[Federal Register Volume 61, Number 197 (Wednesday, October 9, 1996)]
[Notices]
[Pages 52910-52917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25957]


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DEPARTMENT OF COMMERCE
International Trade Administration
A-588-810


Mechanical Transfer Presses From Japan; Final Results of 
Antidumping Administrative Review

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review; Mechanical Transfer Presses from Japan.

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SUMMARY: On April 4, 1996, the Department of Commerce (the Department) 
published the preliminary results of review and termination in part of 
the review of the antidumping duty order on mechanical transfer presses 
(MTPs) from Japan. The review covers four manufacturers/exporters of 
the subject merchandise to the United States and the period February 1, 
1994 through January 31, 1995. We gave interested parties an 
opportunity to comment on the preliminary results of review. We 
received comments from petitioner and three respondents. Based on our 
analysis, we have changed the final results from those presented in the 
preliminary results of review. We have determined that sales have not 
been made below normal value (NV). We will instruct U.S. Customs to 
assess antidumping duties equal to the differences between the export 
price and NV.

EFFECTIVE DATE: October 9, 1996.

FOR FURTHER INFORMATION CONTACT: Elisabeth Urfer 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 statute are 
references to the provisions 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 (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).

SUPPLEMENTARY INFORMATION:

Background

    On April 4, 1996, the Department published the preliminary results 
and termination in part of the review of the antidumping duty order on 
MTPs from Japan (61 FR 15034, April 4, 1996). The Department has now 
completed this administrative review in accordance with section 751 of 
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 spare and 
replacement 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.)
    This review covers four manufacturers/exporters of MTPs, and the 
period February 1, 1994 through January 31, 1995.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received comments from petitioner, 
Verson Division of Allied Products Corp., the United Autoworkers of 
America, and the United Steelworkers of America (AFL-CIO/CLC), and from 
respondents, Aida Engineering, Ltd. (Aida), Kurimoto Co., Ltd. 
(Kurimoto), and Komatsu Ltd. (Komatsu). We received rebuttal comments 
from petitioner, Aida, and Kurimoto.

I. Kurimoto

    Comment 1: Petitioner asserts that the Department should revise the 
profit for Kurimoto's U.S. sale. Petitioner cites to the Statement of 
Administrative Action (SAA) to the URAA at 169, which states:

    Constructed value is used as the basis for normal value where 
home market sales of the merchandise in question are either 
nonexistent, in inadequate numbers, or inappropriate to serve as a 
benchmark for a fair price, such as where sales are disregarded 
because they are sold at below-cost prices. Because constructed 
value serves as a proxy for a sales price, and because a fair sales 
price would recover SG&A expenses and would include an element of 
profit, constructed value must include an amount for SG&A expenses 
and for profit.

    Petitioner notes that the URAA establishes the following 
alternative methods for calculating amounts for profit in those 
instances where the respondent's sales of the foreign like product 
cannot be used: 1) the actual profit realized by the same producer on

[[Page 52911]]

home market sales of the same general category of products; (2) the 
weighted average profit realized by the other investigated companies on 
home market sales of the foreign like product, made in the ordinary 
course of trade; and 3) any other reasonable method, provided that the 
amount for profit does not exceed the profit normally realized by other 
companies on home market sales of the same general category of 
products. Section 773(e)(2)(B) of the Act; SAA at 170.
    Petitioner argues that the Department should use the profit rate 
calculated for Aida in this administrative review, in accordance with 
alternative two in the URAA cited above. For more information, see 
memorandum to the file, ``Mechanical Transfer Presses from Japan--
Additional Discussion of Proprietary Issues Regarding Aida for the 
Final Results of Review,'' dated September 17, 1996.
    Kurimoto contends that the statute requires that the profit level 
of the specific producer be utilized. Kurimoto notes that, as stated in 
the SAA, the statute does not establish a hierarchy among the 
alternative methods for calculating profit and SG&A, and that the 
Department may use any reasonable method, except that the amount 
allowed for profit may not exceed the amount normally realized by 
exporters or producers. Kurimoto argues that the profit level utilized 
by the Department was reasonable because it was consistent with both 
the statute and the SAA and was made with reference to the actual 
experience of the producer. Kurimoto argues that the complex and highly 
customized nature of each MTP, and the pricing for each MTP, may result 
in great differentiation between the profit levels experienced with 
regard to each press sold even by the same producer, and that to resort 
to the profit level experienced by another producer would bear no 
relationship to the conditions faced by the actual producer in 
manufacturing and selling a different piece of machinery under 
different conditions. Kurimoto further argues that utilizing Aida's 
profit level for Kurimoto's calculation would place the Department in a 
position of violating its obligations under the law. Kurimoto states 
that the Department is required to make full, prompt and accurate 
disclosure of Kurimoto's margin calculation. Kurimoto argues that 
Aida's profit level is business proprietary information to which 
Kurimoto is not entitled, and that, if the Department were to utilize 
Aida's profit level in the margin calculation for Kurimoto, it would be 
placed in the position of disclosing Aida's business proprietary 
information.
    Department's Position: For the preliminary results we utilized 
Kurimoto's profit as directed by section 773(e)(2)(A), which states 
that the constructed value of the importer merchandise shall be equal 
to:

    The actual amounts incurred and realized by the specific 
exporter or producer being examined in the investigation or review 
for selling, general and administrative expenses, and for profits, 
in connection with the foreign like product, in the ordinary course 
of trade, for consumption in the foreign country.

    We have evaluated the reasonableness of using Kurimoto's profit on 
sales of the foreign like product by comparing it to profit incurred by 
the producer on sales of merchandise of the same general type as the 
exports in question, and Aida's profit on sales of the foreign like 
product. We have concluded that it is appropriate to use Kurimoto's 
profit on sales of the foreign like product. Because we have continued 
to use Kurimoto's data, the question of whether we would be able to 
provide Kurimoto disclosure of its margin calculation while protecting 
Aida's proprietary information is moot. For further discussion, see the 
memorandum to the file, ``Mechanical Transfer Presses from Japan--
Additional Discussion of Proprietary Issues Regarding Kurimoto for the 
Final Results of Review,'' dated September 17, 1996.
    Comment 2: Petitioner argues that Kurimoto failed to include cost 
variances in its constructed value. Petitioner argues that the 
Department requested this information in its supplemental questionnaire 
and that Kurimoto failed to report this information, but that this 
information was verified by the Department and should be used for 
Kurimoto's constructed value.
    Kurimoto contends that petitioner does not understand the facts 
with regard to these costs. Kurimoto argues that it utilizes a job 
order cost system as the basis for its cost accounting for MTPs. 
Kurimoto notes that its reported costs were tested during the course of 
verification, and no discrepancies were found. Kurimoto argues that, if 
the Department is to make an adjustment, it should only do so for 
labor. For more information see memorandum to the file, ``Mechanical 
Transfer Presses from Japan--Additional Discussion of Proprietary 
Issues Regarding Kurimoto for the Final Results of Review,'' dated 
September 17, 1996.
    Department's Position: We agree with petitioner. We found at 
verification that these costs were associated with labor; however, 
Kurimoto did not provide the information which would allow us to apply 
this adjustment only to labor. We agree with Kurimoto that we found no 
discrepancies with the reported job order costs we tested, with the 
exception of foreign inland freight charges; however, in the course of 
verification, we did find cost variances. Therefore, we are making the 
adjustment for variances suggested by the petitioner. For further 
discussion, see memorandum to the file, ``Mechanical Transfer Presses 
from Japan--Additional Discussion of Proprietary Issues Regarding 
Kurimoto for the Final Results of Review,'' dated September 17, 1996.
    Comment 3: Petitioner argues that the Department should correct for 
Kurimoto's failure to include certain expenses in its constructed 
value. Petitioner asserts that Kurimoto's failure to include these 
costs is confirmed by documents in its questionnaire response, and that 
the Department should correct for this omission.
    Department's Position: We agree with petitioner and have included 
these costs in Kurimoto's constructed value. For further discussion, 
see memorandum to the file, ``Mechanical Transfer Presses from Japan--
Additional Discussion of Proprietary Issues Regarding Kurimoto for the 
Final Results of Review,'' dated September 17, 1996.
    Comment 4: Petitioner argues that the Department should treat 
Kurimoto's U.S. installation and testing costs as movement charges. 
Petitioner notes that, for the preliminary results, the Department 
treated these expenses as direct selling expenses and made a 
circumstance-of-sale adjustment by adding these expenses to constructed 
value.
    Petitioner notes that, during the less-than-fair-value (LTFV) 
investigation, the Department examined the issue of the proper 
treatment of U.S. installation and testing expenses and determined that 
these expenses are movement charges associated with the U.S. sale. 
Petitioner cites to the Final Determination of Sales at Less Than Fair 
Value: Mechanical Transfer Presses from Japan (55 FR 335) January 4, 
1990, which states:

    With respect to installation and installation supervision, 
however, we have determined that these expenses should be treated as 
movement charges. Due to their large size, it is necessary to 
disassemble MTPs for shipment and delivery to the customer's 
facilities. Upon delivery to the customer's premises, the presses 
must be reassembled (installed) in order to function. Because 
disassembly and reassembly are necessary to deliver the merchandise, 
we have determine

[[Page 52912]]

that installation and related supervision expenses are movement 
charges. Therefore, we have deducted the installation and 
installation supervision costs from the verified MTP prices when 
installation and/or supervision of installation were included in the 
contract price for the press.

    Petitioner asserts that installation and testing services are 
required because the MTPs must be disassembled for shipment and must be 
reassembled (installed) in order to function at the customer's 
location, and that, for the final results, the Department should follow 
its stated policy and treat Kurimoto's installation and testing 
expenses as movement charges that should be subtracted from the price 
of the U.S. MTP.
    Kurimoto argues that a reclassification of these costs is a 
meaningless exercise because the Department made a circumstance-of-sale 
adjustment by adding these expenses to constructed value, and therefore 
these expenses are already reflected in the Department's preliminary 
margin calculation.
    Department's Position: We agree with petitioner. It is appropriate 
to consider such costs as movement expenses as we did in the LTFV 
investigation and in subsequent reviews. Because of their size, MTPs 
must be broken down for shipment and installed at the customer's site. 
For the final results we have classified installation costs as movement 
expenses in accordance with our prior practice. Therefore, we have 
subtracted these expenses from the export price, rather than adding 
them to CV.
    Comment 5: Petitioner argues that the Department should correct 
what it claims are understatements of the imputed credit expenses for 
Kurimoto's U.S. sale. Petitioner argues that the Department should 
recalculate the credit expenses, using the period from the date of 
shipment to the U.S. customer. Petitioner argues that, in the LTFV 
investigation, the Department determined that the credit period should 
begin with date of shipment to the U.S. customer.
    Petitioner also argues that the Department should recalculate the 
imputed credit expenses for Kurimoto's U.S. MTP based on a revised 
principal balance that includes the tax portion of the sale. Petitioner 
notes that at verification the Department examined a postcard that 
showed a payment amount that included a three percent tax.
    Finally, petitioner questions an assumption the Department made 
regarding Kurimoto's credit expense. For an additional discussion of 
this issue see the memorandum to the file, ``Mechanical Transfer 
Presses from Japan--Additional Discussion of Proprietary Issues 
Regarding Kurimoto for the Final Results of Review,'' dated September 
17, 1996.
    Kurimoto argues that these suggested adjustments to imputed credit 
expenses are not reasonable. Kurimoto cites to Federal-Mogul Corp. v. 
United States, and states that in that case the plaintiff demanded that 
the Department take into account effects of delayed payment of home 
market expenses in the calculation of circumstance-of-sale adjustments 
to foreign market value. (See Federal-Mogul Corp. v. United States, 839 
F. Supp 881, 17 CIT 1249, 1252-1253 (1993) (Federal-Mogul).) Kurimoto 
notes that in Federal-Mogul the Court relied on the Court of Appeals 
for the Federal Circuit's reasoning in Daewoo Elec. Co. v. United 
States 6F.3d 1511 (CAFC 1993), and stated that requiring that 
econometric analysis of tax incidence would prevent the Department from 
completing antidumping determinations within the statutory time frames 
and that the additional burden would not be justified on the basis of 
more soundly based results. Kurimoto argues that the Court determined 
that reliance on the respondent's financial records for the purposes of 
the circumstance-of-sale adjustment was sufficient, and that the 
Department was ``not required to factor in the effects of delayed 
payment of home market selling expenses on these COS adjustments.'' 
Kurimoto argues that the reasoning of Federal-Mogul is equally 
applicable to credit in its case. Kurimoto argues that the Department 
has had access to all relevant information which has been available to 
respondent and the information which the respondent supplied has been 
verified, and that to go beyond this would demand a level of exactitude 
which is beyond that required by Congress and that of which the 
Department is capable in the context of an administrative review.
    Kurimoto also argues that the adjustments suggested by petitioner, 
such as a change in period for the credit expense calculation, or a 
deduction of the three percent tax amount from the payment amounts 
utilized in the credit calculation, would have only a minuscule effect 
on the margin calculation.
    Department's Position: We agree with petitioner, in part. It is 
appropriate to include in the calculation of credit expense an amount 
for tax, and credit should be calculated from the date of shipment. 
With respect to petitioner's point regarding an assumption made by the 
Department, Kurimoto supplied information at verification, and on 
September 9, 1996 in response to our request for additional information 
about credit. This information is sufficient for us to make certain 
assumptions regarding credit. We agree with Kurimoto that it would be 
unreasonable for us to delay the results of the review any longer given 
that the Department has sufficient record evidence on this issue. We 
therefore have accepted the information supplied by Kurimoto. For an 
additional discussion of this issue see memorandum to the file, 
``Mechanical Transfer Presses from Japan--Additional Discussion of 
Proprietary Issues Regarding Kurimoto for the Final Results of 
Review,'' dated September 17, 1996.
    Comment 6: Petitioner argues that the Department should include 
direct selling expenses in the constructed value for Kurimoto's U.S. 
merchandise. Petitioner notes that Kurimoto's reported selling, general 
and administrative (SG&A) expenses included an amount for indirect 
selling expenses, direct selling expenses, and general and 
administrative expenses, but that at verification Kurimoto submitted a 
revised SG&A calculation in which direct selling expenses were excluded 
from total SG&A expenses, and that the Department used the revised 
calculation in its preliminary results.
    Petitioner argues that exclusion of direct selling expenses from 
the constructed value is improper because constructed value should 
include SG&A expenses as if the U.S. MTP had been sold in the home 
market. Petitioner asserts that, for the final results, the Department 
should revise its preliminary constructed value calculations to include 
the direct selling expenses reported by Kurimoto.
    Kurimoto argues that the expenses removed from the SG&A calculation 
at the beginning of verification were for U.S. sales, not sales of the 
foreign like product, and that such expenses should not be included in 
NV. Kurimoto notes that the Department reviewed its calculations of 
SG&A at verification.
    Department's Position: We agree with Kurimoto. Section 773(e)(2)(A) 
of the Act states that constructed value is to include:

    The actual amounts incurred and realized by the specific 
exporter or producer being examined in the investigation or review 
for selling, general and administrative expenses, and for profits, 
in connection with the production and sale of a foreign like product 
in the ordinary course of trade, for consumption in the foreign 
country.

    At verification Kurimoto submitted revised SG&A expenses because 
the figure it had originally reported

[[Page 52913]]

included selling expenses incurred for the U.S. sale. We examined the 
selling expenses that Kurimoto had removed from the SG&A calculation 
and found that these expenses were incurred for the U.S. sale. We 
therefore have continued to use the revised SG&A expense figures 
submitted at the beginning of verification.
    Comment 7: Kurimoto argues that the Department should deduct an 
amount from foreign inland freight for the shipment of spare parts. 
Kurimoto asserts that the Department should calculate a per kilo amount 
for foreign inland freight, then multiply this amount by the kilos of 
spare parts shipped, using entry documents, invoices and packing lists 
submitted to the Customs Service and included in its supplemental 
questionnaire response. Kurimoto argues that this figure should be 
subtracted from total foreign inland freight.
    Petitioner contends that the Department should reject Kurimoto's 
claim for revised foreign inland freight expenses because the claim is 
untimely, unverified, and not consistent with other information that is 
on the record in this review. Petitioner argues that Kurimoto did not 
submit this claim with in its questionnaire responses or prior to 
verification. Petitioner argues that the Department should also reject 
Kurimoto's suggestion that the Department use U.S. Customs entry 
documents to adjust its Japanese inland freight costs because they are 
not relevant to Kurimoto's inland freight costs. Petitioner contends 
that Kurimoto's reported Japanese inland freight expense calculations 
and documents in Kurimoto's questionnaire response indicate that 
Kurimoto's reported Japanese inland freight costs did not include 
freight for spare parts. Petitioner also argues that Kurimoto's 
proposed method for adjusting its reported Japanese inland freight 
costs should be rejected because MTPs are shipped in large pieces that 
require special handling, and that spare and replacement parts do not 
need such handling; therefore, Kurimoto's methodology would allocate 
these costs to spare parts which did not incur these costs.
    Department's Position: We agree with petitioner. As Kurimoto did 
not submit this claim with its questionnaire responses or at any time 
prior to verification, the claim is therefore untimely. During 
verification, we found additional foreign inland freight charges. 
Kurimoto did not claim, at that time, that any of these freight charges 
were for spare and replacement parts. We also disagree with Kurimoto 
that it would be appropriate to calculate a per kilo amount for foreign 
inland freight, then multiply this amount by the kilos of spare parts 
shipped based on U.S. Customs documents. As petitioner notes, some of 
the foreign inland freight charges are for special equipment which 
might not be necessary for spare and replacement parts. There is no 
information on the record as to which of these charges pertained to 
which type of shipment. Therefore, based on the foregoing, we have not 
made a deduction for foreign inland freight to account for spare and 
replacement parts.

II. Aida

    Comment 1: Petitioner asserts that the Department should reject 
Aida's claimed adjustment to convert transfer prices to cost of 
production. Petitioner notes that Aida reported in its questionnaire 
response that it received major inputs for the U.S. MTPs from its 
affiliated company, Aida Welding Company Ltd. (Aida Welding). 
Petitioner further notes that Aida reported that Aida Welding produced 
the welded steel frames for the crown assembly, slide assembly, bed 
assembly and column assembly, and that Aida submitted a worksheet 
showing the transfer prices and Aida Welding's cost of production for 
the welded steel frames. Petitioner argues that the Department treated 
this transaction improperly by accepting Aida's adjustment to the 
transfer price. Citing Sections 773(f) (2) and (3) of the statute, 
petitioner argues that the statute (1) provides for an adjustment to 
the value of an input obtained from an affiliated party when the value 
reported by the respondent is less than the cost of production for the 
input, and (2) allows the Department the discretion to disregard a 
transaction if the value does not reflect the amount usually reflected 
in sales of the merchandise under consideration. Petitioner contends 
that it is the Department's policy to use affiliated party transfer 
prices for constructed value as long as the transfer prices reflect 
market value and are above the cost of production. Petitioner asserts 
that, for the final results, the Department should revise the 
constructed values for Aida's sales to exclude the adjustment claimed 
by Aida to convert the cost of direct materials purchased from Aida 
Welding from transfer price to Aida Welding's cost of production.
    Aida disagrees with petitioner and asserts that the Department 
correctly applied the price-to-cost adjustment for assemblies produced 
by Aida Welding. Aida notes that welded frame assemblies for Aida are 
produced by Aida Welding, which is a wholly-owned subsidiary of Aida, 
that Aida Welding operates as part of the consolidated operations of 
Aida, and that Aida's purchases from Aida Welding are not at arm's 
length. Aida states that purchases from affiliated entities are 
recorded in Aida's accounting at the transfer price, and that Aida 
included a price-to-cost adjustment in its constructed value submission 
in the amount of the difference between transfer price and cost of 
production for the welded frame assemblies produced by Aida Welding for 
each U.S. press. Aida argues that the effect of this adjustment was to 
state the cost of welded frame assemblies on the basis of fully-
absorbed cost rather than transfer price, and that the same methodology 
was applied by Aida in the original investigation and in the prior 
reviews in which Aida participated.
    Aida contends that petitioner's arguments that Section 773(f)(2) of 
the Act allows affiliated party transactions to be disregarded only if 
the transfer price is below market value and that section 773(f)(3) 
allows affiliated party transactions to be based on cost only if 
transfer price is below cost, are incorrect. Aida argues that Section 
773(f)(2) allows transfer price to be disregarded if there is no market 
reference price for the particular merchandise, in which case the 
Department may use cost as an appropriate measure of value.
    Aida notes that in the original investigation there were no market 
prices for the welded frame assemblies produced by Aida Welding for 
Aida, and asserts that there has been no change in the present review. 
Aida argues that it properly reported the cost of the welded frame 
assemblies produced by Aida Welding on the basis of cost of production 
rather than transfer price and that the Department properly included 
the cost-to-price adjustment in its calculation of constructed value.
    Department's Position: An adjustment to the transfer price for the 
Aida Welding steel frame assemblies is not appropriate in this review. 
In the Final Determination of Sales at Less Than Fair Value: Mechanical 
Transfer Presses from Japan (55 FR 335, January 4, 1990), we found that 
some of Aida's affiliated party parts purchases were made at transfer 
prices below the cost of production. Therefore, we valued the steel 
frame assemblies at their cost of production. This issue has not been 
addressed in the preliminary or final results of subsequent reviews of 
this order. Section 773(f)(2) of the Act states that the Department may 
disregard the transfer price if it ``does not fairly reflect the amount 
usually reflected in sales of

[[Page 52914]]

merchandise under consideration in the market under consideration.'' 
The transfer price is not below cost and there is no evidence that the 
transfer price does not reflect normal market value. Therefore, it 
would be inappropriate to ignore the transfer price. Accordingly, for 
these final results, we have disallowed the adjustment for the steel 
frame assemblies claimed by Aida.
    Comment 2: Petitioner asserts that the Department should adjust the 
costs reported by Aida for parts obtained from an affiliated company, 
Access Co., Ltd. (Access). Petitioner notes that section 773(f)(3) of 
the statute states that, if the Department has reasonable grounds to 
believe or suspect that the values reported for purchases of major 
inputs from affiliated suppliers are less than the cost of production, 
the Department may determine the value of the inputs on the basis of 
information available regarding cost of production. Petitioner asserts 
that the Department requested that Aida demonstrate that purchases from 
its affiliated suppliers were at arm's length, and that Aida failed to 
submit information for Access that it submitted from another affiliated 
party. Petitioner argues that the Department should not accept Aida's 
failure to respond to the Department's request that Aida demonstrate 
that parts purchased from Access were at arm's-length prices. 
Petitioner argues that the Department should adjust the cost of 
production of Access parts by certain percentages. (For an additional 
discussion of petitioner's position on this issue see memorandum to the 
file, ``Mechanical Transfer Presses from Japan--Additional Discussion 
of Proprietary Issues Regarding Aida for the Final Results of Review,'' 
dated September 17, 1996.)
    Aida disagrees with petitioner and argues that the Department 
correctly valued materials purchased from Access at transfer price. 
Aida notes that in its questionnaire response it stated that it 
purchased certain electric components, namely control boxes and 
operation stands, from Access, which is a subsidiary of Aida that 
engages in research, development, and manufacture of electric-
controlled parts for presses. Aida further notes that, unlike Aida 
Welding, Access is not a consolidated subsidiary of Aida, and that the 
prices for the components purchased from Access were determined in 
arm's-length negotiation between Access and Aida. Aida argues that, 
because of the foregoing, it used the transfer price as the cost of 
components purchased from Access. Aida maintains that petitioner's 
argument that the Department has reasonable grounds to believe or 
suspect Access' sales were below the cost of production is not 
supported by the record. Aida argues that the considerations that apply 
to Aida Welding do not similarly apply to Access because the prices to 
Aida Welding are not made at arm's-length. Aida claims that it did 
respond to the Department's questions in its supplemental questionnaire 
response.
    Aida further contends that petitioner's contention that the 
Department should determine a presumed cost of production for the 
Access components using information in the record with respect to the 
difference between transfer price and cost for components supplied by 
Aida Welding is contradictory. Aida argues that, as petitioner 
acknowledges, the Aida Welding transfer prices were above the cost of 
production; therefore, they provide no support for petitioner's 
contention that the Access transfer prices were below cost. Aida argues 
that petitioner compounds the confusion by proposing that the 
percentage difference between transfer price and cost for Aida Welding 
components be applied to the Access transfer prices, but with the sign 
reversed, using the percentage by which Aida Welding's cost was below 
transfer price as the measure for increasing the Access transfer price. 
Aida argues that petitioner's request that the Department adjust the 
Access prices should be rejected.
    Department's Position: Aida was responsive to the questions asked 
in our supplemental questionnaire regarding this issue. In its 
response, Aida stated that these parts were purchased at arm's length 
based on quotations issued by Access and in negotiations between Aida 
and Access, and that it did not purchase identical or similar parts 
from unaffiliated parties. Based on this information, and the 
relationship between the parties, we have accepted Aida's claim that 
the purchases were made at arms-length. Therefore, we have continued to 
accept the transfer price for the Access purchases.
    Comment 3: Aida asserts that the Department made clerical errors in 
its calculation of profit, and argues that the Department should 
correct these errors for the final results. Aida notes that the 
Department calculated the home market profit rate by eliminating below-
cost sales from the calculation. Aida asserts that, in doing so, the 
Department made several errors in copying certain data from Aida's 
exhibits.
    Department's Position: We agree that clerical errors were made and 
have made the necessary corrections to the CV profit calculation. In 
reviewing our methodology, we find that we should not have excluded any 
home market sales from our calculation of CV profit. We did not receive 
an allegation that home market sales were made at prices below the cost 
of production (COP) and have not determined that any home market sales 
are outside the ordinary course of trade (i.e., sales made at prices 
below COP in substantial quantities over an extended period of time). 
Therefore, for our final results we have included all home market sales 
in our calculation of profit.
    Comment 4: Aida argues that the Department erred in its calculation 
of the net profit amount for the constructed export price profit 
calculation by erroneously dividing net profit only by home market cost 
of sales, not by total cost of sales as the Department indicated it did 
in its analysis memorandum for the preliminary results.
    Department's Position: We agree and have recalculated constructed 
export price (CEP) profit using the cost of sales.
    Comment 5: Aida asserts that the Department failed to add to the 
U.S. price an imputed benefit for payment made prior to shipment. Aida 
notes that Department's questionnaire states that such a benefit will 
be allowed if payment is made prior to shipment. Aida asserts that for 
the final results the Department should add to the export price and CEP 
the imputed interest benefit of payments received prior to shipment by 
including the negative credit expense in its calculations.
    Department's Position: We agree with Aida. Because payment was made 
prior to shipment, Aida should receive an imputed benefit for credit. 
We have therefore included the imputed benefit for credit for the final 
results.
    Comment 6: Aida argues that the Department failed to make a CEP 
offset adjustment in its preliminary results calculation of NV for U.S. 
transaction #2, which was a CEP sale. Aida contends that, since CEP was 
calculated at a less advanced stage of distribution than NV, an offset 
should have been applied pursuant to Section 773(a)(7)(B) of the Act. 
Aida argues that the Department established the methodology for making 
level of trade comparisons involving CEP transactions in the 
supplemental questionnaire in the sixth administrative review of 
Antifriction Bearings, which states:

    When the U.S. sale is classified as an export price (EP) sale, 
the level of trade for that sale is based on the selling functions 
provided by the seller to the first unaffiliated party. When the 
U.S. sale is classified as a constructed export price (CEP) sale, 
the level of trade for that sale is based upon the selling

[[Page 52915]]

functions provided by the seller (i.e., the exporter and its 
affiliates to the first unaffiliated party, less those selling 
functions related to expenses which are deducted under section 
772(d) of the Act. Thus, for CEP sale, the selling functions used to 
establish the level of trade cannot include selling functions 
related to expenses deducted under section 772(d). For comparison 
market sales, the level of trade is based upon the selling functions 
provided by the seller and its affiliates to the first unaffiliated 
customer.

    Aida asserts that in determining whether CEP sales and comparison 
market sales involve the same or different selling activities, the 
level of trade for CEP sales is based on the selling activities 
included in CEP after deduction of Section 772(d) expenses.
    Aida notes that, pursuant to section 772(d), the Department 
deducted all selling expenses in calculating CEP for U.S. transaction 
#2, thus reducing CEP to a level of trade that included no selling 
functions, and argues that NV calculated by the Department for U.S. 
transaction #2 included the selling functions related to indirect 
selling expenses, namely indirect warranty, indirect advertising and 
indirect sales office expense. Aida argues that, since NV includes 
selling functions not included in CEP, NV was established at a 
different level of trade from CEP and at a more advanced stage of 
distribution than CEP. Aida asserts that the effect of the level of 
trade difference between NV and CEP sales cannot be demonstrated by 
price differences in the home market because the CEP level of trade 
(i.e., sales with no selling functions) does not exist in the home 
market. Accordingly, the conditions for granting the CEP offset are 
met, and the offset should be applied in calculating NV for U.S. 
transaction #2.
    Aida argues that the application of the CEP offset is required not 
only by Section 773(a)(7)(B), but also by the ``fair comparison'' 
standard in Section 773(a), which states that in determining whether 
subject merchandise is being sold at less than fair value a fair 
comparison shall be made between the export price or the CEP and NV. 
Aida contends that the Department double counted indirect warranty 
expense, indirect advertising expense, and indirect sales office 
expense since these costs were applied both to increase NV and to 
reduce CEP, and that NV and CEP must be stated on the same basis, which 
is accomplished through a CEP offset.
    Petitioner asserts that the Department correctly determined that a 
CEP offset is not warranted for Aida's CEP sale. Petitioner argues that 
the SAA to the URAA makes clear that the CEP offset is no longer 
automatic, but is only to be applied where different levels of trade 
have been shown to exist, and that the respondent bears the burden of 
establishing the appropriateness of adjustments that decrease NV. 
Petitioner contends that Aida has not provided any evidence that 
demonstrates differences in selling functions at different levels of 
trade. Petitioner argues that Aida's questionnaire responses indicate 
that there are no differences in selling functions for its MTP sales. 
Petitioner further argues that Aida's assumption that an adjusted CEP 
includes no selling functions is not correct because the adjusted CEP 
still includes any indirect selling expenses or functions incurred in 
the home market on behalf of U.S. sales. Finally, petitioner argues, 
Aida failed to demonstrate that differences in levels of trade result 
in price differences for the MTPs.
    Department's Position: Aida has not demonstrated that a CEP offset 
is warranted. As petitioner notes, the CEP offset is no longer 
automatic and the respondent bears the burden of demonstrating that 
such an offset is warranted. In the Notice of Final Determination of 
Sales at Less Than Fair Value: Large Newspaper Printing Presses and 
Components Thereof, Whether Assembled or Unassembled, From Japan (61 FR 
38139, July 23, 1996) (Newspaper Presses), we noted that respondents 
must provide the necessary data for the Department to consider a level 
of trade adjustment; without such data, a level of trade adjustment 
under section 773(a)(7)(A) cannot be made and, further, a CEP offset 
under section 773(a)(7)(B) is not authorized. As in Newspapers Presses, 
the respondent in this case, Aida, did not submit in its questionnaire 
responses any information indicating that there were different selling 
functions between CEP and home market sales. Further there is no 
support in the record for Aida's claim that there are no selling 
functions in CEP. Because Aida did not provide the necessary level of 
trade information, a CEP adjustment for Aida's CEP sale is not 
warranted.
    Comment 7: Aida maintains that U.S. press #2 in its questionnaire 
response is not an MTP from Japan, because the press body was produced 
for Aida in Taiwan. Aida argues that only the transfer unit was 
imported from Japan. Aida argues that it erred on the side of 
completeness in reporting the sale in its questionnaire response, but 
noted there that press and transfer unit were outside the scope of 
review. Aida notes that the Department treated the transfer unit from 
Japan as within the scope of the review, and cites to the preliminary 
results, which state:

    The scope includes ``parts suitable for use solely or 
principally'' with MTPs. Therefore, because the transfer unit was 
imported as an original equipment part of an MTP, we have 
preliminarily determined to include the transfer unit in this 
review.

61 FR 15035, April 4, 1996.

    Aida argues that the definition of MTPs, as clearly demonstrated by 
the record of the MTP antidumping proceeding, consists only of MTPs, 
whether imported assembled or disassembled and whether classified as 
machines or parts, and does not include MTP parts per se.
    Aida argues that the petition in the MTP case requested an 
investigation of imports of MTPs only, not MTPs and parts thereof. Aida 
cites to the general description of merchandise and the tariff 
classification in the petition, the Department of Commerce Notice of 
Initiation, the Department of Commerce Hearing and the International 
Trade Commission Final Determination, and argues that it was clear 
throughout all phases of the investigation that the class or kind of 
subject merchandise consisted of MTPs from Japan, and that parts were 
mentioned only as one form in which a complete machine might be 
imported, and that MTP parts or components per se were not included in 
the investigation. Aida contends that this was confirmed by the 
Department in its March 16, 1992 scope proceeding on MTP spare parts. 
Aida states that, while the petitioner had argued in the scope 
proceeding that the petition was intended to cover parts, the 
Department concluded that the petition did not encompass subassemblies 
and parts thereof. Aida notes that the March 16, 1992 scope ruling, 
while not specifically addressing the situation presented by Aida press 
#2, stated that the order is limited to fully assembled MTPs and 
disassembled/unassembled parts of a unique MTP.
    Aida argues that the language from the scope definition on which 
the Department relies in its preliminary results is language from the 
petition, which covers disassembled/ unassembled MTPs in multiple 
shipments, not MTP parts per se.
    Petitioner disagrees with Aida, and states that the Department's 
determination that the MTP transfer unit exported from Japan is subject 
to review is correct. Petitioner argues that the transfer unit is an 
original equipment part and that the plain language of the antidumping 
duty order covers original equipment parts. Petitioner argues that in 
the LTFV

[[Page 52916]]

investigation the petition included MTPs, as well as parts and the 
individual component items that comprise unassembled MTPs. Petitioner 
argues that the language in the order contains no qualifications or 
limitations that the importation of original equipment parts must in 
all cases comprise a complete unassembled MTP, but does contain 
coverage for original equipment parts that are used solely or 
principally in MTPs. Petitioner argues that in the scope ruling on 
spare parts the Department found that the scope language of the order 
was ambiguous with respect to the issue of parts. Petitioner argues 
that in the context of that ruling the Department acknowledged that 
individual parts of a complete, disassembled press that are imported 
from Japan are covered merchandise, and that some parts not comprising 
a complete disassembled press are covered so long as they satisfy the 
order criteria are ``suitable for use solely or principally'' with an 
MTP.
    Department's Position: We disagree with Aida. The scope of the 
order covers MTPs that are imported either assembled or unassembled. 
The transfer unit, which was imported from Japan, is an essential 
component of the complete MTP. Aida states in its July 7, 1995, 
questionnaire response that a mechanical transfer press is 
distinguished from other types of mechanical presses by a tie rod frame 
construction and an internal transfer feed mechanism designed as an 
intregral part of the press (emphasis added). The sale in question was 
made by Aida in Japan to a U.S. customer for a complete MTP. Therefore, 
the transfer unit falls within the scope of the order. We disagree with 
Aida that the spare parts ruling can be applied in this case. Spare and 
replacement parts, when imported with an MTP, constitute additions to 
or replacements for an already complete MTP. In contrast, the transfer 
unit is an essential component of an original, complete, unassembled 
MTP. Based on the foregoing, we have included the transfer unit in our 
final results.

III. Komatsu

    Comment 1: Komatsu argues that the Department's determination in 
the preliminary results that Komatsu had withheld requested 
information, and its resultant decision to base Komatsu's margin on the 
facts otherwise available, were based on the incorrect assertion that 
it did not have sufficient information regarding the nature of the 
parts Komatsu exported to the United States. Komatsu asserts that it 
submitted a scope ruling request on the same date that it submitted a 
letter to the Department explaining that it had no U.S. sales of 
subject merchandise during the review period. Komatsu asserts that it 
later submitted thousands of additional pages of information regarding 
the nature of the parts it exported to the United States in response to 
the Department's requests for information relating to the scope 
analysis. Komatsu argues that, while it did not respond to sections B, 
C, and D of the questionnaire, it did not have sales to the United 
States of subject merchandise. Therefore, Komatsu argues, there is no 
basis for the Department's assertion that Komatsu withheld information, 
and the Department's preliminary determination should be revised.
    Komatsu argues that there is no reason to delay the issuance of the 
results of the scope inquiry. Komatsu argues that its scope inquiry is 
not novel or complicated, and asserts that the Department should 
conclude that the small quantity of parts Komatsu exported during this 
period of review are not within the scope of the antidumping order on 
MTPs from Japan. Komatsu argues that the Department should establish a 
zero cash deposit rate for Komatsu because it had no shipments of 
subject merchandise during this review period and the most recent 
dumping margin for Komatsu was zero.
    Petitioner disagrees with Komatsu and argues that the Department's 
use of facts available for its preliminary analysis of Komatsu's sales 
is appropriate. Petitioner asserts that Komatsu failed to submit a 
response to the Department's questionnaire and that the Department 
properly considered the MTP parts exported to the United States by 
Komatsu subject to this administrative review because the Department 
has not issued a scope ruling concerning these parts.
    Department's Position: Pursuant to our scope determination issued 
on October 1, 1996, the parts at issue have been excluded from the 
order. Therefore, the issue of whether we should use facts available 
for Komatsu's failure to respond to sections C and D of the 
questionnaire is moot. For the final results, we are treating Komatsu 
as a non-shipper, and Komatsu will retain its rate from the last 
administrative review in which it had shipments. Komatsu's rate, 
therefore, is zero percent.

Final Results of the Review

    We determine that the following dumping margins exist:

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter               Time period     (percent)
------------------------------------------------------------------------
Aida Engineering, Ltd.....................     2/1/94-1/31/95       0.00
Kurimoto, Ltd.............................     2/1/94-1/31/95       0.00
Komatsu Ltd...............................     2/1/94-1/31/95       0.00
Ishikawajima-Harima Heavy Industries, Ltd.     2/1/94-1/31/95       0.00
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of these final results for all shipments of MTPs 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 reviewed companies will be the rate 
established in these final results; (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 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) for all 
other producers and/or exporters of this merchandise, the cash deposit 
rate shall be the rate established in the investigation of sales at 
LTFV, which is 14.51 percent. These deposit requirements 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

[[Page 52917]]

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 administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: October 1, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25957 Filed 10-8-96; 8:45 am]
BILLING CODE 3510-DS-P