August 14, 1989)). Tsubakimoto responded by providing evidence
indicating that during the 1986-1987 update review, the review upon
which the Department determined to revoke in part, the Department based
its de minimis margin calculation on sales to the United States made by
Tsubakimoto of roller chain both produced by Tsubakimoto itself and
purchased from two other Japanese manufacturers.
After analyzing all the comments received in regard to this issue,
the Department preliminarily determines that the 1989 notice of
revocation in part applies to Tsubakimoto in both its capacity as a
manufacturer/exporter and reseller/exporter of roller chain. The
evidence on the record demonstrates the Department revoked the company
Tsubakimoto. By revoking Tsubakimoto as a company, the Department
applied the revocation to the manufacturer/exporter and reseller/
exporter operations the company Tsubakimoto conducts. Although the
``manufactured and exported'' language used by the Department in the
1989 revocation notice could be read to limit Tsubakimoto's revocation
to roller chain manufactured by Tsubakimoto, the Department has
preliminarily determined that Tsubakimoto's revocation also applies to
its reseller function because the de minimis margin calculated in the
1986-1987 administrative review, which is the foundation of the
revocation, included sales made by Tsubakimoto of roller chain it
purchased from two other Japanese manufacturers. In addition, the
Department's determinations in other administrative proceedings
concerning roller chain from Japan indicate that Tsubakimoto was
revoked as a manufacturer/exporter and reseller/exporter. Therefore,
the Department's revocation was based upon Tsubakimoto's pricing
practices as both a manufacturer/exporter and reseller/exporter. For
the reasons discussed above, we are preliminarily rescinding this
review with respect to Tsubakimoto.
As provided for in section 353.54(e) of the Commerce Regulations
which were in effect at the time of the tentative determination to
partially revoke the order, Tsubakimoto agreed in writing to an
immediate suspension of liquidation and reinstatement of the finding
(as an order) if circumstances develop which indicate that roller
chain, other than bicycle, manufactured and exported to the United
States by Tsubakimoto is being sold by the firm at less than fair value
(LTFV). See 48 FR 39674 (Sept. 1, 1983). If the Department determines,
from information available to it either from submissions or other
sources, that circumstances have developed which indicate subject
merchandise is being sold by Tsubakimoto, or that Tsubakimoto is
facilitating the sale of subject merchandise, at less than normal value
in the United States, the Department will examine whether the elements
necessary for reinstatement of the finding exist at that time.
Although we are preliminarily rescinding this review with respect
to Tsubakimoto, the Department will continue to review this issue and
encourages interested parties to comment on the appropriateness of our
determination.
Extension of Deadlines
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for completion of a preliminary determination if it
determines that it is not practicable to complete the review within the
statutory time limit. On August 22, 1997, the Department extended the
time limit for the preliminary and final results of this case. See
Notice of Extension of Time Limits of Antidumping Duty Administrative
Review, 62 FR 44643 (August 22, 1997).
Scope of Review
The merchandise subject to this review is roller chain, other than
bicycle, from Japan. The term ``roller chain, other than bicycle,'' as
used in this review, includes chain, with or without attachments,
whether or not plated or coated, and whether or not manufactured to
American or British standards, which is used for power transmissions
and/or conveyance. This chain consists of a series of alternately-
assembled roller links and pin links in which the pins articulate
inside from the bushings and the rollers are free to turn on the
bushings. Pins and bushings are press fit in their respective link
plates. Chain may be single strand, having one row of roller links, or
multiple strand, having more than one row of roller links. The center
plates are located between the strands of roller links. Such chain may
be either single or double pitch and may be used as power transmission
or conveyor chain. This review also covers leaf chain, which consists
of a series of link plates alternately assembled with pins in such a
way that the joint is free to articulate between adjoining pitches.
This review further covers chain model numbers 25 and 35. Roller chain
is currently classified under the Harmonized Tariff Schedule of the
United States (HTSUS) subheadings 7315.11.00 through 7619.90.00.
Although the HTSUS subheadings are provided for convenience and Customs
purposes, the written description remains dispositive.
Verification
As provided in Section 782(i) of the Act, we verified information
provided by two respondents, OCM and Izumi. We used standard
verification procedures, including on-site inspection of the
respondents' facilities, the examination of relevant sales and
financial records, and selection of original documentation containing
relevant information. Our verification results are outlined in the
verification reports placed on file in the Central Records Unit (CRU)
in room B-099 of the Main Commerce Building.
Facts Available (FA)
1. Application of FA
Section 776(a)(2) of the Act provides that if an interested party
withholds information that has been requested by the Department, fails
to provide such information in a timely manner or in the form
requested, significantly impedes a proceeding under the antidumping
statute, or provides information that cannot be verified, the
Department shall use, subject to section 782(d), FA in reaching the
applicable determination.
Section 782(d) provides certain conditions that must be satisfied
before the Department may, subject to subsection (e), disregard all or
part of the information submitted by a respondent. First, this section
states that, if the Department determines that a response to a request
for information
[[Page 25453]]
does not comply with the request, it shall promptly inform the person
submitting the response of the nature of the deficiency and shall, to
the extent practicable, provide that person with an opportunity to
remedy or explain the deficiency in light of the time limits
established for the completion of the review. Section 782(d) continues
that, if the party submits further information in response to the
deficiency and the Department finds the response is still deficient or
submitted beyond the applicable time limits, the Department may
disregard all or part of the original and subsequent responses.
Section 782(e) of the Act states that the Department shall not
decline to consider information deemed ``deficient'' under section
782(d) if: (1) the information is submitted by the established
deadline; (2) the information can be verified; (3) the information is
not so incomplete that it cannot serve as a reliable basis for reaching
the applicable determination; (4) the interested party has demonstrated
that it acted to the best of its ability; and (5) the information can
be used without undue difficulties.
2. Selection of Adverse Facts Available
In selecting from among the facts otherwise available, section
776(b) of the Act authorizes the Department to use an adverse inference
if the Department finds that a party has failed to cooperate by not
acting to the best of its ability to comply with requests for
information. See the Statement of Administrative Action (SAA) at 870.
To examine whether the respondent ``cooperated'' by ``acting to the
best of its ability'' under section 776(b), the Department considers,
inter alia, the accuracy and completeness of submitted information and
whether the respondent has hindered the calculation of accurate dumping
margins. See e.g., Certain Welded Carbon Steel Pipes and Tubes From
Thailand: Final Results of Antidumping Duty Administrative Review, 62
FR 53808, 53819-53820 (October 16, 1997).
A. Total Facts Available
Pulton
In this case, Pulton submitted its questionnaire responses by the
established deadlines and agreed to verification of its responses from
March 16-20, 1998. Subsequently, however, prior to verification, it
informed the Department that it would not allow verification of its
responses. Because the Department was unable to verify the submitted
information, as required by section 782(i) of the Act, the Department
had no authority to rely upon that unverified information in making its
determination; thus section 776(a) of the Act mandates that the
Department use facts available in making its determination vis-a-vis
Pulton. Further, by refusing to allow verification, Pulton also
significantly impeded the instant review, a result which section
776(a)(2)(C) and (D) require be addressed with the use of facts
available. Although referenced under section 776(a), Section 782(d) of
the Act concerns deficient submissions and thus is not applicable to a
verification refusal.
As noted above, in selecting facts otherwise available, the
Department may, pursuant to section 776(b) the Act, use an adverse
inference if the Department finds that an interested party failed to
cooperate by not acting to the best of its ability to comply with
requests for information. Where, as here, the respondent does not allow
the Department officials to conduct verification of submitted
information, it is deemed uncooperative, which constitutes grounds for
applying adverse facts available. See Notice of Final Determination of
Sales at Less Than Fair Value: Steel Wire Rod From Venezuela, 63 FR
8946, 8947 (February 23, 1998); and Notice of Final Determination of
Sales at Less Than Fair Value: Circular Welded Non-Alloy Steel Pipe
From Romania, 61 FR 24274, 24275 (May 14, 1996). As explained above,
although Pulton responded to the Department's requests for information,
it refused to undergo verification, thereby preventing the Department
from verifying the accuracy and completeness of the information it had
submitted. Pulton's refusal to permit the Department to verify the
information in this review demonstrates that it failed to cooperate by
not acting to the best of its ability particularly in light of the fact
that Pulton has participated in numerous administrative reviews and is
generally familiar with the verification process. As Pulton indicated,
it decided not to allow verification in this review because it would
require two employees to spend two weeks dealing with the verification
and its preparation. Pulton did not indicate that verification was
impossible. Thus, consistent with the Department's practice in cases
where a respondent withdraws its participation in a proceeding, in
selecting facts available for Pulton in this review, an adverse
inference is warranted.
In light of Pulton Chain Co., Inc. v. U.S., Slip Op. 97-162 Court
No. 96-12-02877 (December 1, 1997), we are assigning to Pulton an FA
margin of 42.48 percent, the rate calculated for Kaga in the instant
review. For a more detailed discussion of this issue, see the April 30,
1998, Memorandum from The Senior Director, AD/CVD Enforcement, Group
II, Office IV to the Acting Deputy Assistant Secretary, Import
Administration, regarding the Determination of Facts Available for
Pulton Chain Co., on file in room B-099, in the main Commerce Building.
OCM
With respect to OCM, although the Department issued several
supplemental questionnaires requesting that OCM report appropriate home
market comparison sales and appropriate cost information, OCM failed to
comply with the Department's repeated requests. Moreover, at
verification, OCM was unable to explain (1) numerous discrepancies with
respect to its unreported home market sales, and (2) its cost
calculation methodology. Because OCM failed to provide the necessary
information in the form and manner requested, and the information could
not be verified, section 776(a) directs the Department to apply,
subject to section 782(d), facts otherwise available.
Pursuant to section 782(d), we provided OCM the opportunity to
explain its deficiencies. Although we addressed deficiencies in OCM's
original questionnaire response regarding its reporting of home market
sales and variable costs of manufacturing, OCM still did not report all
appropriate home market sales and cost information. Specifically, we
were unable to determine the extent of unreported home market sales of
merchandise identical or similar to merchandise sold in the United
States because of various discrepancies between the information
originally submitted and what we found at verification. OCM was unable
to explain these discrepancies, or to identify which home market sales
had not been reported. Further, OCM only reported variable costs of
manufacture (VCOMs) for certain models of chain sold in both the U.S.
and home markets during the POR. Because we can not determine the
extent of unreported home market sales or the extent of unreported
VCOMs, we are unable to determine whether we have the most appropriate
home market sales for purposes of calculating a dumping margin.
Next, as noted we were unable to verify the accuracy and
completeness of OCM's costs. We could not reconcile OCM's reported
material and labor costs to its internal books and records and,
therefore, could not establish whether the reported costs reflect
actual costs for
[[Page 25454]]
the POR. Thus, we were unable to establish the credibility of the
information contained in OCM's questionnaire responses.
Finally, OCM has not demonstrated on the record that it acted to
the best of its ability in providing the necessary information. OCM
elected not to follow the Department's clear instructions, which were
enunciated in several questionnaires as well as during meetings with
OCM's counsel, that OCM must report all appropriate home market sales
and utilize an appropriate cost methodology. For example, the company
used standard cost data to report model-specific material and labor
costs, even though the Department does not accept standard costs for
purposes of an antidumping analysis. Although we instructed OCM to
calculate a variance between its standard and actual costs for the POR,
it compared data that did not reflect either the period used to
calculate the standard costs (April-September 1993) or the POR (April
1996-March 1997) to calculate this variance. In addition, OCM only
calculated its variance for its four highest selling models of roller
chain and applied a simple average of these variances to the standard
costs reported for all other models.
For the reasons stated above, the application of section 782(e) of
the Act does not overcome section 776(a)'s direction to use facts
otherwise available for OCM's submissions. Thus, the use of facts
available is warranted in this case.
As discussed above, in selecting from among the facts otherwise
available, section 776(b) of the Act authorizes the Department to use
an adverse inference if the Department finds that an interested party
failed to cooperate by not acting to the best of its ability to comply
with the request for information. In this context, however, although
the respondent may not act to the best of its ability, it may be deemed
sufficiently ``cooperative'' so that the Department may determine to
apply FA that are less adverse. See, e.g., Certain Fresh Cut Flowers
From Colombia; Final Results and Partial Rescission of Antidumping Duty
Administrative Review, 62 FR 53287, 53291-53292 (October 14,1997)
(Fresh Cut Flowers-Colombia (1997)); Antifriction Bearings (Other Than
Tapered Roller Bearings) and Parts Thereof From France, et al.; Final
Results of Antidumping Duty Administrative Review, 62 FR 2081, 2088
(January 15, 1997) (AFBs--1997).
As discussed above, we found significant problems with OCM's
submissions. Although we addressed deficiencies in OCM's original
questionnaire response regarding its reporting of home market sales and
variable costs of manufacturing, OCM still did not report all
appropriate home market sales and cost information. Specifically, we
were unable to determine the extent of unreported home market sales of
merchandise identical or similar to merchandise sold in the United
States because of various discrepancies between the information
originally submitted and what we found at verification. OCM was unable
to explain these discrepancies at verification, or to identify which
home market sales had not been reported. OCM did not provide in its
questionnaire responses either the calculation methodology employed to
calculate its reported costs or appropriate cost variances. In its
attempts to update standard costs, OCM calculated variances based on
costs that did not reflect the standard or actual costs for the POR.
Accordingly, because OCM did not act to the best of its ability to
comply with the request for information under section 776(b), an
adverse inference is warranted. However, because OCM made substantial
efforts to cooperate throughout the course of this review, we are
resorting to facts available that are less adverse to the interests of
OCM. See, e.g., Fresh Cut Flowers-Colombia (1997). Therefore, we are
assigning OCM an adverse FA rate of 17.57 percent (a rate calculated
for another respondent in a previous review of this proceeding). This
rate is a significant increase from the company's current cash deposit
rate and thus is sufficiently adverse to induce cooperation by OCM in
future reviews of this proceeding. Since we are applying FA based on a
margin from a prior administrative review of this finding, we have
satisfied the corroboration requirements under section 776(c) of the
Act. See the section below on ``Corroboration of Information Used as
Facts Available.'' For a detailed discussion of this issue, see
Memorandum From The Senior Director, AD/CVD Enforcement, Group II,
Office IV to the Acting Deputy Assistant Secretary, Import
Administration regarding Determination of Facts Available Based on
Results of Verification of Oriental Chain Manufacturing Co., (April 30,
1998), on file in room B-099, in the main Commerce Building.
Izumi
Although the Department issued several supplemental questionnaires
requesting that Izumi report appropriate third country sales and
appropriate cost information, Izumi failed to comply with the
Department's repeated requests. Moreover, at verification, Izumi was
unable to explain: (1) numerous discrepancies with respect to its
unreported third country sales; and (2) its cost calculation
methodology. Because Izumi failed to provide the necessary information
in the form and manner requested, and the information could not be
verified, section 776(a) directs the Department to apply, subject to
section 782(d), facts otherwise available.
Pursuant to section 782(d), we provided Izumi the opportunity to
explain its deficiencies in our sppplemental questionnaire of August
22, 1997, December 31, 1997, and December 19, 1997. In addition, we
held a pre-verification conference with Izumi's counsel to ensure that
Izumi understood our concerns so that its deficiencies could be
remedied in time for verification.
Although Izumi submitted its questionnaire responses by the
established deadlines, we were unable to verify their accuracy and
completeness. First, we could not reconcile Izumi's reported material,
labor, and overhead costs to its internal books and records and,
therefore, could not establish whether the reported costs reflect
actual costs for the POR. Thus, we were unable to establish the
accuracy of the information contained in Izumi's questionnaire
responses.
Second, although we addressed deficiencies in Izumi's original
questionnaire response regarding its reporting of VCOM, Izumi still did
not report all appropriate variable cost information. Specifically,
Izumi did not report full POR costs for approximately 75 percent of its
subject merchandise sold in the United States and to third countries.
Izumi was unable to explain why these costs had not been reported. In
addition, we discovered at verification that Izumi did not report all
appropriate third country sales. Because we can not determine the
extent of unreported comparison market sales of identical and similar
merchandise, and we do not have accurate or complete VCOM's, we are
unable to calculate constructed value (CV) or to determine whether we
have the most appropriate third country sales, for purposes of
calculating a dumping margin.
Finally, Izumi has not demonstrated on the record that it acted to
the best of its ability in providing the necessary information. Izumi
elected not to follow the Department's clear instructions, which were
enunciated in several questionnaires, that Izumi must report all
appropriate third country sales and an appropriate cost methodology.
For
[[Page 25455]]
example, the company informed us at verification that it based its
reported material and labor costs on outdated cost data from the
initial antidumping investigation in this case (that was conducted in
1973). Izumi claimed that it updated this data to reflect POR costs.
However, Izumi was unable to explain the methodology used to calculate
the ``updated'' costs, nor was it able to provide any worksheets
showing these calculations, or linking the reported costs to its POR
internal books and records.
For the reasons stated above, the application of section 782(e) of
the Act does not overcome section 776(a)'s direction to use facts
otherwise available for Izumi's submissions. Thus, the use of facts
available is warranted in this case. Further, also as discussed above,
in selecting from among the facts otherwise available, section 776(b)
of the Act authorizes the Department to use an adverse inference if the
Department finds that an interested party failed to cooperate by not
acting to the best of its ability to comply with the request for
information.
In this context, however, although the respondent may not act to
the best of its ability, it may be deemed sufficiently ``cooperative''
and the Department may determine to apply FA that are less adverse. See
discussion above, for OCM.
As discussed above, we found significant problems with Izumi's
submissions. Although we addressed deficiencies in Izumi's
questionnaire responses regarding its reporting of comparison market
sales and variable costs of manufacturing, Izumi still did not report
all appropriate comparison market sales and cost information.
Specifically, we were unable to determine the extent of unreported
comparison market sales of merchandise identical or similar to
merchandise sold in the United States because of various discrepancies
between the information originally submitted and what we found at
verification. Izumi was unable to explain these discrepancies, and at
verification only provided information regarding a portion of the
unreported third country sales. Izumi did not provide in its
questionnaire responses either the calculation methodology employed to
calculate its reported costs or appropriate cost variances. Moreover,
at verification, Izumi was unable to explain how it had attempted to
update the original investigation costs to reflect POR costs.
Accordingly, because Izumi did not act to the best of its ability to
comply with the request for information under section 776(b), an
adverse inference is warranted. However, because Izumi made substantial
efforts to cooperate throughout the course of this review, we are
resorting to facts available that are less adverse to the interests of
Izumi. See, e.g., Fresh Cut Flowers-Colombia (1997).
Therefore, we are assigning Izumi an adverse FA rate of 17.57
percent (a rate calculated for another respondent in a previous review
of this proceeding). This rate is a significant increase from the
company's current cash deposit rate and thus is sufficiently adverse to
induce cooperation by Izumi in future reviews of this proceeding. Since
we are applying FA based on a margin from a prior administrative review
of this finding, we have satisfied the corroboration requirements under
section 776(c) of the Act. See the section below on ``Corroboration of
Information Used as Facts Available.'' For a detailed discussion of
this issue see Memorandum From The Senior Director, AD/CVD Enforcement,
Group II, Office IV to the Acting Deputy Assistant Secretary, Import
Administration regarding Determination of Facts Available Based on
Results of Verification of Izumi Chain Manufacturing Co., Ltd., (April
30, 1998), on file in room B-099, in the main Commerce Building.
The Department also notes that the majority of Izumi's home market
sales were made to an affiliated Japanese manufacturer. Due to this
affiliation, the Department will be reviewing, for the purposes of the
final determination of this administrative review, the appropriateness
of continuing our analysis of Izumi as a separate entity.
B. Partial Facts Available
DK and Enuma
In our initial questionnaire of June 18, 1997, we stated that if a
respondent elected not to supply difference in merchandise (DIFMER)
information and we later determined for any reason that a U.S. sale
should be compared to a sale of a similar product in the comparison
market, we might have to resort to the use of facts otherwise available
(FA).
In response, both Daido and Enuma stated that they believed that
they had identical home market (HM) sales for every U.S. model.
However, both respondents admitted that a matching contemporaneous HM
sale may not exist for every U.S. sale. Both Daido and Enuma contended
that because of the large number of U.S. and HM sales, they had not
been able to determine if there are any unmatched U.S. sales. Both
respondents stated that they would ``report either difference in
merchandise adjustments or constructed values,'' if they found that
``unmatched U.S. sales exist.''
In the supplemental questionnaires to Daido and Enuma dated
September 2, 1997, and November 5, 1997, respectively, we again
informed the respondents that if we determined that there was not a
contemporaneous sale in the HM of an identical model for every model of
roller chain sold in the United States, or such sales could not be used
as a basis for normal value (NV) for any reason, and Daido and Enuma
failed to report their DIFMER data, we might resort to FA in making our
determinations. In its September 16, 1997, response, Daido stated that
``[n]o response was required'' while Enuma in its November 24, 1997,
submission, provided no response except to state that ``[t]his
particular question does not require an answer.'' Furthermore, in an
additional supplemental questionnaire, dated December 11, 1997, we
again asked Daido to confirm that it had reported a contemporaneous
sale of an identical or similar HM model for every sale in the U.S.
market, as requested in the original questionnaire. The supplemental
questionnaire pointed out that if there is not an identical or similar
HM match for each Daido sale in the U.S. market, then it was Daido's
responsibility to submit CV information for those U.S. models which do
not have contemporaneous comparison sales in the HM. Further, we
reiterated to Daido the requirement to report VCOM data for both the
home market and U.S. models and the TCOM for U.S. models, if there are
sales of U.S. models for which there are no contemporaneous home market
sales of identical merchandise. Daido responded that it ``believes that
it has reported a contemporaneous home market sale of an identical
model for every U.S. sale.'' However, in performing product comparisons
for Daido and Enuma, we were unable to identify HM sales of identical
products for every product sold in the United States, as claimed by the
respondents.
Pursuant to 782(d), we provided Daido and Enuma the opportunity to
explain their deficiencies. As noted above, Daido and Enuma failed to
provide VCOM and/or CV information in response to our initial
questionnaire. Each was sent a supplemental questionnaire requesting
the VCOM and /or CV information. Neither Daido nor Enuma provided the
requested data. Therefore, section 776(a) directs the Department to use
facts otherwise available, subject to section 782(e).
Because the information at issue submitted by Daido and Enuma was
so incomplete that it cannot serve as a
[[Page 25456]]
reliable basis for the unmatched U.S. sales, and by refusing to remedy
the deficiencies in that information Daido and Enuma failed to act to
best of their abilities, section 782(e) authorizes the Department to
decline to consider the deficient information and resort to facts
otherwise available.
The failure by Daido and Enuma to report DIFMER and/or CV data,
information which we requested in our original and in our supplemental
questionnaire(s) and information which they controlled, despite our
warnings regarding the consequences of such an action, demonstrates
that Daido and Enuma failed to cooperate to the best of their ability.
Given Daido and Enuma's lack of cooperation, we are assigning their
unmatched sales an FA margin of 42.48 percent, the rate calculated for
Kaga in the instant review.
Kaga
As a result of our analysis of the revised U.S. sales databases
submitted by Kaga, on January 22, 1998, we identified a number of sales
transactions listed in the U.S. sales databases which have missing
values (e.g. VCOM, gross unit price (GRSUPRU), etc.). In letters dated
March 25, 1998 and March 31, 1998, we requested that Kaga provide a
revised U.S. sales tape containing the missing information we had
identified. Further, we requested that Kaga check its databases to
determine if any other transactions not identified in our request had
missing values. If so, we asked that this information be provided as
well.
On April 1, 1998, we received a call from counsel for Kaga who
explained that in responding to our March 25, 1998, request for
information regarding missing values, Kaga discovered other errors. We
instructed Kaga to submit revised sales tapes for the United States and
HM and informed Kaga that if we found errors or had difficulty in using
the data on the revised tapes, we may proceed with our determination
based on facts available.
On April 6, 1998, Kaga submitted revised sales data for constructed
export price (CEP) sales and for export price (EP) sales to one
customer but stated that it had been unable to locate any missing data
for sales to the other EP customer. In addition, Kaga reported that it
had made corrections with respect to packing, brokerage and handling,
sale date, and freight from port to warehouse. However, in performing
product comparisons for Kaga, we found several transactions with
missing values in the U.S. sales databases, including VCOM, TCOM,
number of strands, and GRSUPRU.
Pursuant to 782(d), we provided Kaga the opportunity to explain its
deficiencies. We sent Kaga a supplemental questionnaire addressing
deficiencies in its response. Although Kaga responded to our
supplemental request for information, despite our warnings that we
might proceed with our determination based on facts available if we
found errors or had difficulty in using Kaga's revised data, the
information provided was deficient. Therefore, Section 776(a) directs
the Department to use facts otherwise available, subject to Section
782(e).
The application of Section 782(e) of the Act does not overcome
Section 776(a)'s direction to use facts otherwise available for Kaga's
U.S. sales database. Because several transactions in Kaga's U.S. sales
databases have missing values for specific variables that are necessary
for matching to HM sales, we are unable to calculate a margin for these
U.S. sales.
Kaga's failure to provide data for specific variables which are
essential to our determination of model match (e.g., VCOM, TCOM, etc.),
despite our pointing out to Kaga exactly what was missing, demonstrates
that Kaga failed to cooperate to the best of its ability especially in
light of Kaga's ability to provide the same type of information for
other sales.
Given Kaga's lack of cooperation, we recommend assigning to Kaga's
unmatched sales, an FA margin of 42.48 percent, which is the rate
calculated for Kaga's other sales in the instant review and is one of
the highest margins calculated in the history of this proceeding.
Sugiyama
As with the other respondents in this review, pursuant to section
782(d) of the Act, we provided Sugiyama the opportunity to explain
deficiencies we noted in the responses. To that end, we issued
supplemental questionnaires to Sugiyama on September 5, 1997, November
26, 1997, November 28, 1997, and December 17, 1997. We noted that in
its original Section B response, Sugiyama reported that one of its
affiliated home market resellers (hereafter referred to as reseller A)
had sales to two customers in the home market during the POR. However,
in its revised database, submitted in January 1998, in response to the
Department's supplemental questionnaires, Sugiyama included previously
unreported sales by reseller A to multiple additional customers. After
careful review of this submission, we discovered that Sugiyama had
increased its home market sales database by more than 40 percent.
Sugiyama's failure to identify the magnitude of the increased sales
resulted in the Department's rejecting this submission. However, we
reconsidered this decision and in March accepted the submission,
stating that we were not certain how we would treat the newly reported
sales. Subsequently, after the deadline had passed for submission of
new factual information, Sugiyama advised the Department that several
of those additional customers were affiliated with reseller A.
Given the lateness of these submissions, the extent of the
additional information provided, and concerns about establishing the
accuracy of the data, we are excluding this data from our preliminary
margin calculations. Further, we have identified all U.S. transactions
where the normal value that would have been used for comparison
purposes relied in whole or in part on those newly reported home market
sales and applied a margin based on the FA to the U.S. sales in
question.
The preceding analysis demonstrates that Sugiyama failed to
cooperate to the best of its ability. Thus, in accordance with section
776(b), in selecting among the FA for this respondent, we believe that
an adverse inference is warranted. Given Sugiyama's lack of
cooperation, we assigned as FA to the U.S. sales in question, the 42.48
percent rate calculated for Kaga in the instant review.
Between the preliminary and final review results, we will address
the appropriateness of including the additional transactional data in
our final margin analysis.
3. Corroboration of Information used as Facts Available
Section 776(b) of the Act authorizes the Department to use as
adverse FA information derived from the petition, the final
determination from the LTFV investigation, a previous administrative
review, or any other information placed on the record.
Section 776(c) of the Act requires the Department to corroborate,
to the extent practicable, secondary information used as facts
available. Secondary information is described in the SAA (at 870) as
``[i]nformation derived from the petition that gave rise to the
investigation or review, the final determination concerning the subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.''
The SAA further provides that ``corroborate'' means simply that the
Department will satisfy itself that the secondary information to be
used has
[[Page 25457]]
probative value (see SAA at 870). Thus, to corroborate secondary
information, the Department will, to the extent practicable, examine
the reliability and relevance of the information used. However, unlike
other types of information, such as input costs or selling expenses,
there are no independent sources for calculated dumping margins. The
only source for margins is an administrative determination. Thus, in an
administrative review, if the Department chooses as total adverse FA a
calculated dumping margin from a prior segment of the proceeding, it is
not necessary to question the reliability of the margin from that time
period (i.e., the Department can normally be satisfied that the
information has probative value and that it has complied with the
corroboration requirements of section 776(c) of the Act. See, e.g.,
Elemental Sulphur from Canada: Preliminary Results of Antidumping Duty
Administrative Review, 62 FR at 971 (January 7, 1997) and AFBs-1997.
As to the relevance of the margin used for adverse FA, the
Department stated in Tapered Roller Bearings from Japan; Final Results
of Antidumping Duty Administrative Review 62 FR 47454 (Sept. 9, 1997)
that it will ``consider information reasonably at its disposal as to
whether there are circumstances that would render a margin irrelevant.
Where circumstances indicate that the selected margin is not
appropriate as adverse [FA], the Department will disregard the margin
and determine an appropriate margin.'' See also Fresh Cut Flowers from
Mexico; Preliminary Results of Antidumping Duty Administrative Review,
60 FR 49567. We have determined that there is no evidence on the record
of the 1987-1988 administrative review, where we calculated the 17.57
percent rate for Hitachi Metals, that would indicate that the 17.57
percent rate is irrelevant or inappropriate as an adverse FA rate for
certain respondents in the instant review. Therefore, where we have
applied as FA, the 17.57 margin from a prior administrative review of
this finding, we have satisfied the corroboration requirements under
section 776(c) of the Act.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products covered by the Scope of the Review, which were produced and
sold by the respondent in the home market during the POR, to be foreign
like products for purposes of product comparisons to U.S. sales. Where
there were no sales of identical or similar merchandise in the home
market to compare to U.S. sales, we compared U.S. sales to the CV of
the product sold in the U.S. market during the comparison period.
In past segments of this proceeding, we have used the model match
databases submitted by the respondents to identify identical and
similar merchandise in the home market. For this review, however, we
have determined it appropriate to make the analysis in this proceeding
consistent with the Department's practice of defining identical and
similar merchandise based on the product characteristics outlined in
the antidumping questionnaire.
In the final results of the prior segment of this proceeding, we
stated our intent to use the model match comments received in that
review as a starting point for determining the appropriate model match
criteria to be employed in future reviews. See Notice of Final Results
and Partial Recission of Antidumping Duty Administrative Review: Roller
Chain, Other Than Bicycle, From Japan, 62 FR at 60475 (November 10,
1997). Using these comments, we developed proposed model match criteria
and issued the proposal to all parties in a letter dated November 26,
1997. Additional comments were received from all parties on December
12, 1997 and December 15, 1997. Based on our analysis of all comments
received as well as our examination of questionnaire responses, product
catalogs of various respondents in the current review, and the model
matching methodology used by the Department in prior segments of this
proceeding, we developed our model match criteria based on eighteen
product characteristics as outlined in our supplemental questionnaire
of December 19, 1997.
Fair Value Comparisons
To determine whether sales of the subject merchandise by the
respondents to the United States were made at below NV, we compared the
EP or CEP to the NV, as described in the ``export price,''
``constructed export price,'' and ``normal value'' sections of this
notice. In accordance with section 777A(d)(2) of the Act, we compared,
where appropriate, the EPs and CEPs of individual transactions to the
monthly weighted-average NV of contemporaneous sales of the foreign
like product.
Export Price
For the price to the United States, we used EP, as defined in
section 772(a) of the Act, where the subject merchandise was sold
directly to the first unaffiliated purchaser in the United States prior
to importation and the CEP methodology was not otherwise warranted
based on the facts of the record. In accordance with section 772(c)(2)
of the Act, we made deductions, where appropriate, for foreign inland
freight from the plant to the port, foreign inland insurance, foreign
brokerage and handling, international freight, and marine insurance
because these expenses were incident to bringing the subject
merchandise from the original place of shipment in the exporting
country to the place of delivery.
Constructed Export Price
The Department based its margin calculation on CEP, as defined in
section 772(b) (c) and (d) of the Act, where sales to the first
unaffiliated purchaser in the United States took place after
importation or where CEP methodology was otherwise warranted.
In the case of RK, the company reported its sales through NIC and
its direct sales to ATSI as EP sales where the price and quantity sold
to unaffiliated parties were established prior to exportation and the
merchandise did not enter ATSI's inventory. When sales are made prior
to the date of importation through an affiliated or unaffiliated sales
entity in the United States, the Department uses the following criteria
to determine whether U.S. sales should be classified as EP sales: (1)
whether the merchandise in question is shipped directly from the
manufacturer to the unaffiliated buyer without being introduced into
the physical inventory of the selling agent; (2) whether direct
shipment from the manufacturer to the unaffiliated buyer is the
customary channel for sales of the subject merchandise between the
parties involved; and (3) whether the selling agent in the United
States acts only as a processor of sales-related documentation and a
communication link (i.e., ``a paper-pusher'') with the unaffiliated
U.S. buyer. Where the factors indicate that the activities of the
selling entity in the United States are ancillary to the sale (e.g.,
arranging transportation or customs clearance), we treat the
transactions as EP sales. Where the U.S. selling agent is substantially
involved in the sales process (e.g., negotiating prices), we treat the
transactions as CEP sales. See Notice of Preliminary Determination of
Sales at Less Than Fair Value: Stainless Steel Wire Rod From Spain , 63
FR 10849,10852 (March 5, 1998).
Based on our review of the record information concerning RK's sales
described above, we preliminarily determine that these sales are CEP
[[Page 25458]]
transactions. We note that according to RK the customary channel is to
sell the merchandise prior to importation and ship the merchandise
directly from RK or RK/NIC to the unaffiliated buyer in the United
States without being introduced into the physical inventory of ATSI.
However, during the POR, FTM & Associates (FTM), an unaffiliated U.S.
sales company, acted as a selling agent for RK and RK/NIC with respect
to all RK-produced merchandise sold in the United States that did not
enter into ATSI's inventory. FTM was responsible for introducing
potential new customers and sales to RK and its affiliates, U.S.
advertising, and all customer contact. Thus, FTM acted as more than
just a paper processor or communication link for sales of RK-produced
merchandise. Accordingly, for purposes of these preliminary results, we
are treating the sales in question as CEP sales. For a more detailed
discussion of this issue, see the April 30, 1998, Memorandum to the
Acting Deputy Assistant Secretary, Import Administration, regarding
Treatment of Certain RK Excel U.S. Sales of Subject Merchandise as
Constructed Export Price or Export Price Transactions, on file in room
B-099, of the main Commerce Building.
We calculated CEP based on delivered prices to unaffiliated
purchasers in the United States. Where appropriate, the Department made
adjustments for discounts and rebates. Also where appropriate, we
deducted credit expenses, direct selling expenses and indirect selling
expenses, including inventory carrying costs, which related to
commercial activity in the United States. We also made deductions,
where appropriate, for movement expenses (foreign inland freight,
foreign brokerage and handling, international freight and insurance,
U.S. duties, U.S. brokerage and handling, and U.S. inland-freight and
insurance), and pursuant to section 772(d)(3), where applicable, we
made an adjustment for CEP profit. With regard to RK and Sugiyama, the
only respondents in this review who further-manufactured the
merchandise in the United States, we made a deduction for the cost of
further manufacturing in the United States in accordance with section
772(d)(2) of the Act.
Normal Value
Viability
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared each respondent's volume of home market sales of the
foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1) of the Act. For DK,
Enuma, RK, Sugiyama, and Kaga, we determined that the quantity of
foreign like product sold in the exporting country was sufficient to
permit a proper comparison with the sales of the subject merchandise to
the United States because each of these respondents made home market
sales which were greater than five percent of its sales in the U.S.
market.
Arms-Length Transactions for Enuma and Sugiyama
Sales to affiliated customers in the home market for Enuma and
Sugiyama which were determined not to be at arms-length were excluded
from our analysis. To test whether these sales were made at arms-
length, we compared the starting prices of sales of comparison products
to affiliated and unaffiliated customers, net of all movement charges,
direct and indirect selling expenses, discounts, and packing. Pursuant
to 19 CFR 353.45(a) and in accordance with our practice, where the
price to the affiliated party was less than 99.5 percent or more of the
price to the unaffiliated party, we determined that the sales made to
the affiliated party were not at arm's length. We disregarded all sales
of Sugiyama's and Enuma's home market customers that did not pass the
arms-length test.
Level of Trade
In accordance with section 773(a)(7) 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 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, that of the sales from which we derive selling,
general, and administrative (SG&A) expenses and profit. For EP sales,
the U.S. level of trade is also the level of the starting-price sale,
which is usually from exporter to importer. For CEP sales, it is the
level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different level of trade
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. Customer categories such as distributor,
original equipment manufacturer, or reseller are commonly used by
respondents to describe levels of trade but are insufficient to
establish an LOT. Different levels of trade necessarily involve
differences in selling functions, but differences in selling functions,
even substantial ones, are not alone sufficient to establish a
difference in the the levels of trade. Different levels of trade are
characterized by purchasers at different stages in the chain of
distribution and sellers performing qualitatively or quantitatively
different selling functions in selling to them.
If we find that the comparison-market sales are at a different
level of trade, 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 level of
trade of the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, 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). 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 (November 19, 1997).
In order to determine whether a LOT adjustment or CEP offset was
warranted for Kaga, RK, Enuma, DK and Sugiyama, we compared the EP and
CEP sales to the HM sales in accordance with the principles discussed
above. For purposes of our analysis, we examined information regarding
the distribution systems in both the United States and the Japanese
markets, including the selling functions, classes of customer, and
selling expenses for each of the above companies.
Based on our analysis of these factors, we found for each
respondent that no LOT difference existed between its U.S. and home
market. Therefore, we have made no LOT adjustment for any of these
respondents. For a detailed discussion of the LOT issues, see the April
30, 1998, memoranda to the Program Manager from the Team, regarding the
LOT analysis for Kaga, RK, Enuma, Daido and Sugiyama.)
Constructed Value
For Sugiyama's, RK's, and Kaga's products for which we could not
determine the NV based on home market sales of roller chain, because
there were no contemporaneous sales of a comparable product, we
compared U.S. prices to CV. In accordance with section 773(e)(1) of the
Act, we calculated CV based on the sum of the cost of manufacturing
(COM) of the product sold in the United States, plus amounts for home
market SG&A
[[Page 25459]]
expenses, profit, and U.S. packing costs. In accordance with section
773(e)(2)(A), we used the actual amounts incurred and realized by the
respective manufacturers in connection with the production and sale of
the foreign like product, in the ordinary course of trade, for
consumption in the foreign country to calculate SG&A expenses and
profit.
Price-to-Price Comparisons
We based NV on packed, ex-factory or delivered prices to
unaffiliated purchasers in the home market. We made adjustments, where
applicable, in accordance with section 773(a)(6) of the Act. Where
applicable, we made adjustments to home market prices for discounts,
rebates, inland freight, insurance, technical services, and other
direct selling expenses. To adjust for differences in circumstances of
sales (COS) between the home market and the EP and CEP transactions in
the United States, we reduced home market prices by an amount for home
market credit expenses. For comparison to EP transactions we also made
an upward adjustment for U.S. credit expenses. We also made adjustments
for indirect selling expenses incurred on comparison market or U.S.
sales where commissions were granted on sales in one market but not in
the other (the commission offset), pursuant to 19 CFR 353.56(b). To
adjust for differences in packing between the two markets, we adjusted
the home market price by deducting HM packing costs and adding U.S.
packing costs. In addition, we made adjustments, where appropriate, for
differences in costs attributable to physical differences of the
merchandise pursuant to section 773(a)(6)(C)(ii) of the Act.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act and 19 CFR 353.56 for COS
differences. For comparisons to EP, where appropriate, we made COS
adjustments by deducting direct selling expenses incurred on home
market sales and adding U.S. direct selling expenses. For comparisons
to CEP, where appropriate, we made COS adjustments by deducting direct
selling expenses incurred on home market sales. We also made
adjustments, where applicable, for the commission offset in the manner
described above.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the official exchange rates published by the
Federal Reserve in effect on the dates of the U.S. sales. Section
773A(a) of the Act directs the Department to use a daily exchange rate
in effect on the date of sale of subject merchandise in order to
convert foreign currencies into U.S. dollars, unless the daily rate
involves a ``fluctuation.'' In accordance with the Department's
practice, we have determined as a general matter that a fluctuation
exists when the daily exchange rate differs from a benchmark by 2.25
percent. (For a detailed explanation, see Policy Bulletin 96-1:
Currency Conversions, 61 FR 9434, March 8, 1996.) The benchmark is
defined as the rolling average of rates for the past 40 business days.
When we determine that a fluctuation exists, we substitute the
benchmark for the daily rate. We have determined that no fluctuation
existed in this review, therefore, we have made currency conversions
based on the daily exchange rates.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following margins exist for the period April 1, 1996, through March 31,
1997:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/exporter margin
percentage
------------------------------------------------------------------------
Daido Kogyo Company Ltd.................................... 0.03
Enuma Chain Mfg. Company................................... 0.06
Izumi Chain Mfg. Company Ltd............................... 17.57
Pulton Chain Company Inc................................... 42.48
R.K. Excel Company Ltd..................................... 10.29
Kaga Kogyo/Kaga Industries................................. 42.48
Oriental Chain Company..................................... 17.57
Sugiyama Chain Company, Ltd................................ 31.50
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five 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 date of publication or the
first business day thereafter. Issues raised in hearings 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. Parties who submit
case briefs or rebuttal briefs in this proceeding are requested to
submit with each argument (1) a statement of the issue, (2) a brief
summary of the argument not to exceed five pages, and (3) a table of
authorities cited.
The Department will subsequently issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or at the hearing, if held, not later
than 180 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. The Department will
issue appropriate appraisement instructions directly to the Customs
Service upon completion of this review. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review and for future deposits
of estimated duties. For duty assessment purposes, for CEP sales we
calculated an importer-specific assessment rate by aggregating the
dumping margins calculated for all U.S. sales to each importer and
dividing this amount by the total value of subject merchandise entered
during the POR for each importer. In order to estimate the entered
value, we subtracted international movement expenses from the gross
sales value. For assessment of EP sales we calculated a per unit
importer-specific assessment rate by aggregating the dumping margins
calculated for all U.S. sales to each importer and dividing this amount
by the total quantity of subject merchandise entered during the POR for
each importer.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this antidumping duty review
for all shipments of roller chain from Japan, entered, or withdrawn
from warehouse, for consumption on or after the publication date, as
provided by section 751(a) of the Tariff Act: (1) the cash deposit
rates for the reviewed companies will be those established in the final
results of this review; (2) for exporters not covered in this review,
but covered in the LTFV investigation or prior reviews, the cash
deposit rate will continue to be the company-specific rate from the
LTFV investigation or the prior review; (3) if the exporter is not a
firm covered in this review, 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 15.92 percent, the ``All
Others'' rate based on the first review conducted by the Department in
which a new shipper rate was established in the final results of
[[Page 25460]]
antidumping finding administrative review (48 FR 51801, November 14,
1983). These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 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
sections 751(a)(1) and 777 (i)(1) of the Act.
Dated: April 30, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-12206 Filed 5-7-98; 8:45 am]
BILLING CODE 3510-DS-P
