[Federal Register Volume 63, Number 132 (Friday, July 10, 1998)]
[Notices]
[Pages 37331-37334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18307]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-810]
Mechanical Transfer Presses From Japan; Final Results of
Antidumping Duty Administrative Review and Revocation of Antidumping
Duty Administrative Order in Part
AGENCY: International Trade Administration/Import Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review and revocation of antidumping duty administrative order in part.
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SUMMARY: On March 6, 1998, the Department of Commerce (the Department)
published in the Federal Register the preliminary results of its
antidumping duty administrative review of the antidumping duty order on
mechanical transfer presses (MTPs) from Japan and intent to revoke in
part with respect to respondent Aida Engineering, Ltd. (Aida) (63 FR
11211). This review covers two manufacturers/exporters of the subject
merchandise to the United States and the period of February 1, 1996
through January 31, 1997. We gave interested parties an opportunity to
comment on the preliminary results of review. We received comments from
Aida. We received rebuttal comments from Verson Division of Allied
Products Corp., the United Autoworkers of America, and the United
Steelworkers of America (AFL-CIO/CLC) (petitioners). We have not
changed the results from those presented in the preliminary results of
review. We have also determined to revoke the order in part, with
respect to Aida.
EFFECTIVE DATE: July 10, 1998.
FOR FURTHER INFORMATION CONTACT: Lesley Stagliano or Maureen Flannery,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington D.C. 20230; telephone (202) 482-3782, (202) 482-3020.
SUPPLEMENTARY INFORMATION:
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provision 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 (1997).
Background
On March 6, 1998, the Department of Commerce (the Department)
published in the Federal Register the preliminary results of the review
of the antidumping duty order and intent to revoke order in part on
MTPs from Japan (63 FR 11211). The Department has now completed this
antidumping duty administrative review in accordance with section
751(b) of the Tariff Act of 1930, as amended (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.
Analysis of the Comments Received
We gave interested parties an opportunity to comment on the
preliminary results of review. We received comments from Aida and
rebuttal comments from petitioners.
Comment 1: Aida contends that the Department erred in excluding
below-cost sales in calculating the profit rate for constructed value.
Aida states that its below-cost sales were not outside the ordinary
course of trade according to the general definition of ``ordinary
course of trade'' as it is defined in Section 771(15) of the Act;
therefore, they should not have been excluded by the Department in its
calculation of constructed value. Section 771(15) states:
The term ``ordinary course of trade'' means the conditions and
practices which, for a reasonable time prior to the exportation of
the merchandise which is the subject of the investigation, have been
normal in the trade under consideration with respect to merchandise
of the same class or kind. The administering authority shall
consider the following sales and transactions, among others, to be
outside the ordinary course of trade:
(A) Sales disregarded under section 773(b)(1)
(B) Transactions disregarded under section 773(f)(2)
Aida states that the Department and the courts have consistently held
that below-cost sales are not per se outside the ``ordinary course of
trade.'' See, e.g., Federal-Mogul Corp. v. United States, 918 F. Supp.
386, 402-403 (Ct. Int'l Trade, 1996); Timken Co. v. United States, 930
F. Supp. 621, 624-625 (Ct. Int'l Trade, 1996); and Torrington Co. v.
United States, 984 F. Supp. 67, 75 (Ct, Int'l Trade, 1996). Although
these cases were decided under the definition of ``ordinary course of
trade'' as it existed prior to the Uruguay Round Agreements Act (URAA),
Aida maintains that these cases continue to be valid because this
definition was carried forward with URAA law. Aida asserts that the
second sentence of section 771(15) only applies to below-cost sales
that have been disregarded for purposes of normal value comparisons
under section 773(b) of the Act.
Aida argues that there were no home market sales ``under
consideration for the determination of normal value,'' and no sales
were disregarded under section 773(b)(1). Aida contends that the
Department based its decision to use constructed value on section
773(a)(1)(C) when it stated that ``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.'' 63 FR
11213. Aida concludes that, since no home market sales were considered
or disregarded for price comparison under section 773(b)(1), the second
sentence of section 771(15) was inapplicable, and that Aida's below-
cost sales were not outside the ordinary course of trade.
Aida argues that the Department's discussion of the below-cost
sales issue is based on an incorrect interpretation of
[[Page 37332]]
section 773(b)(1) in that the Department equated calculation of
constructed value profit with ``determination of normal value.'' Aida
states that, prior to the URAA amendments, the Department consistently
took the position that section 773(b)(1) did not apply to the
calculation of constructed value. See Antifriction Bearings . . . and
Parts Thereof From France, et al., 57 FR 28360, June 24, 1992. Aida
asserts that the Department's position was upheld by the Court of
Appeals for the Federal Circuit in Torrington Co. v. United States, 127
F.3d 1077, 1977, in which the Court stated:
The requirement in 19 U.S.C. 1677b(b) [Section 773(b) of the
Act] that Commerce ``shall'' disregard below-cost sales when
calculating FMV based on actual sales figures does not apply when
Commerce calculates FMV based on constructed value.
Aida asserts that, although the URAA revised section 773(b)(1), it did
not change the basic structure of the provision, namely that
disregarding sales ``in the determination of normal value'' means that
the sales will not be used to determine price-based normal value, not
that they will not be used to determine the profit rate for constructed
value. See SAA at 163, House Rept. 103-316 at 833. Aida states that
Congress amended the statute to provide for exclusion of certain below-
cost sales from the constructed value profit calculation by adding the
second sentence to the definition of ``ordinary course of trade'' in
section 771(15). Aida asserts that in conjunction with the definitions
of constructed value profit in section 773(e), the amendment determines
when below-cost sales may be excluded from constructed value profit.
See 62 FR 27359, supra. See also Final Results of Antidumping Duty
Review: Color Picture Tubes from Japan, 62 FR 34201, 34209, June 25,
1997. Aida contends that if sales could be disregarded under section
773(b)(1) for constructed value purposes there would be no reason for
the addition of clause (A) to section 771(15), and below-cost sales
would be excluded without regard to the method of profit calculation.
Aida argues that sales were not considered for price comparisons under
section 773(a) and were not disregarded for such purposes pursuant to
section 773(b)(1); thus, they are not outside the ordinary course of
trade, and, therefore, do not meet the conditions for exclusion from
the constructed value profit calculation under section 773(e)(2)(A).
In addition, Aida states that nothing on the record suggests that
Aida's below-cost sales fell into any of the ``ordinary course of
trade'' definitions mentioned in the Statement of Administrative Action
(SAA), which accompanied the URAA amendments.
Petitioners contend that, in the 1995-1996 administrative review of
this order, the Department rejected this same argument stating:
We conclude, therefore, that in this review it is appropriate to
exclude these sales from the profit calculation as outside the
ordinary course of trade, pursuant to Section 771(15) of the Act.
The fact that we did not ``disregard'' such sales in a price based
determination of NV as provided in Section 771(15) of the Act does
not prevent the Department from finding these sales outside the
ordinary course of trade when we have, in effect, conducted a cost
test on the sales and found that they have failed. We would have
disregarded these sales, pursuant to Section 773(b)(1) of the Act if
we were using price-to-price comparisons, and, as a result, we
believe that it is appropriate to do so here. Mechanical Transfer
Presses from Japan: Final Results of Antidumping Duty Administrative
Review, 62 FR 11850-22, March 17, 1997.
Petitioners assert that the Department maintained that it was
appropriate to exclude below-cost sales from CV profit, as sales made
outside the ordinary course of trade in Large Newspaper Printing
Presses from Japan; Final Determination of Sales at less Than Fair
Value, 61 FR 38139-45, July 23, 1996; and Certain Welded Carbon Steel
Pipes from Thailand; Final Results of Antidumping Duty Administrative
Review, 61 FR 56515-18, November 1, 1996. Petitioners argue that
although the Department does not treat below-cost sales as per se
outside the ordinary course of trade in price-to-price cases, the
Department has a per se rule with respect to below-cost sales made in a
case where normal value is based on CV from the outset due to the
unique nature of the product involved. Petitioners state that, in such
situations, the Department performs a cost test on a sale-by-sale basis
``because each MTP is custom-built, differs significantly in
specifications, and is essentially a discrete model.'' Preliminary
Results at 11213.
Petitioners state that in the only ``new'' law case cited by Aida,
the Department did not disregard below-cost sales because the
Department based normal value on price-to-price comparisons, and the
specific models found to be below-cost did not exceed the Department's
``20 percent'' test. See Final Results of Antidumping Duty Review:
Color Picture Tubes from Japan, 62 FR 34209. Petitioners point out that
Aida states in its case brief that the Department referenced Mechanical
Transfer Presses from Japan in Color Picture Tubes from Japan, and
indicates that, while a per se rule may not attain in price-to-price
cases, below-cost sales are properly excluded from CV profit when
normal value is based on CV. Accordingly, petitioners argue that the
Department should continue to disregard below-cost sales in its CV
profit calculation for the final results, consistent with its
determination in the preliminary results and the other cited cases.
Department's Position: Aida's argument that no sales were
disregarded under section 773(b)(1), and therefore none can be
considered outside the ordinary course of trade reflects an overly-
restrictive interpretation of the Act, and raises form over substance.
Because the Department found below-cost sales in the previous review,
the Department had ``reasonable grounds to believe or suspect'' that
home market sales were made at prices which were below the cost of
production under section 773(b)(2)(A)(ii), and therefore was required
to initiate a cost investigation under section 773(b)(1). Moreover, as
the Department explained in the prior review, there are reasonable
grounds to believe that below-cost sales were made where actual costs
demonstrate as much, as they do in the present case. MTPs from Japan,
62 FR at 11822.
Furthermore, the facts of this case closely resemble those of
LNPPs, in which the Department explained, ``the unique cost reporting
aspects of this case were such that, in effect, [we] conducted a cost
investigation. . .'' 61 FR at 38145.
The Department also explained in LNPPs that, the Department has
sufficient flexibility under section 771(15) to conclude, in the
present circumstances, that sales below the cost of production should
be disregarded as outside the ordinary course of trade. Id. This
position has been upheld by the CIT in Mitsubishi Heavy Industries v.
U.S., Slip Op. 98-82. at 41-42 (CIT June 23, 1998). Section 771(15)
makes clear on its face that the circumstances listed are only two
``among others'' in which sales should be considered to have been made
outside the ordinary course of trade. See also URAA Statement of
Administrative Action (SAA), H.R. Doc. 103-316, 103d Cong., 2d Sess,
Vol. 1 at 834. Thus, even taking AIDA's view that the Department is not
acting under section 773(b), the Department has the authority to find,
in the present circumstances, that sales which it finds to be below
cost, and which it would disregard under section 773(b), are outside
the ordinary course of trade.
Finally, Aida's overly-rigid reading of the statute must be
rejected because it
[[Page 37333]]
would mean that in cases such as the present one and LNPPs, where the
complexity of the product makes resort to CV almost inevitable, the
Department would be unreasonably precluded from computing actual profit
under section 773(e)(2)(A), the preferred method of determining CV
profit, since sales outside the ordinary course of trade may not be
used in the calculation of profit under that method. Moreover, the SAA,
at 840, indicates that under this provision ``in most cases Commerce
would use profitable sales as the basis for calculating profit.'' Thus,
Aida's interpretation of the statute undermines Congress' preference
for the calculation of actual profit for purposes of CV.
Comment 2: Aida contends that the Department should use the
Japanese short-term interest rate to calculate credit expenses for
Aida's U.S. sales #1-4 which were made in yen. Aida originally reported
the credit expenses for U.S. sales #1-4 based on the Japanese yen
short-term prime interest rate, but later revised their calculations in
accordance with the Department's supplemental questionnaire. Aida cites
both Sodium Azide from Japan, 61 FR 42585, 42588, August 16, 1996, and
Engineered Process Gas Turbo-Compressor Systems * * * from Japan, 62 FR
24394, 24408, May 5, 1997, which state:
[W]hen sales are made in, and future payments are expected in a
given currency, the measure of the company's extension of credit
should be based on an interest rate tied to the currency in which
its receivables are denominated.
Thus, Aida argues that since U.S. sales #1-4 were made in yen and
payment was received in yen, the yen short-term interest rate should be
used to calculate credit expense for these sales.
Department's Position: The Department agrees with respondents, in
that, credit for U.S. sales # 1-4 should be denominated in Japanese
yen. The Department has used a short-term interest rate tied to the
currency in which the sales are denominated. We based this interest
rate on the respondent's weighted-average short-term borrowing
experience in the currency of the transaction. Thus, we have calculated
credit for U.S. sales #1-4 based on Japanese yen since these sales were
denominated in yen.
Comment 3: Aida argues that the Department should reduce expenses
in U.S. sale #2 on a pro-rata basis to adjust for the removal of the
destack feeder from the sales price. In its preliminary determination,
the Department removed the destack feeder from sale #2 by subtracting
from the reported gross unit price the line item price set forth for
the destack feeder in a price quotation that had preceded the contract.
Aida argues that having done so, the Department should have subtracted
the amount of expense attributable to the destack feeder from the
movement expenses, warranty expense, credit expense, and service fee to
reflect the removal of the destack feeder from the sale.
Department's Position: The Department agrees with Aida in that
expenses in U.S. sale #2 should be reduced on a pro rata basis
corresponding to the subtraction of the destack feeder from the sales
price. The Department has revised the U.S. sales summary to reflect
these changes.
Comment 4: Aida asserts that the Department should deduct
transportation expense from the sales price in calculating profit on
home market sales. Aida states that its cost accounting includes
transportation cost in its manufacturing cost. Aida Section D Response,
pp. D-34, D-35. Since the Department treats transportation cost as a
movement expense, Aida deducted transportation cost from manufacturing
cost in calculating cost of manufacture cost (MANCOST), and it
subtracted transportation cost as a separate line item in calculating
the home market profit rate. Aida Supplemental Response Exhibit S-10.
Since it is a cost incurred by Aida on the sales, Aida maintains that
transportation cost must be subtracted from revenue in calculating
profit. Aida contends that when the Department recalculated Aida's home
market profit rate, it failed to deduct transportation expense, thus,
overstating home market profit.
Department's Position: The Department agrees with Aida.
Transportation expense should be deducted from the sales price when
calculating the home market profit rate. To ensure that home market
profit is calculated correctly it is necessary to deduct the
transportation expense from both the sales price and the COM.
Final Results of the Review
We 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....................... 2/1/96-1/31/97 0.00
------------------------------------------------------------------------
We further determine that Aida sold MTPs at not less than NV for
three consecutive review periods, including this review period, and it
is not likely that Aida will in the future sell subject merchandise at
less than NV. Additionally, Aida has submitted the required
certifications, and has agreed to its immediate reinstatement in the
antidumping duty order, as long as any firm is subject to the order, if
the Department concludes under 19 CFR 353.22(f) that, subsequent to
revocation, it sold the subject merchandise at less than NV.
Furthermore, we received no comments from any interested party
contesting the revocation. For these reasons we are revoking the order
on MTPs from Japan with respect to Aida in accordance with section
751(d) of the Act and 19 CFR 353.25(a)(2). In accordance with the
regulations, the Department will take seriously any credible evidence
that, subsequent to the revocation, Aida sold the merchandise at less
than NV.
This revocation applies to all entries of the subject merchandise
from Aida entered, or withdrawn from warehouse, for consumption on or
after February 1, 1997. The Department will order suspension of
liquidation ended for all such entries and will instruct the Customs
Service to release any cash deposits or bonds. The Department will
further instruct the Customs Service to refund with interest any cash
deposits on entries made on or after February 1, 1997.
The following deposit requirements will be effective upon
publication of this notice of final results of administrative review
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date as provided
by section 751(a)(2)(c) of the Act: (1) The cash deposit rate for
Hitachi Zosen will be the rate stated above; (2) if the exporter is not
a firm covered in this review, a prior review, or 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
[[Page 37334]]
the merchandise; and (3) the cash deposit rate for all other
manufacturers or exporters will be the rate established in the
investigation of sales at less than fair value, which is 14.51 percent.
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 final 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 subsequent assessment
of double antidumping duties.
Notification to Interested Parties
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 353.22(f).
Dated: July 2, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-18307 Filed 7-9-98; 8:45 am]
BILLING CODE 3510-DS-P
