[Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
[Notices]
[Pages 40400-40403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19725]


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DEPARTMENT OF COMMERCE
[A-588-703]


Certain Internal-Combustion Industrial Forklift Trucks From Japan 
Preliminary Results of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to a request by an interested party, the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on certain internal-combustion 
industrial forklift trucks from Japan. The review covers 3 
manufacturers/exporters. The period of review (the POR) is June 1, 
1994, through May 31, 1995.
    We have preliminarily determined that sales have been made below 
normal value (NV) by one of the companies subject to this review. If 
these preliminary results are adopted in our final results of this 
administrative review, we will instruct U.S. Customs to assess 
antidumping duties equal to the difference between the constructed 
export price (CEP) and NV.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments in this proceeding are requested 
to submit with each argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: August 2, 1996.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact Thomas O. Barlow, Davina Hashmi or Kris Campbell at Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, Washington, D.C. 20230; telephone: (202) 482-4733.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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's regulations are 
to the current regulations, as amended by the interim regulations 
published in the Federal Register on May 11, 1995 (60 FR 25130).

Background

    On June 7, 1988, the Department published in the Federal Register 
(53 FR 20882) the antidumping duty order on certain internal-
combustion, industrial forklift trucks from Japan. On August 16, 1995, 
we initiated an administrative review of this order for the period June 
1, 1994 through May 31, 1995 (60 FR 42500). On March 14, 1996, we 
extended the time limits for preliminary and final results for this 
administrative review since we determined that it was not practicable 
to complete the review within the time limits mandated by the Act (61 
FR 10562). The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Scope of Review

    The products covered by this review are certain internal-
combustion, industrial forklift trucks, with lifting capacity of 2,000 
to 15,000 pounds. The products covered by this review are further 
described as follows: Assembled, not assembled, and less than complete, 
finished and not finished, operator-riding forklift trucks powered by 
gasoline, propane, or diesel fuel internal-combustion engines of off-
the-highway types used in factories, warehouses, or transportation 
terminals for short-distance transport, towing, or handling of 
articles. Less than complete forklift trucks are defined as imports 
which include a frame by itself or a frame assembled with one or more 
component parts. Component parts of the subject forklift trucks which 
are not assembled with a frame are not covered by this order.
    Imports of these products are classified under the following 
Harmonized Tariff Schedules (HTS) subheadings: 8427.20.00, 8427.90.00, 
and 8431.20.00. The HTS item numbers are provided for convenience and 
Customs purposes. The written descriptions remain dispositive.
    This review covers the following firms: Toyota Motor Corporation 
(TMC), Nissan Motor Company (Nissan), and Toyo Umpanki Company, Ltd 
(Toyo).

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by TMC using standard verification procedures, including on-
site inspection of TMC's sales facility, the examination of relevant 
sales and financial records, and original documentation containing 
relevant information. Our verification results are outlined in the 
public version of the verification report.

[[Page 40401]]

No Shipments

    Nissan and Toyo reported no shipments or sales subject to this 
review and the Department has preliminarily confirmed these facts with 
the U.S. Customs Service. Based on the information on the record, the 
Department has preliminarily determined that Nissan and Toyo had no 
shipments to the United States during the POR.

Constructed Export Price

    The Department based its margin calculation on CEP as defined in 
section 772(b) of the Act because the subject merchandise was first 
sold in the United States to a person not affiliated with TMC after 
importation by a seller affiliated with TMC.
    We calculated CEP based on the packed, f.o.b. or delivered price to 
unaffiliated purchasers in the United States (the starting price). We 
made deductions for any movement expenses in accordance with section 
772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act and the Uruguay 
Round Agreements Act Statement of Administrative Action (SAA) (at 823-
824), we made additional adjustments to the starting price by deducting 
selling expenses associated with economic activities occurring in the 
United States, including commissions, direct selling expenses 
(including direct advertising incurred by TMC in Japan), expenses 
assumed on behalf of the buyer and U.S. indirect selling expenses. 
Where appropriate, in accordance with section 772(d)(2) of the Act, we 
also deducted the cost of any further manufacture or assembly. Finally, 
we made an adjustment for an amount of profit allocated to these 
expenses in accordance with section 772(d)(3) of the Act.
    With respect to subject merchandise to which value was added in the 
United States prior to sale to unaffiliated U.S. customers, e.g., 
``swapping'' of forks, masts, etc., and installation of certain 
accessories by a U.S. affiliate of TMC, we determined that the special 
rule for merchandise with value added after importation under section 
772(e) of the Act did not apply because the value added in the United 
States by the affiliated person did not exceed substantially the value 
of the subject merchandise. Therefore, for subject merchandise further 
manufacturered in the United States, we used the starting price of the 
subject merchandise and deducted the further manufacturing to determine 
the CEP for such merchandise.

Normal Value

    Because the aggregate quantity of the foreign like product sold in 
the home market was more than 5% of the aggregate quantity of sales of 
the subject merchandise to the U.S., in accordance with sections 
773(a)(1) (c) and (a)(1)(B)(i) of the Act, we based NV on the prices at 
which the foreign like products were first sold for consumption in the 
exporting country.
    We treated sales to affiliates as made at arm's length and 
therefore used them in our NV calculations, as we determined that the 
prices to both affiliated and unaffiliated customers were based 
exclusively on a published price-list.
    Based on an allegation of sales below the cost of production (COP), 
the Department had reasonable grounds to believe or suspect that sales 
of the foreign product under consideration for the determination of NV 
in this review may have been made at prices below the COP as provided 
by section 773(b)(2)(A)(i) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by TMC 
in the home market.
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP, on a model-specific basis, based on the sum of the costs of 
materials and fabrication employed in producing the foreign like 
product plus selling, general and administrative (SG&A) expenses and 
all costs and expenses incidental to placing the foreign like product 
in condition packed ready for shipment. In our COP analysis, we used 
the home market sales and COP information provided by TMC in its 
questionnaire and supplemental responses.
    After calculating COP, we tested whether home market sales of the 
foreign like product were made at prices below COP within an extended 
period of time in substantial quantities and whether such prices 
permitted the recovery of all costs within a reasonable period of time. 
We compared model-specific COPs to the reported home market prices less 
any applicable adjustments.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a given model were at prices less 
than COP, we did not disregard any below-cost sales of that model 
because the below-cost sales were not made in substantial quantities. 
Where 20 percent or more of the respondent's sales of a given model 
were at prices less than the COP, we disregarded the below-cost sales 
if they (1) were made within an extended period of time in substantial 
quantities in accordance with sections 773(b)(2) (B) and (C) of the 
Act, and (2) based on comparisons of prices to weighted-average COPs 
for the POR, were at prices which would not permit recovery of all 
costs within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Act. Based on this test, we disregarded below-cost 
sales with respect to TMC.
    We calculated NV using sales of the foreign like product in the 
home market. Where the Department could not match to identical 
merchandise in the home market, the Department matched to similar 
merchandise based on load capacity and six matching criteria, each 
assigned specific weight factors which reflected the criterion's 
relative importance. For a more detailed description of the product-
matching criteria see Appendix III, Department's Sales Questionnaire, 
July 31, 1995.
    Home market prices were based on ex-factory or delivered prices to 
purchasers in the home market. Where applicable, we made adjustments 
for packing and for movement expenses in accordance with sections 
773(a)(6) (A) and (B) of the Act. We also made adjustments for 
differences in cost attributable to differences in physical 
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) 
of the Act and for differences in circumstances of sale (COS) in 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 C.F.R. 
353.56. We made COS adjustments by deducting home market discounts and 
rebates and warranty expenses. Based on the results of verification, we 
are disallowing TMC's reported home market direct advertising expense 
and we are adjusting TMC's home market REBATE2H downward. We added to 
NV revenue earned on home market sales, including revenue from 
transportation insurance received by a TMC affiliate and for interest 
revenue. Based on the results of verification, we are using interest 
revenue earned on U.S. sales as facts otherwise available for home 
market interest revenue. We also made adjustments, where applicable, 
for certain home market indirect selling expenses to offset U.S. 
commissions and U.S. indirect selling expenses in CEP calculations. 
Because we preliminarily determined that TMC's sales to the home market 
which are used to establish normal value were at a level of trade which 
constitutes a more advanced stage of distribution than the level of 
trade of the CEP, and because the data available do not permit an 
appropriate basis to determine a level-of-trade adjustment pursuant to 
section 773(a)(7)(A)(ii) of the Act, we allowed a

[[Page 40402]]

CEP ``offset'' pursuant to section 773(a)(7)(B) of the Act (see Level 
of Trade, below). This offset was permitted only with respect to those 
claimed home market indirect selling expenses that we were able to 
verify. Based on the results of verification, we are disallowing 
reported home market indirect advertising and sales promotion expenses, 
TMC's wage and salary expense and TMC's general & administrative (G&A) 
expenses.
    In accordance with section 773(a)(4) of the Act, we used CV as the 
basis for NV when there were no usable sales of comparable merchandise 
in the home market. We calculated CV in accordance with section 773(e) 
of the Act. We included the cost of materials and fabrication, SG&A 
expenses, and profit. In accordance with section 773(e)(2)(A) of the 
Act, we based SG&A expenses and profit on the amounts incurred and 
realized by TMC in connection with the production and sale of the 
foreign like product in the ordinary course of trade for consumption in 
the foreign country. For selling expenses, we used the weighted-average 
home market selling expenses. We included U.S. packing pursuant to 
section 773(e)(3) of the Act. Where appropriate, we made adjustments to 
CV in accordance with section 773(a)(8) of the Act and 19 CFR 353.56 
for COS differences and level-of-trade differences. We made COS 
adjustments by deducting home market direct selling expenses. We also 
made adjustments, where applicable, for certain home market indirect 
selling expenses to offset U.S. commissions. Since CV was calculated at 
a more advanced level of trade than the level of trade of the CEP, we 
made an adjusment in accordance with sections 773(a)(7) and (a)(8) of 
the Act, i.e., the CEP offset. See Level of Trade, below.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA 
accompanying the URAA at 829-831, to the extent practicable, the 
Department will calculate NV based on sales at the same level of trade 
as the U.S. sales. When the Department is unable to find sales of the 
foreign like product in the comparison market at the same level of 
trade as the U.S. sale, the Department may compare the U.S. sale to 
sales at a different level of trade in the comparison market.
    In accordance with section 773(a)(7)(A) of the Act, if sales at 
allegedly different levels of trade are compared, the Department will 
adjust the NV to account for the difference in level of trade if two 
conditions are met. First, there must be differences between the actual 
selling activities performed by the exporter at the level of trade of 
the U.S. sale and the level of trade of the comparison market sales 
used to determine NV. Second, the differences must affect price 
comparability as evidenced by a pattern of consistent price differences 
between sales at the different levels of trade in the market in which 
NV is determined.
    When CEP is applicable, section 773(a)(7)(B) of the Act establishes 
that a CEP ``offset'' may be made when two conditions exist: (1) NV is 
established at a level of trade which constitutes a more advanced stage 
of distribution than the level of trade of the CEP; and (2) the data 
available do not provide an appropriate basis for a level-of-trade 
adjustment.
    In implementing these principles in this review, we obtained 
information about the selling activities performed by TMC for each 
channel of distribution and asked TMC to establish claimed levels of 
trade based on these selling activities. TMC claimed that the level of 
trade of the CEP was different than the level of trade of its home 
market sales. TMC claimed one level of trade and one channel of 
distribution with regard to its sales to its U.S. affiliate, Toyota 
Motor Sales U.S.A., Inc. (TMS). For its home market, TMC claimed only 
one channel of distribution, from TMC to dealers, which it claimed to 
be at a more advanced stage of distribution than the level of trade of 
the CEP (i.e., the sales from TMC to TMS) based on the selling 
functions performed for the particular markets.
    In order to determine whether the CEP and the home market sales 
were at different levels of trade, we reviewed the selling activities 
associated with the CEP and those associated with home market sales. 
For CEP sales, we considered only the selling activities reflected in 
the price after the deduction of expenses and profit under section 
772(d) of the Act. Whenever sales were made by or through an affiliated 
company as agent, we considered all selling activities of both 
affiliated parties, except for those selling activities related to the 
expenses deducted under section 772(d) of the Act in CEP situations.
    In this review, we determined that the selling functions performed 
by TMC for the home market were dissimilar to those performed by TMC 
for CEP sales, and that TMC's home market level of trade constituted a 
more advanced stage of distribution than the level of trade of the CEP. 
For further discussion see Analysis Memorandum to File, July 26, 1996.
    Further, we examined whether a level-of-trade adjustment was 
appropriate. In this review, the same level of trade as that of the CEP 
did not exist in the home market as TMC's home market sales were made 
at a more advanced stage of distribution than its CEP sales. We could 
not determine whether there was a pattern of consistent price 
differences between the levels of trade, in accordance with section 
773(a)(7)(A) of the Act, based on TMC's home market sales of 
merchandise under review because TMC had only one level of trade in the 
home market and such data did not exist. However, the SAA states that, 
``if information on the same product and company is not available, the 
adjustment may also be based on sales of other products by the same 
company. In the absence of any sales, including those in recent time 
periods, to different levels of trade by the exporter or producer under 
investigation, Commerce may further consider the selling experience of 
other producers in the foreign market for the same product or other 
products.'' SAA at 830. Accordingly, we examined the alternative 
methods for calculating a level-of-trade adjustment. In this review, we 
did not have information that would allow us to apply these alternative 
methods. Therefore, for TMC, in accordance with section 773(a)(7)(B) of 
the Act, because we determined that TMC's home market sales upon which 
we established NV were at a level of trade which constituted a more 
advanced stage of distribution than the level of the CEP, but no data 
were available to adjust for differences in level of trade, we made a 
CEP offset to NV.

Fair Value Comparisons

    To determine whether sales of forklift trucks to the United States 
were made at less than fair value, we compared the CEP to the NV, as 
described in the ``Constructed Export Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(2), we 
calculated monthly weighted-average prices for NV and compared these to 
individual U.S. transactions.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margins (in percent) for the period June 1, 1994, 
through May 31, 1995 to be as follows:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
TMC........................................................        41.29

[[Page 40403]]

                                                                        
Nissan.....................................................     \1\ 7.36
Toyo.......................................................    \1\ 4.48 
------------------------------------------------------------------------
\1\ No shipments or sales subject to this review. Rate is from the last 
  relevant segment of the proceeding in which the firm had shipments/   
  sales.                                                                


    Parties to this proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of the date of publication of this 
notice. A hearing, if requested, will be held 44 days from the date of 
publication of this notice at the main Commerce Department building.
    Issues raised in hearings will be limited to those raised in the 
respective case briefs and rebuttal briefs. Case briefs from interested 
parties are due within 30 days of publication of this notice. Rebuttal 
briefs, limited to the issues raised in the respective case briefs, may 
be submitted not later than 37 days of publication of this notice. 
Parties who submit case briefs or rebuttal briefs in this proceeding 
are requested to submit with each argument (1) a statement of the issue 
and (2) a brief summary of the argument.The Department will 
subsequently publish the final results of this administrative review, 
including the results of its analysis of issues raised in any such 
written briefs or hearing. The Department will issue final results of 
this review within 180 days of publication of these preliminary 
results.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Because the 
inability to link sales with specific entries prevents calculation of 
duties on an entry-by-entry basis, we have calculated an importer-
specific ad valorem duty assessment rate for the merchandise based on 
the ratio of the total amount of antidumping duties calculated for the 
examined sales made during the POR to the total customs value of the 
sales used to calculate those duties. This rate will be assessed 
uniformly on all entries of that particular importer made during the 
POR. (This is equivalent to dividing the total amount of antidumping 
duties, which are calculated by taking the difference between statutory 
NV and statutory CEP, by the total statutory CEP value of the sales 
compared, and adjusting the result by the average difference between 
CEP and customs value for all merchandise examined during the POR.) The 
Department will issue appropriate appraisement instructions directly to 
the Customs Service upon completion of this review.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise 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 rates for the reviewed 
companies will be those rates established in the final results of this 
review; (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 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) the cash 
deposit rate for all other manufacturers or exporters will be 39.45 
percent, the ``All Others'' rate made effective by the final 
determination of sales at LTFV, as explained 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 
Federal-Mogul Corporation and The Torrington Company v. United States, 
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 ``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. Therefore, the 
Department is reinstating the ``All Others'' rate made effective by the 
final determination of sales at LTFV (see Antidumping Duty Order and 
Amendment to Final Determination of Sales at Less Than Fair Value; 
Certain Internal-Combustion, Industrial Forklift Trucks From Japan (53 
FR 20882 (June 7, 1988)).
    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.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act and 19 CFR 353.22(c)(5).

    Dated: July 26, 1996.
Robert S. LaRussa,
Acting Assistant Secretary, for Import Administration.
[FR Doc. 96-19725 Filed 8-01-96; 8:45 am]
BILLING CODE 3510-DS-P