[Federal Register Volume 61, Number 217 (Thursday, November 7, 1996)]
[Notices]
[Pages 57629-57653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28444]


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DEPARTMENT OF COMMERCE
[A-588-054 and 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; Final Results 
of Antidumping Duty Administrative Reviews and Revocation in Part of an 
Antidumping Finding

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

ACTION: Notice of final results of antidumping duty administrative 
reviews and revocation in part of an antidumping finding.

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SUMMARY: On May 5, 1995, the Department of Commerce (the Department) 
published the preliminary results of its 1992-93 administrative reviews 
of the antidumping finding on tapered roller bearing (TRBs), four 
inches or less in outside diameter, and components thereof, from Japan 
(A-588-054 finding) and the antidumping duty order on TRBs and parts 
thereof, finished and unfinished, from Japan (A-588-604 order). The 
review of the A-588-054 finding covers four manufacturers/exporters and 
ten resellers/exporters of the subject merchandise during the period 
October 1, 1992, through September 30, 1993. The review of the A-588-
604 order covers five manufacturers/exporters of the subject 
merchandise, ten resellers/exporters of the subject merchandise, and 18 
alleged forging producers for the period October 1, 1992, through 
September 30, 1993.

EFFECTIVE DATE: November 7, 1996.

FOR FURTHER INFORMATION CONTACT:
Valerie Turoscy or John Kugelman, Office of Antidumping Compliance, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-5253.

SUPPLEMENTARY INFORMATION:

Background

    On May 5, 1995, the Department published in the Federal Register 
the preliminary results (60 FR 22349) of the 1992-93 administrative 
reviews of the antidumping finding on TRBs, four inches or less in 
outside diameter, and components thereof, from Japan (41 FR 34974, 
August 18, 1976), and the antidumping duty order on TRBs and parts 
thereof, finished and unfinished, from Japan (52 FR 37352, October 6, 
1987).

Applicable Statute and Regulations

    In accordance with section 751 of the Tariff Act of 1930, as 
amended (1988) (the Tariff Act), the Department has now completed these 
reviews for all firms except Koyo Seiko Company, Ltd. (Koyo). We will 
publish our preliminary and final results for Koyo at later dates. 
Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are in reference to the provisions as they 
existed on December 31, 1994.

Scope of the Reviews

    Imports covered by the A-588-054 finding are sales and 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 the 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 tapered 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 the A-588-604 order, except for those 
manufactured by NTN Corporation (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, 8484.30.80, 8483.90.20, 8483.90.30, and 
8483.90.60. These HTS item numbers and those for the A-588-054 finding 
are provided for convenience and Customs purposes.

[[Page 57630]]

The written descriptions remain dispositive.
    In addition, on February 2, 1995, we published in the Federal 
Register our final scope determination regarding Koyo's rough forgings 
(60 FR 6519). Because we determined that these forgings are within the 
scope of the A-588-604 order on TRBs from Japan, we have considered 
such forgings as within the scope of this 1992-93 review of the order.
    These reviews cover TRBs manufactured and exported by NTN, NSK Ltd. 
(NSK), Nachi-Fujikoshi (Nachi), and Maekawa Bearing Mfg., Co., Ltd. 
(Maekawa), and TRBs resold/exported by Honda Motor Co., Ltd. (Honda), 
Fuji Heavy Industries, Ltd. (Fuji), Kawasaki Heavy Industries, Ltd. 
(Kawasaki), Yamaha Motor Co., Ltd. (Yamaha), Sumitomo Corporation 
(Sumitomo), Itochu Co., Ltd. (Itochu), Suzuki Motor Co., Ltd. (Suzuki), 
Nigata Converter Co., Ltd. (Nigata), Toyosha Co., Ltd. (Toyosha), and 
MC International (MC Int'l). These reviews also cover U.S. sales of 
forgings by NTN and 18 other firms originally identified as Japanese 
forging producers (Daido Steel Co., Ltd., Asakawa Screw Co., Ltd., Fuse 
Rashi Co., Ltd., Hamanaka Nut Mfg. Co., Ltd., Ichiyanagi Tekko, Isshi 
Nut Industries, Kawanda Tekko, Kinki Maruseo Nut Kogyo Kumiai, Kitazawa 
Valve Co., Ltd., Nittetsu Bolten, Shiga Bolt, Shinko Bolt, Sugiura 
Seisakusho, Sumikin, Seiatsu, Toyo Valve Co., Unytite Fasterner Mfg. 
Co., Ltd., Gotoh Nut Seisakusho, and Kawada Tekkosho). However, as 
explained in our preliminary results for these reviews, we have 
terminated our review for 14 of these 18 firms (see 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, Termination in Part, and Intent to Revoke in 
Part, 60 FR 22350 (May 5, 1995) (TRB 90/92 Prelim)). The period of 
review (POR) is October 1, 1992 through September 30, 1993.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on our 
preliminary results. At the request of the Timken Company (Timken), the 
petitioner in these proceedings, NTN, and NSK, we held a hearing 
covering both the reviews on August 4, 1995. We received case briefs 
from Timken, NTN, NSK, Fuji, and Kawasaki, and rebuttal briefs from 
Timken, NTN, NSK, and Honda.
    At the request of the presiding official at the hearing, on August 
11, 1995, Timken, NSK, and NTN submitted additional comments regarding 
specific issues. These comments and those contained in the case and 
rebuttal briefs are addressed below in the following order:
    1. Model Match, Difference-in-Merchandise (Difmer) Adjustments, 20-
Percent Test, and Set-Splitting
    2. Cost Test Methodology
    3. Packing and Movement Expenses
    4. Adjustments to USP
    5. Samples, Prototypes, and Sales Not in the Ordinary Course of 
Trade
    6. Discounts, Rebates, and Price Adjustments
    7. Miscellaneous Comments Regarding Level of Trade, VAT 
Methodology, Assessment and Cash Deposit Rates, Supplier's Knowledge, 
and Honda's Revocation
    8. Cost of Production and Constructed Value
    9. Clerical and Computer Programming Errors

Comments Regarding Model Match, Difference-In-Merchandise 
Adjustments, 20-Percent Test, and Set-Splitting

    Comment 1: NTN and NSK argue that due to decisions by the Court of 
International Trade (the CIT) in litigation related to earlier TRB 
reviews, the Department is required to include in its sum-of-the 
deviations model-match methodology a ten-percent ``cap'' on deviations 
in each of the five physical criteria used in this methodology, citing, 
as examples, NTN Bearing Corp. v. United States, 881 F. Supp. 595 (CIT 
1995) (NTN1), and Koyo Seiko Co. v. United States, 834 F. Supp. 431, 
434-35 (CIT 1993) (Koyol). NSK adds that the Department's failure to 
apply the ten-percent deviation cap invites comparisons between 
physically dissimilar TRBs because the Department's use of the 20 
percent diffmer cap alone does not adequately screen out dissimilar 
matches.
    Petitioner argues that, because the issue of the ten-percent 
deviation cap is currently on appeal at the United States Court of 
Appeals for the Federal Circuit (Federal Circuit), the Department 
should decline to alter its methdology until the final judicial 
decision is made on this issue.
    Department's Position: We disagree with respondents. Since the 
issuance of our preliminary results, the Federal Circuit has 
definitively ruled that our choice not to apply the ten-percent 
deviation cap is reasonable and that we are not required to apply such 
a cap in connection with our sum-of-the-deviations model-match 
methodology (see Koyo Seiko Co. v. United States, No. 94-1363 (Fed. 
Cir. September 20, 1995)). As a result, we have not applied a ten-
percent deviation cap on our five model-match criteria for these final 
results.
    Comment 2: NTN argues that the Department incorrectly split home 
market TRB sets which are ``unsplittable.'' NTN claims that because 
certain of its TRB models contain cups and cones which are never sold 
individually in any market, it is illogical to split such models into 
individual cup and cone sales. Furthermore, NTN states that because the 
rationale behind the Department's set-splitting methodology is to find 
merchandise ``such or similar'' to individual cups and cones sold in 
the United States, the Department may only split TRB sets sold in the 
home market which contain cups and cones identical or similar to those 
cups and cones sold individually in the United States. NTN argues that, 
because cups and cones contained in its ``unsplittable'' sets are never 
sold individually, they do not represent merchandise which is 
potentially similar to individually sold cups and cones. Therefore, NTN 
asserts, the Department, by splitting such sets, creates a pool of home 
market cups and cones which cannot be fairly considered as candidates 
for matching to cups and cones sold separately in the United States.
    Timken argues that, in accordance with section 771(16) of the 
Tariff Act, the Department's model-match methodology reasonably 
assesses objective physical criteria and the variable costs of 
production when identifying that home market merchandise which is such 
or similar to merchandise sold in the United States. Because the 
Department does not consider other factors such as packaging or 
invoicing, if the cup or cone split from an ``unsplittable'' set is 
physically identical, or most physically similar to a cup or cone 
individually sold in the United States, there is no statutory basis for 
the Department to reject such a comparison. Timken further states the 
NTN's argument, which basically asserts that a cup or cone sold within 
a set can never be found to be such or similar to a cup or cone that is 
sold separately, calls for an additional matching factor which is 
unwarranted by the statute. Finally, Timken argues that if the 
Department were not to split NTN's claimed ``unsplittable'' sets, the 
pool of home market such or similar merchandise would be narrowed and 
the Department's ability to match U.S. and home market merchandise 
would be curtailed.

[[Page 57631]]

    Department's Position: We agree with Timken. Section 771(16) of the 
Tariff Act does not require that such or similar merchandise be sold in 
the same manner as merchandise under review. TRB components that are 
sold solely within sets do not lose their status as merchandise such or 
similar to individually-sold TRB components simply by virtue of the 
fact that they are sold as components of sets instead of an individual 
cups and cones. The fact that a home market cup or cone was never sold 
individually in any market does not preclude the possibility that the 
cup or cone may be the most physically similar merchandise to cups and 
cones NTN sold separately in the United States. Because they may be the 
most similar products, it is appropriate to include this merchandise in 
the pool of home market sales and, if such cups and cone are determined 
to be the most similar merchandise to products sold in the United 
States, it is appropriate to use them in our dumping comparisons, as we 
have done in past reviews of NTN and as has been approved by the CIT 
(see, e.g., 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, 
1992) (TRBs 90/92) and NTN Bearing Corp. v. United States, 747 F. Supp. 
726, 741 (CIT 1990)).
    Comment 3: NTN argues that the Department should not compare TRBs 
with different design types and, more specifically, that the Department 
should not compare TRBs of different precision ratings. NTN explains 
that not only is the physical nature of high precision TRBs much 
different than that for normal precision items, but high precision TRBs 
are sold at prices much higher than normal precision TRBs, and the two 
types of TRBs are never used interchangeably. Therefore, NTN asserts, 
the Department's comparison of normal precision TRBs to high precision 
TRBs is contrary to law. NTN also argues that, because the Department 
did not compare bearings with different precision ratings in the 
antifriction bearings (AFBs) investigation and subsequent reviews, and 
because the Department noted the use of bearing design type in its 
less-than-fair-value (LTFV) final determination in the A-588-604 TRB 
case, the Department should include design type and precision rating in 
its model-match methodology for these final results.
    Timken contends that the Department's AFB model-match methodology, 
which reflects a ``family'' approach that includes design type and 
precision rating, does not serve as a basis for the use of design type 
and precision rating in the Department's TRB model-match methodology, 
because the AFB methodology was developed specifically for AFBs and 
neither NTN nor any other party has asserted that there are 
``families'' of TRBs or identified characteristics of TRBs that would 
require a model-match methodology like that of AFBs. Timken also argues 
that NTN's reliance on the Department's LTFV determination in the A-
588-604 case is incorrect in that the Department's referral to ``type 
of bearing'' in its determination did not encompass design types, but 
rather referred to the number of rows of rollers in a TRB, citing Final 
Determination of Sales of Less than Fair Value; Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, From Japan, 52 FR 30700. 
Finally, Timken states that NTN has not provided evidence that the 
Department's TRB model-match methodology is contrary to law, and, 
absent such a demonstration, the Department is not required to alter 
its methodology.
    Department's Position: We agree with Timken. As we explained in 
TRBs 90/92, design type categories are not consistent throughout the 
TRB industry. If we could not match across such categories, we would 
substantially limit the number of matches, thus working contrary to the 
statutory preference for price-to-price comparisons. If the physical 
nature of the compared bearings is significantly different, as NTN 
states is true for its high precision and low precision TRBs, the sum-
of-the-deviations model-match methodology addresses the differences in 
physical criteria. In addition, if the bearings are not of equal 
commercial value, our 20 percent difmer cap precludes such a comparison 
(see, e.g., TRBs 90/92 at 64721 and Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From Japan; Final Results of 
Administrative Review, 57 FR 4960 (February 11, 1992) (TRBs 89/90 
(604))). Furthermore, concerning NTN's statement that high precision 
and low precision TRBs should not be compared because they are not 
interchangeable, ``interchangeability'' is not a requisite criterion 
for matching similar merchandise. If it were, it would effectively 
mandate that all comparison models be identical to ensure the 
``interchangeability'' of the comparison merchandise. Finally, while 
all TRBs and AFBs are bearing products, because TRBs are different 
products than AFBs, it is reasonable for us to employ different model-
match and other methodologies in our calculations for TRBs.
    Comment 4: NSK argues that, in prior reviews, when determining the 
pool of potential similar home market merchandise, the Department has 
calculated its 20 percent difmer cap as 20 percent of the value of U.S. 
variable costs of manufacturing (VCOM). NSK states that in the 
preliminary results of these reviews the Department departed from its 
previous methodology and calculated its 20 percent difmer cap as 20 
percent of the total cost of manufacture (TCOM) of the U.S. model. NSK 
concludes that, because the TCOM for a model is larger than the VCOM, 
the Department's new methodology resulted in an unreasonable and 
insupportable increase in the pool of similar home market merchandise. 
NSK further states that the Department's previous methodology was 
affirmed by the CIT in numerous cases, citing NTN1. NSK contends that 
because the Department has not adequately explained its reasons for 
using the new methodology, and given the CIT's approval of the 
Department's previous methodology, for these final results the 
Department should revert to its previous practice and use the VCOM as 
the denominator in its 20 percent difmer cap calculation.
    Timken argues that the Department's use of the TCOM as the 
denominator in its calculation of the 20 percent difmer cap was not 
only explained, but, contrary to NSK's assertion, was given notice of 
in a 1992 Departmental ``Policy Bulletin.'' Timken adds that in the 
third AFBs review, the Department again explained its selection of TCOM 
as the reference point of the 20 percent difmer cap, citing 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof, From France, Et. Al.; Final Results of Antidumping 
Administrative Reviews and Revocation in Part of an Antidumping Duty 
Order, 58 FR 39729 (July 26, 1993) (AFBs 91/92).
    Department's Position: In accordance with section 771 (16)(b)(iii) 
of the Tariff Act, in order to ensure that the home market merchandise 
being compared to the U.S. merchandise is commercially comparable, we 
automatically exclude from our pool of comparison home market 
merchandise those home market models for which the VCOM deviates by 
more than 20 percent from that of the U.S. model. In our preliminary 
results of review we calculated this deviation as the absolute value of 
the difference between the VCOMs for the home market and U.S. model 
divided by the TCOM for the U.S. model. In previous

[[Page 57632]]

TRB reviews we calculated this deviation as the absolute value of the 
difference between the VCOMs for the home market and U.S. model divided 
by the VCOM of the U.S. model. Our change in methodology for these 
preliminary results was based on a policy change announced in a 1992 
Departmental policy bulletin which stated, ``because variable 
manufacturing costs change as a share of total manufacturing costs from 
product to product, the size of the 20 percent difference would vary as 
well in relation to both the price and total manufacturing costs. 
Therefore, a more stable basis for the denominator is the total 
manufacturing costs, and it has been chosen for uniform use'' (see 
Import Administration Policy Bulletin, No. 92.2, at 3 (July 29, 1992) 
(Policy Bulletin)). We also stated that this change would be 
implemented in all future and current reviews and investigations if the 
change could be made ``without delaying the cases beyond their due 
dates'' (see Policy Bulletin at 4). Upon review of the timing of this 
policy and the 1990-92 TRB reviews, the two TRB review periods for 
which we had initiated but not yet completed the reviews by the date of 
the policy bulletin, we determined that the implementation of this 
policy would serve to further delay those reviews. Because the 
implementation of this policy would not serve to delay these 1992-93 
reviews, we adopted the policy in our preliminary results. In addition 
to this policy bulletin, our policy of using TCOM in the denominator 
when calculating our 20 percent difmer cap is apparent in the final 
results for several other cases published prior to the initiation of 
these 1992-93 reviews (see, e.g., Porcelain-on-Steel Cooking Ware From 
Mexico; Final Results of Antidumping Duty Administrative Review, 58 FR 
43327, 43328 (August 16, 1993), AFBs 91/92 at 39766, and Paving Parts 
for Self-Propelled Bituminous Paving Equipment From Canada; Final 
Results of Administrative Review of the Antidumping Finding, 58 FR 
15481, 15482 (March 23, 1993) (Paving Parts)). It is clear that NSK had 
notice of the Department's policy change and that the implementation of 
this policy in the TRB reviews was imminent. Concerning NSK's 
contention that we have not adequately explained our reasons for using 
the new policy, we disagree. As demonstrated above, the Policy Bulletin 
clearly stated that TCOM represents a more stable denominator than 
VCOM. In AFBs 91/92 we explained that TCOM is the more appropriate 
denominator because, unlike VCOM, it more accurately reflects the value 
of the model. In addition, it provides a more stable benchmark against 
which the absolute size of physical differences in merchandise can be 
compared in order to determine if the difference is so large that the 
two products being compared cannot be considered similar for model-
matching purposes (AFBs 91/92 at 39766). Furthermore, in Paving Parts 
we again explained that ``because the proportion of variable to fixed 
costs can vary significantly among products, the Department chooses to 
use TCOM, rather than VCOM, as the appropriate denominator, thus 
providing a reasonable, stable basis for evaluating comparability which 
is not affected by a particular product's proportion of fixed to 
variable costs'' (Paving Parts at 15482).
    In light of the above, we have not changed our policy for these 
final results and have continued to use the TCOM of the U.S. model as 
the denominator in our calculation of the 20 percent difmer cap.
    Comment 5: Timken argues that for those comparisons in which the 
sum of the deviations is zero the Department should set the difmer 
adjustment equal to zero such that no difmer adjustment would be made 
for comparisons between physically identical merchandise.
    NTN argues that the five physical criteria used by the Department 
in its sum-of-the-deviations methodology are not the only physical 
criteria which TRBs have. Rather, NTN notes, these are simply the five 
which the Department relies upon for its model-match methodology. NTN 
claims that Timken is attempting to effectively eliminate the difmer 
adjustment and the Department should reject the petitioner's argument.
    Department's Position: We disagree with Timken. To determine those 
home market TRBs which are identical to U.S. products, we compare TRBs 
on the basis of nomenclature. Because there are numerous criteria which 
define TRBs, the comparison of actual product coding is the only way we 
can ensure that two TRBs are physically identical. If we are unable to 
match the U.S. merchandise with identical home market merchandise by 
means of nomenclature we conclude that there is no physically identical 
home market match for that U.S. model. It is at this point in our 
model-match methodology that we employ the sum-of-the-deviations 
methodology. Therefore, it is only when an identical match can not be 
found that we use a comparison between models based on the sum of the 
deviations. Once we have found the one home market model whose sum of 
the deviations is the closest to that of the U.S. model, we consider 
this home market model to be the most similar home market merchandise. 
When we begin our search for the most similar model using our sum-of-
the-deviations methodology, it is possible that the most similar home 
market model will not differ from the U.S. model in any of the five 
physical criteria used in our model-match methodology. However, simply 
because the sum of the deviations is zero, we do not assume the 
merchandise is identical. There are numerous characteristics which 
affect the variable costs incurred when producing that TRB. While we 
use a methodology based on the five most prominent characteristics of 
TRBs, we do not presume that all TRBs with the identical five physical 
criteria are identical bearings. We therefore agree with Timken that a 
difmer adjustment should not be made when comparing identical 
merchandise and, accordingly, we did not make such an adjustment in 
these reviews. However, because the sum-of-the-deviations methodology 
does not account for all possible difmers, it is proper to make other 
difmer adjustments when we compare the U.S. model to the most similar, 
but not identical, home market merchandise, even though it is at times 
possible that the sum of the deviations for the two will be zero.

Comments Regarding the Cost Test Methodology

    Comment 6: NTN argues that the Department should not have performed 
set-splitting of home market set sales prior to conducting its cost-of-
production (COP) test (cost test). NTN contends that, by splitting sets 
prior to the cost test, the Department derived fictional COP figures 
for its split cup and cone sales which it used to determine whether a 
split cup or cone sale was at, above, or below COP. NTN argues that 
there is no authority under the antidumping statute or regulations 
which allows for the derivation of fictional COP figures. NTN states 
that because the Department's current methodology results in the 
calculation of split cup and cone COP figures on the basis of the set 
the components were split from, the split cup and cone COP figures are 
not based on costs and expenses incurred in producing such or similar 
merchandise. As a result, NTN contends that the Department is in 
violation of its own regulations, citing 19 CFR 353.51(c). Finally, NTN 
claims that splitting sets prior to the cost test allows for the absurd 
possibility of a split cup or cone sale passing the cost test while the 
parent set does not.

[[Page 57633]]

    Timken argues that, contrary to NTN's assertion that the Department 
derived fictional COP figures for NTN's split cup and cone sales, the 
Department derived these figures from actual costs submitted by NTN. In 
addition, the petitioner points out that a review of the split 
component COP figures derived by the Department indicates that these 
split cup and cone COP figures are virtually identical to the component 
COPs NTN reported for its sales of individually sold cups and cones 
identical to those split from home market sets. As such, Timken argues, 
the split component COPs derived by the Department are accurate, fair, 
and reasonable. Timken further asserts that, in accordance with section 
771(16) of the Tariff Act, the Department correctly determine whether 
the split cup and cone sales represented such or similar merchandise on 
the basis of the physical characteristics and VCOM of the split cup and 
cones and not the parent set. Likewise, Timken comments, in accordance 
with section 773(a)(1) of the Tariff Act, the prices and price 
adjustments used by the Department to determined the foreign market 
value (FMV) of the split cups and cones were correctly based on the 
prices and price adjustments attributable to the split cups and cones, 
and not the parent sets. Therefore, Timken concludes, just as it would 
be absurd for the Department to base the prices, price adjustment 
amounts, and the determination of such and similar merchandise for the 
split component sales on the parent set, it would be just as absurd to 
determine under section 773(b) of the Tariff Act that the split cups 
and cones sales were below cost based on the costs of the parent set 
rather than on the costs of the split component sales. In light of the 
above, Timken argues that NTN's ``absurd'' result that a split cup and 
cone sale may pass the cost test while the parent set does not is not 
absurd, but the exact result mandated by the statute.
    Department's Position: We agree with Timken. It is consistent with 
our set-splitting methodology and with the statute to first conduct the 
splitting of sets in the home market and then perform the cost test on 
all sales of cups and cones, whether they be individually sold cups and 
cones or split cup and cone sales. The split-component COP figures we 
derive from set splitting are based on NTN's reported cup and cone 
ratios for each home market set. These ratios reflect the variable cost 
of the cup to the cost of the set and the variable cost of the cone to 
the cost of the set, and are based on costs NTN actually incurred in 
producing individual cups and cones. Therefore, the resulting split cup 
and cone COP figures are not fictional. We have not created COP data 
where none existed, but, rather have apportioned actual costs incurred 
by NTN for a set to the cup and cone contained in that set. 
Furthermore, NTN has not explained why it is unreasonable for us to use 
these actual cost-based ratios in deriving the split cup and cone COP 
figures.
    Because split cups and cones may be found to be the most similar 
merchandise to the product sold in the United States, we must ensure, 
in accordance with section 773(b) of the Tariff Act and 19 CFR 353.51, 
that the transaction price for the split cup and cone is above COP. By 
splitting sets prior to the cost test, we are able to separately test 
each home market sale, whether it was an individually sold or split 
sale, to determine if the sale was at, above, or below COP, rather than 
imputing the results of the cost test for the parent set to the split 
component sales. Finally, section 771(16) of the Tariff Act requires us 
to compare the price of the imported cups and cones with such or 
similar home market merchandise. Clearly, the home market merchandise 
which is such or similar to the imported cups and cones are home market 
cups and cones, whether they are regular or split sales, and not home 
market sets. It is, therefore, necessary to perform the cost test on 
the merchandise that is actually being compared to the U.S. merchandise 
(home market cups and cones), rather than the merchandise that is not 
being compared (home market sets) (see TRBs 90/92 at 64729).
    Comment 7: NTN argues that the Department has provided no 
explanation why a period of 3 months or more represents an ``extended 
period of time'' in its analysis of whether to disregard sales NTN made 
in the home market at prices below the COP. NTN contends that by 
definition, extended means ``covering a great period of time.'' NTN 
claims that this indicates that an extended period of time should 
account for at least 6 months (fifty percent) of the 12-month review 
period.
    Petitioner argues that, as the CIT has noted, Congress did not 
provide for a specified time period in section 773(b) of the Tariff Act 
for determining whether sales below cost were made ``over an extended 
period of time,'' citing Toho Titanium Co., Ltd. v. United States, 657 
F. Supp. 1280, 1285 (CIT 1987). According to Timken, it has therefore 
been left to the Department to determine whether sales below COP were 
made over an extended period of time. Timken states that the Department 
has correctly selected a period of three months as the time necessary 
to meet the goal of the statute and retain for comparison home market 
sales of obsolete or end-of-model-year merchandise.
    Department's Position: The CIT, ruling on this identical argument 
by NTN in NTN Bearing Corporation of America, American NTN Bearing Mfg. 
Corporation, and NTN Corporation v. United States, Slip. Op. 94-96 (CIT 
1994), clearly stated that the Department's definition of ``extended 
period of time'' was reasonable and in accordance with the law. Because 
NTN did not provide any evidence indicating that below-cost sales are a 
normal and expected characteristic of the TRB industry, and because our 
definition of ``extended period of time'' for these reviews is 
identical to that which we applied in previous TRB reviews and has been 
upheld by the CIT, we have not changed our definition for these final 
results.

Comments Concerning Packing and Movement Expenses

    Comment 8: Timken argues that while section 772(D)(2)(A) of the 
Tariff Act authorizes the deduction of U.S. pre-sale inland freight 
expenses from United States price (USP), there is no corresponding 
provision authorizing a parallel adjustment to foreign market value 
(FMV). Timken states that this, long with the Federal Circuit's 
decision in The Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray 
Portland Cement v. United States, 13 F.3d 398 (Fed. Cir. 1994) (Ad 
Hoc), demonstrates that home market pre-sale inland freight charges 
should not be treated differently depending on the basis on which USP 
is determined and the Department should therefore not deduct pre-sale 
inland freight expenses in either purchase price or exporter's sales 
price (ESP) comparisons. Timken also argues that pre-sale movement 
expenses may not be deducted as indirect expenses in ESP comparisons 
because such expenses are not incurred in the selling of the 
merchandise, but rather before a sale occurred. Timken concludes that 
because the ESP offset is limited exclusively to selling expenses, pre-
sale inalnd freight expenses cannot be adjsuted for under 19 CFR 
353.56(b)(1) or (2) of the Department's regulations and, like pre-sale 
warehousing expenses, are best categorized as overhead or general and 
administrative expenses. Finally, the petitioner argues that, even if 
the Department adheres to its current methodology for adjusting FMV for 
pre-sale inland freight expenses, the Department should not

[[Page 57634]]

have made a deduction to FMV for NTN's home market pre-sale inland 
freight expenses in purchase price situations because NTN failed to 
demonstrate that its pre-sale inland freight expenses were direct 
selling expenses.
    NTN argues that Timken's position completely ignores the CIT's 
decision in Federal-Mogul v. United States, 17 CIT, Slip Op. 94-40 
(March 7, 1994) (Federal-Mogul), in which the CIT stated that, in Ad 
Hoc the Federal Circuit limited its decision to the calculation of FMV 
in purchase price situations only and specifically noted that it was 
not ruling on the Department's authority to adjust for pre-sale inland 
freight pursuant to the circumstance-of-sale (COS) provisions in 
section 773(a)(4)(b) of the Tariff Act (Federal-Mogul at 7). NTN argues 
that not only does Federal-Mogul authorize the Department's current 
practice of deducting pre-sale inland freight in ESP situations, but, 
given the Department's broad authority to make COS adjustments, the 
Department may also legitimately make such a deduction from FMV in 
purchase price situations as well.
    NSK argues that if pre-sale inland freight expenses are deducted 
from USP, the plain language of the statute requires that the 
Department should deduct pre-sale inland freight expenses from FMV, 
regardless of whether it is a purchase price or ESP calculation.
    NSK asserts that the Department has correctly defined the place of 
shipment in the country of exportation as ex-factory and, having done 
so, is bound by section 772(d)(2)(A) of the Tariff Act to deduct ``post 
factory'' freight expenses from FMV regardless of whether the 
Department designates the freight expense as pre-sale or post-sale. 
Like NTN, NSK also argues that the antidumping law grants the 
Department the authority to deduct both direct and indirect movement 
expenses from FMV as a COS adjustment.
    NSK also argues that the Department should not have deducted pre-
sale inland freight expenses in NSK's USP calculations. NSK contends 
that section 772(d)(2)(A) of the Tariff Act refers only to those costs 
or expenses incident to bringing merchandise from the place of shipment 
in the country of exportation to the place of delivery in the United 
States. NSK states that the record demonstrates that, after 
manufacture, but prior to sale, NSK sends TRBs to distribution centers. 
NSK explains that these TRBs are then shipped from the distribution 
center to the customers. NSK asserts that, because the freight it 
incurred in transporting the merchandise from the factory to the 
distribution center was incurred prior to the date of sale, and because 
the places of shipment in the country of exportation in NSK's case are 
its distribution centers, this pre-sale inland freight expense does not 
constitute an expense which was incurred incident to bringing the TRBs 
from the place of shipment to the place of delivery and should not be 
deducted from USP.
    Department's Position: We agree with NSK that the Ad Hoc decision 
was limited to the narrow question of our inherent authority to deduct 
pre-sale freight expenses in purchase price situations. However, as 
noted by the CIT in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray 
Portland Cement v. United States, 865 F. Supp. 857 (CIT 1994), the Ad 
Hoc Committee decision ``discussed without disapproval, Commerce's ESP-
COS procedures where, as indicated, indirect expenses, such as most 
pre-sale transportation costs, are deductible from FMV to the extent of 
the USP level of expenses.'' (emphasis added)
    As explained in numerous other Departmental decisions, we have 
determined, in light of Ad Hoc  and its progeny, that the Department no 
longer can deduct home market movement charges from FMV pursuant to its 
inherent power to fill in gaps in the antidumping statute. We instead 
adjust for those expenses under the COS provision of 19 CFR 353.56 and 
the ESP offset provision of 19 CFR 353.56(b) (1) and (2), as 
appropriate, in the manner described below (see, e.g., Antifriction 
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From 
France, et. al.; Final Results of Antidumping Duty Administrative 
Reviews, Partial Termination of Administrative Reviews, and Revocations 
in Part of Antidumping Duty Orders, 60 FR 10900 (February 28, 1995) 
(AFBs 92/93), Porcelain-on-Steel Cooking Ware From Mexico; Final 
Results of Antidumping Duty Administrative Review, 60 FR 2378 January 
9, 1995), Final Determination of Sales at Less Than Fair Value; Canned 
Pineapple From Thailand, 60 FR 29553 (June 5, 1995)).
    When USP is based on either ESP or purchase price, we adjust FMV 
for home market movement charges through the COS provision of 19 CFR 
353.56(a). Under this adjustment, we capture only direct selling 
expenses, which include post-sale movement expenses and, in some 
circumstances, pre-sale movement expenses. Specifically, we treat pre-
sale movement expenses as direct expenses if those expenses are 
directly related to the home market sales of the merchandise under 
consideration.
    In order to determine whether pre-sale movement expenses are 
direct, the Department examines the respondent's pre-sale warehousing 
expenses, since the pre-sale movement charges incurred in positioning 
the merchandise at the warehouse are, for analytical purposes, linked 
to pre-sale warehousing expenses (see Final Results of Redetermination 
Pursuant to Court Remand, dated January 5, 1995 (pertaining to Slip. 
Op. 94-151)). If the pre-sale warehousing constitutes an indirect 
expense, the expense involved in getting the merchandise to the 
warehouse, in the absence of contrary evidence, also must be indirect; 
conversely, a direct pre-sale warehousing expense necessarily implies a 
direct pre-sale movement expense. We note that although pre-sale 
warehousing expenses in most cases have been found to be indirect 
expenses, these expenses may be deducted from FMV as a COS adjustment 
in a particular case if the respondent is able to demonstrate that the 
expenses are directly related to the sales under consideration (see Ad 
Hoc Committee of AZ-NM-TX-FL producers of Gray Portland Cement v. 
United States, Slip Op. 95-91 (CIT May 15, 1995) (upholding the 
Department's pre-sale inland freight methodology set forth in its 
January 5, 1995, Remand Results)).
    Additionally, when USP is based on ESP, under the ESP offset 
provision set forth in 19 CFR 353.56(b) (1) and (2), we adjust for any 
pre-sale movement expenses found to be indirect selling expenses.
    We disagree with Timken that we deducted pre-sale inland freight 
expenses from FMV in our purchase price comparisons for NTN. In our 
preliminary results for NTN we determined that NTN's reported inland 
freight expenses were not directly related to its sales. As a result, 
in our preliminary results computer program for NTN we included pre-
sale inland freight in our home market indirect expenses variable. 
However, we used this variable in our ESP calculations only for ESP 
offset purposes, in accordance with our policy to adjust FMV for pre-
sale inland freight expenses which are indirect in nature, pursuant to 
the ESP offset provision set forth in 19 CFR 353.56(b) (1) and (2). We 
did not apply this home market indirect selling expenses variable in 
our purchase price calculations. Therefore, contrary to Timken's claim, 
in our preliminary results for NTN we did not deduct pre-sale inland 
freight from FMV in purchase price comparisons, and, as a result, we 
have not changed our calculations in these final results for NTN.

[[Page 57635]]

    We also disagree with Timken's argument that pre-sale movement 
expenses should not be viewed as selling expenses. The only purpose of 
moving merchandise from the factory to a warehouse or distribution 
center is in furtherance of the process of selling that merchandise and 
no other characterization is sensible.
    Concerning NSK's claim that we should not have deducted pre-sale 
inland freight from USP because its reported pre-sale inland freight 
expenses do not fall within the meaning section 772(d)(2)(A) of the 
Tariff Act, we disagree. The crux of NSK's argument is that because it 
reports the date the home market merchandise was shipped from the 
distribution center as its home market date of shipment, then, in terms 
of its U.S. sales, the distribution center must be the point of 
shipment from the country of exportation in accordance with section 
772(d)(2)(A) of the Tariff Act. We have reviewed NSK's responses to our 
original and supplemental questionnaires and have determined that NSK 
has provided no evidence which demonstrates that its home market 
distribution centers constitute the ``point of shipment in the country 
of exportation.'' To the contrary, the evidence on the record suggests 
that, for that merchandise which is destined for export, NSK's home 
market distribution centers are intermediary points of shipment and not 
the original point of shipment in Japan, the country of exportation. 
For example, TRBs destined for exportation are first transported from 
the plant to distribution centers, and subsequently shipped to NSK's 
freight forwarder. From the freight forwarder the merchandise is then 
shipped to the port of exportation. The initial packing of all 
merchandise is done at the plant, and that merchandise destines for 
exportation receives additional packing for export by the freight 
forwarder. NSK provided no explanation of what type of processing takes 
place (such as what type of paperwork is generated or what type of 
activities occur) at the distribution centers with regard to export 
merchandise. Nor did NSK provide information on the record concerning 
any expenses it might have incurred at the distribution centers for 
TRBs destined for export. In other words, we have no information upon 
which to make a determination that these distribution centers should be 
considered as the shipment point in the country of exportation pursuant 
to section 772(d)(2)(A) of the Tariff Act. Rather, this record evidence 
leads us to conclude that NSK's home market distribution centers are 
merely one stopping point in the transit of merchandise destined for 
export, which begins at the factory door and ends with the port of 
exportation. Therefore, we have not changed our treatment of this 
expense and have deducted from USP NSK's reported pre-sale inland 
freight expenses for U.S. merchandise, including those expenses 
incurred for the transport of the merchandise from the factory door to 
the distribution centers.
    Comment 9: Timken points out that NTN reported distinct pre-sale 
inland freight expenses for its U.S. and home market sales. Timken 
argues that, given the fact that NTN's pre-sale inland freight expenses 
represent the costs incurred when moving merchandise from the factory 
to the warehouse or distribution center, the allocation ratios NTN 
calculated for these expenses should be consistent, whereas NTN's vary. 
Timken contends that the Department should either make identical 
deductions from USP and FMV for pre-sale inland freight, or eliminate 
the adjustment entirely.
    Citing previous Departmental decisions on this issue in both the 
TRB and AFB cases, NTN argues that the Department has acknowledged in 
the past that pre-sale freight expenses do not have to be the same in 
both markets and urges the Department to again reject Timken's 
position.
    Department's Position: We agree with NTN. Because sales in each 
market may be handled differently and, thus, different freight expenses 
may be incurred, variations in these expenses between markets is 
reasonable and such variations are not an adequate basis upon which to 
reject NTN's claimed adjustment for home market and U.S. pre-sale 
inland freight expenses. Likewise, the deduction of pre-sale inland 
freight from either the home market or the U.S. market is not 
contingent on whether pre-sale inland freight occurred in the other 
market (see TRBs 90/92 at 64723 and AFBs 91/92 at 39768).
    Comment 10: The petitioner argues that NSK's reported U.S. 
repacking material and labor expense factors, which NSK allocated on 
the basis of the total POR sales value of all products sold in the 
United States, is incorrect. Timken contends that, while NSK packs both 
domestically produced and imported TRBs in the United States, its 
allocation methodology does not accurately account for the repacking 
costs attributable to imported merchandise only. A a result, Timken 
argues that the Department should recalculate NSK's repacking expense 
factor by dividing NSK's reported repacking expenses during the POR by 
the reported sales value of only that subject merchandise which was 
imported during the POR.
    NSK contents that, while it normally shipped merchandise from its 
U.S. warehouses in its original containers, it occasionally repacked 
merchandise to accommodate small orders. NSK added that because it 
ships both imported merchandise and domestically-produced merchandise 
from its U.S. warehouses, the repacked merchandise may have been 
imported or may have been domestically produced. NSK argues that, 
because it does not maintain records in the ordinary course of business 
concerning this distinction, it cannot calculate the exact repacking 
expenses attributable to its imported merchandise only and its 
calculation of its repacking expenses is therefore reasonable.
    Department's Position: We agree with NSK. NSK explained in its 
response that it incurs repacking material and labor expenses for both 
imported and domestically-produced merchandise and does not maintain 
records which allow it to make a distinction between the repacking 
expenses incurred for its imported merchandise separate from those for 
its domestically-produced merchandise. As a result, NSK's inclusion in 
its numerator of all the repacking expenses it incurred during the POR 
for all products sold in the United States is acceptable, given its 
ordinary business practices. Because its numerator reflected the 
repacking expenses incurred on all products sold in the United States 
during the POR, NSK correctly used the total sales value of all 
products it sold in the United States as its denominator. In addition, 
because the fact that a particular product was imported or domestically 
produced did not affect the amount of materials NSK used or the labor 
required to repack that product, and because NSK's allocation 
methodology reflects the manner in which it incurred and booked its 
repacking expenses, we are satisfied that its reported repacking 
expenses are accurate and reasonable.

Comments Concerning Various Adjustments to USP

    Comment 11: Timken argues that, because NTN has failed to 
demonstrate that its allocation of U.S. selling expenses by level of 
trade was reasonable and accurate, the Department should re-allocate 
NTN's reported U.S. selling expenses without regard to levels of trade. 
In addition, Timken asserts that when re-allocating certain of NTN's 
reported U.S. selling expenses in its

[[Page 57636]]

preliminary results, the Department used an incorrect allocation base 
such that the Department's calculated expense factors failed to yield 
the net expense figures NTN reported in its response.
    NTN argues that its allocation of U.S. expenses by level of trade 
is directly based on its accounting and sales records. NTN also points 
out that the Department has consistently accepted all aspects of its 
U.S. selling expense allocation methodology in previous segments of 
these proceedings, and insofar as its methodology is not unreasonable, 
the Department should accept it in these final results as well.
    Department's Position: In our preliminary results for NTN we 
slightly modified NTN's U.S. selling expense allocations such that 
certain expenses incurred by NTN Bearing Company of America (NBCA) in 
selling to U.S. customers were more appropriately expressed as a 
percentage of U.S. sales value rather than the transfer price between 
NTN and NBCA. However, in doing so we accepted NTN's level-of-trade 
methodology because we have determined that this methodology prevents, 
rather then creates, certain distortions. As demonstrated in NTN's 
response, NTN developed its level-of-trade allocations, which it based 
on regional sales and the regional average number of employees, to 
compensate for the fact that in certain regions NTN sells to only one 
level of trade. To avoid the distortions that would arise if expenses 
incurred in a region were allocated to a level of trade that does not 
exist in that region, NTN developed a complex allocation methodology 
which operates to attribute expenses incurred on sales to a particular 
level of trade only to that level of trade. NTN achieved this level of 
detail because it maintains its books and accounting records according 
to levels of trade. In this way, we are satisfied that NTN's detailed 
and often complex U.S. expense reporting methodologies result in 
reasonable allocations. Therefore, absent specific evidence 
demonstrating that NTN's level-of-trade allocations are unreasonable, 
we do not agree with Timken that we should disregard these allocations. 
However, for these final results, we have re-allocated NTN's U.S. 
selling expenses without regard to different levels of trade for a 
different reason, as discussed below.
    To support its position that the Department's re-allocations of 
certain of NTN's reported U.S. expenses in the preliminary results 
failed to properly account for the gross expense amounts NTN reported 
in its response, the petitioner provided a detailed computer analysis 
demonstrating the discrepancy. In reviewing Timken's computer analysis, 
we discovered a significant error in NTN's response. In its 
supplemental questionnaire response dated May 31, 1994, NTN submitted a 
revised total U.S. in-scope sales value and stated that it discovered 
an error in its earlier reported figure. We compared this new figure to 
the total sales value we derived from NTN's submitted U.S. sales data 
computer files and verified its accuracy. However, our further review 
of NTN's response revealed that, in its U.S. selling expense 
allocations detailed in proprietary exhibit B-8 of its initial 
response, NTN did not use the same total sales value, but rather a 
figure much different from the revised figure submitted in its 
supplemental response, and even significantly different from its 
originally-reported ``incorrect'' figure (submitted in proprietary 
exhibit A-19 of its original response). We have examined NTN's 
responses in detail and are unable to find any explanation for this 
discrepancy. Because (1) NTN clearly reported that the sales figure 
submitted in its supplemental response was the ``corrected'' figure, 
(2) NTN reported this figure subsequent to its submission of 
proprietary exhibit B-8, and (3) the revised figure matches that which 
we derived from NTN's home market sales computer data files, we have 
determined that the figure contained in NTN's supplemental response is 
the correct U.S. total sales value for scope merchandise during the POR 
and that NTN's U.S. selling expense allocations should be revised to 
employ this total amount. However, the complex nature of NTN's U.S. 
selling expense reporting methodologies, which incorporate layers of 
allocations, makes it impossible for us to simply duplicate NTN's 
methodology and preserve any level-of-trade distinctions. We have 
therefore reallocated NTN's U.S. selling expenses using a simple 
method: we divided the expense amounts attributable to scope sales by 
the ``corrected'' total U.S. sales value for scope merchandise. We did 
this in our reallocations for NTN's U.S. inland freight from-warehouse-
to-customer expenses, direct technical service expenses, indirect 
advertising expenses, other indirect selling expenses, U.S. repacking 
material expenses, and U.S. repacking labor expenses, all of which 
represent expenses incurred by NBCA on its sales to U.S. customers and 
are properly allocated on the basis of total U.S. sale value.
    In sum, while we have completely re-allocated certain of NTN's U.S. 
expenses without regard to different levels of trade, our determination 
to do so in these final results was based solely on our discovery of a 
discrepancy in NTN's reported total U.S. sales value for scope 
merchandise during the POR.
    Comment 12: Timken argues that it is apparent that respondents have 
adopted a strategy of absorbing antidumping duties, rather than 
correcting their price discrimination. Timken maintains that when a 
related U.S. importer absorbs antidumping duties as a cost of doing 
business, the duties themselves constitute a selling expense because 
the duty represents an additional cost, charge, expense, or import duty 
within the meaning of section 771(d)(2)(A) of the Tariff Act. 
Therefore, the petitioner contends that the Department must reduce USP 
by an amount equal to the antidumping duties absorbed. Timken further 
argues that if the Department refuses to treat antidumping duties as a 
cost of selling merchandise, then it should at least apply 19 CFR 
353.41(a), which addresses situations in which a foreign producer 
reimburses its U.S. affiliates for antidumping duties paid. Timken 
contends that, contrary to the Department's position on this issue 
expressed in other cases, the regulation was always intended to apply 
to both ESP and purchase price situations. Timken states that because 
the objective of an ESP calculation is to arrive at an appropriate 
estimation of arm's-length ex-factory prices from the foreign producer 
to the related U.S. buyer, it is not possible to estimate the true 
f.o.b. price if the exporter is allowed to reimburse a related importer 
for antidumping duties. Timken also maintains that because it is 
conceptually incorrect to treat related exporters and importers as 
single entities for the purpose of identifying and deducting selling 
expenses incurred by the importing entity, it is likewise incorrect to 
treat the companies as a single entity for the purpose of determining 
whether duties have been reimbursed. Finally, Timken argues that 
Outokumpu Copper Rolled Products AB v. United States, 829 F. Supp. 1371 
(CIT 1993) (Outokumpu), the case the Department has previously used to 
support its position on this issue, is irrelevant because these TRB 
reviews address exporters who, Timken asserts, reimburse the entities 
who actually pay duties to Customs, that is, the related U.S. 
importers.
    NSK argues that antidumping duties do not constitute additional 
expenses included in USP but only exist as a result of the difference 
between USP and FMV, citing Borusan Holding A.S. v. United States, 16 
CIT 278 (CIT 1992). NSK contends that to deduct

[[Page 57637]]

antidumping duties from USP would double-count them and, as such, would 
constitute a violation of the antidumping duty law (Holmes Prod. Corp. 
v. United States, 795 F. Supp 1205 (CIT 1992)). NSK next argues that 
the Department and the CIT have consistently held that 19 CFR 353.26 
(1992) does not authorize the deduction of reimbursed antidumping 
duties from USP, citing Brass Sheet and Strip From Sweden; Final 
Results of Antidumping Duty Administrative Reviews, 57 FR 2706 (January 
23, 1992) (Swedish Brass). NSK states that the regulation clearly calls 
for the deduction of antidumping duties that have been paid on behalf 
of the importer and that, because antidumping duties are only paid upon 
liquidation, the Department cannot logically adjust USP for an event 
that has not yet taken place. NSK also points out that 19 CFR 353.26(b) 
specifically requires an importer to file a certificate with Customs 
attesting to the fact that it has not entered into an agreement for the 
payment or refund of all or part of the antidumping duties due. NSK 
states that once an importer has indicated on this certificate that it 
has not been reimbursed for antidumping duties, the Department is not 
required to expend additional resources on the issue, citing Outokumpu 
at 1384.
    NTN points out that the CIT and the Department have both rejected 
Timken's position concerning the reduction of USP for so-called 
absorbed antidumping duties and that there is no reason to depart from 
this practice in these present reviews. NTN also argues that the 
Department acted correctly by not adjusting USP for the alleged 
reimbursement of antidumping duties under 19 CFR 353.26 for several 
reasons. First, NTN claims that because this regulation does not 
implement a provision of the law and lacks a statutory nexus, it 
constitutes an impermissible interpretation and the Department lacks 
the authority to implement it. Second, NTN asserts that the regulation 
requires an adjustment only where there has been a reimbursement by the 
producer and Timken has provided no such evidence. Finally, NTN 
maintains that, as upheld in Outokumpu, the regulation permits the 
adjustment to USP only where the producer paid duties on behalf of the 
importer. NTN argues that because NBCA, for whose account the 
merchandise was imported, is a wholly-owned subsidiary of NTN Japan, 
NBCA is actually the exporter, not the importer.
    Department's Position: We disagree with Timken. First, concerning 
Timken's position that we should deduct ``absorbed'' antidumping duties 
from USP, Timken has provided no evidence demonstrating that the U.S. 
affiliates of the manufacturers/exporters subject to these reviews have 
absorbed the antidumping duties as a cost of selling in the United 
States. In addition, we agree with NSK that to make this additional 
deduction for antidumping duties assessed on imports of subject 
merchandise would result in double-counting (see AFBs 92/93 at 10907). 
Finally, as stated in AFBs 92/93 at 10907, we do not agree that 
antidumping duties constitute a selling expense and should be deducted 
from ESP. This position was upheld by the CIT in Federal-Mogul v. 
United States, 813 F. Supp 856 (CIT 1993).
    Concerning Timken's position that we should apply 19 CFR 353.26 of 
our regulations, we again disagree. We have consistently held that, 
absent evidence of reimbursement, we do not have the authority to make 
such an adjustment to USP (see Swedish Brass at 2708 and Brass Sheet 
and Strip From the Republic of Korea; Final Results of Antidumping Duty 
Administrative Review, 54 FR 33257 (1989). Furthermore, in Torrington 
Co. and Federal-Mogul Corp. v. United States, 881 F. Supp. 622 (CIT 
1995), the CIT clearly explained that in order for 19 CFR 353.26 to 
apply, it must be shown that the foreign manufacturer either paid the 
antidumping duty on behalf of the U.S. importer or reimbursed the U.S. 
importer and that the regulation does not impose upon the Department an 
obligation to investigate based on mere allegations. The CIT went on 
further to state that, before the Department is required to commit 
resources to investigate the transfer of funds between related 
corporations, the party who requests the investigation must produce 
some link between the transfer of funds and the reimbursement of 
antidumping duties. In addition, the CIT pointed out that once an 
importer has indicated on its certificate at the time of liquidation 
that it has not been reimbursed for antidumping duties, it is 
unnecessary for the Department to conduct additional inquiry absent a 
sufficient allegation of customs fraud. In the present reviews Timken 
has provided no evidence demonstrating a link between intracorporate 
transfers and the reimbursement of antidumping duties. Absent this 
evidence, we have not conducted an investigation concerning this issue 
and we have not made an adjustment to USP in accordance with 19 CFR 
353.26.
    Comment 13: The petitioner questions NTN's reported U.S. credit 
expenses, stating that the amounts NTN reported are unrealistic. Timken 
argues that the Department, therefore, should use as best information 
available (BIA) for NTN's reported U.S. credit expenses the highest 
credit expense amount reported for any transaction or a proxy amount 
from another respondent.
    NTN argues that because Timken's argument is based on speculation 
and that Timken has offered no proof to support its assertions, there 
is no basis for the use of BIA.
    Department's Position: NTN explained in its response that it 
derived a customer-specified U.S. credit expense ratio based on 
information from its accounts receivables ledgers concerning the 
average number of days payment was outstanding for each of its 
customers throughout the review period (see proprietary attachment 4 to 
NTN's March 31, 1994, supplemental response). As such, NTN's reported 
credit expense amounts are based on customer's actual payment 
information as maintained in NTN's books and records. We have verified 
this method in previous reviews, and, because NTN has not changed its 
methodology for these reviews, we are satisfied that NTN has again 
reported U.S. credit expense amounts which are derived directly from 
actual customer payment information. In its brief, Timken, by comparing 
the U.S. credit expenses to home market credit expenses, concludes that 
NTN's U.S. credit expenses are unrealistic. We disagree. In light of 
the fact that NTN's credit expenses are based on actual customer 
payment information and the fact that the home market and U.S. markets 
constitute two distinct markets with different customer payment 
histories, we are not persuaded that NTN's credit expenses are 
unrealistic and we have not altered our treatment of these claimed 
expenses for these final results.
    Comment 14: The petitioner contends that NTN exclude certain 
commissions it paid on specific purchase price sales from its reported 
indirect selling expenses and did not otherwise report them as 
adjustments to USP. Timken argues that the Department should either 
adjust USP for NTN's purchase price commissions, or, in the 
alternative, include them in NTN's total U.S. indirect selling expense 
adjustment.
    NRN argues that the Department has addressed this issue several 
times before and there is not reason for the Department to change its 
position in these current TRB reviews.
    Department's Position: NTN explained in its response that, as a 
means of compensating NBCA for expenses it incurred with respect to

[[Page 57638]]

services it provided for certain of NTN's purchase price sales, NTN 
made ``commission' payments to NBCA. Because these payments were not 
related to ESP sales, NTN excluded them from its reported U.S. indirect 
selling expenses for its ESP sales. As stated by the CIT in Outokumpu 
Copper Rolled Products AB and Outokumpu Copper (USA) Inc. v. United 
States, 850 F. Supp. 16 (March 16, 1994), the Department generally does 
not make an adjustment for commissions to related parties because such 
commissions are considered intra-company transfers of funds and, as 
such, do not qualify for COS adjustments. In order to determine whether 
an adjustment for related-party commissions is appropriate, we apply a 
two-pronged test. First, we determine if the commissions are directly 
related to specific sales and then whether the commission is at arm's 
length (see LMI-La Metalli Industriale, S.p.A United States, 912 F.2d 
455, 458-459 (Fed. Cir. 1990) and Certain Welded Carbon Steel Standard 
Pipes and Tubes from India, 57 FR 54360 (November 18, 1992)). To 
determine whether a related-party commission is at arm's length, where 
possible, we compare the related-party ``commissions'' to commissions 
paid to unrelated parties in the same market (see Coated Groundwood 
Paper from the United Kingdom, 56 FR 56403 (November 4, 1991)).
    Because in the case of ESP sales NBCA paid commissions to unrelated 
sales representatives in the U.S. market, we have a benchmark to which 
we can compare NTN's related-party ``commission.'' NTN reported in its 
response the range of commission rates granted to its unrelated sales 
representatives. The only data we have about the related-party 
``commission'' is the POR payment amount NTN reported as an adjustment 
to its ESP indirect selling expenses. Therefore, to determine a 
percentage rate for the NBCA ``commission,'' we divided this amount by 
the total sales value of those purchase price sales for which NBCA 
provided services. Our analysis revealed that NTN's percentage payment 
to NBCA was not at arm's length when compared to the commissions NBCA 
paid to unrelated U.S. commissionaires. As a result, we have treated 
this payment to NBCA as an indirect selling expense for NTN's purchase 
price sales and have deducted this payment amount from NTN's reported 
U.S. indirect selling expenses for its ESP sales.
    Comment 15: Timken argues that the Department should not accept 
NTN's claimed downward adjustment to its reported U.S. indirect selling 
expenses for interest on cash deposits. Timken points out that the 
Department clearly rejected such a claim in its last AFB final results 
and should do so here as well, citing AFBs 92/93 at 109182.
    NTN argues that, just as antidumping duties are not the basis of an 
adjustment to ESP, so too the costs that are related to them should not 
be an adjustment to ESP. Therefore, the expenses should be treated as a 
deduction from its U.S. indirect selling expenses.
    Department's Position: We disagree with NTN. Cash deposits of 
estimated antidumping duties are provisional in nature because they may 
be refunded, with interest, at some future date. Because the cash 
deposits are provisional in nature, so too are any interest expenses 
that respondents may incur in borrowing to finance cash deposits. To 
the extent that respondents receive refunds of cash deposits with 
interest, that interest will offset the interest expenses that 
respondents may have incurred in financing the cash deposits. 
Therefore, we have not allowed NTN's claimed offsets to its reported 
interest expenses in the United States to account for that portion of 
the interest expenses that NTN estimated to be related to payment of 
cash deposits of estimated antidumping duties.
    Comment 16: The petitioner contends that the two additional export 
selling expenses NTN reported in its supplemental response, foreign 
exchange charges and commissions on export sales, were incorrectly 
allocated on the basis of the ratio of salaries in NTN's export sales 
department. Timken argues that these expenses, unlike NTN's other 
reported export selling expenses, are not general overhead expenses but 
expenses related to specific sales and, as such, should be allocated 
based on sales value.
    NTN contends that its allocation of these expenses on the basis of 
the salaries of its export sales department is reasonable and should be 
accepted by the Department. NTN argues that because the export selling 
expenses it incurred bear no relationship to the size or identity of 
the export sales, its allocation is actually more accurate than one 
based on sales values.
    Department's Position: We disagree with Timken. We have found NTN's 
export selling expense allocation methodology based on the salaries of 
its export department personnel a reasonable measure of its export 
selling expenses attributable to U.S. sales. Timken has provided no 
evidence demonstrating why the application of this methodology to these 
two expenses is distortive or why its suggested methodology would yield 
more accurate results. We therefore have no reason to suspect that an 
allocation methodology which is reasonable for the export selling 
expenses NTN originally reported in its response is unreasonable for 
the two additional expenses it reported in its supplemental 
questionnaire response. As a result, for these expenses we have 
accepted NTN's allocation methodology for these final results.

Samples, Prototypes, and Sales Not in the Ordinary Course of Trade

    Comment 17: NTN contends that the Department improperly determined 
its reported home market sample and small-quantity sales to be within 
the ordinary course of trade and included such sales in its margin 
calculations. NTN argues that its home market sample sales cannot be 
considered as in the ordinary course of trade because they are items 
which enable a customer to make a buying decision. NTN also maintains 
that its reported home market small-quantity sales cannot be considered 
ordinary, given the extremely small quantities involved.
    The petitioner argues that the Department incorrectly excluded from 
its analysis certain of NSK's U.S. and home market sales which the 
Department determined were outside the ordinary course of trade. Timken 
contends that because NSK failed to demonstrate that its reported home 
market sample and prototype sales were outside the ordinary course to 
trade in accordance with the standards set out by the CIT in Murata 
Mfg. Co., Ltd. v. United States, 820 F. Supp. 603, 606 (CIT 1993) 
(Murata), the Department must alter its determination for these final 
results and include such sales within NSK's home market data bases. 
Likewise, Timken argues that the Department should not have excluded 
NSK's reported U.S. zero-priced sample sales from its analysis. Timken 
states that not only is there no statutory basis for excluding any 
sales from the U.S. data base, but section 751(a)(2)(A) of the Tariff 
Act specifically requires that the Department calculate the amount of 
duty payable ``on each entry of merchandise'' into the United States.
    NSK argues that the Department correctly treated its reported home 
market sample and prototype sales and U.S. zero-priced sample sales as 
sales outside the ordinary course of trade. NSK points out that the 
Department completely verified its classification of its home market 
sample and prototype sales as outside the ordinary course of trade and 
examined various documentation demonstrating the abnormal nature of 
these sales. In

[[Page 57639]]

addition, NSK argues that the zero-priced sample sales given to U.S. 
customers constitute promotional expenses and not ``sales.'' NSK states 
that, as such, the expense of these zero-priced sales is considered in 
accord with NSK's normal accounting practices as an indirect selling 
expense, and, to avoid double-counting, the Department must exclude 
these samples from the U.S. database. NSK further argues that 
merchandise delivered free of charge clearly does not constitute 
merchandise ``sold,'' and, finally, citing Ipsco Inc. v. United States, 
714 F. Supp. 1211, 1217 (CIT 1989), NSK claims that the Department may 
exclude from its U.S. sales data base those sales which are not 
representative of the seller's behavior and sales which are so small 
that they have an insignificant effect on the margin.
    Department's Position: In the case of NSK's claim that its zero-
priced U.S. sales should be considered as outside the ordinary course 
of trade and excluded from NSK's U.S. data base, other than for 
sampling, there is no statutory nor regulatory basis for excluding any 
U.S. sales from an administrative review. Section 751(a)(2)(A) of the 
Tariff Act requires that we analyze all U.S. sales within the review 
period (see, e.g., AFBs 92/93 at 10948 and Final Results of Antidumping 
Administrative Review; Color Television Receivers From the Republic of 
Korea, 56 FR 12701, 12709 (March 27, 1991)). We disagree with NSK that 
Ipsco is applicable here because that case concerned a LTFV 
investigation in which we have the discretion to eliminate from our 
analysis unusual U.S. sales. The present proceeding is an 
administrative review and section 751(a)(2)(A) of the Tariff Act 
requires us to establish a dumping margin for ``each U.S. entry.'' In 
addition, in this review we have not used ``averages or generally 
recognized sampling techniques'' which, pursuant to section 777A of the 
Tariff Act, could also justify the exclusion of certain U.S. sales from 
our analysis. However, we do agree with NSK that to include its zero-
priced sample sales in our U.S. data base and allow the inclusion of an 
expense in NSK's indirect selling expenses which reflects the cost of 
these sample sales would effectively be double-counting. Therefore, for 
these final results we have included NSK's zero-priced U.S. sample 
sales in our analysis, and, to avoid double-counting, we have deducted 
the cost of these samples from NSK's reported U.S. indirect selling 
expenses (see AFBs 92/93 at 10948).
    In contrast to the above, there is a clear statutory and regulatory 
basis for the exclusion from our analysis of those home market sales we 
determine to be outside the ordinary course of trade. Section 
773(a)(1)(A) of the Tariff Act states that the Department is required 
to compare the price of the merchandise imported into the United States 
to the price of the merchandise sold or offered for sale ``in the 
principal markets of the country from which exported in the usual 
commercial quantities and in the ordinary course of trade for home 
market comparison.'' As defined in section 771(15) of the Tariff Act, 
ordinary course of trade means the ``conditions and practices which, 
for a reasonable time prior to exportation of the merchandise which is 
the subject of an investigation, have been normal in the trade under 
consideration with respect to merchandise of the same class or kind.''
    Generally, when determining whether home market sales are within 
the ordinary course of trade, the Department applies the standards set 
forth in Murata, Nachi-Fujikoshi Corp. v. United States, 708 F. Supp. 
716, 718 (1992) (Nachi), and Mantex, Inc., Et. Al., v. United States, 
841 F. Supp. 1290, 1305-1309 (CIT 1993) (Mantex). In Murta the CIT 
quoted with approval the Department's statement in Certain Welded Steel 
Standard Pipes and Tubes from India; Final Results of Antidumping Duty 
Administrative Reviews, 56 FR 64753 (1991), that the Department, in 
determining whether home market sales are in the ordinary course of 
trade, does not rely on one factor considered in isolation, but rather 
considers all circumstances of the sales in question. In addition, the 
CIT noted that in other cases the Department determined that sales were 
outside the ordinary course of trade based not only on the presence of 
small quantities or high prices, but also because the Department found 
other factors that supported the outside-the-ordinary-course-of-trade 
categorization (see Murata at 9). In Nachi the CIT held that the 
Department must make determinations regarding sample sales by examining 
the relevant facts of each individual case and that the burden of proof 
in demonstrating that such sales are outside the ordinary course of 
trade lies with the respondent. In Mantex the CIT restated its previous 
opinion in Nachi.
    In its response NTN described its sample sales as sales of items to 
a customer which are used by the customer to determine whether or not 
to buy the product. NTN explained that, through statements and other 
representations the customer makes, NTN determines the ``sample'' 
nature of the sale and codes the sale accordingly. Concerning its 
small-quantity sales reported as not in the ordinary course of trade, 
NTN explained that for each transaction where the total quantity was 
three units or less, and the total number of transactions during the 
POR was seven or less, NTN searched back to fiscal year 90 and, if 
certain conditions were met, it considered the sale as outside the 
ordinary course of trade. The only other information on the record 
regarding these sales are NTN's computer data files in which it 
reported such sales separately from the rest of its home market data 
base.
    In accordance with Murata, we attempted to examine all factors 
surrounding NTN's reported sample and small-quantity sales to determine 
if they were outside the ordinary course of trade. However, NTN 
provided us with little information other than a general description of 
these sales upon which to base such a determination. We have no other 
narrative explanation, supporting documentation, or other evidence to 
demonstrate why these sales are not representative of NTN's normal 
practices in selling TRBs in Japan, or otherwise demonstrates the 
``aberrational'' nature of these sales. For example, we have no 
evidence supporting the notion that NTN's sample sales were sold only 
for the purpose of allowing the customer to make a decision to buy. 
Likewise, we have no evidence supporting NTN's categorization of its 
``small-quantity'' sales as abnormal, other than the fact that they 
were small-quantity sales. In accordance with Nachi, the burden of 
proving that its sales are outside the ordinary course of trade lies 
clearly with the respondent, and in this instance NTN has failed to 
meet that burden.
    Furthermore, this is not the first review or the first case in 
which we have rejected NTN's categorization of certain of its sales as 
not in the ordinary course of trade. In our last TRB reviews we clearly 
explained that we applied the Murata and Nachi standards to our 
determination of whether NTN's alleged outside-the-ordinary-course-of-
trade sales were indeed outside the ordinary course of trade (see TRBs 
90-92 at 64732). In these reviews we determined that NTN did not supply 
sufficient evidence to allow us to find these sales as outside the 
ordinary course of trade. NTN has had clear notice prior to these 
current reviews that its method of responding to our questionnaire 
failed to demonstrate the ``not-in-the-ordinary-course-of-trade'' 
status of its sample and small-quantity sales. However, NTN took no 
steps to improve its response regarding this issue, but rather provided

[[Page 57640]]

only the same general information with little other explanation. 
Therefore, for these reasons we have not changed our treatment of NTN's 
sample and small-quantity home market sales for these final results. We 
have again determined these sales as within the ordinary course of 
trade and we have included them in our margin calculations.
    We also re-examined the record to determine if evidence exists 
supporting NSK's categorization of its home market prototype and sample 
sales as outside the ordinary course of trade, and we agree with NSK 
that these sales represent ``atypical'' sales which we consider as 
outside the ordinary course of trade. In contrast to NTN, NSK provided 
ample narrative explanation and documentation allowing us to examine 
all factors of the sales it reported as not in the ordinary course of 
trade. Described by NSK as non-commercial quantity sales with abnormal 
prices, the small quantities and high-priced nature of these sales were 
not the only factors upon which NSK based its characterization of these 
sales as outside the ordinary course of trade. Rather, NSK provided at 
verification and in its response documentation which clearly 
demonstrated the unique circumstances surrounding the limited number of 
sales of those models it designated as sample/prototype models. In 
general, evidence provided by NSK demonstrated that (1) a prototype 
model is made only at the express request of a customer to address a 
specific need of the customer, (2) such models are used solely for 
testing purposes, (3) a specific prototype model was never sold to more 
than one particular customer, (4) there was no other demand for these 
models except for that of the specific customer who requested that the 
model be manufactured in the first place, (5) the price of the 
prototypes included tooling and die charges which are not included in 
the prices for ``normal'' home market sales, (6) several of those 
customers who requested and purchased a prototype model made only one 
purchase of the model during the entire review period, and (7) NSK's 
reported prototype/sample home market sales represent an insignificant 
portion of NSK's home market sales during the review period.
    Clearly, in NSK's case we have been able to examine all factors 
surrounding the sale of NSK's home market prototypes/samples and, based 
on the evidence on the record, we have determined that these sales are 
not within the ordinary course of trade and have excluded them from our 
margin calculations.

Comments Concerning Discounts, Rebates, and Price Adjustments

    Comment 18: The petitioner argues that in its preliminary results 
for NSK the Department incorrectly made direct adjustments to FMV for 
NSK's reported early payment discounts, return rebates, distributor 
incentives, performance incentives, post-sale price adjustments 
(PSPAs), lump-sum PSPAs, and stock transfer commissions. Timken also 
states that the Department, in its preliminary results for NTN, 
incorrectly allowed a direct adjustment for NTN's reported home market 
discounts. Timken contends that in light of recent CIT decisions and 
the Department's policy regarding such adjustments, as outlined in AFBs 
92/93, the Department should reject entirely NSK's reported home market 
early payment discounts, distributor incentives, performance 
incentives, and lump-sum PSPAs, and NTN's home market discount 
adjustment. Timken also contends that, to the extent that any 
adjustment is allowed for NSK's reported home market return rebates and 
PSPAs, the Department should adjust for these expenses as indirect 
expenses.
    NSK, citing numerous passages from the public version of the 
Department's 1992-93 NSK home market verification report dated July 8, 
1994 (NSK Report), argues that the Department thoroughly verified each 
of these reported adjustments and correctly treated them as direct 
adjustments to FMV. NSK states that its distributor incentive rebate, 
early payment discount, and performance incentive rebate calculations 
reflect a fixed and constant percentage of sales and, as such, 
accurately reflect individual in-scope specific-transaction expense 
amounts. NSK adds that its PSPAs, lump-sum PSPAs, and return rebates 
also warrant direct adjustments to FMV. NSK further states that if the 
Department accepts Timken's position that none of these expenses 
warrant direct adjustment to FMV, the Department should, at a minimum, 
treat them as indirect adjustments to FMV.
    NTN argues that it correctly allocated its discounts to in-scope 
merchandise and that there is no basis for the complete rejection of 
this expense.
    Department's Position: In light of the CIT's decisions in 
Torrington Co. v. United States, 818 F. Supp. 1563, 1579 (1993) 
(Torrington 1), and Torrington Co. v. United States, 881 F. Supp. 622, 
640 (March 31, 1995) (Torrington II), which state that the Department 
may not use a methodology which allows for the inclusion of PSPAs and 
rebates on out-of-scope merchandise when calculating adjustments to 
FMV, and the CIT's decision in Torrington Co. v. United States, 832 F. 
Supp. 379, 390 (1993), which restated the above and also applied the 
same rationale to discount adjustments to FMV, for these final results 
we have followed our policy as detailed in AFBs 92/93.
    In general, we accept claims for direct discount, rebate, and price 
adjustments to FMV if actual amounts are reported for each transaction 
and the adjustment is not based on allocations. Discounts, rebates, and 
price adjustments based on allocations are not allowable as direct 
adjustments to FMV because allocated adjustments have the effect of 
distorting individual prices by diluting the discounts or rebates 
received on some sales, inflating them on other sales, and attributing 
them to still other sales that did not actually receive any. Thus, they 
have the effect of partially averaging prices. Just as we do not allow 
respondents to report average prices, we do not allow average direct 
additions to or subtractions from FMV. Although we usually average FMVs 
on a monthly or, where appropriate, annual basis, we require individual 
prices to be reported for each sale. However, if allocated scope-
specific adjustments were granted as a constant and fixed percentage of 
sales on all transactions for which they were reported, such that the 
allocations reflected the actual amounts for each individual sale, we 
allow the adjustment as a direct adjustment to FMV. Alternatively, if 
these scope-specific adjustments were allocated on a customer- or 
product-specific basis, but there is no evidence of a fixed or constant 
percentage, we treat them as indirect selling expenses (see AFBs 92/93 
at 10929).
    We also do not allow any direct adjustments to FMV if the 
allocation includes non-scope merchandise. The only exception is if the 
adjustment was granted as a fixed and constant percentage of all sales 
such that the apportionment of the total expense to in-scope and non-
scope merchandise yielded the exact amount per unit paid on sales of 
in-scope merchandise (see Torrington II where the CIT cited the Federal 
Circuit's decision in Smith Corona Group v. United States, 713 F. 2d 
1568, 1580 (Fed. Cir. 1983), cert. denied, 465 U.S. 1022 (1984)).
    For these final results we have reviewed NTN's and NSK's reported 
discount, rebate, and price adjustments to FMV in light of this policy 
and we have made the following determinations:
    (1) NSK's Early Payment Discounts: NSK calculated this adjustment 
using a distributor-specific allocation

[[Page 57641]]

methodology whereby it divided the total early payment discount amounts 
taken by a distributor during the POR by the total payments it received 
from the distributor during the review period. To derive its per-
transaction discount expense amounts, NSK applied this ratio to the 
unit price of each of its reported transactions which reflected a sale 
to the specific distributor. While this adjustment reflects customer-
specific allocations which include non-scope merchandise, we have 
determined that NSK's early payment discounts reflect a fixed and 
constant percentage of its sales to its distributors and warrant a 
direct adjustment to FMV.
    NSK's distributors do not pay NSK each time a purchase is made 
(i.e., on a transaction-specific basis). Rather, NSK bills the 
distributors and the distributors pay NSK for a month's purchases. This 
monthly payment reflects all purchases during the month of both in-
scope and non-scope merchandise. Those distributors who pay early 
deduct from their monthly payment to NSK an amount equal to the 
discount rate NSK established for payment within that specific time 
period. The rate thus applies equally to all the merchandise covered by 
the payment. As stated by the CIT in Torrington II, ``in Smith Corona 
the court approved an apportionment of total rebates paid between in 
and out-of-scope sales because the apportionment yielded the actual 
amount per unit paid on sales of in-scope merchandise * * *. Such an 
apportionment was possible because the rebates in Smith Corona were 
granted as a fixed percentage of sales, regardless of the models 
sold.'' In the present case, regardless of the combination of in-scope 
and non-scope merchandise purchased by the distributor within the 
month, the discount rate granted remained the same and we found no 
evidence on the record to suggest that the distributor would have paid 
differently if only in-scope or only non-scope merchandise was 
purchased.
    Furthermore, at verification we examined documentation that 
demonstrated that, for every distributor who received such discounts, 
the distributor's payments qualified it for the same discount category 
each month during the POR. In other words, each distributor 
consistently remitted payment to NSK the same number of days early each 
month during the POR. Although the rates a distributor received varied 
throughout the POR due to the fact that NSK altered its discount 
schedule throughout the POR, for the segment of the POR where each 
discount schedule was in effect, the rate granted to a distributor was 
fixed and constant within that segment because the distributor did not 
alter its payment pattern. When calculating its reported discounts NSK 
combined a distributor's rates throughout the POR such that the 
resulting factor reflected the average rate the distributor received 
throughout the POR. We have determined that, if NSK were simply to 
apply to a distributor's sales within each segment of the POR the rate 
in effect for the distributor during that same segment, the allocations 
would yield actual individual sale amounts and correctly apportion the 
expense to in-scope and non-scope merchandise. It was only when NSK 
combined its discounts into a single POR allocation that it distorted 
the fixed and constant discount percentages. Therefore, for these final 
results we have re-calculated NSK's reported discounts so that, each 
time a distributor's rate varied in the POR, that different rate is 
attributed to all of NSK's reported sales to that distributor within 
that segment of the POR. As a result, we have made a direct adjustment 
to FMV for NSK's early payment discounts, re-calculated as discussed 
above.
    (2) NSK's Return Rebates: For certain home market sales made by 
related and unrelated distributors, NSK grants a return rebate on a 
customer- and part number-specific basis. To derive this expense 
factor, NSK totaled return amounts paid to a distributor for a specific 
part number during the POR, then divided this amount by the total sales 
value of that part from NSK to the distributor. NSK then applied this 
ratio to the unit price reported for each of its sales to the 
distributor of the specific part number to yield an expense for each 
transaction. Since the allocation was part-specific, it is necessarily 
scope-specific and accurately reflects an adjustment attributable to 
in-scope merchandise alone. At verification we verified that NSK 
correctly reported a return rebate adjustment only for those sales 
which may have involved return rebates. However, although NSK's 
calculations produce part-specific allocations, there is no evidence on 
the record that NSK granted these rebates as a fixed and constant 
percentage of its sales. As a result, we cannot ascertain that the 
transaction amounts NSK reported are identical to those that were 
actually incurred for each individual sale. Therefore, we have treated 
NSK's reported return rebates as indirect selling expenses and adjusted 
FMV accordingly.
    (3) NSK's Distributor Incentives: For those distributors who sold 
in-scope and non-scope NSK merchandise to NSK-approved sub-
distributors, NSK granted the distributors incentive rebates equal to a 
set percentage of the distributor's gross sales value (based on the 
distributor's price to the sub-distributor) to the approved sub-
distributors. We verified that this percentage did not change during 
the POR, since throughout the POR the eligible distributors' rebate 
amounts were equal to a constant and fixed percentage of each 
distributor's sales to the approved sub-distributors. While we 
recognize that NSK incurred this expense as a fixed percentage of its 
distributors' sales to certain sub-distributors, we note that NSK did 
not report this expense in the same manner. Rather, NSK reported its 
rebate amounts as a percentage of its own sales to each distributor 
during the POR. In other words, the amount of rebates paid to a 
distributor during the POR was divided by NSK's sales to the 
distributor during the POR and the resulting ratio was applied to the 
unit price of each sales transaction to the distributor reported in 
NSK's response. While the rebate amounts NSK incurred where a function 
of NSK's distributors' sales to certain sub-distributors, they were not 
a function of NSK's sales to the distributor. NSK provided no evidence 
suggesting that the rebates were a function of the sales to the 
distributor over which they were allocated, nor did it provide evidence 
demonstrating that there was a direct relationship between its sales to 
a distributor and the distributor's sales to a sub-distributor. 
Therefore we are not convinced that NSK incurred this expense as a 
constant and fixed percentage of NSK's sales to its distributors. In 
addition, by reporting this expense on the basis of its sales to 
distributors, NSK neither calculated accurate individual-transaction 
expense amounts nor did it accurately apportion the expenses to in-
scope and non-scope merchandise. We have, therefore, disallowed an 
adjustment to FMV for NSK's reported distributor incentives.
    (4) NSK's performance Incentives: During the POR NSK granted to 
certain distributors an incentive rebate based on the distributors' 
improvement in sales over a specified time period. The percentage of 
the rebate granted was directly dependent upon a distributor's 
percentage increase in purchases from NSK. NSK calculated its 
performance rebates expense factor by dividing the total rebates 
granted to a distributor during the POR by NSK's totals sales of both 
in-scope and non-scope merchandise to the distributor during the POR. 
At verification NSK demonstrated that a distributor received a constant 
rebate percentage where its

[[Page 57642]]

percentage improvement in sales was unchanged throughout the POR. 
However, the distributor's improvement depended on additional purchases 
of both in-scope and non-scope merchandise. NSK did not identify what 
portion of that improvement was attributable to in-scope merchandise, 
and provided no means by which we could determine that portion 
attributable to in-scope purchases. As a result, it is reasonable to 
conclude that, if all additional non-scope purchases were excluded, the 
improvement attributable to only in-scope merchandise could be at a 
percentage rate different from the rate for the overall improvement in 
purchases. Based on the evidence, we have determined that NSK's 
allocation methodology does not result in an accurate apportionment of 
these expenses to in-scope merchandise. In addition, the evidence on 
the record does not provide an alternative method that would allow us 
to remove the expense amounts reported for non-scope merchandise. We 
have, therefore, disallowed this adjustment.
    (5) NSK's PSPAs: NSK's PSPAs reflect NSK's alteration of prices for 
completed transactions, alterations to provisional prices to reflect 
negotiated price agreements, and corrections of clerical errors. NSK 
calculated its reported individual-transaction PSPAs by dividing the 
total PSPAs made for a customer per part number during the POR by NSK's 
total sales of the part to the customer during the POR. NSK applied the 
resulting ratio to the unit price for all its reported sales of the 
part to the customer. As we stated earlier when discussing NSK's return 
rebates, since a part-specific allocation is necessarily scope-
specific, NSK's allocation methodology clearly calculates the actual 
expense attributable to in-scope merchandise. However, we have 
determined that this allocation is neither transaction-specific nor 
representative of a fixed and constant percentage. For example, NSK 
does not trace the adjustments directly to the actual transactions for 
which they were incurred, but rather aggregates all PSPAs by customer 
and by part, allocates them, and applies the allocation ratio equally 
to all transactions. In addition, there is no evidence demonstrating 
the NSK's PSPAs were granted as a fixed and constant percentage of all 
sales to the customer. Rather, the percentage adjustment for each PSPA 
varied according to the specifics of each negotiated price, clerical 
error, or other alteration in individual prices. We have, therefore, 
treated NSK's reported PSPAs as indirect selling expenses.
    (6) NSK's Lump-Sum PSPAs: To derive its reported lump-sum PSPA 
individual-transaction expense amounts, for each customer NSK totaled 
the lump-sum price adjustment granted during the POR and then divided 
this by its total POR sales to the customer. Then, for each of its 
reported sales to the customer, NSK applied the resulting ratio to the 
reported unit price. We verified that NSK either attributed the lump-
sum rebate correctly to the part number to which it applied (i.e., the 
rebate was scope-specific), or it correctly attributed a PSPA amount 
granted on a group of products to the in-scope merchandise. However, we 
found no evidence on the record or at verification that supports the 
notion that NSK's lump-sum price adjustments were transaction-specific 
or granted as a fixed and constant percentage of all sales to a 
customer. Therefore, we have treated NSK's reported lump-sum PSPAs as 
indirect selling expenses.
    (7) NSK's Stock Transfer Commission: When NSK does not have a 
specific part available, whether an in-scope or non-scope part, a 
distributor who needs the part may obtain it from another of NSK's 
distributors. NSK then grants the latter distributor a percentage of 
the price the needy distributor was ultimately paid for the part by its 
customer. In this way, these stock transfers are very similar to NSK's 
distributor incentive rebates in that the commission amount NSK pays to 
the distributor who locates the part is based on the needy 
distributor's price to the ultimate customer. Like its distributor 
incentive rebates, NSK allocated these commissions on the basis of its 
sales to the distributor to which the commission was paid. As a result, 
these commissions are reported as a function of a total sales value to 
which they have no direct relationship, and there is no evidence that a 
direct relationship exists between NSK's sales to the distributor which 
had the part and the needy distributor's sales to the end user to which 
the part was ultimately sold. Therefore, as we explained for NSK's 
distributor incentives, while the commissions were granted as a fixed 
and constant percentage of the needy distributor's sales to the end 
user, they were not granted as a fixed and constant percentage of NSK's 
sales to the supplying distributor. We have, therefore, disallowed this 
adjustment.
    (8) NTN's Discounts: We have reexamined NTN's discount adjustment 
methodology and have concluded that, while NTN's reported discounts 
accurately reflect the actual per-unit discount expense NTN incurred on 
in-scope merchandise, NTN's allocation methodology is not transaction-
specific and there is no evidence on the record that NTN grants its 
discounts as a fixed percentage of its sales. For these final results 
we have, therefore, treated NTN's reported home market discounts as 
indirect selling expenses.
    With the exception of NSK's early payment discounts, our final 
determinations regarding the above adjustments to FMV reflect changes 
from our preliminary results. We have, therefore, adjusted our final 
results margin calculations for NSK and NTN accordingly.

Comments Concerning Cost of Production and Constructed Value

    Comment 19: The petitioner argues that, in accordance with section 
773(e)(2) of the Tariff Act, when calculating statutory profits added 
to CV in accordance with section 773(e)(1)(B) of the Tariff Act, the 
Department should exclude those sales to related parties which it 
determined were not at arm's length.
    NTN argues that nothing in the statute suggests that the Department 
should determine whether a sale was at arm's length when calculating 
profit for CV. NTN and NSK point out that the issue is moot in this 
current review because the Department found that all of NTN's and NSK's 
home market related-party sales were at arm's length.
    Department's Position: As indicated by both NTN and NSK, the two 
respondents in this review for which an arm's-length test was required, 
we found all related-party home market sales at arm's length. As a 
result, Timken's concerns are unfounded in these reviews and we have 
not altered our calculations for NTN and NSK for these final results.
    Comment 20: Timken argues that statutory profit calculations should 
also exclude home market below-cost sales which have been disregarded 
in accordance with section 773(b) of the Tariff Act. Timken argues that 
because CV is a proxy for FMV when prices and other data are inadequate 
or unavailable, and because below-cost sales are disregarded when sales 
form the basis of FMV, balance in the statute requires that the same 
sales be disregarded for CV as are disregarded for FMV, citing Timken 
Company v. United States, 11 CIT 785, 797, 673 F. Supp. 495, 507 (CIT 
1987) and Associacion Colombiana Exportadores de Flores v. United 
States, 13 CIT 13, 19 704 F. Supp. 1117, 1124 (CIT 1989). Timken also 
argues that below-cost sales should be excluded from the CV profit

[[Page 57643]]

calculation because such sales are not in the ordinary course of trade. 
Timken contends that because the definition of CV specifies that 
statutory profits should be calculated on the basis of sales in the 
ordinary course of trade (section 773(e)(1)(B) of the Tariff Act), 
below-cost sales, when in substantial quantities over an extended 
period of time, must be disregarded when calculating profit for CV.
    Timken also points out that the United States has taken the 
position that disregarded below-cost sales are not considered as sales 
in the normal course of trade, as referred to in Article VI of the 
General Agreement on Tariffs and Trade (GATT) and the Antidumping Code. 
Finally, Timken recognizes the recent decision by the CIT against its 
position, but respectfully submits that the decision was in error.
    NSK argues that the below-cost sales test (section 773(b) of the 
Tariff Act) applies only when the Department bases FMV on home market 
or third-country prices. It does not extend to the CV provision 
because, in NSK's view, Congress specifically did not intend to apply 
it to CV. NSK further adds that the statute's definition of ``ordinary 
course of trade'' (section 771(15) of the Tariff Act) does not limit 
sales in the ordinary course of trade to sales above cost. NSK also 
contends that the fact that section 771(15) of the Tariff Act as 
amended by the recently passed Uruguay Round Agreements Act (URAA) 
specifically characterizes below-cost sales as outside the ordinary 
course of trade constitutes evidence that the previous statute, the one 
in effect for these TRB reviews, meant the contrary.
    NTN argues that the structure of the statute as a whole indicates 
that there was no Congressional intent to link the concepts of sales in 
the ordinary course of trade and sales below the cost of production. 
NTN contends that the Department correctly interprets the statute by 
making its ordinary-course-of-trade determination prior to the 
determination of whether sales are below cost. To do so any other way, 
argues NTN, would be redundant because sales below cost would have 
already been excluded as not in the ordinary course of trade. NTN 
maintains that the petitioner has provided no evidence of its position 
and further states that the very structure of the CV calculation 
demonstrates that it is intended to approximate a sale made above cost.
    Department's Position: We disagree with Timken that, in these 
reviews, the calculation of profit for CV should be based only on sales 
that are priced above COP. While we recognize that section 771(15) of 
the URAA requires the exclusion of such sales from our CV profit 
calculation, these TRB reviews, which were initiated prior to January 
1, 1995, are being conducted pursuant to previous law and regulations. 
In Torrington II, ruling on the law in effect prior to January 1, 1995, 
not only did the CIT affirm that CV is an alternative to price-based 
FMV and that sales prices are irrelevant to a CV calculation, but it 
specifically stated that ``nowhere does the statute require the 
exclusion of below-cost sales when determining the profit amount in 
calculating CV'' (Torrington II at 633). We have, therefore, not 
excluded below-cost sales from our CV profit calculation for these 
final results.
    Comment 21: NSK claims that the Department violated the antidumping 
law by never establishing the grounds for collecting cost data from 
related-party suppliers. NSK contends that, pursuant to section 
773(e)(3) of the Tariff Act, the Department has the right to disregard 
sales prices NSK paid to related-party suppliers in favor of the 
supplier's COP only if (1) the Department has reasonable grounds to 
believe or suspect that an amount represented as the value of such 
input is less than the COP of the input, and (2) the information being 
requested is for a ``major'' input. NSK argues that, because the 
language in section 773(e)(3) of the Tariff Act is identical to that in 
773(b) of the Tariff Act (the provision which grants the Department the 
authority to conduct cost investigations), the same threshold standard 
is applicable. In other words, NSK argues that, because the petitioner 
never alleged that NSK purchased an input from a related supplier at 
less than COP, and because the Department never alleged or 
substantiated that transfer prices from related suppliers were less 
than COP, let alone whether the input was a ``major'' input, reasonable 
grounds for the collection of this data did not exist.
    NSK further contends that the Department has no other statutory 
authority for requesting related-supplier COP data and that there is no 
evidence on the record to support the Department's disregard of NSK's 
related-supplier transfer prices. Finally, NSK concludes that the 
Department should not use this illegally-obtained related-supplier 
information and should strike it from the record of these reviews.
    Timken argues that the Department's preliminary results decision 
regarding NSK's related-supplier transfer prices was justified and in 
accordance with the law. Timken contends that the standard for 
analyzing below-cost sales pursuant to section 773(b) of the Tariff Act 
does not require any allegation by domestic parties. Likewise, 
accepting NSK's position that the identical language of section 
773(e)(3) and 773(b) constitutes the application of the same standard, 
Timken maintains that there is therefore no requirement that the 
domestic party has the burden of submitting evidence of below-cost 
related-party supplier transfer prices. In fact, Timken maintains that 
the respondent should bear the responsibility of providing such 
evidence because domestic producers simply to not have access to the 
respondent's books and records, or access to what inputs were purchased 
from related suppliers. Timken adds that, given the nature of TRB 
production, it is also nearly impossible to submit data regarding the 
production costs at every stage of production that might be a transfer 
point. Furthermore, the petitioner states that to require allegations 
from the domestic party as a prerequisite for the Department's ability 
to investigate would effectively curtail the inherent authority of the 
Department to conduct below-cost sales and related-party transfer price 
investigations. Timken also maintains that the Department's collection 
of NSK's related-supplier transfer prices was justified because NSK has 
engaged in below-cost selling. Timken argues that, given that NSK does 
sell at below-cost prices, it is reasonable to infer that its losses 
are passed back to related suppliers which are forced to transfer 
inputs at a loss. Finally, Timken asserts that there is ample evidence 
on the record for these reviews supporting the Department's decision to 
disregard NSK related-party transfer prices.
    Department's Position: We disagree with NSK. NSK erroneously argues 
that it was unlawful for the Department to request cost data for parts 
purchased from related suppliers. NSK's argument is grounded on the 
mistaken notion that section 773(e)(3) of the Tariff Act provides the 
sole basis for requesting cost information regarding inputs purchased 
from related suppliers. Two separate sections of the Tariff Act direct 
the Department to disregard transfer prices for certain transactions: 
section 773(e)(2) which directs us to disregard transfer prices if the 
transfer prices for ``any element of value'' do not reflect their 
normal market value, and section 773(e)(3) which directs the Department 
to disregard transactions if the transfer prices for ``major inputs'' 
are below cost of production.
    For CV purposes, pursuant to section 773 (e)(2), the Department, in 
general, determines whether the transfer prices

[[Page 57644]]

for any element of value occurred below the normal market value of that 
element of value. Pursuant to these statutory provisions, we do not use 
transfer prices between related companies to value any element of value 
if such prices do not fairly reflect the amount usually reflected in 
sales of the merchandise under consideration in the market under 
consideration. This is sometimes referred to as the requirement for an 
``arm's-length'' price. To determine whether the transfer prices 
reflect arm's-length prices, we normally compare the transfer price to 
(1) the prices related suppliers charge to unrelated parties, or (2) 
the prices charged by unrelated suppliers to the respondent. If we 
disregard a transaction because the respondent cannot demonstrate that 
the transaction was made at arm's length, and there are no other 
transactions available for consideration, then we must rely on the 
``best evidence available'' to determine the value of the element of 
value. In other words, if there are no arm's length prices for 
components to compare to transfer prices, ``Commerce generally use[s] 
the cost of the components as representative of the value reflected in 
the market under consideration'' (see Final determinations of Sales at 
less Than Fair Value: Antifriction Bearings (Other Than tapered Roller 
Bearings) and Parts Thereof From the Federal Republic of Germany et 
al., 54 FR 18992 (1989) (AFBs LTFV). In that situation, we must 
determine whether to use the reported cost data as the ``best evidence 
available.'' Otherwise, we cannot fulfill our statutory obligation of 
valuing elements of value for CV purposes.
    Furthermore, NSK erroneously argues that, before we can request 
cost data for inputs, we must have a specific and objective basis for 
suspecting that the transfer price paid to a particular related 
supplier for a major input is below the related supplier's COP. NSK's 
argument is based on the erroneous assumption that we must rely upon 
section 773(e)(3) to request information regarding transfer prices of 
components parts. As demonstrated above, section 773(e)(3) simply 
provides an alternative basis for requesting transfer price 
information. We agree with the petitioner's argument that, when a 
domestic party files a COP allegation, it does not necessarily have 
information about inputs which are obtained from related suppliers. We 
also agree that the petitioner does not have the information necessary 
to specifically allege that a particular input or element of value from 
a related party is priced below COP. Therefore, the petitioner cannot 
necessarily make COP allegations regarding specific related-party 
inputs. As a result, we consider our initiation of a cost investigation 
of the subject merchandise that is based on a petitioner's allegation a 
specific and objective reason to believe or suspect that the transfer 
price from a related party for any element of value may be below the 
related suppliers' COP.
    In accordance with our standard practice (see, e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Carbon Steel 
Butt-Weld Pipe Fittings From France, 60 FR 10538, (February 27, 1995) 
and AFBS LTFV), we asked NSK to provide cost data for inputs produced 
by related parties. NSK complied with our request for information and 
supplied the transfer prices and cost of production of inputs from its 
related parties. The record for these reviews demonstrates that in its 
response NSK also submitted a comparison of the weighted-average 
transfer prices for those inputs NSK purchased from both related and 
unrelated suppliers. By this comparison NSK intended to show the arm's-
length nature of its transfer prices where inputs were purchased from 
both related and unrelated suppliers. This comparison, however, was not 
useful in determining whether related-supplier transfer prices were at 
arm's length because it listed only a limited number of instances where 
NSK purchased an identical or similar input from both a related and 
unrelated supplier. Because we could not rely on NSK's related-party 
transfer price comparison, we examined in detail the submitted COP and 
transfer prices for all of NSK's related suppliers. We found that, 
contrary to NSK's claim, transfer prices from related suppliers were 
often below the suppliers' COP for that input (see the proprietary 
version of the Department's COP and CV adjustment memorandum for NSK 
dated August 9, 1994 (NSK COP/CV Memo)). Because NSK was unable to 
demonstrate that elements of value included in its submitted CV 
calculations were reflective of their normal market value, the 
submitted related-party cost information was required by law. Hence, we 
did not strike NSK's reported related-party cost information from the 
record for these reviews. To the contrary, for these final results, we 
relied on NSK's submitted related-party cost information if the COP for 
the input exceeded the transfer price NSK reported for the input.
    Comment 22: NSK argues that the Department unreasonably adjusted 
its reported general and administrative (G&A) expenses to include 
certain non-operating expenses which were clearly not G&A expenses and 
not part of NSK's COP.
    The petitioner argues that the Department's inclusion of certain 
expenses NSK omitted from its reported G&A expenses was proper and in 
accordance with past Departmental practice.
    Department's Position: We agree with the petitioner. At 
verification we discovered that NSK excluded from its reported G&A 
expenses several items which we consider to be part of the cost of 
producing the subject merchandise (see the NSK CV/COP Memo for an 
itemization of these expenses). We therefore included these cost items 
in NSK's G&A expense calculation and adjusted NSK's reported COP and CV 
figures accordingly.
    Comment 23: The petitioner argues that the revised credit expense 
ratio NTN reported for use in those margins calculations where the 
Department based FMV on CV is distortive. To eliminate this distortion, 
Timken contends that the Department should use a specific ratio 
originally submitted by NTN rather than this revised ratio.
    NTN points out that the revised CV credit expense ratio it 
submitted was calculated at the specific request of the Department. NTN 
further states that the Department may choose to use either this 
revised ratio or the separate ratios it originally reported in its 
response.
    Department's Position: We agree with the petitioner. In its initial 
questionnaire response NTN provided us with two separate credit ratios 
to be used for CV purposes. One was for NTN sales and it was based on 
the weighted-average POR credit expense for NTN. The other was for NTN 
Sales Company, Ltd. (NSCL), and it was based on NSCL's weighted-average 
POR credit expenses. Upon receipt of these ratios we agreed that they 
accurately reflected NTN's and NSCL's average credit expenses 
throughout the POR, but we were unable to separate certain of NTN's and 
NSCL's sales within our home market sales computer data bases. This 
precluded us from applying the separate credit expense ratios. In our 
supplemental questionnaire we asked NTN to either submit an NTN/NSCL 
combined credit expense ratio or indicate a way in which we could 
distinguish between certain of NTN's and NSCL's sales within our data 
bases. NTN chose to submit a combined ratio. We agree with Timken that 
this combined ratio is distortive. However, since the issuance of our 
preliminary results we have derived a method for distinguishing between 
certain of NTN's and NSCL's sales within our computer data bases. As a 
result, because they

[[Page 57645]]

accurately reflect the average credit expenses incurred by NTN and NSCL 
during the POR, we have determined to use the separate NTN and NSCL 
credit expense ratios NTN initially reported in our CV margin 
calculations and we have done so for these final results.
    Comment 24: Timken argues that NSK failed to demonstrate that 
interest income was related to the normal production of TRBs. Timken 
contends that the Department must recalculate NSK's financing expense 
by disallowing the interest income offsets.
    NSK argues that at verification the Department reviewed and 
accepted its method for calculating interest expense. Therefore, NSK 
contends that the Department should not alter its preliminary results 
calculations by disallowing NSK's interest income offset.
    Department's Position: We agree with NSK. We verified that the 
interest income offset was attributed to short-term investments of 
NSK's working capital. Therefore, we reduced NSK's interest expense by 
the amount of the company's reported short-term interest income.
    Comment 25: NTN argues that the adjustment the Department made to 
its CV and further-manufacturing calculations with respect to a certain 
related party was incorrect for two reasons. First, NTN contends that 
the Department's re-calculations, which applied an overall figure to 
all products, were, in essence, a de facto use of BIA. NTN argues that 
BIA was not justified because it submitted all the necessary CV and 
further-manufacturing data the Department would need to recalculate its 
CV and further-manufacturing costs without restoring to an overall 
figure for all products. Second, NTN states that the Department's 
recalculations incorrectly used figures from an exhibit in its original 
questionnaire response and NTN indicated the correct figures the 
Department should have used from another exhibit in its response.
    Timken argues that the Department's recalculations of NTN's 
reported CV and further-manufacturing costs were not based on BIA but 
on actual data from NTN's response. Timken further notes that the 
figures from the exhibit which NTN claims the Department should use are 
also incorrect. Timken provided figures from the same exhibit which it 
states should be used in the Department's recalculation.
    Department's Position: We agree in part with the petitioner and the 
respondent. We used information that was submitted by NTN and its 
related supplier for our calculation of the adjustment in our 
preliminary results. Therefore, our adjustment was not based on BIA. 
The submitted cost of inputs from a related party were included at the 
transfer price which was below the COP. Therefore, we increased NTN's 
cost of manufacturing (COM) to reflect the related-supplier's COP. 
However, as both the petitioner and the respondent pointed out, one of 
the amounts we used in the related-party input adjustment calculation 
for the preliminary results was incorrect. We intended to use the cost 
of goods manufactured (COGM) from NTN's sample plant, but, instead, we 
used only the material cost of the sample plant. We revised our 
adjustment calculation for the final results to reflect the COGM of the 
sample plant as we had intended for the preliminary results. In 
calculating the COGM, we included the effect of the plant's change in 
the work-in-process inventory
    Comment 26: Timken argues that NTN's reported repacking expenses 
for its further-processed merchandise are unrealistic and that the 
Department should re-examine NTN's further-processing calculations, 
determine if NTN has misreported these expenses, and make any 
appropriate adjustments for the final results.
    NTN argues that the U.S. packing expenses it reported for its 
further-processed merchandise were accurate and that the Department 
should not change its treatment of these expenses for these final 
results.
    Department's Position: We agree with the respondent. Based on the 
information on the record, we have no reason to conclude that NTN's 
submitted packing costs are understated. Accordingly, no adjustment to 
these packing costs is appropriate.
    Comment 27: Timken argues that NTN incorrectly reported its 
depreciation on idle production assets by not treating it as an 
overhead expense in calculating COM, and that the Department should 
adjust NTN's COP calculation accordingly.
    NTN argues that the method it used to report its idle asset 
depreciation is identical to that used by the Department's accounting 
office in a recent AFB verification. NTN further states that its 
depreciation on idle assets is unrelated to producing subject 
merchandise and is properly not part of COP. NTN also argues that it 
has reported its costs in accordance with the Generally Accepted 
Accounting Principles (GAPP) of Japan and that the Department should 
therefore accept its reported COP calculations.
    Department's Position: We agree with NTN that it properly accounted 
for costs associated with depreciation of its idled equipment. The 
equipment at issue was never used to produce subject merchandise. In 
these instances we normally include the depreciation expense of idle 
production assets as part of G&A expenses. Because NTN included the 
depreciation expense associated with all idle equipment for the entire 
plant in its submitted G&A expense calculation, an adjustment for 
depreciation of idle equipment is unnecessary.
    Comment 28: Timken argues that NTN has not demonstrated that its 
reported interest income offsets are related to normal operation or 
short-term deposits. in particular, Timken points out that NTN's 
interest income includes income from the sales of market securities, 
which Timken contends is unlikely to be derived from the short-term 
investment of working capital. Timken further argues that the 
Department should eliminate the effects of foreign exchange adjustments 
on NTN's corporate financing rate. The petitioner states that the 
Department has generally rejected accounting adjustments that influence 
corporate financing rates and should do so again here.
    NTN argues that it has used the exact methodology in this review as 
it has in past reviews of TRBs and that, absent a reason for rejecting 
this methodology, the Department should accept its reported interest 
income offsets and financing expenses.
    Department's Position: We agree in part with the petitioner. In our 
preliminary results we computed interest expense using the 
unconsolidated financial statements of NTN and its related selling 
entity NSCL. For the final results we recalculated interest expense 
using information from NTN's consolidated financial statements, which 
is consistent with our normal practice. We reduced NTN's consolidated 
interest expense by NTN's submitted unconsolidated short-term interest 
income and we excluded the income from the trading of marketable 
securities, gains on foreign exchange transactions, and NSCL's reported 
interest income from our recalculation of NTN's financing expense. In 
this case, we did not offset NTN's interest expense by amounts received 
from marketable securities investments because the income from these 
securities was not shown to be derived from the company's short-term 
working capital investments. We did not include the foreign exchange 
transaction gains because we could not confirm that the reported 
amounts related to costs included in NTN's COP and CV figures.

[[Page 57646]]

We excluded the submitted short-term interest income of NSC because the 
amount reported exceeded the total amount of interest income reported 
in NSCL's submitted financial statements.
    Comment 29: Timken contends that level-of-trade differences have no 
meaning within the context of CV because CV is intended to reflect 
expenses generally incurred on sales of subject merchandise in the home 
market. Timken argues that the Department must therefore eliminate from 
NTN's CV calculations any data related to differences in levels of 
trade.
    NTN argues that level-of-trade differences do have meaning within 
the context of CV because its selling expenses are incurred in 
different amounts for each level of trade. NTN contends that the 
Department has consistently accepted its home market expenses 
differentiated by level of trade and should not ignore this distinction 
in the context of CV.
    Department's Position: We agree with NTN. We are satisfied that 
NTN's allocation of its home market selling expenses by level of trade 
reflects the fact that NTN incurs different selling expenses when 
selling at different levels of trade, and that these level-of-trade 
differences in selling expenses are reflective of NTN's experience in 
selling TRBs in Japan. Section 772(e)(B) of the Tariff Act states that 
the CV calculation must include ``an amount for general expenses and 
profit equal to that usually reflected * * *.'' By retaining its level 
of trade distinction for those expenses it included in its CV 
calculation, NTN reported CV amounts which captured its actual 
experience in selling TRBs in Japan and ensured that its CV 
calculations included expense amounts equal to those which are usually 
incurred.

Miscellaneous Comments Regarding Level of Trade, VAT-Adjustment 
Methodology, Assessment and Cash Deposit Rates, Suppliers' Knowledge, 
and Revocation

    Comment 30: NSK contends that the Department should add taxes to 
USP whenever such taxes are assessed in the home market, but that it 
should not add taxes to FMV or otherwise calculate FMV so as to include 
taxes, whether FMV is based on home market price, third country sales, 
or CV. NSK argues that the plain language of the statute does not 
define FMV to include taxes imposed in the home market. Furthermore, 
NSK states that if Congress had meant to include taxes in every 
calculation of FMV, the statute, at a minimum, would have defined third 
country prices and CV to include such taxes. NSK also argues that, even 
if the Department rejects its position, the methodology the Department 
used in the preliminary results is incorrect. NSK maintains that in the 
preliminary results the Department did not apply the VAT to the proper 
tax base. NSK states that the CIT has made it very clear that the VAT 
must be applied to USP at the same point in the chain of commerce as 
the Japanese tax authorities apply the VAT on home market sales, citing 
Federal-Mogul Corp. v. United States, 834 F. Supp. 1391, 1396 (CIT 
1993) (Federal-Mogul). NSK contends that, according to Japanese law, 
the VAT is applied to the net revenue of the sale with no offset for 
expenses, whereas the Department adjusted all expenses for VAT in its 
preliminary results.
    Timken argues that, contrary to NSK's position, the Federal 
Circuit's decision in Zenith Elec. Corp. v. United States, 988 F.2d 
1573 (Fed. Cir. 1993), is dispositive that FMV was intended to include 
VAT. Timken further contends that, given the language of section 
772(d)(1)(C) of the Tariff Act, there is no question that the ``price'' 
referenced in section 773(a) of the Tariff Act must include VAT, if 
applicable. The petitioner also argues that the Department's 
preliminary results VAT-adjustment methodology did in fact correctly 
apply the tax rate to USP at the same point in the chain of commerce 
and appropriately implemented the statute and the CIT's instructions in 
Federal-Mogul.
    Department's Position: Concerning NSK's first argument that taxes 
should never be added to FMV, we disagree. Taxes imposed in the foreign 
market are an integral part of the final price paid by the customer and 
are only ``added'' when reference is made to a tax-exclusive home 
market gross price. Furthermore, section 772(d)(1)(C) of the Tariff Act 
directs us to adjust for any taxes which are rebated or uncollected by 
reason of exportation to the extent that such taxes are added to or 
included in the price of home market such or similar merchandise. This 
means that taxes should be included in the prices used by the 
Department in its calculation of FMV.
    Concerning our preliminary results VAT-adjustment methodology, in 
light of the decision by the United States Court of Appeals for the 
Federal Circuit (the Federal Circuit) in Federal-Mogul v. United 
States, CAFC No. 94-1097, we have changed our treatment of home market 
consumption taxes. For these final results, where merchandise exported 
to the United States was exempt from the consumption tax, we added to 
the U.S. price the absolute amount of such taxes charged on the 
comparison sales in the home market. This is the same methodology that 
we adopted following the decision of the Federal Circuit in Zenith v. 
United States, 988 F.2d 1573, 1582 (1993), and which was suggested by 
the Federal Circuit in footnote 4 of its decision. The Court of 
International Trade (CIT) overturned this methodology in Federal-Mogul 
v. United States, 834 F. Supp. 1391 (1993), and we acquiesced to the 
CIT's decision. We then followed the CIT's preferred methodology, which 
was to calculate the tax to be added to U.S. price by multiplying the 
adjusted U.S. price by the foreign market tax rate; we made adjustments 
to this amount so that the tax adjustment would not alter a ``zero'' 
pre-tax dumping assessment.
    The foreign exporters in the Federal-Mogul case, however, appealed 
the decision to the Federal Circuit, which reversed the CIT and held 
that the statute did not preclude Commerce from using the ``Zenith 
footnote 4'' methodology to calculate taxneutral dumping assessments 
(i.e., assessments that are unaffected by the existence or amount of 
home market consumption taxes). Moreover, the Federal Circuit 
recognized that certain international agreements of the United States, 
in particular the General Agreement on Tariffs and Trade (GATT) and the 
Tokyo Round Antidumping Code, required the calculation of tax-neutral 
dumping assessments. The Federal Circuit remanded the case to the CIT 
with instructions to direct Commerce to determine which tax methodology 
it will employ.
    We have determined that the ``Zenith footnote 4'' methodology 
should be used. First, as we have explained in numerous administrative 
determinations and court filings over the past decade, and as the 
Federal Circuit has now recognized, Article VI of the Gatt and Article 
2 of the Tokyo Round Antidumping Code required that dumping assessments 
be tax-neutral. This requirement continues under the new Agreement on 
Implementation of Article VI of the GATT. Second, the Uruguay Round 
Agreements Act (URAA) explicitly amended the antidumping law to remove 
consumption taxes from the home market price and to eliminate the 
addition of taxes to U.S. price, so that no consumption tax is included 
in the price in either market. The Statement of Administrative Action 
(p. 159) explicitly states that this change was intended to result in 
tax neutrality.
    While the ``Zenith footnote 4'' methodology is slightly different 
from the URAA methodology, in that section

[[Page 57647]]

772(d)(1)(C) of the pre-URAA law required that the tax be added to U.S. 
price rather than subtracted from home market price, it does result in 
tax-neutral duty assessments. In sum, we have elected to treat 
consumption taxes in a manner consistent with our longstanding policy 
of tax-neutraility and with the GATT. We have applied this tax-neutral 
methodology to our final margin calculations for NTN, NSK, Fuji, and 
Honda, the four companies for which we made a VAT-adjustment in our 
preliminary margin calculations and for which a VAT-adjustment was 
again necessary for these final results.
    Comment 31: NSK argues that the Department's margin calculations 
for NSK were artificially inflated because the Department failed to 
make an appropriate level-of-trade adjustment when comparing home 
market such or similar merchandise to U.S. merchandise sold at a 
different level of trade. NSK contends that there is sufficient 
evidence on the record to quantify a level-of-trade adjustment based on 
the weighted-average differences in prices at each level of trade and 
concludes that the Department must grant NSK such an adjustment when 
the comparison home market merchandise was sold at a different level of 
trade than the U.S. merchandise.
    NTN argues that, while the Department correctly made a level-of-
trade adjustment when comparing home market such or similar merchandise 
to U.S. merchandise sold at a different level of trade, the 
Department's adjustment, which was cost-based, did not take into 
account the full price differences between NTN's levels of trade. NTN 
contends that the recently-enacted URAA endorses such an adjustment, 
and that, in accordance with section 1677b(a)(A) of the URAA, the 
evidence in this review clearly demonstrates that differences in NTN's 
levels of trade affect price comparability based on a consistent 
pattern of price differences between sales at different levels of trade 
in Japan.
    Timken argues that the Department properly did not grant NSK a 
level-of-trade adjustment because NSK failed to provide cost-based data 
documenting its entitlement to such an ajdustment. The petitioner 
points out that the Department and the CIT have consistently held that 
cost-based data, and not the existence of price differentials alone, 
constitute the evidence necessary to support a level-of-trade 
adjustment. Timken maintains that while the record demonstrates that 
there are price differences between NSK's reported home market levels 
of trade, NSK provided no evidence demonstrating that these price 
differences were due to the different costs NSK incurred in selling to 
different levels of trade.
    The petitioner also argues that, under the governing law for these 
reviews, NTN still is not entitled to a price-based level-of-trade 
adjustment because it has not met the burden of quantifying the price-
based level-of-trade adjustment that it seeks. Finally, Timken contends 
that, while these subject reviews are not governed by the URAA because 
they were initiated prior to January 1, 1995, even if the Department 
were to apply the requirements of the new law to NTN's analysis, NTN 
would still not be entitled to a price-based level-of-trade adjustment 
because it has not demonstrated that there is a consistent pattern of 
price differences between sales at different levels of trade.
    Department's Position: We disagree with NTN and NSK. As described 
below, NSK's request for a level-of-trade adjustment was untimely, and 
NTN did not qualify for the price-based level-of-trade adjustment it 
seeks.
    We have examined NSK's initial and supplemental questionnaire 
responses and, while NSK provided evidence demonstrating that it sells 
to distinct levels of trade, it did not request that we make a level-
of-trade adjustment when comparing home market such or similar 
merchandise sold at one level to U.S. merchandise sold at another 
level. In fact, only in its case brief did NSK first argue that a 
level-of-trade adjustment should be made and first argue that this 
adjustment should be price-based. For this reason we find NSK's request 
for such an adjustment to be untimely and we have not considered it for 
these final results (see, e.g., Fijitsu General Ltd. v. United States, 
Slip Op. 95-44 at 28 (CIT March 14, 1995), Industrial Belts and 
Components and Parts Thereof, Whether Cured or Uncured, From Italy: 
Final Results of Antidumping Duty Administrative Review, 57 FR 8295 
(March 9, 1992), Final Determination of Sales at Less Than Fair Value: 
Certain Steel Pails From Mexico, 55 FR 12245 (April 2, 1990), and Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Woven 
Wire Cloth From Japan, 50 FR 10520 (March 15, 1985)).
    We have examined the record evidence for NTN to determine if a 
price-based level-of-trade adjustment is warranted. Basically, in 
accordance with 19 CFR 353.58, in order to make the type of price-based 
level-of-trade adjustment NTN seeks, we would have to be satisfied that 
the full difference in prices between levels of trade was due solely to 
level-of-trade differences and no other factors. If quantitative 
analysis reveals that there is a pattern of price differences between 
levels of trade, then we can reasonably conclude that level-of-trade 
differences alone affected price comparability. If a pattern is not 
evident, then we can only conclude that other factors, and not level-
of-trade differences alone, caused the price differences between levels 
of trade. For these final results we conducted such a quantatitive 
analysis on NTN's home market prices, as reported in its home market 
sales computer data base. For each home market model that NTN sold to 
each of its three distinct levels of trade, we calculated, for each 
level of trade, a weighted-average net price adjusted for all those 
home market selling expenses which we determined in our analysis 
warranted a direct adjustment to FMV. We then calculated the percentage 
differences in the weighted-average prices between levels of trade for 
all models in each month the models were sold throughout the POR. We 
then compared these monthly, model-specific percentage differences to 
determine if a pattern of price differences at different levels of 
trade was evident.
    Our comparison of NTN's percentage price differences revealed that 
there were numerous models for which there was no pattern in price 
differences between levels of trade in that the pricing order for 
certain random months was the reverse of the pricing order in other 
months. For example, for many models the pricing order for several 
months was, from highest priced to lowest, level-of-trade 2, level-of-
trade 3 and then level-of-trade 1. However, in other random months the 
order was reversed such that, from highest to lowest, the order was 
level-of-trade 3, level-of-trade 1, then level-of-trade 2. Furthermore, 
even in those months where the pricing order was the same, the range of 
percentage price differences between levels was erratic in that a model 
may have been sold at a price slightly higher at level 1 in one month, 
but much higher at level 1 in another month. Therefore, absent a 
discernible pattern in the price differences between level-of-trade, we 
lack the evidence necessary to grant NTN a priced-based level-of-trade 
adjustment.
    Comment 32: Fuji agrees that the Department properly excluded from 
its preliminary results margin calculations that merchandise which met 
the criteria for the application of the ``Roller Chain'' principle, and 
which was, as a result, outside the scope of the Japanese TRBs order 
and finding. However, Fuji contends that unless the Department adopts 
one of the three assessment

[[Page 57648]]

strategies Fuji proposes, the Department will overassess the amount of 
antidumping duties owed by Fuji and will be in violation of the 
antidumping duty law because it will apply antidumping duties to non-
scope merchandise.
    Fuji first proposes that because it had fewer than fifty entries 
during the review period, the Department should assess duties on an 
entry-by-entry basis. Alternatively, Fuji proposes that, because all of 
those TRBs which qualify for exclusion under the ``Roller Chain'' 
principle were imported by a single related importer, Subaru-Isuzu 
Automotive, Inc. (SIA), the Department should assess duties on an 
importer-specific basis and apply zero duties to all SIA imports. Fuji 
adds that if the Department selects this option it should also adjust 
its calculated cash deposit rate for Fuji to take into account the 
``Roller Chain'' merchandise by including the value of the ``Roller 
Chain'' merchandise in the denominator. Finally, Fuji proposes that, if 
the Department rejects these first two proposals, the Department, at a 
minimum, should then adjust both Fuji's cash deposit and assessment 
rates by including the value of the TRBs meeting the ``Roller Chain'' 
criteria in the denominators the Department uses when calculating these 
rates.
    Kawasaki argues that although the Department resorted to BIA for 
its preliminary results margins for Kawasaki, and will presumably do so 
again for these final results, this should not preclude the Department 
from determining that those TRBs which meet the ``Roller Chain'' 
criteria and those TRBs manufactured by a German company but sold by 
Kawasaki in the United States constitute out-of-scope merchandise and 
are therefore not subject to antidumping duty assessment. Kawasaki 
contends that there is sufficient evidence on the record to demonstrate 
that certain of its TRBs not only meet the criteria for the ``Roller 
Chain'' principle, but all such TRBs were imported only by Kawasaki 
Motors Manufacturing Corporation (KMM). Kawasaki further contends that 
it has demonstrated that certain other TRBs imported by Kawasaki 
Loaders Inc. (KLI) were originally manufactured by a German company and 
sold to Kawasaki in Japan by the German company's Japanese affiliate. 
Kawasaki maintains that the Department should ensure the exclusion of 
its German-made TRBs from assessment by simply identifying to Customs 
the unique model numbers for such TRBs as reported in its response. 
Kawasaki argues that the record in the A-588-054 case contains the 
information necessary for the Department to recalculate its BIA rate 
such that duties are not assessed on Kawasaki's ``Roller Chain'' TRBs. 
Finally, Kawasaki states that, because KMM did not import any TRBs 
which fell within the scope of the A-588-604 order, the Department's 
BIA rate would not require any recalculation.
    The petitioner argues that because at the time of entry there is no 
way of knowing that a particular entry will meet the ``Roller Chain'' 
principle criteria, the Department should require cash deposits on all 
entries. Timken further argues that including the value of Fuji's and 
Kawasaki's ``Roller Chain'' TRBs in the denominator of the cash deposit 
calculations would result in the underassessment of antidumping duties 
because importers ultimately receive refunds of all duty deposits on 
``Roller Chain'' entries.
    Department's Position: We agree in part with the petitioner and in 
part with the respondents. It is important to first make clear that 
merchandise which meets the criteria of the ``Roller Chain'' principle 
is not out-of-scope merchandise. Our determination in an administrative 
review that the ``Roller Chain'' principle is applicable to certain 
merchandise is not the equivalent of a determination that the 
merchandise is non-scope merchandise. To the contrary, in these TRB 
reviews, that merchandise which we have deemed to be ``Roller Chain'' 
merchandise clearly falls within the scope of the A-588-054 finding and 
the A-588-604 order, as described earlier in this notice. Based on 
section 772(e)(3) of the Tariff Act and the applicable legislative 
history, we have developed a practice whereby we do not calculate and 
do not assess antidumping duties on subject merchandise which is 
imported by a related party and which is further processed where the 
subject merchandise comprises less than one percent of the value of the 
finished product sold to the first unrelated customer in the United 
States (Roller Chain Other Than Bicycle From Japan, 48 FR 51804 
(November 14, 1983), and AFBs 92/93 at 10937)). The statute provides 
for the assessment of antidumping duties only to the extent of the 
dumping that occurs. If there can be no determination of any dumping 
margin where the imported merchandise is an insignificant part of the 
product sold, then there is no dumping to offset and antidumping duties 
are not appropriate. We therefore do not consider ``Roller Chain'' 
merchandise as non-scope merchandise, but rather as scope-merchandise 
which is not subject to duty assessment.
    We disagree with Fuji that our cash deposit rates should somehow 
take into account merchandise meeting the ``Roller Chain'' criteria 
because we have no way of knowing at the time of entry whether any 
particular entry qualifies under the ``Roller Chain'' principle for 
exclusion from assessment of antidumping duties. Our decision to 
exclude any merchandise is made on a case-by-case basis within the 
course of an administrative review, which takes place after the actual 
entry of the potentially excludable merchandise. For this reason, at 
the time of entry we must require cash deposits of estimated 
antidumping duties on all entries, including those entries of 
merchandise potentially excludable from assessment under the ``Roller 
Chain'' principle. Furthermore, cash deposit rates are estimates of 
dumping liability. Because at the time of entry we have no idea of the 
value of merchandise which we may ultimately determine as meeting the 
``Roller Chain'' criteria, we cannot alter our cash deposit rate to 
effectively compensate for the value of the ``Roller Chain'' 
merchandise in the current review, which may be a value significantly 
different from that in the future.
    We also disagree with Fuji that entry-by-entry assessment is a 
viable option for its assessment. Entry-by-entry assessment requires 
the traditional appraisement instructions which list each entry and the 
margin calculated for it. The disadvantages of such assessment are 
numerous. For example, because our dumping analysis focuses on sales, 
it is necessary for us to associate reviewed sales with entries in some 
way. However, companies are generally unable to make such a link. In 
addition, such appraisement instructions are burdensome, time-
consuming, and at risk for error. It is therefore the position of the 
Department that assessment rates applicable to all covered entries are 
preferable. In comparison to entry-by-entry assessment, the use of an 
assessment rate which applies to all entries during the POR is far less 
burdensome and time-consuming. In addition, the risk of incorrect 
assessment is minimized. In general, we have tried to calculate 
assessment rates on an importer-specific basis to prevent one importer 
from paying antidumping duties attributable to margins found on sales 
to a different importer. However, this concern for importer-specific 
rates is limited to those instances where the importer is not related 
to the foreign exporter. Where the importer is related to the foreign 
exporter, we consider the related

[[Page 57649]]

parties to constitute one corporate entity and the use of manufacturer/
exporter-specific assessment rates to be appropriate. Therefore, we 
also reject Fuji's proposal that we adopt an importer-specific rate for 
SIA, its related U.S. subsidiary, and we will calculate one rate for 
Fuji's related importers.
    We have determined that Fuji's final proposal, that the assessment 
rate take into account the value of the ``Roller Chain'' merchandise, 
is the most viable assessment option and would ensure that antidumping 
duties are not assessed on that merchandise we determined to meet the 
``Roller Chain'' principle criteria. As explained above, we do not 
agree that the cash deposit rate should be altered in any way. 
Therefore, to ensure that assessment does not occur on ``Roller Chain'' 
merchandise, we will include the value of the ``Roller Chain'' 
merchandise in our denominator. This will have the effect of 
``diluting'' the percentage assessment rate so that, even though 
antidumping duties will be assessed on all entries, the lower 
``diluted'' percentage assessment rate (which will still result in the 
collection of the actual amount of antidumping duties owed) will 
effectively exclude the ``Roller Chain'' merchandise from assessment.
    Concerning Kawasaki's alleged ``Roller Chain'' merchandise, as the 
record for these reviews demonstrates, due to a consistent pattern of 
late submissions in response to our questionnaires and the quality of 
the information contained in Kawasaki's timely responses, we rejected 
all of Kawasaki's untimely responses and used total cooperative BIA 
rates for Kawasaki in our 1992-93 reviews for both the A-588-054 and A-
588-604 cases (see, e.g., the Department's 1992-93 decision memorandum 
for Kawasaki, dated April 13, 1995). Kawasaki contends that information 
contained in its two timely responses, dated February 10, 1994, and May 
24, 1994, respectively, which were not rejected by the Department and, 
as such, are part of the administrative record for these 1992-93 TRB 
reviews, demonstrates the ``Roller Chain'' nature of KMM's imports. For 
these final results we have reviewed Kawasaki's two timely submissions 
and have determined that neither submission contains evidence 
demonstrating the ``Roller Chain'' nature of KMM's imported TRBs. Our 
examination of Kawasaki's May 24, 1994, submission revealed that this 
submission dealt exclusively with TRBs imported and sold by KLI and did 
not contain any information concerning those TRBs imported by KMM. Our 
examination of Kawasaki's February 10, 1994, submission revealed that, 
while this submission contained information about KMM's imported TRBs, 
it did not contain sufficient evidence demonstrating the ``Roller 
Chain'' nature of KMM's imports. For example, page 4 of the submission 
indicates that all of KMM's imported TRBs are used solely in the 
manufacture of motorcycles and all-terrain vehicles (ATVs). Attachment 
3 of the submission contains a listing of the product codes for the 
TRBs KMM imported along with the corresponding product copies of the 
finished motorcycle or ATV into which the TRBs were incorporated. Page 
6 of the submission contains the POR total value of KMM's imports along 
with a statement by Kawasaki indicating that the value of these TRBs is 
less than one percent of the value of the finished ATVs and 
motorcycles. However, this submission does not contain any analysis, or 
the raw data necessary for us to conduct an analysis, comparing the 
value of the imported TRBs to the value of the finished motorcycles or 
ATVs. As a result, we lack the data necessary for use to determine with 
certainty that the value of those TRBs imported by KMM and used solely 
in the manufacture of motorcycles and ATVs in the United States was 
indeed less than one percent of the value of the finished motorcycles 
and ATVs. We therefore do not agree with Kawasaki that evidence on the 
record demonstrates the ``Roller Chain'' nature of KMM's imports and we 
will not calculate Kawasaki's assessment rate for the 1992-93 review of 
the A-588-054 case to reflect the value of its alleged ``Roller Chain'' 
merchandise. However, because KMM imported TRBs within the scope of the 
A-588-054 finding only, we agree with Kawasaki that no recalculation of 
its A-588-604 assessment rate is warranted.
    As for Kawasaki's German-made TRBs, proper identification on entry 
documents by Kawasaki of the German origin of the merchandise should 
ensure that this merchandise is properly treated as outside the scope 
of these TRB cases and not assessed antidumping duties resulting from 
these reviews. However, to ensure that only Japanese-made TRBs are 
subject to antidumping duties, we will instruct Customs to apply 
Kawasaki's rates for both cases to Japanese-made TRBs only.
    Comment 33: Timken argues that because Honda has been a part of 
numerous reviews and because in Japan a manufacturer/supplier 
participates actively in the design, technology, manufacture, and 
quality control of the products it supplies, all Japanese suppliers of 
TRBs to Honda know for a fact that a portion of the TRBs they supply to 
Honda, a reseller, are destined for export to the United States. The 
petitioner contends that simply because those of Honda's Japanese 
suppliers who are also subject to these reviews claim not to know which 
group of TRBs will in fact be shipped to the United States, this does 
not overshadow the fact that these suppliers have knowledge that a 
portion of those TRBs they supply to Honda are destined for exportation 
to the United States. Timken therefore concludes that this portion of 
Honda's purchases from its Japanese suppliers should be reclassified as 
suppliers' purchase price sales and the Department has an obligation to 
review these sales using the prices paid by Honda in Japan as USP.
    Honda argues that section 772(b) of the Tariff Act does not apply 
to those instances where a supplier might have general knowledge that 
merchandise was destined for export to the United States, but only in 
those situations where the supplier knew or had reason to know that the 
specific merchandise it sold to Honda was subsequently exported by 
Honda to the United States. Honda, citing the Department's 1992-93 home 
market verification report for Honda dated July 20, 1994 (Honda Ver. 
Report), contends that there is no evidence on the record to support 
the conclusion that Honda's Japanese suppliers knew or had reason to 
know that TRBs purchased by Honda would be exported to the United 
States. Both Honda and NTN maintain that in prior reviews of the AFBs 
cases, the petitioner in that case raised the identical issue and the 
Department repeatedly rejected such a contention. Honda and NTN 
therefore conclude that, absent evidence to the contrary, the 
Department must reject Timken's position in these current TRB reviews.
    Department's Position: We agree with the respondent. It has been 
our practice to define a U.S. sale as a sale in which a manufacturer is 
informed in advance or has reason to know at the time of sale that the 
product sold in the home market was destined for exportation to the 
United States. Furthermore, the evidence on the record must demonstrate 
this actual or constructed knowledge (see AFBs 92/93 at 10950, 
Television Receivers, Monochrome and Color, From Japan; Final Results 
of Antidumping Duty Administrative Review, 58 FR 11211 (February 24, 
1993), Oil Country Tubular Goods From Canada, Final Results of 
Antidumping Duty Administrative Review, 55 FR 50739 (December 10, 
1990), and Ferrovanadium and Nitride Vanadium From the Russian 
Federation; Notice of

[[Page 57650]]

Final Determination of Sales at Less Than Fair Value, 60 FR 27957 (May 
26, 1995)). At our home market verification of Honda for the 1992-93 
Japanese TRB reviews we specifically addressed the issue of supplier 
knowledge and examined various documents in an effort to determine 
whether Honda's Japanese suppliers knew at the time of sale that the 
merchandise they sold was to be exported to the United States (see 
Honda Ver. Report at 7-8). We concluded that, while Honda's Japanese 
suppliers may realize in general that a portion of the parts they 
supplied to Honda would eventually be shipped to the United States, we 
found no evidence that these suppliers could determine at the time of 
sale whether a part was to be sold by Honda domestically, for export, 
for export to the United States, or whether it would be sold for 
replacement purposes or for original equipment manufacture. We have 
therefore treated Honda as a TRB reseller for these final results and 
have not reclassified any portion of Honda's purchases from certain 
Japanese suppliers as suppliers' purchase price sales.
    Comment 34: The petitioner argues that the Department should not 
proceed with the final revocation of Honda from the A-588-054 finding 
for two fundamental reasons. First, arguing that the determination to 
revoke must be based on the most up-to-date information available, 
Timken contends that the period of three consecutive years of no 
dumping margins which the Department has relied on for Honda is too 
outdated to serve as a basis for revocation. Second, Timken points out 
that, under the recently-enacted URAA, the ``Roller Chain'' principle 
has been effectively eliminated. Thus, Timken contends, imports 
previously excluded from margin calculations and assessment are, under 
the new law, subject to review and the application of antidumping 
duties. While Timken recognizes that these 1992-93 Japanese TRB reviews 
are governed by the pre-January 1, 1995, law, the petitioner contends 
that the Department cannot reasonably predict that Honda is not likely 
to dump in the future because there has never been an analysis of 
Honda's ``Roller Chain'' TRBs.
    Honda argues that the period of three consecutive years of zero 
(0.0) margins the Department has relied on as a basis for revocation is 
adequate because there is no limitation on the ``remoteness'' of this 
period in 19 CFR 353.25(a)(2) of the Department's regulations. In 
addition, Honda states that Timken has overlooked the fact that, in 
accordance with its policy to conduct an ``update'' review when a 
significant delay in finalizing a tentative revocation has occurred, 
the Department has conducted such an update review in this 1992-93 
review of the A-588-054 finding and has again found zero percent 
dumping margins for Honda. Honda further argues that Timken's position 
that the Department cannot reasonably predict that there is no 
likelihood that Honda will dump in the future is essentially an attempt 
by Timken to retroactively apply the new law to a revocation proceeding 
clearly governed by the pre-January 1, 1995, law. Honda maintains that 
such a retroactive application is in direct contradiction to Congress's 
expressed intent to apply the new law only to those administrative 
reviews requested on or after January 1, 1995.
    Department's Position: We agree with Honda. As explained in our 
preliminary results of review for these 1992-93 reviews, we found no 
dumping margins for Honda's sales for the period January 1977 through 
July 1980. As a result, in accordance with our revocation requirements 
in effect at the time, on September 1, 1981, we published in the 
Federal Register (46 FR 43864) our tentative determination to revoke 
Honda from the A-588-054 finding. Based on the fact that we again found 
no dumping margin for Honda for the period August 1, 1980, through 
September 1, 1981 (the ``gap period''), on May 14, 1984, we published 
our intent to revoke Honda from the finding (TRB 90/92 Prelim at 
22353). Due to a unique pattern of events which we thoroughly detailed 
in our preliminary results notice, we did not proceed with final 
revocation of Honda and, as a result, the ``Intent to Revoke'' notice 
we published in May 1984 has lost its official standing (TRBs 90/92 
Prelim at 22353).
    In October and November 1992 the petitioner requested and we 
initiated a review of Honda in the A-588-054 finding. We conducted a 
thorough verification of Honda and preliminarily determined that Honda 
again had no margin. As a result, we decided to publish, along with our 
preliminary results notice of these current reviews, our intent to 
revoke Honda from the A-588-054 finding. We also explained that, under 
the revocation procedures in effect at the time Honda's revocation 
proceeding began, the intent-to-revoke stage of the renovation usually 
covers the ``gap period.'' However, in accordance with our policy in 
similar situations, we conducted an update review of the most recent 
one-year period in lieu of the ``gap period.'' We first adopted this in 
light of the CIT's concern in Freeport Minerals v. United States, 776 
F. 2d 1029 (CIT 1985), that revocation determinations be based on 
``current data,'' and it reflects a consistent practice which has been 
approved by the CIT (see Television Receivers, Monchrome and Color, 
From Japan, 55 FR 35916 (September 4, 1990), Roller Chain Other Than 
Bicycle, From Japan, 56 FR 50093 (October 3, 1991), and Matsushita 
Electric Industrial Company v. United States, 12 CIT 455, 688 F. Supp. 
617, 623 (1988), aff'd, 861 F.2d 257, 7 Fed. Cir. (T) 13 (1988)).
    Therefore, Timken's contention that we did not base our revocation 
of Honda on the most current data available is unfounded. We clearly 
collected, analyzed, and verified the most current sales information 
and other data available from Honda. Thus, our decision to proceed with 
final revocation of Honda from the A-588-054 finding is not only based 
on a demonstrated past history of no dumping by Honda (the three-year 
period of no dumping margins pursuant to 19 CFR 353.25(a)(2)), but on a 
current confirmation that Honda has continued not to dump TRBs (the 
1992-93 update review).
    We also disagree with the petitioner's contention that the 
elimination of the ``Roller Chain'' principle under the new law 
precludes us from reasonably predicting that Honda is not likely to 
sell TRBs at LTFV in the future. As explained in our response to 
Comment 30 above, based on the relevant legislative history of section 
772(e)(3) of the Tariff Act, we concluded that Congress did not intend 
that USP be calculated and that antidumping duties be assessed when the 
imported value of subject merchandise that is imported and then 
further-processed is insignificant in comparison to the value of the 
finished merchandise (see Rep No. 1298, 93d Cong. 2d Sess. 172-73, 245, 
reprinted in 1974 U.S.C.C.A.N. 7185, 7130). We therefore established 
the ``Roller Chain'' principle by which we consider as 
``insignificant'' the value of imported merchandise that constitutes 
less than one percent of the value of the finished product (see, e.g., 
AFBs 92/93 at 10937). In other words, because there can be no 
determination of dumping in situations where the value of certain 
imported subject merchandise is an insignificant part of the value of 
the product sold in the United States, then it follows that such 
merchandise does not play a role in a determination of whether dumping 
is likely to recur. Because we base our likelihood determination on 
evidence currently on the record, ``Roller Chain'' merchandise is not a 
factor in our likelihood determinations pursuant to the law and 
regulations governing these

[[Page 57651]]

reviews. Were we to allow the exclusion of the ``Roller Chain'' 
principle under the new law and ``Roller Chain'' merchandise itself to 
influence our likelihood determination for Honda at this time, not only 
would we, in effect, be imposing an unreasonable burden on Honda to re-
qualify for revocation under a new set of standards, but, most 
importantly, we would be retroactively applying the new statute, which 
is proscribed when Congress clearly expresses a statute's effective 
date, as it did here in section 291 of the URAA (see Landgraf v. USI 
Film Products, 114 S. CT. 1483 (1994)). For these reasons we do not 
agree that ``Roller Chain'' merchandise should be a factor in our 
likelihood determination and we have based our likelihood determination 
on the factors described below.
    The evidence on the record clearly demonstrates that Honda has not 
dumped TRBs in the past and is not likely to dump TRBs in the future. 
We have found no margins for Honda in all the reviews of the A-588-054 
finding in which we reviewed Honda. Not only has Honda demonstrated a 
consecutive three-year of no dumping margins, but it demonstrated that 
in the nearly 15 years since the Department's last review of the firm, 
it continued not to dump. It is also important to note that our 
consistent calculation of no margins for Honda is not dependent upon 
the presence of ``Roller Chain'' merchandise. In other words, not all 
of Honda's entries were exempt under the ``Roller Chain'' principle. 
Honda also exports to the United States a significant amount of TRBs 
which are imported by American Honda, Honda's sales subsidiary in the 
United States, and sold to unrelated U.S. customers for replacement 
purposes. These U.S. sales constitute Honda ESP sales and we have based 
our past and current margin calculations on these replacement-part TRB 
sales. As a result, our repeated determinations of no dumping margins 
for Honda reflect Honda's actual pricing practices in the United States 
and constitute clear and uncontroverted evidence that Honda does not 
engage in dumping pricing practices. There is no evidence on the record 
indicating that Honda is likely to dump in the future. In fact, since 
there was nearly a 15-year gap between this current review and our last 
review of Honda, we have had the rare opportunity to examine Honda's 
pricing practices after a nearly 15-year period of no examination 
whatsoever. The fact that, after 15 years of no review, we have found 
no dumping by Honda in the current review, only provides additional 
support for our determination that Honda is unlikely to sell TRBs at 
LTFV in the future. Furthermore, our calculation of no margin for Honda 
after 15 years is even more persuasive because the substantial 
appreciation of the yen against the dollar over the years would make 
the incidence of dumping margins after such an extended period even 
more likely. For these reasons, we have determined that Honda is not 
likely to sell TRBs at LTFV in the future, and, since Honda has met all 
other requirements for revocation, we are revoking the A-588-054 
finding with respect to Honda.

Clerical Errors

    Comment 35: The petitioner, providing two examples from the 
Department's preliminary results margin calculations for NTN, contends 
that the Department failed to apply set-splitting ratios to the home 
market commission and credit expense amounts NTN reported for TRB sets 
the Department split into individual cup and cone sales. Timken 
concludes that this error resulted in the failure to calculate accurate 
credit and commission expense amounts for individual cups and cones 
split from TRB sets, and, as a result, distorted the Department's 
margin calculations for NTN.
    Department's Position: We agree in part with Timken. In the 
beginning of our preliminary results computer program for NTN we 
calculated home market net prices by deducting from NTN's reported 
gross prices several direct expenses, including home market commissions 
and credit. It is this net price variable which we split to derive the 
net price attributable to the individual cups and cones split from TRB 
sets, and it is the price which we eventually weight-averaged prior to 
comparison to U.S. sales. Because this net price reflects a price 
already adjusted for credit and commissions, it is unnecessary to carry 
the components we used to derive this price into the set-splitting 
portion of our programs. In other words, by splitting the net price, 
which is already adjusted for commissions, credit, and other direct 
expenses, it becomes unnecessary to split the components used to derive 
the net price. However, if for some reason it was necessary for us to 
retain one of these components for the final margin calculations we 
conduct at the end of our computer program, it would then be necessary 
to preserve the expense variable and calculate the amount of that 
expense attributable to split cups and cones.
    For NTN we conduct our commission offset later in our margin 
calculation program. While we correctly weight-averaged this variable, 
we did not include it in the set-splitting portion of our program. This 
had the effect of overstating the weighted-average commission amounts 
because split cups and cones simply retained the commission amount NTN 
reported for the parent set. In this case we agree with Timken and 
corrected this error for these final results.
    In contrast to commissions, we did not use the credit variable at 
any point after its original deduction from the net price. As a result, 
it was unnecessary to retain this variable for individual weight-
averaging or later margin calculations and unnecessary to include it in 
the set-splitting portion of our calculations. Therefore, we disagree 
with Timken that there was an error in our treatment of the home market 
credit expense variable and we have not changed our treatment of this 
variable for these final results.
    Comment 36: Timken contends that the Department failed to include 
all of NTN's U.S. expenses in its further-manufacturing calculations 
because the Department's calculated U.S. total direct selling expense 
amount, in comparison to its calculated U.S. manufacturing amount, 
appears to be ``exceptionally low.'' Timken argues that this 
discrepancy, of which it provided three examples from the Department's 
preliminary results NTN computer printouts, is due to either (1) the 
error it previously described in regard to NTN's home market credit 
expense variable, (2) some other error, or (3) NTN's failure to report 
accurate U.S. direct selling expense amounts.
    Department's Position: We agree with the petitioner in part. First, 
as described in our response to Comment 35, there is no error in our 
treatment of NTN's home market credit expense variable. Furthermore, 
even if there were an error, this would have no effect on our 
calculation of total U.S. direct selling expenses for further-
manufacturing purposes. However, based on the discrepancy in NTN's U.S. 
selling expense allocations addressed earlier in this notice, we have 
determined that the application of NTN's originally-calculated 
allocation ratios would have resulted in the understatement of NTN's 
U.S. selling expense amounts, including those direct selling expense 
amounts we relied on in our further-manufacturing calculations. Because 
we have re-allocated NTN's U.S. selling expense such that accurate per-
unit expense amounts result, we have also eliminated those other 
discrepancies, such as the one Timken describes here, which

[[Page 57652]]

stemmed from NTN's incorrectly allocated U.S. selling expenses.
    Comment 37: NSK argues that the Department relied on an improper 
COP variable when determining whether a home market sale occurred at, 
below, or above COP.
    The petitioner states that the Department properly relied on that 
COP variable which would correctly implement the Department's decision 
to use the higher of transfer price or the actual COP of inputs NSK 
purchased from related suppliers.
    Department's Position: We agree with Timken. In its home market 
computer data base NSK reported two separate COP amounts for each home 
market model. The first amount (COP1) reflected the total COP of the 
model using the transfer prices between NSK and its related suppliers 
for those inputs used in the model's production. The second amount 
(COP2) reflected the total COP of the model using not the transfer 
prices but the related supplier's actual COP for the inputs. As 
explained in our response to Comment 21, because we found that NSK's 
related-supplier transfer prices were not at market value, we made the 
appropriate adjustments in our analysis. One of these adjustments was 
intended to ensure that, if the COP1 amount NSK reported for a model 
(which was based on related-supplier input transfer prices) was less 
than the COP2 amount (which reflected the COP of the model based on the 
related suppliers' actual COP for the inputs used), then we would use 
COP2 as the COP for the model. We therefore did not make a clerical 
error, but rather chose the appropriate COP for our cost test.

Final Results of Review

    Based on our review of the arguments presented above, for these 
final results we have made changes in our margin calculations for NTN, 
NSK, Fuji, and Honda. As explained in our preliminary results of these 
reviews, we used a cooperative-BIA rate, based on the highest 
calculated rate for any firm in the A-588-054 review as Kawasaki's 
margin in the A-588-054 case (see TRBs 92/93 Prelim at 22350). Because 
the highest calculated rate for the A-588-054 review has changed for 
these final results, we have adjusted Kawaski's A-588-054 BIA rate 
accordingly. The preliminary margins we calculated for all other 
companies and our preliminary determinations concerning the use of BIA, 
no shipments, and the terminations of the review have remained 
unchanged for these final results (see TRBs 92/93 Prelim at 22353, 
22354).
    As a result of our comparison of USP to FMV, we have determined 
that margins exist for the period October 1, 1992, through September 
30, 1993, as follows:

For the A-588-054 Review

------------------------------------------------------------------------
                                                               Margin   
              Manufacturer/reseller/exporter                  (percent) 
------------------------------------------------------------------------
Nachi-Fujikoshi Corp......................................     \1\ 18.07
NSK Ltd...................................................         11.62
Fuji......................................................          1.76
Honda.....................................................          0.0 
Kawasaki..................................................         11.62
Yamaha....................................................         47.63
MC Int'l..................................................          0.45
Maekawa...................................................      \1\ 0.0 
Toyosha...................................................         47.63
Nigata....................................................         47.63
Suzuki....................................................         47.63
------------------------------------------------------------------------
\1\ No shipments or sales subject to this review. Rate is from the last 
  relevant segment of the proceeding in which the firm had shipments/   
  sales.                                                                

For the A-588-604 Review

------------------------------------------------------------------------
                                                              Margin    
             Manufacturer/reseller/exporter                  (percent)  
------------------------------------------------------------------------
NTN.....................................................           19.15
Nachi-Fujikoshi Corp....................................           40.37
NSK Ltd.................................................           10.19
Fuji....................................................        (\2\)   
Honda...................................................        (\2\)   
Kawasaki................................................           36.52
Yamaha..................................................           40.37
MC Int'l................................................        (\2\)   
Maekawa.................................................        (\2\)   
Toyosha.................................................           40.37
Nigata..................................................           40.37
Suzuki..................................................           40.37
Daido...................................................        (\2\)   
Ichiyanagi Tekko........................................           40.37
Nittetsu Bolten.........................................           40.37
Sumikin Seiatsu.........................................           40.37
------------------------------------------------------------------------
\2\ No shipments or sales subject to this review. The firm has no rate  
  from any segment of this proceeding.                                  

    As stated in our response to Comment 34 above, we have determined 
that Honda has met the requirements for revocation set forth in 19 CFR 
353.54(f) (1988) of our regulations. We are therefore revoking the A-
588-054 finding with respect to Honda. This revocation applies to all 
entries of TRBs and certain components thereof, four inches or less in 
outside diameter, subject to the A-588-054 case, exported by Honda, 
entered or withdrawn from warehouse, for consumption on after September 
1, 1981, the date of the original tentative revocation, and for which 
liquidation remains suspended. The Department will instruct Customs to 
proceed with liquidation of all unliquidated entries of this 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after September 1, 1981, without regard to antidumping duties, to 
refund any estimated antidumping duties collected with respect to those 
entries, and to cease collecting cash deposits.
    The Department shall determine, and the Customs service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and FMV may vary from the percentages stated 
above. The Department will issue appraisement instructions on each 
exporter directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of these 
final results, as provided for by section 751(a)(1) of the Tariff Act:
    (1) The cash deposit rates for the reviewed companies other than 
Honda will be those rates outlined above;
    (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 original 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;
    (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 finding will be 18.07 percent and 36.52 
percent for the A-588-604 order (see Preliminary 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 51058 (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 merchandise to determine the 
assessment rate. In the case of Fuji, the Department will calculate 
assessment rates which reflect the total value of that merchandise 
which we determined to meet the criteria for the ``Roller Chain'' 
principle.
    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 353.25 to file a certificate regarding the

[[Page 57653]]

reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written 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.
    These administrative reviews, revocation in part, and this notice 
are in accordance with section 751(a)(1) of the Tariff Act (19 U.S.C. 
1675(a)(1)) and 19 CFR 353.22 and 353.25.

    Dated: October 29, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-28444 Filed 11-6-96; 8:45 am]
BILLING CODE 3510-DS-M