[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)]
[Notices]
[Pages 46624-46627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22521]
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DEPARTMENT OF COMMERCE
[A-588-823]
Professional Electric Cutting Tools 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 the respondent, Makita Corporation
and Makita U.S.A. Inc. (Makita), the Department of Commerce (the
Department) is conducting an administrative review of the antidumping
duty order on professional electric cutting tools (PECTs) from Japan.
The review covers shipments of the subject merchandise to the United
States during the period July 1, 1994, through June 30, 1995. The
review indicates the existence of dumping margins during the period of
review.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results of administrative review, we will instruct U.S. Customs
to assess antidumping duties equal to the difference between the
constructed export price (CEP) and NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit arguments are requested to submit with each
argument (1) A statement of the issue and (2) a brief summary of the
argument.
EFFECTIVE DATE: September 4, 1996.
FOR FURTHER INFORMATION CONTACT: Rebecca Trainor 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) 482-4733.
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 July 12, 1993, the Department published in the Federal Register
the antidumping duty order on PECTs from Japan (58 FR 37461). On July
3, 1995, the Department published in the Federal Register a notice of
opportunity to request an administrative review of this antidumping
duty order (60 FR 34511). On July 27, 1995, Makita requested that we
conduct an administrative review in accordance with 19 CFR
353.22(a)(1). We published the notice of initiation of this antidumping
duty administrative review on August 16, 1995 (60 FR 42500).
The Department is conducting this review in accordance with section
751 of the Act.
Scope of the Review
The products covered by this review are PECTs from Japan. PECTs may
be assembled or unassembled and corded or cordless.
The term ``electric'' encompasses electromechanical devices,
including tools with electronic variable speed features. The term
``assembled'' includes unfinished or incomplete articles, which have
the essential characteristics of the finished or complete tool. The
term ``unassembled'' means components, which when taken
[[Page 46625]]
as a whole, can be converted into the finished or unfinished or
incomplete tool through simple assembly operations, (e.g., kits).
PECTs have blades or other cutting devices used for cutting wood,
metal, and other materials. PECTs include chop saws, circular saws, jig
saws, reciprocating saws, miter saws, portable bank saws, cut-off
machines, shears, nibblers, planers, routers, joiners, jointers, metal
cutting saws, and similar cutting tools.
The products subject to this order include all hand-held PECTs and
certain bench-top, hand-operated PECTs. Hand-operated tools are
designed so that only the functional or moving part is held and moved
by hand while in use, the whole being designed to rest on a table top,
bench, or other surface. Bench-top tools are small stationary tools
that can be mounted or placed on a table or bench. They are generally
distinguishable from other stationary tools by size and ease of
movement.
The scope of the order includes only the following bench-top, hand-
operated tools: cut-off saws; PVC saws; chop saws; cut-off machines,
currently classifiable under subheading 8461 of the Harmonized Tariff
Schedule of the United States (HTSUS); all types of miter saws,
including slide compound miter saws and compound miter saws, currently
classifiable under subheading 8465 of the HTSUS; and portable band saws
with detachable bases, also currently classifiable under subheading
8465 of the HTSUS.
This order does not include: professional sanding/grinding tools;
professional electric drilling/fastening tools; lawn and garden tools;
heat guns; paint and wallpaper strippers; and chain saws, currently
classifiable under subheading 8508 of the HTSUS.
Parts or components of PECTs when they are imported as kits, or as
accessories imported together with covered tools, are included within
the scope of this order.
``Corded'' and ``cordless'' PECTs are included within the scope of
this order. ``Corded'' PECTs, which are driven by electric current
passed through a power cord, are, for purposes of this order, defined
as power tools which have at least five of the following seven
characteristics:
1. The predominate use of ball, needle, or roller bearings (i.e., a
majority or greater number of the bearings in the tool are ball,
needle, or roller bearings);
2. Helical, spiral bevel, or worm gearing;
3. Rubber (or some equivalent material which meets UL's
specifications S or SJ) jacketed power supply cord with a length of 8
feet or more;
4. Power supply cord with a separate cord protector;
5. Externally accessible motor brushes;
6. The predominate use of heat-treated transmission parts (i.e., a
majority or greater number of the transmission parts in the tool are
heat treated); and
7. The presence of more than one coil per slot armature.
If only six of the above seven characteristics are applicable to a
particular ``corded'' tool, then that tool must have at least four of
the six characteristics to be considered a ``corded'' PECT.
``Cordless'' PECTs, for the purposes of this order, consist of
those cordless electric power tools having a voltage greater than 7.2
volts and a battery recharge time of one hour or less.
PECTs are currently classifiable under the following subheadings of
the HTSUS: 8508.20.00.20, 8508.20.00.70, 8508.20.00.90, 8461.50.00.20,
8465.91.00.35, 85.80.00.55, 8508.80.00.65 and 8508.80.00.90. The HTSUS
subheadings are provided for convenience and Customs purposes only. The
written description remains dispositive as to the scope of the order.
This review covers one manufacturer/exporter of PECTs from Japan,
Makita, and the period July 1, 1994 through June 30, 1995.
Verification
From June 3 through June 12, 1996, the Department conducted
verification of Makita's questionnaire responses, as provided in
section 782(i) of the Act. We used standard verification procedures,
including on-site inspection of the manufacturer's facilities,
examination of relevant accounting, sales, and other financial records,
and selection of original documentation containing relevant
information. Our verification results are outlined in the public
version of the verification report.
Constructed Export Price
In calculating United States price, we used CEP, in accordance with
subsections 772(b), (c), and (d) of the Act, because Makita's sales to
the first unaffiliated purchaser occurred after importation into the
United States. We calculated CEP based on the packed, delivered prices
to the first unrelated purchaser in the United States.
Where appropriate, we made deductions from the starting price for
discounts, rebates, Japanese and U.S. inland freight, ocean freight,
Japanese and U.S. brokerage and handling, and those imputed credit and
warranty expenses that were incurred in the United States. In
accordance with section 772(d)(1) and the Statement of Administrative
Action (SAA) at 823-24, we also deducted those selling expenses that
related to commercial activity in the United States, and added revenues
earned from drop-ship fees and miscellaneous charges, where
appropriate. Finally, we made an adjustment for an amount of profit
allocated to these expenses in accordance with section 772(d)(3) of the
Act.
Normal Value
Based on a comparison of the aggregate quantity of Makita's home-
market and U.S. sales, we determined that the quantity of the foreign
like product Makita sold in Japan was sufficient to permit a proper
comparison to its sales of PECTs to the United States, pursuant to
section 773(a) of the Act. Makita's quantity of home-market sales was
greater than five percent of its sales to the U.S. market. Therefore,
in accordance with section 773(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 Japan.
In calculating NV, we disregarded sales to affiliated customers
where we determined that such sales were not made at arm's-length
prices, i.e., at prices comparable to prices at which Makita sold
identical merchandise to unrelated customers.
Based on petitioner's allegation, and in accordance with section
773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or
suspect that Makita made sales in the home market at prices below the
cost of production (COP). As a result, we initiated a sales-below-cost
investigation. We calculated COP based on the sum of Makita's cost of
materials and fabrication employed in producing the foreign like
product plus amounts for home-market selling, general, and
administrative expenses (SG&A) and packing costs, in accordance with
section 773(b)(3) of the Act. We compared Makita's weighted-average COP
for the review period to home-market sales of the foreign like product
as required under section 773(b) of the Act, in order to determine
whether these sales had been made at below-cost prices within an
extended period of time in substantial quantities, and whether they
were at prices which permit recovery of all costs within a reasonable
period of time. On a product-specific basis, we compared the COP to the
home-market prices, less any applicable movement charges,
[[Page 46626]]
discounts, rebates, and direct and indirect selling expenses.
Pursuant to section 773(b)(2)(C), where less than 20 percent of
respondent's sales of a given product were at prices less than the COP,
we did not disregard any below-cost sales of that product because we
determined that the below-cost sales were not made in ``substantial
quantities.'' Where 20 percent or more of a respondent's sales during
the review period of a given product were at prices less than the COP,
we disregarded the below-cost sales because we determined that the
below-cost sales were made within an extended period of time in
``substantial quantities'' in accordance with section 773(b)(2)(B) and
(C) of the Act, and because we determined that the below-cost sales of
the product 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. Where all sales of a specific model were at
prices below the COP, we disregarded all sales of that model, and
calculated NV based on CV, in accordance with section 773(b)(1) of the
Act.
Home-market prices were based on the packed, delivered prices to
affiliated or unaffiliated purchasers in the home market. Where
applicable, we made adjustments for differences in packing and for
movement expenses in accordance with section 773(a)(6)(A) and (B) of
the Act. We also made adjustments for discounts and rebates, and
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 CFR 353.56.
If appropriate, we made COS adjustments by deducting home-market direct
selling expenses and adding U.S. direct selling expenses, except those
deducted from the starting price in calculating CEP pursuant to section
772(d) of the Act.
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we based NV on sales at the same level of trade as
the CEP sales. If NV was calculated at a different level of trade, we
made an adjustment, if appropriate, and if possible, in accordance with
section 773(a)(7) of the Act. This adjustment is discussed further in
the Level of Trade section below.
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 the foreign like
product in the comparison market. We calculated CV in accordance with
section 773(e) of the Act. We included the cost of materials and
fabrication, SG&A expenses, profit, and U.S. packing. 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 the respondent 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 calculated CV by level of trade, using the selling
expenses and profit determined for each level of trade in the
comparison market.
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 and adding U.S. direct selling expenses
except those deducted from the starting price in calculating CEP
pursuant to section 772(d) of the Act.
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. sale. When the Department is unable to find sale(s) in the
comparison market at the same level of trade as the U.S. sale(s), the
Department may compare U.S. sales to comparison market sales at a
different level of trade.
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. In making this determination, we consider all
selling functions and activities performed by the exporter. The fact
that there is some overlap in selling functions and activities does not
preclude us from finding that sales were made at different levels of
trade. Where selling functions and activities are substantially the
same, however, we normally will consider sales to have been made at the
same level of trade. See, Notice of Proposed Rulemaking and Request for
Public Comments, 61 FR 7348 (February 27, 1996).
Second, pursuant to section 773(a)(7)(A), 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.
Makita reported two levels of trade in the home market and one
level of trade in the United States. We reviewed and verified the
selling functions and activities associated with each claimed level of
trade. Because Makita's sales to the United States were all CEP sales
made by an affiliated company, we considered only the parent company's
selling activities reflected in the price after the deduction of
expenses and profit, pursuant to section 772(d) of the Act. In
examining all of Makita's selling functions and activities, we found
that no single selling function or activity was sufficient to warrant
distinguishing separate levels of trade.
We also determined that Makita's selling functions with respect to
the channels of distribution for wholesalers and retailers in the home
market are sufficiently dissimilar to conclude that two separate levels
of trade exist in the home market. Further, we determined that Makita's
aggregate selling functions and activities in the United States were
substantially the same as those it performs in Japan at the wholesaler
channel of distribution. Thus, we concluded that sales to the United
States and sales in the home market at the wholesaler channel of
distribution were made at the same level of trade.
When we were unable to find sales of the foreign like product in
the home market at the same level of trade as the U.S. sale, we
examined whether a level of trade adjustment was appropriate. We will
make this adjustment when it is demonstrated that a difference in level
of trade has an effect on price comparability. This is the case when it
is established that, with respect to sales used to calculate NV, there
is a pattern of consistent price differences between sales made at the
two different levels of trade. To make this determination, we compared
the weighted average of Makita's NV prices of sales made in the
ordinary course of trade at the two levels of trade for models sold at
both levels, after making any other adjustments required under section
773(a)(6). If the weighted-average prices were higher at one of the
levels of trade for a preponderance of the models, we considered this
to demonstrate a pattern of consistent price differences. We also
considered whether the weighted-average prices were higher at one of
the levels of trade for a preponderance of sales, based on the
quantities of each
[[Page 46627]]
model sold, in making this determination. See Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof from France, et
al.: Preliminary Results of Antidumping Duty Administrative Reviews, 61
FR 35713 (July 8, 1996). As a result of our analysis, we found that
there was a pattern of consistent price differences between the two
levels of trade in the home market. Thus, we made an adjustment to NV
for the differences in levels of trade.
We calculated the level of trade adjustment based on home-market
sales made in the ordinary course of trade and on prices net of
movement expenses, discounts, rebates, direct selling expenses and
packing expenses. For each model sold at both levels of trade in the
home market, we calculated the difference between the weighted-average
prices at the two levels of trade as a percentage of the weighted-
average price at the comparison level of trade. We then calculated a
weighted average of these model-specific percentage differences. We
calculated the amount of the level-of-trade adjustment by applying this
weighted-average percentage price difference to the NV determined at
the different level of trade.
The level of trade methodology employed in these preliminary
results of review is based on the facts particular to this review. We
will continue to examine our policy for making level-of-trade
comparisons and adjustments for the final results of review.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following margins exist:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
------------------------------------------------------------------------
Makita Corporation................. 7/1/94- 6.34
6/30/95
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within ten days of publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. Parties who submit comments are requested to submit with
their comments (1) A statement of the issue and (2) a brief summary of
the comment. The Department will publish a notice of final results of
this administrative review, which will include the results of its
analysis of issues raised in any such comments. The Department will
issue the final results of this review within 180 days of publication
of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between CEP and NV may vary from the percentage stated
above. Upon completion of this review, the Department will issue
appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this administrative review for
all shipments of PECTs from Japan entered, or withdrawn from warehouse,
for consumption on or after the publication date, as provided for by
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for Makita
will be the rate we determine in the final results of 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 shall 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, the
cash deposit rate will be 54.52 percent, the all others rate
established in the LTFV investigation.
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 of the Department's regulations 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.
Dated: August 27, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22521 Filed 9-3-96; 8:45 am]
BILLING CODE 3510-DS-P