[Federal Register Volume 60, Number 163 (Wednesday, August 23, 1995)]
[Notices]
[Pages 43769-43771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20930]



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DEPARTMENT OF COMMERCE
[A-588-028]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Roller Chain, Other Than Bicycle, From Japan

AGENCY: International Trade Administration/Import Administration, 
Department of Commerce

EFFECTIVE DATE: August 23, 1995.

SUMMARY: In response to a request from the American Chain Association, 
the petitioner in this proceeding, the Department of Commerce has 
conducted an administrative review of the antidumping finding on roller 
chain, other than bicycle, from Japan. This review, which covers four 
manufacturers/exporters of this merchandise to the United States and 
the period April 1, 1992 through March 31, 1993, indicates the 
existence of dumping margins. Interested parties are invited to comment 
on these preliminary results.

FOR FURTHER INFORMATION CONTACT: Donna Berg or Gregory Thompson, Office 
of Antidumping Investigation, International Trade Administration, U.S. 
Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-
0114 or 482-3003, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statue and Regulations

    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.
    The Department is conducting this review in accordance with section 
751 of the Tariff Act of 1930, as amended (the Act), and section 353.22 
of the Department's regulations (19 CFR 353.22).

Background

    On October 7, 1993, the Department of Commerce (the Department) 
published in the Federal Register (58 FR 52264) the final results of 
its last administrative review of the antidumping finding on roller 
chain, other than bicycle, from Japan (38 FR 9226; April 12, 1973). In 
April 1993, the petitioner requested that we conduct an administrative 
review for the period April 1, 1992 through March 31, 1993, in 
accordance with 19 CFR 353.22(a)(1). We published a notice of 
initiation of review on May 27, 1993 (58 FR 30769).
    On August 9, 1993, the Department issued an antidumping 
questionnaire to the following six companies: Daido Kogyo Co., 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 (Excel). Of those six companies, 
Excel and Izumi submitted their responses on September 24, 1993. 
Hitachi and Pulton asserted that they had no sales during this period 
of review (POR). Although Daido and Enuma were included when the 
Department published a notice of initiation for this review, the 
administrative reviews of Daido and Enuma are being conducted 
separately and their preliminary results will be published in a later 
notice.

Scope of the Review

    Imports covered by the review are shipments of 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 
transmission and/or conveyance. Such chain consists of a series of 
alternately-assembled roller links and pin links in which the pins 
articulate inside 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.
    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 


[[Page 43770]]
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.

Fair Value Comparisons

    We compared the United States price (USP) to the foreign market 
value (FMV), as specified in the ``United States Price'' and ``Foreign 
Market Value'' sections of this notice. When comparing the U.S. sales 
to sales of similar merchandise in the home market, we made adjustments 
for differences in physical characteristics, pursuant to 19 CFR 353.57.

United States Price

    Pursuant to section 772(b) of the Act, we based USP on purchase 
price because all of Excel's and Izumi's U.S. sales to the first 
unrelated purchaser took place prior to importation into the United 
States, and exporter's sales price methodology was not otherwise 
indicated.
    We calculated purchase price based on packed FOB or ex-go-down 
Japanese port prices to unrelated purchasers in the United States or 
Japan. Inasmuch as Excel incorrectly reported U.S. price, net of 
commissions, we recalculated gross unit price to include U.S. 
commissions. Where applicable, we made deductions for foreign inland 
freight and foreign inland insurance. See Roller Chain, Other Than 
Bicycle, From Japan: Final Results of Antidumping Duty Administrative 
Review 57 FR 56319-20 (November 27, 1992).
    In accordance with our standard practice, pursuant to the decision 
of the U.S. Court of International Trade (CIT) in Federal-Mogul 
Corporation and The Torrington Company v. United States (Federal-
Mogul), 834 F. Supp. 1391 (CIT 1993), our calculations include an 
adjustment to U.S. price for the consumption tax levied on comparison 
sales in Japan. See Final Antidumping Duty Determination of Sales at 
Less Than Fair Value: Stainless Steel Angle From Japan, 60 FR 16609 
(March 31, 1995) and Preliminary Antidumping Duty Determination: Color 
Negative Photographic Paper and Chemical Components from Japan, 59 FR 
16177, 16179 (April 6, 1994), for an explanation of this methodology.
Foreign Market Value

    In order to determine whether there were sufficient sales of the 
subject merchandise in the home market to serve as a viable basis for 
calculating FMV, we compared each respondents' volume of home market 
sales of the subject merchandise to the volume of third country sales 
in accordance with section 773(a)(1)(B) of the Act. We found that the 
home market was viable for both respondents. See 19 CFR 353.48(a).
    We calculated FMV for both respondents based on packed, FOB or 
delivered prices to unrelated purchasers in Japan. We made deductions, 
where appropriate, from FMV for inland freight, insurance, and 
discounts. In accordance with section 773(a)(1) of the Act, we 
deducted, as appropriate, home market packing costs and added U.S. 
packing costs. We made circumstance-of-sale adjustments, where 
applicable, for differences in credit expenses, advertising expenses, 
warranty expenses and technical service expenses. Pursuant to section 
353.56 (b)(1) of the Department's regulations, we offset U.S. 
commissions, where appropriate, by deducting home-market indirect 
selling expenses from FMV in an amount not exceeding the U.S. 
commissions. We recalculated Excel's technical service costs. Only the 
travel portion of Excel's technical service costs was treated as a 
direct selling expense because these expenses would not have been 
incurred absent the sales of the subject merchandise. Following our 
past practice, the fixed costs associated with technical services 
(salaries, benefits, and automobile depreciation) were treated as 
indirect selling expenses.
    An adjustment for the consumption tax was made in accordance with 
our practice (see ``United States Price'' section of this notice).
    We performed an arm's-length test to determine whether Izumi's 
sales to its related customers were made at arm's length. Consequently, 
we disregarded one of Izumi's reported sales to a related party for 
margin calculation purposes because there were no comparable sales to 
unrelated parties to use as an arm's length benchmark.
    Section 773(a)(4)(c) of the Act provides that a difference-in-
merchandise (DIFMER) allowance may be made when a product on which FMV 
is based is not identical to that exported to the United States. 
However, when the DIFMER is greater than 20 percent of the U.S. 
product's total cost of manufacture (COM), the Department resorts to 
constructed value (CV) to establish FMV. See ``Differences in 
Merchandise: 20% Rule,'' Import Administration Policy Bulletin: Number 
92.2 (July 29, 1992).
    In this review, we found that the variable manufacturing cost 
differences for certain models of roller chain, other than bicycle, did 
not exceed 20 percent of the total average COM of the product exported 
to the United States. In such instances, we based FMV on home-market 
prices, including a DIFMER allowance. For some models sold by Izumi, 
however, these variable-cost differences exceeded 20 percent of the 
U.S. product COM. In these instances, we based FMV on CV, as described 
in the ``Constructed Value'' section below.

Constructed Value

    Pursuant to section 773(a)(2) of the Act, where there were no 
contemporaneous home-market sales of such or similar merchandise, we 
based FMV on CV. We also relied on CV where there were contemporaneous 
home-market sales of such or similar merchandise but the DIFMER 
exceeded 20 percent.
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the cost of materials, fabrication costs, general 
expenses, profit, and U.S. packing. Based on Import Administration 
Policy Bulletin: Number 94.6 (March 25, 1994), we did not include 
consumption taxes in our calculation of CV. We added statutory or 
actual amounts for the general expenses and profit components of CV, as 
appropriate.
    With respect to Izumi's CV submission, we made the following 
adjustments:
    (1) General and administrative (G&A) expenses: Izumi, in accordance 
with its accounting period, reported its G&A expenses for the chain 
division in two six-month periods. We recalculated these expenses on a 
company-wide basis for the year ending September 30, 1992. Using this 
period is consistent with the Department's practice, i.e., it was the 
annual period corresponding most closely to the POR. Additionally, we 
deducted inland freight from the submitted G&A expenses.
    (2) Interest expenses: Izumi computed interest expense for CV based 
on amounts incurred by the company's chain division. It is the 
Department's normal practice to compute interest at the highest entity 
level, in this case, Izumi Chain Manufacturing Co., Ltd. We therefore 
revised Izumi's interest expense based on its company-wide financial 
statements for the year ended September 30, 1992, the annual period 
most closely related to the POR.
Preliminary Results of the Review

    As a result of our comparison of United States price to foreign 
market value, we preliminarily determine the following dumping margins:

                                                                        

[[Page 43771]]
------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Hitachi.....................................................   \1\ 12.68
Izumi.......................................................        0.27
Pulton......................................................    \1\ 0.01
Excel.......................................................        0.10
All Others..................................................      15.92 
------------------------------------------------------------------------
\1\ No sales during the period. Rate is from the last period in which   
  there were sales.                                                     


    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and FMV may vary from the percentages stated 
above. Upon completion of this administrative review, the Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service. 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 this administrative 
review, as provided by section 751(a)(1) of the Act: (1) the cash 
deposit rate will be that established in the final results of this 
administrative review; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published in the final determination covering 
the most recent period review; (3) if the exporter is not a firm 
covered in this review, previous reviews, or the original 
investigation, but its manufacturer is such a firm, the cash deposit 
rate will be the rate established for the manufacturer in the final 
results of the most recently completed review; and (4) for any future 
entries from all other manufacturers or exporters who are not covered 
in this or prior administrative reviews, and who are unrelated to any 
firms listed above, or any previously reviewed firm, the cash deposit 
rate will be the ``new shipper'' rate established in the first review 
conducted by the Department in which a ``new shipper'' rate was 
established, as discussed below.
    On May 25, 1993, the Court of International Trade (CIT) in Floral 
Trade Council v. United States, 822 F. Supp. 766 (CIT 1993), and in 
Federal-Mogul, 822 F. Supp. 782 (CIT 1993), decided that once an ``all 
others'' rate is established for a company, it can only be changed 
through an administrative review. The Department has determined that in 
order to implement these decisions, it is appropriate to reinstate the 
original ``all others'' rate from the LTFV investigation (or that rate 
as amended for correction of clerical errors or as a result of 
litigation) in proceedings governed by antidumping duty orders for the 
purposes of establishing cash deposits in all current and future 
administrative reviews. Because this proceeding is governed by an 
antidumping duty finding, and we are unable to ascertain the ``all 
others'' rate from the Treasury LTFV investigation, the ``all others'' 
rate for the purposes of this review would normally be the ``new 
shipper'' rate established in the first notice of final results of 
administrative review published by the Department (46 FR 44488, 
September 4, 1981). However, a ``new shipper'' rate was not established 
in that notice. Therefore, the ``all others'' rate of 15.92 percent is 
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 also 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.

Public Comment

    Interested parties who wish to request a hearing must submit a 
written request to the Assistant Secretary for Import Administration, 
U.S. Department of Commerce, Room B-099, within ten days of 
publication. Requests should contain: (1) the party's name, address and 
telephone number; (2) the number of participants; and (3) a list of the 
issues to be discussed.
    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies must be submitted to the Assistant 
Secretary no later than September 18, 1995, and rebuttal briefs no 
later than September 20, 1995. A public hearing, if requested, will be 
held on September 22, 1995, at 10:00 am at the U.S. Department of 
Commerce, in Room 1410, 14th Street and Constitution Avenue, NW, 
Washington, DC. Parties should confirm by telephone the time, date, and 
place of the hearing 48 hours prior to the scheduled time. In 
accordance with 19 CFR 353.38(b), oral presentations will be limited to 
issues raised in the briefs. The Department will publish a notice of 
final results of this administrative review, including an analysis of 
issues raised in any written comments.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 
of the Department's regulations (19 CFR 353.22).

    Dated: August 16, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-20930 Filed 8-22-95; 8:45 am]
BILLING CODE 3510-DS-P