[Federal Register Volume 62, Number 139 (Monday, July 21, 1997)]
[Notices]
[Pages 38975-38976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19013]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-428-821, A-588-837]


Large Newspaper Printing Presses and Components Thereof (LNPP) 
From Germany and Japan: Scope Inquiry Instructions and Revision of 
Suspension of Liquidation Procedures for Entries of LNPP Elements 
Outside the Scope of the Antidumping Duty Order

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

EFFECTIVE DATE: July 21, 1997.

FOR FURTHER INFORMATION CONTACT: David Genovese, Office of Antidumping/
Countervailing Duty Enforcement, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4697.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all references to the Department's regulations are to 19 CFR 
Part 351, as published in the Federal Register on May 19, 1997 (62 FR 
27296).

Background

    On September 4, 1996, the Department published the antidumping duty 
order on LNPP from Japan and Germany (61 FR 46,621 and 46,623, 
respectively). The scope of the orders cover LNPP systems, additions 
and five named components: printing units, reel tension pasters, 
folders, conveyance and access apparatuses, and computerized control 
systems. Also included in the scope are elements (i.e., parts and 
subcomponents) of a LNPP system, addition or component, which taken 
altogether, constitute at least 50 percent of the cost of manufacture 
of any of the five major LNPP components of which they are a part. 
These orders also contained instructions as to the suspension of 
liquidation of subject merchandise. These liquidation instructions 
directed the Customs Service to suspend liquidation and to require the 
posting of cash deposits on entries of LNPP systems, additions and 
components, and all elements imported to fulfill an LNPP contract. With 
respect to elements, suspension of liquidation would be in effect until 
the Department was able to make a determination as to whether a 
specific element met the 50 percent threshold described above, which 
would be decided after all entries of such merchandise had been made 
and the component of which they are a part had been produced.
    On September 24, 1996, Koenig & Bauer-Albert AG and KBA-Motter 
Corp. (KBA), a German producer of LNPP and its affiliated U.S. 
importer, asked the Department to reevaluate its liquidation 
instructions. They argued that by requiring the suspension of 
liquidation of all LNPP elements, the Department unlawfully encompassed 
non-subject merchandise (i.e., elements that constitute less than 50 
percent of the cost of manufacture of the component of which they are a 
part) and unfairly imposed a financial burden on U.S. companies who 
would have to post cash deposits on such non-subject merchandise until 
the Department, at some future date, was able to make a determination 
as to whether the imported elements met the 50 percent threshold 
described above. The Department thereafter solicited comments from all 
interested parties concerning the liquidation instructions as to 
elements.

Scope Inquiry Procedures and Revision of Suspension of Liquidation 
Instructions

    Following are the scope inquiry procedures and revised suspension 
of liquidation instructions that the Department and interested parties 
agreed upon with regard to the importation of LNPP elements that 
constitute less than 50 percent of the cost of manufacture of the 
finished LNPP component of which they are a part.
    1. Upon the request of an interested party (i.e., foreign 
manufacturer/exporter or U.S. importer), the Department will initiate a 
scope inquiry with respect to LNPP elements (i.e., parts and 
subcomponents) to be imported into the United States in order to 
fulfill a LNPP contract which are claimed to fall outside the scope of 
the above-referenced AD orders. The Department will instruct the 
Customs Service to suspend liquidation at a zero cash deposit rate if 
the party can establish to the Department's satisfaction, through the 
submission of certain factual information, that the sum of the LNPP 
elements to be imported pursuant to a particular LNPP contract 
represents less than 50 percent of the cost of manufacture of the LNPP 
component of which they are a part. The deadline for requesting such an 
inquiry is no later than 75 days prior to the intended date of entry of 
the LNPP elements.
    2. In such an inquiry, the interested party will: (1) Make a claim 
that all of the elements to be imported into the United States from 
Germany or Japan pursuant to a particular LNPP contract constitute less 
than 50 percent of the cost of manufacture of the finished LNPP 
component of which they are part and, thus, are not subject 
merchandise; and (2) submit the documentation specified below to 
substantiate its claim. The interested party is also required to serve 
the submitted materials upon counsel for the petitioner on the earlier 
of: (i) the same day they are filed with the Department, if an 
applicable Administrative Protective Order (``APO'') is outstanding, or 
(ii) within one day of the issuance of an applicable APO. Public 
versions of such materials will be served upon counsel for the 
petitioner in accordance with section 351.303(f) of the Department's 
regulations. The petitioner will have 15 calendar days from the date of 
receipt of such documents for review and the filing of comments.
    3. The foreign manufacturer/exporter and U.S. importer are required 
to

[[Page 38976]]

provide the following information to the Department:

--A list of the elements to be imported from Germany or Japan, and 
other countries, and those to be sourced domestically pursuant to a 
LNPP contract, including the component classification for each element;
--The LNPP contract and subsequent amendments;
--A diagram of the LNPP;
--A copy of the most recent cost estimate for the finished LNPP in the 
United States on a component-specific basis;
--the actual or estimated cost (depending on what is available prior to 
the time of importation of the German or Japanese elements into the 
United States) of elements comprising the finished component by country 
of origin (i.e., Japan, Germany, United States, other)
--Data on historical variances between estimated and actual costs of 
production of LNPP merchandise;
--A financial statement for the business unit that produces LNPPs;
--A schedule of element importation and component production completion 
in the United States.

    If, after providing the above-specified information, the interested 
party finds that the costs reported to the Department were understated 
and that the cost of manufacture of the import elements will be over 50 
percent of the cost of manufacture of the LNPP component of which they 
are a part, the interested party must immediately inform the Department 
of Commerce.
    4. After the expiration of the 15-day comment period, the 
Department will conduct its review of the submitted documentation and 
will, to the extent practicable, make an expedited preliminary ruling 
as to whether the merchandise falls outside of the scope of the orders. 
If the Department determines preliminarily that such merchandise is 
outside of the scope, for all such entries made pursuant to a 
particular LNPP contract, the Department will instruct the Customs 
Service to suspend liquidation at a zero deposit rate.
    5. Pursuant to the Department's preliminary ruling, the U.S. 
importer will be able to declare a zero deposit rate for the imported 
merchandise at issue. Upon entry of the merchandise into the U.S. 
Customs territory, the U.S. importer and/or foreign manufacturer/
exporter will be required to submit an appropriate certification to the 
Department concerning the contents of the entry. An appropriate 
certification would generally read as follows:

    I, [Name and Title], hereby certify that the cost of the large 
newspaper printing press (LNPP) parts contained in entry summary 
number(s) ________ pursuant to contract number ________, constitute 
less than 50 percent of the cost of manufacture of the complete LNPP 
component of which they are a part.

    6. The Department will make a final scope ruling within the context 
of an administrative review, if requested by interested parties. 
Verification of the submitted information will occur within the context 
of such review, when appropriate. If the Department finds in its final 
ruling that the imported merchandise falls below the 50 percent 
threshold, then the Department will instruct the Customs Service to 
liquidate the entries at issue without regard to antidumping duties. 
Conversely, if the Department finds that the imported merchandise falls 
within the scope of the orders (i.e., because the actual total cost of 
the elements imported to fulfill a LNPP contract is 50 percent or more 
of the cost of manufacture of the complete LNPP component of which they 
are a part), then the U.S. importer will be subject to the assessment 
of antidumping duties on the imported elements, together with any 
applicable interest from the date of entry of such elements, at the 
rate determined in the review.

    Dated: July 14, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-19013 Filed 7-18-97; 8:45 am]
BILLING CODE 3510-DS-P