[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Notices]
[Pages 42750-42755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20940]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[A-588-823]


Professional Electric Cutting Tools From Japan; Preliminary 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

-----------------------------------------------------------------------

SUMMARY: In response to a request by Black & Decker Inc., the 
petitioners in this case, the Department of Commerce (the Department) 
is conducting an administrative review of the antidumping duty order on 
professional electric cutting tools (PECTs) from Japan. The period of 
review (``POR'') covers shipments of the subject merchandise to the 
United States during the period July 1, 1995 through June 30, 1996.
    We have preliminarily determined that respondents sold subject 
merchandise at less than normal value (NV) during the POR. If these 
preliminary results are adopted in our final results of this 
administrative review, we will instruct U.S. Customs to assess 
antidumping duties equal to the difference between the constructed 
export price (``CEP'') and the NV.
    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding should also 
submit with the argument (1) a statement of the issue, and (2) a brief 
summary of the argument.

EFFECTIVE DATE: August 8, 1997.

FOR FURTHER INFORMATION CONTACT: Stephen Jacques, AD/CVD Enforcement

[[Page 42751]]

Group III, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-
3434.

SUPPLEMENTARY INFORMATION:

The 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 by the 
Uruguay Rounds Agreements Act (URAA). In addition, unless otherwise 
indicated, all references to the Department's regulations as codified 
at 19 CFR part 353, as they existed on April 1, 1996.

Background

    On July 12, 1993, the Department published in the Federal Register 
the antidumping duty order on PECTs from Japan (58 FR 37461). On July 
8, 1996, the Department published in the Federal Register a notice of 
opportunity to request an administrative review of this antidumping 
duty order (61 FR 35713). On July 31, petitioners requested that we 
conduct an administrative review in accordance with 19 CFR 
353.22(a)(1). We published the notice of initiation of this antidumping 
duty administrative review on August 15, 1996 (61 FR 42416).
    The Department is conducting this review in accordance with section 
751 of the Act.

Scope of the Review

    Imports covered by this review are shipments of PECTs from Japan. 
PECTs may be assembled or unassembled, and corded or cordless.
    The term ``electric'' encompasses electromechanical devices, 
including tools with electronic variable speed features. The term 
``assembled'' includes unfinished or incomplete articles, which have 
the essential characteristics of the finished or complete tool. The 
term ``unassembled'' means components which, when taken as a whole, can 
be converted into the finished or unfinished or incomplete tool through 
simple assembly operations (e.g., kits).
    PECTs have blades or other cutting devices used for cutting wood, 
metal, and other materials. PECTs include chop saws, circular saws, jig 
saws, reciprocating saws, miter saws, portable bank saws, cut-off 
machines, shears, nibblers, planers, routers, joiners, jointers, metal 
cutting saws, and similar cutting tools.
    The products subject to this order include all hand-held PECTs and 
certain bench-top, hand-operated PECTs. Hand-operated tools are 
designed so that only the functional or moving part is held and moved 
by hand while in use, the whole being designed to rest on a table top, 
bench, or other surface. Bench-top tools are small stationary tools 
that can be mounted or placed on a table or bench. They are generally 
distinguishable from other stationary tools by size and ease of 
movement.
    The scope of the PECT order includes only the following bench-top, 
hand-operated tools: cut-off saws; PVC saws; chop saws; cut-off 
machines, currently classifiable under subheading 8461 of the 
Harmonized Tariff Schedule of the United States (HTSUS); all types of 
miter saws, including slide compound miter saws and compound miter 
saws, currently classifiable under subheading 8465 of the HTSUS; and 
portable band saws with detachable bases, also currently classifiable 
under subheading 8465 of the HTSUS.
    This order does not include: professional sanding/grinding tools; 
professional electric drilling/fastening tools; lawn and garden tools; 
heat guns; paint and wallpaper strippers; and chain saws, currently 
classifiable under subheading 8508 of the HTSUS.
    Parts or components of PECTs when they are imported as kits, or as 
accessories imported together with covered tools, are included within 
the scope of this order.
    ``Corded'' and ``cordless'' PECTs are included within the scope of 
this order. ``Corded'' PECTs, which are driven by electric current 
passed through a power cord, are, for purposes of this order, defined 
as power tools which have at least five of the following seven 
characteristics:
    1. The predominate use of ball, needle, or roller bearings (i.e., a 
majority or greater number of the bearings in the tool are ball, 
needle, or roller bearings);
    2. Helical, spiral bevel, or worm gearing;
    3. Rubber (or some equivalent material which meets UL's 
specifications S or SJ) jacketed power supply cord with a length of 8 
feet or more;
    4. Power supply cord with a separate cord protector;
    5. Externally accessible motor brushes;
    6. The predominate use of heat treated transmission parts (i.e., a 
majority or greater number of the transmission parts in the tool are 
heat treated); and
    7. The presence of more than one coil per slot armature. If only 
six of the above seven characteristics are applicable to a particular 
``corded'' tool, then that tool must have at least four of the six 
characteristics to be considered a ``corded'' PECT.
    ``Cordless'' PECTs, for the purposes of this order, consist of 
those cordless electric power tools having a voltage greater than 7.2 
volts and a battery recharge time of one hour or less.
    PECTs are currently classifiable under the following subheadings of 
the HTSUS: 8508.20.00.20, 8508.20.00.70, 8508.20.00.90, 8461.50.00.20, 
8465.91.00.35, 85.80.00.55, 8508.80.00.65 and 8508.80.00.90. Although 
the HTSUS subheading is provided for convenience and customs purposes, 
the written description of the merchandise under review is dispositive.
    This review covers one company, Makita Corporation (``Makita''), 
and the period July 1, 1995 through June 30, 1996.

Level of Trade

    To the extent practicable, we determine NV for sales at the same 
level of trade (LOT) as the U.S. sales (either EP or CEP). When there 
are no sales at the same level of trade, we compare U.S. sales to home 
market (or, if appropriate, third-country) sales at a different level 
of trade. The NV level of trade is that of the starting-price sales in 
the home market. When NV is based on constructed value, the LOT is that 
of the sales from which we derive SG&A and profit.
    For both EP and CEP, the relevant transaction for the level-of-
trade analysis is the sale (or constructed sale) from the exporter to 
the importer. While the starting price for CEP is that of a subsequent 
resale to an unaffiliated buyer, the construction of the CEP results in 
a price that would have been charged if the importer had not been 
affiliated. We calculate the CEP by removing from the first resale to 
an independent U.S. customer the expenses under section 772(d) of the 
Act and the profit associated with those expenses. These expenses 
represent activities undertaken by the affiliated importer. Because the 
expenses deducted under section 772(d) represent selling activities in 
the United States, the deduction of these expenses normally yields a 
different level of trade for the CEP than for the later resale (which 
we use for the starting price). Movement charges, duties, and taxes 
deducted under 772(c) do not represent activities of the affiliated 
importer and we do not remove them to obtain the CEP level of trade.
    To determine whether home market sales are at a different level of 
trade than

[[Page 42752]]

U.S. sales, we examine whether home market sales are at different 
stages in the marketing process than the U.S. sales. The marketing 
process in both markets begins with goods being sold by the producer 
and extends to the sale to the final user, regardless of whether the 
final user is an individual consumer or an industrial user. The chain 
of distribution between the producer and the final user may have many 
or few links, and each respondent's sales occur somewhere along this 
chain. In the United States, the respondent's sales are generally to an 
importer, whether independent or affiliated. We review and compare the 
distribution systems in the home market and U.S. export markets, 
including selling functions, class of customer, and the extent and 
level of selling expenses for each claimed level of trade. Customer 
categories such as distributor, original equipment manufacturer (OEM), 
or wholesaler are commonly used by respondents to describe levels of 
trade, but, without substantiation, they are insufficient to establish 
that a claimed level of trade is valid. An analysis of the chain of 
distribution and of the selling functions substantiates or invalidates 
the claimed levels of trade. If the claimed levels are different, the 
selling functions performed in selling to each level should also be 
different. Conversely, if levels of trade are nominally the same, the 
selling functions should also be the same. Different levels of trade 
necessarily involve differences in selling functions, but differences 
in selling functions, even substantial ones, are not alone sufficient 
to establish a difference in the levels of trade. Differences in levels 
of trade are characterized by purchasers at different stages in the 
chain of distribution and sellers performing qualitatively or 
quantitatively different functions in selling to them.
    When we compare U.S. sales to home market sales at a different 
level of trade, we make a level-of-trade adjustment if the difference 
in levels of trade affects price comparability. We determine any effect 
on price comparability by examining sales at different levels of trade 
in a single market, the home market. Any price effect must be 
manifested in a pattern of consistent price differences between home 
market sales used for comparison and sales at the equivalent level of 
trade of the export transaction. To quantify the price differences, we 
calculate the difference in the average of the net prices of the same 
models sold at different levels of trade. We use the average difference 
in net prices to adjust NV when NV is based on a level of trade 
different from that of the export sale. If there is a pattern of no 
consistent price differences, the difference in levels of trade does 
not have a price effect, and no adjustment is necessary.
    The statute also provides for an adjustment to NV when NV is based 
on a level of trade different from that of the CEP if the NV level is 
more remote from the factory than the CEP and if we are unable to 
determine whether the difference in levels of trade between CEP and NV 
affects the comparability of their prices. This latter situation can 
occur where there is no home market level of trade equivalent to the 
U.S. sales level or where there is an equivalent home market level but 
the data are insufficient to support a conclusion on price effect. This 
adjustment, the CEP offset, is identified in section 773(a)(7)(B) and 
is the lower of the following:
     The indirect selling expenses on the home market sale, or
     The indirect selling expenses deducted from the starting 
price in calculating CEP.
    The CEP offset is not automatic each time we use CEP. The CEP 
offset is made only when the level of trade of the home market sale is 
more advanced than the level of trade of the U.S. (CEP) sale and there 
is not an appropriate basis for determining whether there is an effect 
on price comparability.
    In this review, Makita reported two levels of trade in the home 
market: (1) Sales made at the wholesale/distributor price level; and 
(2) sales made to the retail level. Makita also reported twelve 
channels of distribution for the two levels of trade in the home 
market. Makita based the channels of distribution on which entity 
(i.e., wholesaler, subwholesaler or retailers) in the distribution 
chain Makita had billed or shipped the merchandise to.
    Although Makita described twelve channels of distribution, upon 
review we found that channels 1 through 7 were sales to the wholesale 
LOT, and channels 8 through 12 were at the retail LOT.
    We found that the two home market levels of trade differed 
significantly with respect to selling activities. The level of selling 
activities with respect to the retail sales was much greater than with 
respect to the wholesaler sales. Based on these differences, which have 
been reported as business proprietary, we found that Makita's selling 
activities with respect to the levels of trade for wholesalers and 
retailers in the home market are sufficiently dissimilar to conclude 
that two separate levels of trade exist in the home market (i.e., 
wholesale and retail) (See Analysis Memo from Stephen Jacques to the 
File, July 31, 1997).
    Makita reported only CEP sales in the U.S. market. The CEP sales 
were based on sales made by Makita to its wholly-owned U.S. subsidiary, 
Makita U.S.A. We determined that these sales constitute a single level 
of trade in the United States. Because Makita's sales to the United 
States were all CEP sales made by an affiliated company, we considered 
only the parent company's selling activities reflected in the price 
after the deduction of expenses and profit, pursuant to section 772(d) 
of the Act.
    Based on an analysis of the record evidence, we disagree with 
Makita's assertion that there is no home market level equivalent to the 
CEP level of trade. To determine whether sales in the comparison market 
were at a different level of trade than CEP sales, we examined whether 
the CEP comparison sales were at different stages in the marketing 
process. We made this determination on the basis of a review of the 
distribution system in the two markets, including selling functions, 
class of customer, and the extent and the level of selling expenses for 
each type of sale. Overall, Makita listed fourteen separate selling 
activities which it performed in making sales in both markets in its 
business proprietary chart in Exhibit B-20 of the November 27, 1996 
questionnaire response. The majority (ten) of these selling activities 
were either different in character or intensity between the CEP level 
of trade and the retail and wholesaler levels of trade in the home 
market. However, in comparing the CEP level of trade against both home 
markets levels of trade we found that the CEP level of trade had 
several (six) selling functions that were either identical to the home 
market wholesaler level of trade or differed only in intensity, not in 
character. In contrast, between the CEP level of trade and the retailer 
level of trade in the home market, we found only one selling activity 
that was identical to a CEP selling activity, while most of the 
remaining selling functions were completely different from selling 
activities Makita performed for its CEP sales.
    Based upon this evidence, we have concluded that the differences 
between the channels of distribution for the CEP and the home market 
wholesale level of trade sales are not sufficient to constitute 
different levels of trade. Therefore, to the extent possible, we have 
used sales at the wholesale level of trade for comparison purposes in 
our

[[Page 42753]]

analysis without making a level-of-trade adjustment.
    In addition, we note that in a previous review of this order, the 
Department found, based on verified information, that the wholesale 
level of trade in Japan is equivalent to the CEP level in the United 
States. See Professional Electric Cutting Tools from Japan; Preliminary 
Results of Antidumping Duty Administrative Review, 61 FR 46624, 46626 
(September 4, 1996).
    When we are unable to find sales of the foreign like product in the 
home market at the same level of trade as the U.S. sale, we examine 
whether a level of trade adjustment is appropriate. We make this 
adjustment when it is demonstrated that a difference in level of trade 
has an effect on price comparability. This is the case when it is 
established that, with respect to sales used to calculate NV, there is 
a pattern of consistent price differences between sales made at the two 
different levels of trade. To make this determination, we compared the 
weighted average of Makita's NV prices of sales made in the ordinary 
course of trade at the two levels of trade for models sold at both 
levels as indicated in Makita's Appendix B-21 of the November 27, 1996 
questionnaire response. Because the weighted-average prices were higher 
at one of the levels of trade for a preponderance of the models, we 
considered this to demonstrate a pattern of consistent price 
differences. We based our finding on whether the weighted-average 
prices were higher for a preponderance of sales on the quantities of 
each model sold. See Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from France, et al.: Preliminary Results of 
Antidumping Duty Administrative Reviews, 61 FR 35713 (July 8, 1996). On 
the basis of this analysis, we found that there was a pattern of 
consistent price differences between the two levels of trade in the 
home market. Thus, we made an adjustment to NV for the differences in 
levels of trade when we made our comparison to sales at the retail 
level.
    Makita has requested a CEP offset in this review. Section 
773(a)(7)(B) of the Act establishes that a CEP ``offset'' may be made 
when two conditions exist: (1) NV is established at a level of trade 
which constitutes a more advanced stage of distribution than the level 
of trade of the CEP; and (2) the data available do not provide an 
appropriate basis for a level-of-trade adjustment.
    As we stated in the final results of the recently completed 
administrative review of this product, ``the amended statute permits 
the deduction of indirect selling expenses from NV as a CEP offset only 
when a level-of-trade adjustment is warranted, but the data available 
do not provide an appropriate basis to determine a level of trade 
adjustment.'' See Sec. 773(a)(7)(B). In addition, the SAA clearly 
states that the CEP offset is to be used in lieu of a level of trade 
adjustment. See SAA at 829. In the preliminary results of this review, 
we made a level of trade adjustment to NV in accordance with 
Sec. 773(a)(7)(B). Therefore, we have not made a CEP offset.

Product Comparisons

    In accordance with section 777A(d)(2) of the Act, we calculated 
transaction-specific CEPs for comparison to monthly weighted-average 
NVs. We compared CEP sales to sales in the home market and to 
constructed value (CV).

Constructed Export Price

    For Makita, we based our margin calculation on CEP as defined in 
section 772(b) of the Act because the subject merchandise was first 
sold in the United States after importation into the United States by 
Makita U.S.A., a seller affiliated with Makita. We calculated CEP based 
on packed, delivered prices to the first unrelated purchaser in the 
United States.
    We deducted Japanese and U.S. inland freight, ocean freight, 
insurance, brokerage and handling pursuant to section 772(c)(2) of the 
Act. We also deducted an amount from the price for the following 
expenses in accordance with section 772(d)(1) of the Act, which related 
to economic activities in the United States: commissions, direct 
selling expenses, including credit expenses, and indirect selling 
expenses, including inventory carrying costs. We also made deductions 
for discounts and rebates. Finally, we made an adjustment for profit 
allocated to these expenses in accordance with section 772(d)(3) of the 
Act.

Normal Value

    We compared the aggregate volume of Makita's home-market sales of 
the foreign like product and U.S. sales of the subject merchandise to 
determine whether the volume of the foreign like product Makita sold in 
Japan was sufficient, pursuant to section 773(a)(1)(C) of the Act, to 
form a basis for NV. Because Makita's volume of home-market sales of 
foreign like product was greater than five percent of its U.S. sales of 
subject merchandise, in accordance with section 773(a)(1)(B)(i) of the 
Act, we based NV on the prices at which the foreign like products were 
first sold for consumption in Japan.
    In calculating NV, we disregarded sales of the foreign like product 
to affiliated customers in the home market where we determined that 
such sales were not made at arm's length. To test whether these sales 
were made at arm's length, we compared the starting prices of sales of 
the foreign like product to affiliated and unaffiliated customers net 
of all movement charges, direct selling expenses, discounts and 
packing. Where the price to the affiliated party was on average 99.5 
percent or more of the price to the unaffiliated party, we determined 
that the sale made to the affiliated party was at arm's-length. Where 
no affiliated customer ratio could be constructed because identical 
merchandise was not sold to unaffiliated customers, we were unable to 
determine that these sales were made at arm's length and, therefore, 
excluded them from our analysis. See Final Determination of Sales at 
Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products 
from Argentina, (58 FR 37062, 37077 (July 9, 1993)). Where the 
exclusion of such sales eliminated all sales of the most appropriate 
comparison product based on our model-matching hierarchy, we made 
comparisons to the next most similar model.
    We based home-market prices on the packed, delivered prices to 
affiliated or unaffiliated purchasers in the home market. Where 
applicable, we made adjustments for differences in packing and for 
movement expenses in accordance with section 773(a)(6) (A) and (B) of 
the Act. We also made adjustments for discounts and rebates, and 
differences in cost attributable to the differences in physical 
characteristics of the merchandise pursuant to section 
773(a)(6)(C)(iii) of the Act and 19 CFR 353.56. If appropriate, we made 
circumstance of sale adjustments by deducting home-market direct 
selling expenses and adding U.S. direct selling expenses, except those 
deducted from the starting price in calculating CEP pursuant to section 
772(d) of the Act.
    We based NV on the price at which the foreign like product was 
first sold for consumption in Japan, in the usual commercial 
quantities, in the ordinary course of trade and in accordance with 
section 773(a)(1)(B)(i) of the Act. To extent practicable, we based NV 
on sales at the same level of trade as the CEP sales. If NV was 
calculated at a different level of trade, we made an adjustment, in 
accordance with section 773(a)(7) of the Act. This adjustment is 
discussed further in the Level of Trade section above.

[[Page 42754]]

Cost of Production Analysis

    On December 13, 1996, Black & Decker (U.S.), the petitioner in the 
LTFV investigation, alleged that respondent Makita made home market 
sales of professional electric cutting tools at prices below the cost 
of production (``COP'') during this POR and provided information in 
support those allegations.
    After petitioner's December 1996 allegation, the Department 
published the final results of the second administrative review on 
Professional Electric Cutting Tools from Japan (62 FR 386, January 3, 
1997). In that most recently completed review of Makita, the Department 
disregarded sales by Makita at prices below cost, pursuant to section 
773(b)(1). Because the Department disregarded sales below the COP in 
the last completed review, we have reasonable grounds to believe or 
suspect that sales of the foreign like product under consideration for 
the determination of NV in this review may have been made at prices 
below the COP as provided by section 773(b)(2)(A)(ii) of the Act. 
Therefore, we did not consider petitioner's allegation, but pursuant to 
section 773(b)(1) of the Act, we initiated an investigation to 
determine whether Makita made home market sales during the POR at 
prices below its COP.

A. Calculation of COP

    We calculated the COP based on the sum of the costs of materials 
and fabrication employed in producing the foreign like product, plus 
amounts for home market selling, general and administrative (SG&A) 
expenses and packing costs in accordance with section 773(b)(3) of the 
Act. We relied on the home market sales and COP information provided by 
Makita in their questionnaire responses.

B. Test of Home Market Prices

    After calculating COP, we tested whether home market sales of the 
subject merchandise were made at prices below COP within an extended 
period of time in substantial quantities and whether such prices 
permitted recovery of all costs within a reasonable period of time. We 
compared model-specific COPs to the reported home market prices less 
any applicable movement charges, discounts, rebates and direct selling 
expenses.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of a respondent's sales of a given product are at prices less 
than COP, we do not disregard any below-cost sales of that product 
because we determine that the below-cost sales are not made in 
substantial quantities within an extended period of time. Where 20 
percent or more of a respondent's sales of a given product during the 
POR are at prices less than the COP, we disregard the below-cost sales 
because we find such sales to be made in substantial quantities within 
an extended period and were at prices which would not permit the 
recovery of all costs within a reasonable period of time (see section 
773(b)(2)(D) of the Act). Based on this test, for these preliminary 
results, we disregarded certain of Makita's below-cost sales. Where we 
disregarded all contemporaneous sales of the comparison product based 
on this test, we calculated NV based on CV, in accordance with section 
773(a)(4) of the Act.

Constructed Value

    In accordance with section 773(a)(4) of the Act, we used CV as the 
basis for NV when there were no usable sales of the foreign like 
product in Japan. We calculated CV in accordance with section 773(e) of 
the Act. We included the cost of materials and fabrication, SG&A 
expenses, and profit. In accordance with section 773(e)(2)(A) of the 
Act, we based SG&A expenses and profit on the actual amounts incurred 
and realized by Makita in connection with the production and sale of 
the foreign like product in the ordinary course of trade for 
consumption in Japan. We used the weighted-average home market selling 
expenses.
    Where appropriate, we made adjustments to CV in accordance with 
section 773(a)(6)(C)(iii) of the Act for differences in the 
circumstances of sale (COS). We made COS adjustments by deducting home 
direct selling expenses and adding U.S. direct selling expenses, except 
those deducted from the starting price in calculating CEP pursuant to 
section 772(d) of the Act. Where appropriate we made level of trade 
adjustments pursuant to 773(a)(7)(A).

Duty Absorption

    On December 13, 1996, the petitioner requested that the Department 
examine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides that the Department, if 
requested, shall determine, during an administrative review initiated 
two years or four years after publication of the order, whether 
antidumping duties have been absorbed by a foreign producer or exporter 
subject to the order if the subject merchandise is sold in the U.S. 
through an affiliated importer. As noted above, this proceeding is 
governed by the provisions of the Act as they existed on January 1, 
1995, which includes section 751(a)(4). However, the regulations 
applicable to this proceeding do not address duty absorption. 
Therefore, section 351.701 of the new regulations (19 CFR part 351) 
serves as a statement of the Department's interpretation of the 
requirements of the Act regarding duty absorption.
    Under section 751(c)(6)(C), orders that were in effect on January 
1, 1995, constitute transition orders. Under section 751(c)(6)(D), the 
Department is to treat transition orders, such as the 1993 order at 
issue, as being issued on January 1, 1995. Section 351.213(j)(2) of the 
Department's new antidumping duty regulations provides that the 
Department will make a duty absorption determination, if requested by a 
domestic interested party, for any administrative review initiated in 
1996 or 1998. See Antidumping Duties; Countervailing Duties; Final 
Rule, 62 FR 2295, 27394 (May 19, 1997). The preamble to the antidumping 
regulations explains that reviews initiated in 1996 will be considered 
initiated in the second year and reviews initiated in 1998 will be 
considered initiated in the fourth year. See 62 FR 27318.
    This approach ensures that interested parties will have the 
opportunity for a duty absorption inquiry prior to a sunset review of 
the order under section 751(c) in cases where the second and fourth 
years following issuance of an order have already passed. Because the 
order on professional electric cutting tools from Japan had been in 
effect since 1993, this is a transition order. Therefore, the 
Department will first consider a request for an absorption 
determination during a review initiated in 1996. This being a review 
initiated in 1996, we are making a duty-absorption determination as 
part of this segment of the proceeding.
    The statute provides for a determination on duty absorption if the 
subject merchandise is sold in the United States through an affiliated 
importer. In this case, Makita U.S.A. is the importer of record. Makita 
U.S.A. is wholly-owned by Makita Corporation of Japan. Therefore, the 
importer and exporter are ``affiliated'' within the meaning of section 
751(a)(4). Furthermore, we have preliminary determined that there is a 
dumping margin for Makita on 16.3 percent of its U.S. sales during the 
POR. In addition, we cannot conclude from the record that the 
unaffiliated purchaser in the United States will pay the ultimately 
assessed duty. Therefore, based on these

[[Page 42755]]

circumstances, we preliminarily find that antidumping duties have been 
absorbed by Makita on 16.3 percent of its U.S. sales.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following weighted-average dumping margin exists for the period June 
30, 1995, through July 1, 1996:

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Makita Corporation...........................................       0.50
------------------------------------------------------------------------

    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 44 days after the date of publication or the 
first business day thereafter. Case briefs and/or other written 
comments from interested parties may be submitted not later than 30 
days after the date of publication. Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in those comments, may be 
filed not later than 37 days after the date of publication of this 
notice. The Department will publish the final results of this 
administrative review, including its analysis of issues raised in any 
written comments or at a hearing, not later than 120 days after the 
date of publication of this notice.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. We have 
calculated an importer-specific ad valorem duty assessment rate 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 statutory 
NV and statutory EP or CEP, by the total statutory EP or CEP value of 
the sales compared, and adjusting the result by the average difference 
between EP or CEP and customs value for all merchandise examined during 
the POR).
    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 the 
final results of these administrative reviews, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for Makita will be the 
rate established in the final results of this review (except that no 
deposit will be required for Makita if we find zero or de minimis 
margins, i.e., margins less than 0.5 percent); (2) for previously 
reviewed or investigated companies not listed above, the cash deposit 
rate will continue to be the company-specific rate published for the 
most recent period; (3) if the exporter is not a firm covered in this 
review, a prior review, or the original LTFV investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (4) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be 54.52 percent, the ``All Others'' rate made effective by 
the LTFV investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    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(c)(5).

    Dated: July 31, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-20940 Filed 8-7-97; 8:45 am]
BILLING CODE 3510-DS-P