[Federal Register Volume 61, Number 216 (Wednesday, November 6, 1996)]
[Notices]
[Pages 57391-57397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28559]


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DEPARTMENT OF COMMERCE
[A-588-054, A-588-604]


Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or 
Less in Outside Diameter, and Components Thereof, From Japan; 
Preliminary Results of Antidumping Duty Administrative Reviews and 
Partial Termination of Administrative Reviews

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews.

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SUMMARY: In response to requests by the petitioner and two respondents, 
the Department of Commerce (the Department) is conducting 
administrative reviews of the antidumping duty order on tapered roller 
bearings (TRBs) and parts thereof, finished and unfinished, from Japan 
(A-588-604), and of the antidumping finding on TRBs, four inches or 
less in outside diameter, and components thereof, from Japan (A-588-
054). The review of the A-588-054 finding covers one manufacturer/
exporter and seven resellers/exporters of the subject merchandise to 
the United States during the period October 1, 1994, through September 
30, 1995. The review of the A-588-604 order covers two manufacturers/
exporters, seven resellers/exporters, four firms identified by the 
petitioner in this case as forging producers, and the period October 1, 
1994, through September 30, 1995.
    We preliminarily determine that sales of TRBs have been made below 
the normal value (NV). If these preliminary results are adopted in our 
final results of administrative review, we will instruct the U.S. 
Customs Service to assess antidumping duties equal to the difference 
between United States price and the NV. Interested parties are invited 
to comment on these preliminary results. Parties who submit argument in 
these proceedings are requested to submit with the argument (1) a 
statement of the issues and (2) a brief summary of the argument.

EFFECTIVE DATE: November 6, 1996.

FOR FURTHER INFORMATION CONTACT: Valerie Turoscy, Robert James, or John 
Kugelman, AD/CVD Enforcement, Group III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230, 
telephone: (202) 482-0145, 5222, or 0649, respectively.

APPLICABLE STATUTE AND REGULATIONS: 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 Rounds Agreements 
Act. 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 August 18, 1976, the Treasury Department published in the 
Federal Register (41 FR 34974) the antidumping finding on TRBs from 
Japan, and on October 6, 1987, the Department published the antidumping 
duty order on TRBs from Japan (52 FR 37352). On October 5, 1995, the 
Department published the notice of ``Opportunity to Request 
Administrative Review'' for both TRB cases covering the period October 
1, 1994 through September 30, 1995 (60 FR 52149).
    In accordance with 19 CFR 353.22(a)(1) (1995), the petitioner, the 
Timken Company (Timken), requested that we conduct a review of Honda 
Motor Company, Ltd. (Honda), Fuji Heavy Industries (Fuji), Kawasaki 
Heavy Industries (Kawasaki), Yamaha Motor Co., Ltd. (Yamaha), Nigata 
Convertor Co., Ltd. (Nigata), Suzuki Motor Co., Ltd. (Suzuki), and 
Toyosha Co., Ltd. (Toyosha), in both the A-588-054 and A-588-604 cases. 
In addition, Timken requested that we conduct a review of Nittetsu 
Bolten (Nittetsu), Showa Seiko Co., Ltd. (Showa), Ichiyanagi Tekko 
(Ichiyanagi), and Sumikin Seiatsu (Sumikin) in the A-588-604 TRB case. 
Koyo Seiko Co., Ltd. (Koyo) requested that we conduct a review of its 
sales in both TRB cases, and NTN Corporation (NTN) requested that we 
conduct a review of its sales in the A-588-604 case. On November 11, 
1995, we published in the Federal Register a notice of initiation of 
these antidumping duty administrative reviews covering the period 
October 1, 1994 through September 30, 1995 (60 FR 57573).
    Because it was not practicable to complete these reviews within the 
normal time frame, on May 6, 1996, we published in the Federal Register 
our notice of the extension of the time limits for both the A-588-054 
and A-588-604 1994-95 reviews (61 FR 8253). As a result of this 
extension and the 28-day total federal government shutdown, we extended 
the deadline for these preliminary results to October 30, 1996, and for 
the final results to February 28, 1997.

Scope of the Reviews

    Imports covered by the A-588-054 finding are sales or entries of 
TRBs, four inches or less in outside diameter when assembled, including 
inner race or cone assemblies and outer races or cups, sold either as a 
unit or separately. This merchandise is classified under Harmonized 
Tariff Schedule (HTS) item numbers 8482.20.00 and 8482.99.30.
    Imports covered by the A-588-604 order include TRBs and parts 
thereof, finished and unfinished, which are flange, take-up cartridge, 
and hanger units incorporating TRBs, and roller housings (except pillow 
blocks) incorporating tapered rollers, with or without spindles, 
whether or not for automotive use. Products subject to the A-588-054 
finding are not included within the scope of this order, except those 
manufactured by NTN. This merchandise is currently classifiable under 
HTS item numbers 8482.99.30, 8483.20.40, 8482.20.20, 8483.20.80, 
8482.91.00, 8483.30.80, 8483.90.20, 8483.90.30, and 8483.90.60. In 
addition, on February 2, 1995, we published in the Federal Register our 
final scope decision concerning Koyo's rough forgings (60 FR 6519), in 
which we determined that Koyo's rough forgings were within the scope of 
the A-588-604 order. The HTS item numbers listed above for both the A-
588-054 finding and the A-588-604 order are provided for convenience 
and Customs purposes. The written description remain dispositive.
    The period for each 1994-95 review is October 1, 1994, through 
September 30, 1995. The review of the A-588-054 case covers TRB sales 
by one manufacturer/exporter (Koyo), and seven reseller/exporters 
(Honda, Fuji, Kawasaki, Yamaha, Nigata, Suzuki, and Toyosha). The 
review of the A-588-054 case covers TRBs sales by two manufacturers/
exporters (Koyo and NTN), seven reseller/exporters (Honda, Fuji, 
Kawasaki, Yamaha, Nigata, Suzuki, and Toyosha), and four firms 
identified as forging producers (Nittetsu, Showa, Ichiyanagi, and 
Sumikin). As described in the ``Termination in Part '' section of

[[Page 57392]]

this notice, we are terminating our review of five of the 13 firms in 
the A-588-604 case and two firms in the A-588-054 case.

Termination in Part

    In accordance with section 353.22(a)(5) (1995) of the Department's 
regulations, on January 16, 1996, Koyo withdrew its request for review 
in the A-588-604 case and on January 25, 1996, NTN also withdrew its 
request for review in the A-588-604 case. In addition, on March 7, 
1996, Timken withdrew its request for review for Ichiyanagi in the A-
588-604 case and for Toyosha in both the A-588-604 and A-588-054 cases. 
Because we received timely requests for the withdrawal of review from 
Koyo, NTN, and Timken, and because no other party to the proceedings 
requested a review for Koyo, NTN, and Ichiyanagi in the A-588-604 case 
and Toyosha in both the A-588-604 and A-588-054 cases, in accordance 
with 19 CFR 353.22(a)(5), we are terminating the A-588-604 review with 
respect to Koyo, NTN, Ichiyanagi, and both the A-588-054 and A-588-604 
reviews for Toyosha.
    In addition, we are terminating the A-588-604 review for one of the 
four firms Timken identified as a potential forging producer. Sumikin 
reported that not only did it not export subject merchandise to the 
United States during the POR, but it did not manufacture any TRBs or 
forgings for TRBs during the POR. Because this firm did not produce or 
export the subject merchandise, we are terminating the A-588-604 review 
for Sumikin. Our termination of the A-588-604 review for this firm does 
not constitute a revocation of the firm from the order. If this firm 
ever becomes a manufacturer/exporter of TRBs or forgings used in the 
production of TRBs, its sales to the United States will be subject to 
the order.
    We are also terminating the A-588-054 review for Honda based on the 
fact that we recently revoked Honda from the A-588-054 finding in our 
1992-93 TRB final results notice. See Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From Japan and TRBs, Four Inches or 
Less in Outside Diameter, and Components Thereof, From Japan; Final 
Results of Antidumping Duty Administrative Reviews and Revocation in 
Part of an Antidumping Finding, issued October 29, 1996.

No Shipments

    Two resellers, Fuji and Honda, made no shipments of A-588-604 
merchandise during the review period. In addition, neither Fuji nor 
Honda was a party to the A-588-604 less-than-fair-value (LTFV) 
investigation or any prior administrative reviews of the A-588-604 
case. Because Fuji's and Honda's shipments have never been reviewed 
individually, we have not assigned a rate to either firm for the A-588-
604 case. If Fuji or Honda begins shipping merchandise subject to the 
A-588-604 order at some future date, the entries will be subject to 
cash deposit rates attributable to the manufacturer(s) of the subject 
merchandise.
    Two of the four firms Timken identified as forging producers also 
made no shipments of A-588-604 merchandise. Showa reported that, while 
it made forgings used in the production of TRBs, it did not export TRBs 
or forgings to the United States during the review period. Nittetsu 
also reported that it did not export TRBs or forgings used in the 
production of TRBs during the review period. Because both producers (1) 
had no shipments of merchandise subject to the A-588-604 order during 
the review period, (2) were not party to the LTFV investigation, and 
(3) were never party to any prior administrative reviews of the A-588-
604 case, we have not assigned individual rates to Showa and Nittetsu 
for the A-588-604 case. If Showa or Nittetsu were to begin shipping 
merchandise subject to the A-588-604 order at some future date, the 
entries will be subject to the A-588-604 LTFV ``all others'' cash 
deposit rate of 36.52 percent.

Use of Facts Available

    We preliminarily determine, in accordance with section 776(a) of 
the Act, that the use of facts available is appropriate for Yamaha, 
Kawasaki, Nigata, and Suzuki in both the A-588-054 and A-588-604 cases 
because these firms either did not respond in any way to our 
antidumping questionnaire, or submitted letters stating that they 
decline to respond to our antidumping questionnaire. We preliminarily 
find that these firms have withheld ``information that has been 
requested by the administering authority.'' Furthermore, we 
preliminarily determine that, pursuant to section 776(b) of the Act, it 
is appropriate to make an inference adverse to the interests of these 
companies because they failed to cooperate by not responding to our 
questionnaire. As a result, for the weighted-average dumping margins 
for these firms, we have used the highest rate from any prior segment 
of the respective A-588-054 and A-588-604 proceedings as adverse facts 
available, which is secondary information within the meaning of section 
776(c) of the Act.
    Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information used as facts 
available from independent sources reasonably at its disposal. The 
Statement of Administrative Action (SAA) provides that ``corroborate 
means simply that the Department will satisfy itself that the secondary 
information to be used has probative value (see H.R. Doc. 316, Vol. 1, 
103d Cong., 2d sess. 870 (1994)).
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information used. However, unlike other types of information, such as 
input costs or selling expenses, there are no independent sources for 
calculated dumping margins. The only source for margins is 
administrative determinations. Thus, in an administrative review, if 
the Department chooses as total adverse facts available a calculated 
dumping margin from a prior segment of the proceeding, it is not 
necessary to question the reliability of the margin for that time 
period. With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal as 
to whether there are circumstances that would render a margin 
irrelevant. Where circumstances indicate that the selected margin is 
not appropriate as adverse facts available, the Department will 
disregard the margin and determine an appropriate margin (see Fresh Cut 
Flowers from Mexico; Preliminary Results of Antidumping Duty 
Administrative Review, 60 FR 49567 (February 22, 1996), where we 
disregarded the highest margin in the case as adverse best information 
available because the margin was based on another company's 
uncharacteristic business expense resulting in an extremely high 
margin).
    For these preliminary results, we have examined the history of the 
A-588-054 and A-588-604 cases and have determined that 47.63 percent, 
the rate we calculated for Koyo in the 1987-88 A-588-054 review, is the 
highest calculated rate for any firm in any prior segment of the A-588-
054 finding, and that 40.37 percent, the rate we calculated for NSK 
Corporation in the 1988-89 A-588-604 review, is the highest calculated 
rate for any firm in any prior segment of the A-588-604 order. In 
addition, we have examined the circumstances surrounding the 
calculation of these two rates and have determined that there is no 
reliable evidence on the administrative records

[[Page 57393]]

for the reviews in which these rates were calculated which indicates 
that these margins are irrelevant or inappropriate. As a result, for 
these preliminary results we have used 47.63 percent in the A-588-054 
case and 40.37 percent in the A-588-604 case as total adverse facts 
available for Yamaha, Kawasaki, Nigata, and Suzuki.

Constructed Export Price

    Because all of Koyo's sales and certain of Fuji's sales of subject 
merchandise were first sold to unrelated purchasers after import into 
the United States, in calculating U.S. price we used constructed export 
price (CEP) for all of Koyo's sales and certain of Fuji's sales, as 
defined in section 772(b) of the Act.
    We based CEP on the packed, delivered price to unrelated purchasers 
in the United States. We made deductions, where appropriate, for 
discounts, billing adjustments, freight allowances, and rebates. 
Pursuant to section 772(c)(2)(A) of the Act, we reduced this price for 
movement expenses (Japanese pre-sale inland freight, Japanese post-sale 
inland freight, international air and/or ocean freight, marine 
insurance, Japanese brokerage and handling, U.S. inland freight from 
the port to the warehouse, U.S. inland freight from the warehouse to 
the customer, U.S. duty, and U.S. brokerage and handling). We also 
reduced the price, where applicable, by an amount for the following 
expenses incurred in the selling of the merchandise in the United 
States pursuant to section 772(d)(1): commissions to unrelated parties, 
U.S. credit, payments to third parties, U.S. repacking expenses, and 
indirect selling expenses (which included, where applicable, inventory 
carrying costs, indirect warehouse expenses, indirect advertising 
expenses, indirect technical services expenses, pre-sale warehousing 
expenses, other U.S.-incurred indirect selling expenses, and indirect 
selling expenses incurred by the Japanese parent related to commercial 
activity in the United States). Finally, pursuant to section 772(d)(3), 
we further reduced USP by an amount for profit to arrive at CEP.
    Because certain of Fuji's sales of subject merchandise were made to 
unrelated purchasers in the United States prior to importation into the 
United States, in accordance with section 772(a) of the Act, we used 
export price (EP) for these sales. We calculated EP as the packed, 
delivered price to unrelated purchasers in the United States. In 
accordance with section 772(c)(2)(A) of the Act, we reduced this price 
by Japanese pre-sale inland freight, Japanese post-sale inland freight, 
international air and/or ocean freight, marine insurance, Japanese 
brokerage and handling, U.S. brokerage and handling, U.S. duty, and 
U.S. inland freight.
    Where appropriate, in accordance with section 772(d)(2) of the Act, 
the Department also deducts from USP the cost of any further 
manufacture or assembly in the United States, except where the special 
rule provided in section 772(e) of the Act is applied. With respect to 
Koyo, there was no further manufacturing of A-588-054 TRBs by Koyo in 
the United States during the review period and, as a result, an 
adjustment for value added in the United States was unnecessary. With 
respect to Fuji, its two U.S. affiliates, Subaru of America (SOA) and 
Subaru-Isuzu Automotive (SIA), both import TRBs into the United States 
which were first purchased by Fuji from Japanese producers in Japan. 
While SOA imported TRBs during the review period for the sole purpose 
of reselling the bearings as replacement parts for Subaru automobiles 
in the United States, SIA imported TRBs for the sole purpose of using 
them in its production of Subaru automobiles in the United States, the 
final product sold by SIA to the first unaffiliated customer in the 
United States. As a result, we requested information from Fuji and SIA 
concerning this further manufacture and have determined that the 
special rule for merchandise with value added after importation under 
section 772(e) of the Act applies to Fuji.
    Section 772(e) of the Act provides that, where the subject 
merchandise is imported by an affiliated person and the value added in 
the United States by the affiliated person is likely to exceed 
substantially the value of the subject merchandise, we shall determine 
the CEP for such merchandise using the price of identical or other 
subject merchandise if there is a sufficient quantity of sales to 
provide a reasonable basis for comparison and we determine that the use 
of such sales is appropriate. If there is not a sufficient quantity of 
such sales or if we determine that using the price of identical or 
other subject merchandise is not appropriate, we may use any other 
reasonable basis to determine CEP.
    To determine whether the value added in the United States by SIA is 
likely to exceed substantially the value of the subject merchandise, we 
estimated the value added based on the differences between the averages 
of the prices charged to the first unaffiliated U.S. customer for the 
final merchandise sold (the automobiles) and the averages of the prices 
paid for the subject merchandise (the imported TRBs) by the affiliated 
person. Based on this analysis and information on the record, we 
determined that the value of the TRBs further processed by SIA in the 
United States was a minuscule amount of the price charged by SIA to the 
first unaffiliated customer for the automobiles it sold in the United 
States. Therefore, we determined that the value added is likely to 
exceed substantially the value of the subject merchandise. Accordingly, 
it was unnecessary for us to make an adjustment for value added in the 
United States. In addition, we have determined that those sales of TRBs 
made by SOA as replacement parts in the United States, which constitute 
sales of merchandise identical and/or most similar to those TRBs 
imported by SIA for use in the manufacture of Subaru automobiles, were 
made in sufficient quantities to provide a reasonable basis for 
comparison. Therefore, for purposes of determining dumping margins for 
the TRBs entered by SIA and used in the production of automobiles, we 
have used the weighted-average dumping margins we calculated on sales 
of identical or other subject merchandise sold by SOA as replacement 
TRBs to unaffiliated persons in the United States.
    No other adjustments to USP were claimed or allowed.

Normal Value

A. Viability

    Based on (1) Our comparison of the aggregate quantity of home 
market and U.S. sales, (2) the absence of any information that a 
particular market situation in the exporting country does not permit a 
proper comparison, and (3) the fact that each company's quantity of 
sales in the home market was greater than five percent of its sales to 
the U.S. market, we determined that the quantity of the foreign like 
product for Fuji and Koyo sold in the exporting country was sufficient 
to permit a proper comparison with the sales of subject merchandise to 
the United States pursuant to section 773(a) of the Act. 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 the exporting country.

B. Arm's-Length Sales

    We excluded from our analysis those sales Koyo and Fuji made to 
affiliated customers in the home market which were not at arm's length. 
We determined the arm's-length nature of Koyo's and

[[Page 57394]]

Fuji's home market sales to affiliated parties by means of our 99.5 
percent arm's-length test in which we calculated, for each model, the 
percentage difference between the weighted-average prices to the 
affiliated customer and all unaffiliated customers and then calculated, 
for each affiliated customer, the overall weighted-average percentage 
difference in prices for all models purchased by the customer. If the 
overall weighted-average price ratio for the affiliated customer was 
equal to or greater than 99.5 percent, we determined that all sales to 
this affiliated customer were at arm's length. Conversely, if the ratio 
for a customer was less than 99.5 percent, we determined that all sales 
to the affiliated customer were not at arm's length because, on 
average, the customer paid less than unaffiliated customers for the 
same merchandise. Therefore, we excluded all sales to the customer from 
our analysis. Where we were unable to calculate an affiliated customer 
ratio because identical merchandise was not sold to both affiliated and 
unaffiliated customers, we were unable to determine if these sales were 
at arm's length and, therefore, excluded them from our analysis (see 
Stainless Steel Wire Rods from France: Preliminary Results of 
Antidumping Duty Administrative Review (61 FR 8915 (March 6, 1996)).

C. Cost of Production Analysis

    Because we disregarded sales below the cost of production (COP) in 
our last completed A-588-054 review for Koyo, we have reasonable 
grounds to believe or suspect that sales of the foreign like 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)(ii) of the Act (see Final Results of Antidumping Duty 
Administrative Reviews; Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From Japan and Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Components Thereof, from Japan, 
58 FR 64720 (December 9, 1993)). Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Koyo.
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the costs of materials and fabrication employed in 
producing the foreign like product, plus selling, general, and 
administrative expenses (SG&A) and the cost of all expenses incidental 
to placing the foreign like product in condition packed ready for 
shipment. We relied on the home market sales and COP information 
provided by Koyo in its questionnaire responses.
    After calculating COP, we tested whether home market sales of TRBs 
were made at prices below COP within an extended period of time in 
substantial quantities and whether such prices permit 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 
movement charges, discounts, or rebates.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's home market sales for a model are at prices 
less than the COP, we do not disregard any below-cost sales of that 
model because we determine that the below-cost sales were not made 
within an extended period of time in ``substantial quantities.'' Where 
20 percent or more of a respondent's home market sales of a given model 
are at prices less than COP, we disregard the below-cost sales because 
they are (1) 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 the recovery of all 
costs within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Act.
    The results of our cost test for Koyo indicated that for certain 
home market models less than 20 percent of the sales of the model were 
at prices below COP. We therefore retained all sales of the model in 
our analysis and used them as the basis for determining NV. Our cost 
test for Koyo also indicated that within an extended period of time 
(one year, in accordance with section 773(b)(2)(B) of the Act), for 
certain home market models more than 20 percent of the home market 
sales were sold at prices below COP. In accordance with section 
773(b)(1) of the Act, we therefore excluded these below-cost sales from 
our analysis and used the remaining above-cost sales as the basis for 
determining NV.

D. Product Comparisons

    For both Fuji and Koyo we compared U.S. sales with contemporaneous 
sales of the foreign like product in the home market. We considered 
bearings identical on the basis of nomenclature and determined most 
similar TRBs using our sum-of-the-deviations model-match methodology 
which compares TRBs according to the following five physical criteria: 
inside diameter, outside diameter, width, load rating, and Y2 factor. 
For Koyo we used a 20 percent difference-in-merchandise (difmer) cost 
deviation cap as the maximum difference in cost allowable for similar 
merchandise, which we calculated as the absolute value of the 
difference between the U.S. and home market variable costs of 
manufacturing divided by the U.S. total cost of manufacturing. Because 
Fuji, a reseller, was unable to provide the variable and total costs of 
manufacturing for the TRBs it purchased from Japanese producers, it 
instead provided its acquisition cost for each TRB model it purchased 
from Japanese producers. As a result, consistent with our practice in 
past TRB reviews for Fuji, we used these acquisition costs as the basis 
for our 20-percent difmer cap (see, e.g., Tapered Roller Bearings and 
Part Thereof, Finished and Unfinished, From Japan and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, from Japan: Preliminary Results of Administrative Reviews and 
Termination in Part, 61 FR 25200 (May 20, 1996)).

E. Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA 
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 we 
are unable to find sales of the foreign like product in the comparison 
market at the same level of trade as the U.S. sale, we may compare U.S. 
sales 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, we will adjust the NV 
to account for the difference in levels 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 between levels of trade 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.
    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 order to determine that there is a difference in level of trade, 
the Department must find that two sales

[[Page 57395]]

have been made at different phases of marketing, or the equivalent. 
Different phases of marketing necessarily involve differences in 
selling functions, but differences in selling functions (even 
substantial ones) are not alone sufficient to establish a difference in 
the level of trade. Similarly, seller and customer descriptions (such 
as ``distributor'' and ``wholesaler'') are useful in identifying 
different levels of trade, but are insufficient to establish that there 
is a difference in the level of trade.
    In implementing these principles in these reviews, we asked Fuji 
and Koyo to provide detailed information concerning their selling 
activities/functions for each claimed phase of marketing and to 
establish any claimed levels of trade based on these activities. In 
order to determine whether separate levels of trade actually existed 
within or between the U.S. and home markets, we reviewed the selling 
activities associated with each phase of marketing claimed by Fuji and 
Koyo. Pursuant to section 773(a)(1)(B)(i) of the Act and the SAA at 
827, in identifying levels of trade for EP and home market sales we 
considered the selling functions reflected in the starting price before 
any adjustments. 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 affiliate company or agent, we considered all selling 
activities of both affiliated parties, except for those selling 
activities related to expenses deducted under section 772(d) of the Act 
in CEP situations.
    In reviewing the selling functions reported by Fuji and Koyo, we 
considered all types of selling activities performed. In analyzing 
whether separate levels of trade existed in these reviews, we found 
that no single selling function in the bearings industry was sufficient 
to indicate a separate level of trade (see Notice of Proposed 
Rulemaking and Request for Public Comments, 61 FR 7307, 7348 (February 
27, 1996)). In addition, in determining whether separate levels of 
trade existed in or between the U.S. and home markets, we analyzed the 
selling activities associated with the phases of marketing the 
respondents reported and expected the functions and activities of the 
seller to be similar if a respondent claimed levels of trade to be the 
same. Conversely, if the party claimed that levels of trade were 
different for different groups of sales, we expected the functions and 
activities of the seller to be dissimilar.
    Koyo reported two different phases of marketing, original equipment 
manufacturers (OEM) and after-market (AM), in both its U.S. and home 
markets. Based on our analysis of the information of the record 
concerning the selling activities associated with each of Koyo's 
claimed home market phases of marketing, we found significant 
differences in the advertising, inventory maintenance, and sales and 
marketing support activities performed and, to a lesser degree, 
differences in other selling activities as well. As a result, we 
determined that Koyo's claimed phases of marketing constituted two 
separate home market levels of trade.
    While Fuji sold to both related and unrelated dealers in Japan, it 
reported that there were no significant differences in the selling 
activities it performed when selling to each group and claimed only one 
phase of marketing in the home market. Based on our examination of the 
information supplied by Fuji, we agree that only one phase of marketing 
exists and have therefore determined that there is only one level of 
trade for Fuji in the home market.
    With respect to Koyo's U.S. sales, which were all CEP sales, Koyo 
reported two different phases of marketing based on the starting price 
of the CEP sales made by its affiliated reseller to unaffiliated U.S. 
customers. Likewise, Fuji reported three phases of marketing for its 
U.S. CEP sales based on the starting price for the CEP sales made by 
its affiliated reseller to unaffiliated customers in the United States. 
While we recognize that Koyo's and Fuji's affiliated resellers 
performed different selling activities in association with the reported 
phases of marketing such that different U.S. levels of trade exist 
based on the price to the unaffiliated U.S. customer (i.e., the CEP 
starting price), in CEP situations we do not determine the U.S. level 
of trade on the basis of the CEP starting price. Rather, as described 
above, in CEP situations we determine the U.S. level of trade on the 
basis of the CEP starting price minus the expenses and profit deducted 
pursuant to section 772(d) of the Act (i.e., the level of trade of the 
CEP sale). Therefore, in order to determine the U.S. level of trade for 
Koyo's and Fuji's CEP sales, we examined those selling expenses Koyo 
and Fuji performed in association with the phase of marketing from the 
foreign parent to the affiliated reseller and, regardless of the level 
of trade of the CEP starting price, found no significant differences in 
the functions either Koyo or Fuji performed when selling to its 
respective U.S. affiliate. As a result, we determined that there was 
only one U.S. level of trade for both Koyo's and Fuji's CEP sales.
    In regard to its EP sales, Fuji identified two categories of U.S. 
EP sales: those to certain independent distributors in the United 
States where the merchandise is directly shipped from Japan and the 
paperwork is processed by, and certain selling functions are performed 
by, Fuji's related affiliate SOA, and those direct sales to an 
independent dealer/distributor in Hawaii. In determining whether 
separate levels of trade existed between these two phases, we examined 
the selling functions as reflected in the starting price to the 
unaffiliated U.S. customer and found that Fuji provided very limited 
selling functions to the Hawaiian dealer/distributor as compared to the 
independent distributors. As a result, we have determined that Fuji's 
EP sales constitute two separate U.S. EP levels of trade.
    When we compared the level of trade of Koyo's CEP sales to Koyo's 
home market levels of trade we found that the record indicated that the 
level of trade of the CEP sales involved little or no technical 
services, engineering services, advertising, after-sales services, or 
strategic planning and, as a result, was different from either of the 
home market levels and also at a less advanced stage of distribution 
than sales at either of the home market levels. Likewise, when we 
compared the level of trade of Fuji's CEP sales to its home market 
level of trade, the record again indicated that the CEP sales involved 
little or no technical services, engineering services, after-sale 
services, or advertising and were at a less advanced stage of 
distribution than the sales at the home market level of trade. Upon 
comparing Fuji's sales at its two U.S. EP levels of trade to its sales 
at its home market level we found that the selling functions at its 
home market level of trade included strategic/economic planning 
services, training and personnel services, and technical services which 
were not characteristic of the U.S. EP levels of trade. Consequently, 
because we were unable to find the same levels of trade in the home 
market as in the United States for both respondents, we were unable to 
match Fuji's and Koyo's U.S. CEP sales and Fuji's EP sales at the same 
level of trade in the home market.
    When we are unable to find sales of the foreign like product in the 
home market at the same level of trade as that of the CEP or EP sales, 
we examine whether a level-of-trade adjustment is appropriate. Because 
the same level of trade as Koyo's and Fuji's CEP level and Fuji's EP 
levels did not exist in their home markets, we lacked the data 
necessary to determine whether there

[[Page 57396]]

was a consistent pattern of price differences between levels of trade 
based on Koyo's and Fuji's home market sales of merchandise under 
review, in accordance with section 773(a)(7)(A) of the Act. 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 home market for the 
same product or other products'' (see SAA at 830). Accordingly, we 
examined these alternative methods for calculating the level-of-trade-
adjustment for Koyo and Fuji, but we lacked the information that would 
allow us to apply them. Because the data available do not provide an 
appropriate basis for making a level-of-trade adjustment for Koyo or 
Fuji, but Koyo's and Fuji's respective home market levels of trade are 
at a more advanced stage of distribution than the level of trade of 
their respective CEP sales, a CEP offset adjustment, in accordance with 
section 773(a)(7)(B) of the Act, is appropriate. Both respondents 
claimed a CEP offset adjustment and we applied the offset to NV in our 
CEP comparisons for Koyo and Fuji.

F. Home Market Price

    While we found below-cost home market sales for Koyo, Koyo's 
remaining home market sales at or above cost were sufficient to serve 
as the basis for NV.
    We based home market prices on the packed, ex-factory or delivered 
prices to affiliated purchasers (where an arm's-length relationship was 
demonstrated) and unaffiliated purchasers in the home market. We made 
adjustments for differences in packing and for movement expenses in 
accordance with sections 773(a)(6) (A) and (B) of the Act. In addition, 
we 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 CFR 353.56. For comparison to EP we made COS adjustments by 
deducting home market direct selling expenses and adding U.S. direct 
selling expenses. For comparisons to CEP, we made COS adjustments to NV 
by deducting home market direct selling expenses and, where applicable, 
adding U.S. direct selling expenses, except those deducted from the 
starting price in calculating CEP pursuant to section 772(d) of the 
Act. We also made adjustments, where applicable, for home market 
indirect selling expenses to offset U.S. commissions in EP and CEP 
calculations.
    While both Koyo and Fuji claimed certain post-sale price 
adjustments to their reported home market prices, we have not allowed 
these adjustments, as explained in detail in the proprietary versions 
of our 1994-95 preliminary results analysis memoranda for Koyo and 
Fuji.
    No other adjustments were claimed or allowed.

Fair Value Comparisons

    To determine whether sales of TRBs by the respondents in the United 
States were made at less than fair value, we compared the CEP and EP to 
NV, as described in the ``United States Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(2) of the 
Act, we calculated monthly weighted-average prices for NV and compared 
these monthly averages to individual U.S. sales transactions. For Koyo, 
which had two phases of marketing in the home market, we first 
calculated monthly weighted-average NVs for the phase of marketing in 
the home market which was most comparable to that in which the U.S. 
transaction was made (as defined by the price to the first unrelated 
U.S. customer). Then, to the extent possible, we compared CEP to this 
NV. Alternatively, where there were no home market sales in the phase 
of marketing most comparable to the U.S. sale, we weight-averaged home 
market sales for the other home market phase of distribution and 
compared CEP to this NV (see, e.g., Stainless Steel Wire Rods from 
France: Preliminary Results of Antidumping Duty Administrative Review, 
61 FR 8015 (March 6, 1996) and Fresh Kiwifruit from New Zealand: 
Preliminary Results of Antidumping Duty Administrative Review, 61 FR 
15922 (April 10, 1996)). In regard to Fuji, which sold in only one home 
market channel of distribution, we compared CEP and EP to the monthly 
weighted-average NVs we calculated for this single channel of 
distribution.

Preliminary Results of Review

    As a result of our reviews, we preliminarily determine the 
following weighted-average dumping margins exist for the period October 
1, 1994, through September 30, 1995:

------------------------------------------------------------------------
                                                                Margin  
               Manufacturer/exporter/reseller                 (percent) 
------------------------------------------------------------------------
For the A-588-054 Case:                                                 
  Koyo Seiko...............................................        31.25
  Fuji.....................................................        11.35
  Kawasaki.................................................        47.63
  Yamaha...................................................        47.63
  Nigata...................................................        47.63
  Suzuki...................................................        47.63
For the A-588-604 Case:                                                 
  Fuji.....................................................        (\1\)
  Honda....................................................        (\1\)
  Kawasaki.................................................        40.37
  Yamaha...................................................        40.37
  Nigata...................................................        40.37
  Suzuki...................................................        40.37
  Nittetsu.................................................        (\1\)
  Showa Seiko..............................................       (\1\) 
------------------------------------------------------------------------
\1\ No shipments or sales subject to this review. The firm has no rate  
  from any prior segment of this proceeding.                            

    Parties to these proceedings may request disclosure within five 
days of the date of publication of this notice and may request a 
hearing within ten days of publication. Any hearing, if requested, will 
be held 44 days after the date of publication, or the first business 
day thereafter. Case briefs and/or written comments from interested 
parties may be submitted no later than 30 days after the date of 
publication. Rebuttal briefs and rebuttals to written comments, limited 
to issues raised in the case briefs and comments, may be filed no later 
than 37 days after the date of publication of this notice. Parties who 
submit argument in these proceedings are requested to submit with the 
argument (1) a statement of the issues and (2) a brief summary of the 
argument. The Department will issue final results of these 
administrative reviews, including the results of our analysis of the 
issues in any such written comments or at a hearing, within 180 days of 
issuance of these preliminary results.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and NV may vary from the percentages stated 
above. The Department will issue appraisement instructions directly to 
Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of TRBs from Japan entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of these administrative reviews, as provided by section 
751(a)(1) of the Act:
    (1) The cash deposit rates for the reviewed companies will be those 
rates

[[Page 57397]]

established in the final results of these reviews;
    (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 these reviews, a prior 
review, or the LTFV investigations, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the merchandise; and
    (4) If neither the exporter nor the manufacturer is a firm covered 
in these or any previous reviews conducted by the Department, the cash 
deposit rate for the A-588-054 case will be 18.07 percent, and 36.52 
percent for the A-588-604 case (see Preliminary Results of Antidumping 
Duty Administrative Reviews; Tapered Roller Bearings, Finished and 
Unfinished, and Parts Thereof, from Japan and Tapered Roller Bearings, 
Four Inches or less in Outside Diameter, and Components Thereof, From 
Japan, 58 FR 51058, 51061 (September 30, 1993)).
    All U.S. sales by each respondent will be subject to one deposit 
rate according to the proceeding.
    The cash deposit rate has been determined on the basis of the 
selling price to the first unrelated customer in the United States. For 
appraisement purposes, where information is available, the Department 
will use the entered value of the subject merchandise to determine the 
appraisement rate.
    This notice serves as a preliminary reminder to importers of their 
responsibility 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. These administrative reviews and this 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 30, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-28559 Filed 11-5-96; 8:45 am]
BILLING CODE 3510-DS-P