[Federal Register Volume 61, Number 108 (Tuesday, June 4, 1996)]
[Notices]
[Pages 28171-28174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13965]
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DEPARTMENT OF COMMERCE
[A-588-028]
Roller Chain, Other Than Bicycle, 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 from the American Chain Association
(ACA), petitioner in this proceeding, the Department of Commerce (the
Department) has conducted administrative reviews of the antidumping
finding on roller chain, other than bicycle, from Japan. The reviews
cover two manufacturers/exporters of the subject merchandise to the
United States during the period April 1, 1992 through March 31, 1993,
and six manufacturers/ exporters of this merchandise to the United
States during the period April 1, 1993 through March 31, 1994. The
reviews indicate the existence of dumping margins for certain firms
during the relevant periods.
If these preliminary results are adopted in our final results of
administrative reviews, we will instruct the U.S. Customs Service
(Customs) to assess antidumping duties equal to the difference between
the United States price (USP) and the foreign market value (FMV).
We invite interested parties to comment on these preliminary
results. Parties who submit argument in this
[[Page 28172]]
proceeding are requested to submit with the argument (1) a statement of
the issue and (2) a brief summary of the argument.
EFFECTIVE DATE: June 4, 1996.
FOR FURTHER INFORMATION CONTACT: Jack Dulberger, Matt Blaskovich, Ron
Trentham or Joseph Hanley, Office of Antidumping Compliance,
International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230; telephone (202) 482-5253.
SUPPLEMENTARY INFORMATION:
Background
On May 27, 1993, in response to a timely request from petitioner,
the Department published a notice of initiation of review for the
period April 1, 1992 through March 31, 1993, for Daido Kogyo, Ltd.
(Daido), Enuma Chain Mfg. Co., Ltd. (Enuma), Hitachi Metals Techno Ltd.
(Hitachi), Izumi Chain Manufacturing Co., Ltd. (Izumi), Pulton Chain
Co., Ltd. (Pulton), and R.K. Excel. The reviews for Hitachi, Izumi,
Pulton and R.K. Excel were conducted separately. On December 6, 1995,
the Department published in the Federal Register (60 FR 62387), the
final results of the 1992-93 administrative review of the antidumping
finding on roller chain, other than bicycle, from Japan (38 FR 9226,
April 12, 1973) for Hitachi, Izumi, Pulton and R.K. Excel. On May 15,
1994, in response to a timely request from petitioner, the Department
published a notice of initiation of review for the period April 1, 1993
through March 31, 1994 for the following six companies: Daido, Enuma,
Hitachi, Izumi, Pulton, and R.K. Excel. Hitachi and Pulton asserted
that they had no sales during the period of review (POR).
Applicable Statute and Regulations
The Department is conducting these reviews in accordance with
section 751 of the Tariff Act of 1930, as amended (the Act) and
Sec. 353.22 of the Department's regulations (19 CFR 353.22). Unless
otherwise indicated, all citations to the statute and to the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994.
Scope of the Review
Imports covered by the reviews are shipments of roller chain, other
than bicycle, from Japan. The term ``roller chain, other than
bicycle,'' as used in these reviews 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
transmission and/or conveyance. Such 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 conveyer chain.
These reviews also cover 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. These reviews
further cover 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. HTSUS item numbers
are provided for convenience and Customs purposes. The written
description remains dispositive.
Best Information Available (BIA)
In accordance with section 776(c) of the Tariff Act, the Department
has preliminarily determined that the use of best information available
(BIA) is appropriate for Pulton for the 1993-94 POR and for Daido and
Enuma for the 1992-1993 and 1993-1994 PORs. In determining what to use
as BIA, 19 CFR 353.37(b) provides that the Department may take into
account whether a party fails to provide requested information. When a
company fails to provide the information requested in a timely manner,
or otherwise significantly impedes the Department's review, the
Department considers that company to be uncooperative, and, in
accordance with its two-tier BIA methodology, generally assigns that
company first-tier BIA, which is the higher of (1) the highest rate for
any company for the same class or kind of merchandise from any previous
review or the original investigation, or (2) the highest rate for a
responding firm with shipments of the same class or kind of merchandise
during the current review period.
When a company has substantially cooperated with our requests for
information including, in some cases, verification, but fails to
provide complete or accurate information, we assign that company
second-tier BIA, which is the higher of: (1) the highest rate
(including the ``all others'' rate) ever applicable to the firm for the
same class or kind of merchandise from either the LTFV investigation or
a prior administrative review or, if the firm has never before been
investigated or reviewed, the all others rate from the LTFV
investigation; or (2) the highest calculated rate in this review for
the same class or kind of merchandise for any firm. (Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From
the Federal Republic of Germany, et al; Final Results of Antidumping
Duty Administrative Review, 56 FR 31692, 31704-05 (July 11, 1991);
Allied Signal Aerospace Co. v. United States, 996 F. 2d 1185 (Fed. Cir.
1993)).
Results Based on Total BIA
In response to the Department's questionnaire, Pulton stated that
it had no sales and no exports to U.S. customers during the 1993-94
period of review (POR). Subsequently, the Department received
information from Customs indicating that there were entries of roller
chain, other than bicycle, manufactured by Pulton during the POR.
When presented with this information, Pulton stated that it had
inadvertently failed to report one shipment of subject merchandise
during the POR. Because Pulton failed to report the shipment of subject
merchandise in response to the Department's questionnaire, we have
treated Pulton as uncooperative and used first-tier BIA (see above) to
determine its dumping margin for this review. In this case the rate
used was 43.29 percent which was from the first roller chain review
completed by the Department (46 FR 44488, September 4, 1981).
Assignment of Partial BIA
Partial BIA was applied in cases where we were unable to use some
portion of a response in calculating a dumping margin. The use of
partial rather than total BIA reflects the fact that, in general, the
respondent has been cooperative.
During the 1993-94 POR, a large portion of Izumi's home market (HM)
sales were to an affiliated reseller. We have concluded that the
extremely small percentage of Izumi's remaining HM sales to
unaffiliated customers do not provide a sufficient factual basis to
determine whether sales to the affiliated reseller were made at arm's-
length prices. See Television Receivers, Monochrome and Color, from
Japan; Final, Results of Antidumping Duty Administrative Review, 52 FR
8940, 8943 (March 20, 1987), and Certain Stainless Steel Cooking Ware
from the Republic of Korea; Preliminary Results of Antidumping Duty
Administrative
[[Page 28173]]
Review, 61 FR 8253 (March 4, 1996). Further, Izumi did not submit
information concerning home market downstream sales (sales by the
affiliated customer to unaffiliated customers).
During the 1992-93 and 1993-94 PORs, further processing costs were
incurred by Daido and Enuma in sales of further-assembled, attachment-
equipped roller chain, through their United States subsidiary, Daido
Corporation. However, Daido and Enuma reported transfer prices rather
than actual material costs, and used a cost allocation methodology
which, upon analysis, we determined was in a form not providing a
reliable indication of their actual further processing costs.
Additionally, Daido and Enuma refused to provide the Department with
the necessary model match and difference in merchandise adjustment
information necessary to calculate a dumping margin for certain U.S.
sales where there were no contemporaneous sales of identical
merchandise in the home market.
However, because the overall integrity of Izumi, Daido and Enuma's
questionnaire responses warrants a calculated rate, but certain U.S.
sales lacked the proper further manufacturing, model match, or
downstream sales information necessary to calculate a dumping margin,
we applied the appropriate second-tier BIA rate (see above) to each
respondent. For the 1992-93 POR we assigned the second-tier BIA rate of
1.19 percent to Daido and Enuma which is the highest rate previously
assigned to Daido and Enuma in the final results of the April 1, 1979
through September 30, 1979 antidumping administrative review (46 FR
44488, 44490, September 4, 1981). For the 1993-94 POR we applied the
second-tier BIA rate of 2.17 percent to Daido and Enuma which is the
highest calculated rate in these preliminary results, and the second-
tier BIA rate of 43.29 percent to Izumi, which is the highest rate
previously assigned to Izumi in the final results of the April 1, 1983
through March 31, 1984 antidumping administrative review (57 FR 46535,
October 9, 1992). We limited application of these rates to the
particular transactions involved.
United States Price (USP)
In calculating USP for the 1992-93 and 1993-94 PORs for all
companies subject to these reviews, the Department used purchase price
(PP) as defined in section 772 (b) of the Act, when the sale to the
first unrelated purchaser occurred prior to importation. The Department
treated Daido and Enuma's sales as exporter's sale price (ESP) sales,
as defined in section 772(c) of the Act, when subject merchandise was
sold to unrelated U.S. purchasers after importation. PP sales were
based on the packed, FOB or ex-go-down Japanese port price, or CIF U.S.
port prices to unrelated purchasers in the United States. For PP sales,
we made adjustments, where applicable, for brokerage and handling
charges, foreign inland freight, foreign inland insurance, ocean
freight, marine insurance, commissions, discounts, credit expenses, and
bank charges in accordance with 772(d)(2) of the Act.
ESP for the 1992-93 and 1993-94 PORs for Daido and Enuma was based
on the packed, FOB warehouse or delivered price to unrelated
purchasers. We made adjustments, where applicable, for brokerage and
handling charges, movement expenses, marine insurance, inventory
expenses, credit expenses, packing costs, indirect selling expenses,
and commissions in accordance with 772(d)(2) of the Act. During the
1992-93 and 1993-94 PORs, further processing costs were incurred by
Daido and Enuma's United States subsidiary, Daido Corporation. However,
we determined that the reporting methodology of such expenses is
unreliable and assigned a BIA margin to sales that incurred such
expenses (see BIA above).
In light of the Federal Circuit's decision in Federal Mogul versus
United States, 63 F.3d 1572 (Fed. Cir. 1995), the Department has
changed its treatment of home market consumption taxes. Where
merchandise exported to the United States is exempt from the
consumption tax, the Department will add to the U.S. price the absolute
amount of such taxes charged on the comparison sales in the home
market. This is the same methodology that the Department adopted
following the decision of the Federal Circuit in Zenith versus United
States, 988 F. 2d 1573, 1582 (1993), and which was suggested by that
court in footnote 4 of its decision. The Court of International Trade
(CIT) overturned this methodology in Federal Mogul versus United
States, 834 F. Supp. 1391 (1993), and the Department acquiesced in the
CIT's decision. The Department then followed the CIT's preferred
methodology, which was to calculate the tax to be added to U.S. price
by multiplying the adjusted U.S. price by the foreign market tax rate;
the Department made adjustments to this amount so that the tax
adjustment would not alter a ``zero'' pre-tax dumping assessment.
The foreign exporters in the Federal Mogul case, however, appealed
that decision to the Federal Circuit, which reversed the CIT and held
that the statute did not preclude Commerce from using the ``Zenith
footnote 4'' methodology to calculate tax-neutral dumping assessments
(i.e., assessments that are unaffected by the existence or amount of
home market consumption taxes). Moreover, the Federal Circuit
recognized that certain international agreements of the United States,
in particular the General Agreement on Tariffs and Trade (GATT) and the
Tokyo Round Antidumping Code, required the calculation of tax-neutral
dumping assessments. The Federal Circuit remanded the case to the CIT
with instructions to direct Commerce to determine which tax methodology
it will employ.
The Department has determined that the ``Zenith footnote 4''
methodology should be used. First, as the Department has explained in
numerous administrative determinations and court filings over the past
decade, and as the Federal Circuit has now recognized, Article VI of
the GATT and Article 2 of the Tokyo Round Antidumping Code required
that dumping assessments be tax-neutral. This requirement continues
under the new Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade. Second, the URAA explicitly amended the
antidumping law to remove consumption taxes from the home market price
and to eliminate the addition of taxes to U.S. price, so that no
consumption tax is included in the price in either market. The
Statement of Administrative action (p.159) explicitly states that this
change was intended to result in tax neutrality.
While the ``Zenith footnote 4'' methodology is slightly different
from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA
law required that the tax be added to United States price rather than
subtracted from home market price, it does result in tax-neutral duty
assessments. In sum, the Department has elected to treat consumption
taxes in a manner consistent with its longstanding policy of tax-
neutrality and with the GATT.
Foreign Market Value (FMV)
In calculating FMV for the 1992-93 and 1993-94 PORs for all
companies subject to these reviews, the Department used home market
price, as defined in section 773 of the Tariff Act, when sufficient
quantities of such or similar merchandise were sold in the home market
to provide a basis for comparison.
We utilized constructed value (CV) as the basis for FMV for those
U.S. sales by Izumi during the 1993-94 POR for
[[Page 28174]]
which there were no corresponding home market model matches, in
accordance with section 773(a) of the Tariff Act.
Home market price, for the 1992-93 and 1993-94 PORs for all
companies subject to these reviews, was based on a packed, FOB or CIF,
delivered price to related and unrelated purchasers in Japan. We
calculated CV for Izumi for the 1993-94 POR as the sum of materials,
fabrication costs, general expenses, profit and U.S. packing. We added
statutory or actual amounts for the general expenses and profit
components of CV, as appropriate.
For PP sales comparisons, where applicable, for all companies
subject to the 1992-93 and 1993-94 PORs, we made deductions from FMV
for brokerage, inland freight, insurance and discounts. Where
applicable, we made adjustment for differences in packing expenses,
credit expenses, advertising expenses, warranty expenses, technical
services, and differences in merchandise. We made further adjustments,
where appropriate, for U.S. commissions in accordance with 19 CFR
353.56(a)(2). Where commissions were paid on U.S. sales and not paid on
home market sales, we allowed an offset to FMV amounting to the lesser
of the weighted-average home market indirect selling expenses or the
U.S. commissions in accordance with 19 CFR 353.58(b) of the
Department's regulations. We also made an adjustment to FMV for
consumption taxes in accordance with the ``Zenith footnote 4''
methodology discussed above.
For comparison to ESP sales by Daido and Enuma during the 1992-93
and 1993-94 PORs, we allowed an ESP offset to FMV, amounting to the
lesser of the weighted-average total of home market indirect selling
expenses or the total U.S. indirect selling expenses, in accordance
with 19 CFR 353.56(b)(2). No other adjustments were claimed or allowed.
We conducted an arms's length test and determined that Izumi's
sales to its related customers during the 1993-94 POR were made at
arm's length because the prices Izumi charged to its related customers
were at least 99.5 percent of the prices it charged to unrelated
customers.
Preliminary Results of the Review
As a result of this review, we preliminarily determine the
following dumping margins for the period April 1, 1992 through March
31, 1993:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Daido....................................................... 0.15
Enuma....................................................... 0.04
------------------------------------------------------------------------
Further, we preliminarily determine the following dumping margins for
the period April 1, 1993 through March 31, 1994:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Hitachi..................................................... *12.68
Izumi....................................................... 23.57
Pulton...................................................... **43.29
RK Excel.................................................... 2.17
Daido....................................................... 0.03
Enuma....................................................... 0.06
All Others.................................................. 15.92
------------------------------------------------------------------------
* No sales during the period. Rate is from the last period in which
there were sales.
** Not a calculated rate. Rate reflects the assignment of first-tier
total BIA (see BIA section above).
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between United States price and FMV may vary from the percentages
stated above. Upon completion of the review the Department will issue
appraisement instructions on each exporter directly to Customs.
Interested parties may request disclosure within five days of the
date of publication of this notice, and may request a hearing within
ten days of the date of publication. Any hearing, if requested, will be
held as early as convenient for the parties but not later than 44 days
after the date of publication or the first work day thereafter. Case
briefs or other written comments from interested parties may be
submitted not later than 30 days after the date of publication of this
notice. Rebuttal briefs and rebuttal comments, limited to issues in the
case briefs, may be filed not later than 37 days after the date of
publication. The Department will publish the final results of this
administrative review, including the results of its analysis of issues
raised in any such written comments or at a hearing.
Furthermore, the following deposit requirements will be effective
for all shipments of roller chain, other than bicycle, from Japan,
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 rate for the reviewed companies will be those
rates outlined above, except for Daido and Enuma, which, because their
weighted-average margins were de minimis, will be zero percent;
(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 in the original less-than-fair-value (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) If neither the exporter nor the manufacturer is a firm covered
in this or any previous review conducted by the Department, the cash
deposit rate will be 15.92, 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 antidumping finding administrative
review (48 FR 51801, November 14, 1983).
These deposit 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 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)(a) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: May 28, 1996.
Paul L. Joffe,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-13965 Filed 6-3-96; 8:45 am]
BILLING CODE 3510-DS-P
