[Federal Register Volume 62, Number 28 (Tuesday, February 11, 1997)]
[Notices]
[Pages 6168-6171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3361]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-609]


Color Picture Tubes From Japan; Preliminary Results of 
Antidumping Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review of color picture tubes from Japan.

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[[Page 6169]]

SUMMARY: In response to a request by the petitioners, the Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on color picture tubes (CPTs) from Japan. The 
period of review (POR) is January 1, 1995 through December 31, 1995. 
The review indicates the existence of dumping margins during this 
period.
    We have preliminarily determined that subject merchandise has been 
sold at less than normal value (NV) during the POR. If these 
preliminary results are adopted in our final results of administrative 
review, we will instruct the U.S. Customs Service to assess antidumping 
duties on entries during the POR. Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: February 11, 1997.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington D.C. 20230; telephone (202) 482-4733.

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended, (the Act) are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, all citations 
to the Department's regulations are to the current regulations, as 
amended by the interim regulations published in the Federal Register on 
May 11, 1995 (60 FR 25130).

Background

    On January 26, 1996, the Department published in the Federal 
Register (61 FR 2488) a notice of ``Opportunity To Request an 
Administrative Review'' of the antidumping duty order on CPTs from 
Japan (52 FR 44171 (November 18, 1987)). In accordance with 19 C.F.R. 
353.22(a), the petitioners, the International Association of Machinists 
and Aerospace Workers, International Union of Electronic, Electrical, 
Salaried, Machine & Furniture Workers, AFL-CIO, Industrial Union 
Department AFL-CIO, requested that we conduct an administrative review 
of sales of CPTs from Japan by Mitsubishi Electric Corporation (MELCO). 
We published a notice of initiation of this antidumping duty 
administrative review on February 20, 1996 (61 FR 6347), covering the 
period January 1, 1995 through December 31, 1995.
    Because it was not practicable to complete this review within the 
normal time frame, on October 25, 1996, we published in the Federal 
Register our notice of extension of the time limit for these 
preliminary results to January 30, 1997 (61 FR 55271). The deadline for 
the final results will continue to be 120 days after publication of 
these preliminary results.

Scope of Review

    Imports covered by this review are shipments of CPTs from Japan. 
CPTs are defined as cathode ray tubes suitable for use in the 
manufacture of color televisions or other color entertainment display 
devices intended for television viewing. This merchandise is 
classifiable under the Harmonized Tariff Schedule (HTS) item numbers 
8540.11.00.10, 8540.11.00.20, 8540.11.00.30, 8540.11.00.40, 
8540.11.00.50 and 8540.11.00.60. Although the HTS item numbers are 
provided for convenience and customs purposes, our written description 
of the scope of this proceeding is dispositive.

Verification

    In accordance with section 782(i) of the Act, we verified 
information provided by MELCO by using standard verification 
procedures, including onsite inspection of the manufacturer's 
facilities, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. We conducted the verification at the company's 
headquarters in Kyoto, Japan, from September 17 through September 20, 
1996. Our verification results are outlined in the public version of 
the verification report. See Memorandum from Case Analyst to File, 
dated December 27, 1996.

Product Comparisons

    We calculated NV on a monthly weighted-average basis. Where 
possible, we compared U.S. sales to sales of identical merchandise in 
Japan. For U.S. sales in which identical merchandise was not sold 
during the relevant contemporaneous period, we compared U.S. sales to 
the most similar foreign like product on the basis of characteristics 
listed in MELCO's April 1, 1996 response to section A of our 
questionnaire.

Constructed Export Price

    We calculated a constructed export price (CEP) for MELCO's U.S. 
transactions, in accordance with section 772(b) of the Act, because 
sales to the first unrelated purchaser took place after importation 
into the United States.
    We calculated CEP based on the packed, ex-warehouse price from the 
U.S. subsidiary to unrelated customers. We made deductions from CEP for 
U.S. packing in the United States, international freight, foreign 
inland freight, marine insurance, U.S. customs duties, U.S. inland 
freight insurance and U.S. inland freight. In accordance with section 
772(d)(1) of the Act, we deducted from CEP the following selling 
expenses that related to economic activity in the United States: 
commissions, direct selling expenses, including advertising, 
warranties, credit expenses, discounts, rebates, and indirect selling 
expenses, including inventory carrying costs, and further 
manufacturing. We also made an adjustment for CEP profit in accordance 
with section 772 (d)(3) of the Act.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared respondent's volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(C) of the Act. Since respondent's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales for the 
subject merchandise, we determined that the home market was viable. 
Therefore, we have based NV on home market sales. We based NV on the 
packed, delivered price to unrelated purchasers in the home market.
    Where applicable, we made adjustments to home market prices for 
discounts, rebates, technical service expenses, pre-sale warehouse 
expenses, and royalties. To adjust for differences in circumstances of 
sale between the home market and the United States, we deducted post-
sale inland freight and credit expense from NV in accordance with 
section 773(a)(6)(C) of the Act. In accordance with 19 C.F.R. 
353.56(b), we made an adjustment to NV for indirect selling expenses in 
the home market to offset the sum of commissions in the United States.
    In order to adjust for differences in packing between the two 
markets, we deducted home market packing costs from NV and added U.S. 
packing costs.
    We compared U.S. sales of CPTs to NV based on constructed value 
(CV) when MELCO did not have contemporaneous home market sales of CPTs 
with which we could compare the U.S. sale. We calculated CV in 
accordance with section 773(e) of the Tariff Act. We included the cost 
of materials, labor, general expenses, profit and packing. Where 
appropriate, we

[[Page 6170]]

made adjustments to CV, in accordance with 19 C.F.R. 353.56, for 
differences in circumstances of sale.
    The home market and CV databases that MELCO submitted did not 
contain matches for certain U.S. sales. See Memorandum from Analyst to 
File: Preliminary Results for MELCO, January 30, 1997. Therefore, in 
accordance with section 776 of the Act, we applied a rate based on the 
facts available to these sales. Given the nature and extent of the 
deficiency, we have selected the weighted-average rate that we 
calculated for all other sales in this review (1.92 percent) as facts 
available. See section 776(a) of the Act.

Level of Trade and CEP Offset

    As set forth in section 773(a)(7) of the Act and in the Statement 
of Administrative Action (H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 
(1994)) (SAA) at 829-831, to the extent practicable, we will calculate 
NV based on sales at the same level of trade as the U.S. sale. In this 
review, we were unable to find comparison sales at the same level of 
trade as the U.S. sales. Accordingly, we compared the sales in the 
United States to sales at a different level of trade in the comparison 
market.
    In accordance with section 773(a)(7)(A) of the Act, if we compare a 
U.S. sale with a home market sale made at a different level of trade, 
we will adjust the NV to account for this difference if two conditions 
are met. First, there must be differences between the actual selling 
functions performed by the seller at the level of trade of the U.S. 
sale and at the level of trade of the comparison market sale used to 
determine NV. Second, the differences must affect price comparability 
as evidenced by a pattern of consistent price differences between sales 
at the different levels of trade in the market in which NV is 
determined. For CEP sales, section 773(a)(7)(B) of the Act establishes 
the procedures for making a CEP ``offset'' when two conditions exist: 
(1) NV is established at a level of trade which constitutes a more 
advanced stage of distribution than the level of trade of the CEP; and 
(2) the data available do not provide an appropriate basis for a level-
of-trade adjustment.
    We based the level of trade of CEP sales on the price in the United 
States after making the CEP deductions under section 772(d) but before 
making the deductions under section 772(c). Where home market sales 
served as the basis for NV, we determined the NV level of trade based 
on starting prices in the home market. Where NV was based on CV, we 
determined the NV level of trade based on the level of trade of the 
sales from which we derived SG&A and profit for CV.
    In order to determine whether sales in the comparison market are at 
a different level of trade than the CEP, we examined whether the 
comparison sales were at different stages in the marketing process than 
the CEP. We made this determination on the basis of a review of the 
distribution system in the comparison market, including selling 
functions, class of customer, and the level of selling expenses for 
each type of sale. Different stages of marketing necessarily involve 
differences in selling functions, but differences in selling functions, 
even substantial ones, are not alone sufficient to establish a 
difference in the level of trade. Similarly, while customer categories 
such as ``distributor'' and ``wholesaler'' may be useful in identifying 
different levels of trade, they are insufficient in themselves to 
establish that there is a difference in the level of trade. See Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate from Canada: Preliminary Results of 
Antidumping Duty Administrative Review, 61 FR 51896 (October 4, 1996).
    MELCO requested that we make a level-of-trade adjustment, or a CEP 
offset if we could not quantify a level-of-trade adjustment, because 
sales in the home market involved a more advanced level of trade than 
the level of trade of the CEP. Our analysis of the reported selling 
expenses, selling functions, and customer classes of U.S. and home 
market sales demonstrates that the home market sales are distributed 
through a more advanced marketing stage than that involved at the level 
of trade of the CEP.
    Because we compared CEP sales to home market sales at a different 
level of trade, we examined whether a level-of-trade adjustment was 
appropriate. In this case, we were unable to quantify price differences 
involving comparisons of sales made at different levels of trade 
because the same level of trade as that of the CEP did not exist in the 
home market. Therefore, we could not determine whether there was a 
pattern of consistent price differences between the levels of trade 
based on respondent's home market sales of merchandise under review.
    Because we were unable to quantify a level-of-trade adjustment 
based on a pattern of consistent price differences, we granted a CEP 
offset where the comparison sales were at a more advanced level of 
trade than the sales to the United States, in accordance with section 
773(a)(7)(B) of the Act.
    To calculate the CEP offset, in accordance with section 
772(d)(1)(D) of the Act, we considered the home market indirect selling 
expenses and deducted this amount from NV on home market sales which we 
compared to U.S. CEP sales. We limited the home market indirect selling 
expense deduction by the amount of the indirect selling expenses 
incurred in the United States.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act. Currency conversions were made at the rates certified by the 
Federal Reserve Bank. Section 773A(a) directs the Department to use a 
daily exchange rate to convert foreign currencies into U.S. dollars 
unless the daily rate involves a ``fluctuation.'' It is our practice to 
find that a fluctuation exists when the daily exchange rate differs 
from a benchmark rate by 2.25 percent. See Preliminary Results of 
Antidumping Duty Administrative Review: Certain Welded Carbon Steel 
Pipe and Tube from Turkey, 61 FR 35188, 35192 (July 5, 1996). The 
benchmark rate is defined as the rolling average of the rates for the 
past 40 business days. Because we found no fluctuation in this case, we 
believe it is appropriate to use a daily exchange rate for currency 
conversion purposes.

Preliminary Results of the Review

    As a result of our comparison of the CEP to NV, we preliminarily 
determine that the following dumping margin exists for the period 
January 1, 1995 through December 31, 1995:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
MELCO......................................................         1.92
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held approximately 44 days after the publication of 
this notice. Interested parties may submit written comments (case 
briefs) within 30 days of the date of publication of this notice. 
Rebuttal comments (rebuttal briefs), which must be limited to issues 
raised in the case briefs, may be filed not later than 37 days after 
the date of publication. The Department will publish a notice of final 
results of this administrative review, including the results of its 
analysis of issues raised in any such written comments, within 120 days 
of publication of these preliminary results.

[[Page 6171]]

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Because the 
inability to link sales with specific entries prevents calculation of 
duties on an entry-by-entry basis, we have calculated an importer-
specific ad valorem duty assessment rate for the merchandise based on 
the ratio of the total amount of antidumping duties calculated for the 
examined sales made during the POR to the total customs value of the 
sales used to calculate those duties. This rate will be assessed 
uniformly on all entries of that particular importer made during the 
POR. (This is equivalent to dividing the total amount of antidumping 
duties, which are calculated by taking the difference between NV and 
CEP, by the total CEP value of the sales compared, and adjusting the 
result by the average difference between CEP and customs value for all 
merchandise examined during the POR.) The Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following cash deposit requirements will be 
effective upon publication of the final results of this administrative 
review for all shipments of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(1) of the Act: (1) For MELCO 
the cash deposit rate will be the rate established in the final results 
of this review; (2) if the exporter is not a firm covered in this 
review, a previous review, or the original less-than-fair value 
investigation (LTFV), but the manufacturer is, the cash deposit rate 
will be that which was established for the most recent period for the 
manufacturer of the merchandise; (3) for non-Japanese exporters of 
subject merchandise from Japan, the cash deposit rate will be the rate 
applicable to the Japanese supplier of that exporter; (4) if neither 
the exporter nor the manufacturer is a firm covered in this or any 
previous reviews, the cash deposit rate will be 27.93 percent, the 
``all others'' rate established in the LTFV investigation, as explained 
below. These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    On May 25, 1993, the Court of International Trade (CIT) in Floral 
Trade Council v United States, 822 F.Supp. 766 (CIT 1993), and Federal-
Mogul Corporation and The Torrington Company v. United States, 822 
F.Supp. 782 (CIT) 1993), decided that once an ``All Others'' rate is 
established for a company it can only be changed through an 
administrative review. We have determined that, in order to implement 
these decisions, it is appropriate to reinstate the ``All Others'' rate 
from the LTFV investigation (or that rate as amended for correction of 
clerical errors or as a result of litigation) in proceedings governed 
by antidumping duty orders. Therefore, we are reinstating the ``All 
Others'' rate made effective by the final determination of sales at 
LTFV (see Color Pictures Tubes, 52 FR 44171, November 18, 1987).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 C.F.R. 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 C.F.R. 
353.22.

    Dated: January 30, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-3361 Filed 2-10-97; 8:45 am]
BILLING CODE 3510-DS-P