[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