[Federal Register Volume 62, Number 217 (Monday, November 10, 1997)]
[Notices]
[Pages 60472-60481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29630]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-028]
Notice of Final Results and Partial Recission of Antidumping Duty
Administrative Review: Roller Chain, Other Than Bicycle, From Japan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On May 8, 1997, the Department of Commerce (the Department)
published the preliminary results of its administrative review of the
antidumping duty order on roller chain, other than bicycle, from Japan.
This review covers six manufacturers/exporters of roller chain in Japan
during the period April 1, 1995, through March 31, 1996: Daido Kogyo
Co., Ltd., Enuma Chain Mfg. Co., Ltd., Izumi Chain Manufacturing Co.,
Hitachi Metals Techno Ltd., Pulton Chain Co., Ltd., and R.K. Excel Co.,
Ltd.
We gave interested parties an opportunity to comment on the
preliminary results. Based on our analysis of the comments received, we
have changed our results from those presented in our preliminary
results, as described below in the ``Interested Party Comments''
section of this notice. The final results are listed below in the
section ``Final Results of Review.''
EFFECTIVE DATE: November 10, 1997.
FOR FURTHER INFORMATION CONTACT: Ron Trentham or Jack Dulberger, AD/CVD
Enforcement Group II, Office Four, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-4793 and (202) 482-5505, respectively.
SUPPLEMENTARY INFORMATION:
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 citations to the Department's regulations are to the
regulations codified at 19 CFR Part 353 (April 1, 1997).
Background
On May 8, 1997, the Department published its preliminary results of
review, Notice of Preliminary Results and Partial Rescission of
Antidumping Duty Administrative Review: Roller Chain, Other than
Bicycle, from Japan, 62 FR 25165 (Preliminary Results), of the
antidumping duty order on roller chain, other than bicycle, from Japan
(38 FR 9926, April 12, 1973). Pursuant to the Department's request in
its notice of preliminary results, we received comments on the product
matching characteristics used in the preliminary results from (1) Daido
Kogyo Co., Ltd. (Daido Kogyo); (2) Enuma Chain Mfg. Co., Ltd. (Enuma);
(3) Izumi Chain Manufacturing Co., Ltd. (Izumi); (4) Hitachi Metals
Techno Ltd. (Hitachi); (5) Pulton Chain Co., Ltd. (Pulton); and (6)
R.K. Excel Co., Ltd. (RK) (collectively, the respondents), and the
petitioner on May 22, 1997, and rebuttals to these comments on May 29,
1997. As a result of the preliminary results and pursuant to the
Department's request, Enuma submitted a revised section C questionnaire
response on June 12, 1997. The Department requested additional
information related to this response on June 30, 1997 and on July 10,
1997, Enuma submitted a response that addressed our additional
questions. On July 14, 1997, and July 21, 1997, we received case and
rebuttal briefs from the respondents and the petitioner. At the request
of both petitioner and respondents, we held a hearing on August 1,
1997. The Department has now completed this administrative review in
accordance with section 751(a) of the Act.
[[Page 60473]]
Verification
In accordance with section 782(i) of the Act, we verified the
further manufacturing costs for merchandise produced by Enuma in March
1997. The results of this verification are outlined in the public
version of the verification report on file in room B-099 of the main
Commerce building. (See April 2, 1997 Memorandum to the File from Jack
K. Dulberger and Justin Jee.)
Rescission
In our preliminary results, we determined that during the period of
review (POR), Hitachi did not export the subject merchandise to the
United States. Therefore, as we confirmed with the United States
Customs Service that Hitachi had no shipments of subject merchandise,
we rescinded this review with respect to Hitachi in accordance with
section 351.213 of the regulations. See Preliminary Results at 25165.
Scope of Review
The merchandise subject to this review is roller chain, other than
bicycle, from Japan. The term ``roller chain, other than bicycle,'' as
used in this review, includes chain, with or without attachments,
whether or not plated or coated, and whether or not manufactured to
American or British standards, which is used for power transmissions
and/or conveyance. This chain consists of a series of alternately-
assembled roller links and pin links in which the pins articulate
inside from the bushings and the rollers are free to turn on the
bushings. Pins and bushings are press fit in their respective link
plates. Chain may be single strand, having one row of roller links, or
multiple strand, having more than one row of roller links. The center
plates are located between the strands of roller links. Such chain may
be either single or double pitch and may be used as power transmission
or conveyor chain. This review also covers leaf chain, which consists
of a series of link plates alternately assembled with pins in such a
way that the joint is free to articulate between adjoining pitches.
This review further covers chain model numbers 25 and 35. Roller chain
is currently classified under the Harmonized Tariff Schedule of the
United States (HTSUS) subheading 7315.11.00 through 7619.90.00.
Although the HTSUS subheadings are provided for convenience and Customs
purposes, the written description remains dispositive.
Changes Since the Preliminary Results
We have made the following changes in these final results:
1. We have returned to the model match methodology of constructing
a concordance based on the model code numbering reported by
respondents, which we have used in prior segments of this proceeding.
See Comment 1 below.
2. We have calculated a dumping margin using Enuma's original HM
sales questionnaire response and its June 12, 1997, U.S. sales
questionnaire response. See Comment 2 below.
3. With regard to Enuma's and Daido Koyo's unmatched U.S. sales, we
have selected an adverse FA of 43.29 percent. See Comment 2 below.
4. We have removed the commission offset adjustment from Daido
Koyo's margin calculation program for these final results. See Comment
4 below.
5. With regard to those U.S. sales for which Izumi did not report
constructed value (CV) information, we have selected a non-adverse FA
rate as described in Comment 2 below.
Interested Party Comment
Comment 1: Model Matching
The petitioner maintains that the Department should consider the
extensive model match comments submitted on May 22 and 29, 1997, and
articulate objective model matching criteria that will apply to all
respondents in this and future roller chain proceedings. The petitioner
argues that the respondents should no longer be permitted to provide
company-specific codes in lieu of the model match data requested by the
Department. Furthermore, the petitioner argues that individual
respondents are not allowed to add company-specific model matching
criteria absent full opportunity for comment from all other parties.
According to the petitioner, any subsequent changes to product matching
criteria should be applicable to all respondents.
The petitioner argues that should the Department adopt different
model matching criteria than those used in the preliminary results,
programming errors, which did not appear in the preliminary results,
may occur for the first time. As a result, the petitioner contends that
the Department should allow for a ``pre-final'' disclosure for all
parties in order to review the revised computer programs and printouts.
The petitioner maintains that, in order to do so, the Department could
delay publication of the final results, pending analysis by the
parties, or the Department could publish a tentative final results
which would become final unless modified by a certain date.
The petitioner maintains that it would be appropriate to supplement
the three-factor product matching test used in the preliminary results
with the following nine factors: Pitch length, roller width, roller
diameter, pin diameter, pin length, link height/length, link plate
thickness, average strength, and average weight. The petitioner also
states that additional computer fields should be added to address
attachment chain. However, the petitioner asserts that none of the
respondents have met their burden of persuasion with respect to the
expansion of the Department's three-part ``most similar'' merchandise
test. Therefore, the petitioner contends that we should continue using
the three-factor model match test for the final results.
Izumi contends that the Department, in order to identify identical
matches, should use actual product model numbers instead of the
methodology adopted in the preliminary results. Izumi further argues
that in matching non-identical merchandise, the Department should use
multiple physical characteristics. Izumi contends that characteristics
in addition to the three-factor model match used in the preliminary
results, as well as application of the 20 percent difference-in-
merchandise (DIFMER) test is required in order to reasonably and
accurately identify product matches. Izumi additionally argues that,
were the Department to use price-to-price comparisons for purposes of
the final results, then the Department's revised product matching
methodology would result in erroneously matched merchandise.
Daido Kogyo argues that the Department's revised product matching
methodology employed in the preliminary results significantly distorts
the dumping margin calculations for Daido Kogyo. Daido Kogyo points
out, for example, that this methodology groups physically diverse chain
together as a unique product.
Daido Kogyo argues that the Department, in revising the product
matching methodology, violated the antidumping statute and the
Department's past practice. First, Daido Kogyo argues that the
Department changed its longstanding product matching methodology at a
point in the current proceeding where Daido Kogyo had no opportunity to
comment on, or comply with, this policy change. Second, Daido Kogyo
asserts that the Department made this matching methodology change
without providing Daido Kogyo an opportunity to remedy or explain its
deficiency, in violation of 19 U.S.C. 1677m (d). Third, Daido
[[Page 60474]]
Kogyo argues that the Department's matching methodology change
constituted a new policy, rule, or practice requiring notice and
hearing in order to provide all respondents with an opportunity to
comment early on in the proceeding, under the Administrative Procedure
Act (APA)(5 U.S.C. 533(b)).
RK states that the model match methodology adopted by the
Department in its preliminary results is a radical departure from the
longstanding and consistent method that the Department has used for
nearly a decade in this proceeding. RK argues that this new method for
defining identical merchandise is a fatally imprecise means of
comparing motorcycle chains. According to RK, the Department's new
model match methodology fails to consider the uniqueness of each
motorcycle chain sold by RK, and it ignores many product
characteristics that are essential for defining identical merchandise.
Moreover, RK contends that applying the new methodology to comparisons
of similar merchandise also radically departs from the Department's
``traditional method'' of defining the most similar product, as
exemplified by the method followed in the 1989-1990 POR, which took
into account numerous criteria beyond the three used in the preliminary
results. See, e.g., Antidumping Questionnaire, POR April 1, 1989
through March 31, 1990, Appendix I; Appendix V, (July 27, 1990)
(Questionnaire 1989-1990). RK maintains that under the Department's
proposed method, essentially there can be no ``similar'' motorcycle
chains; they are virtually all one identical match.
In short, RK asserts that the Department's proposed model match
methodology changes are not reasonable. According to RK, these proposed
changes penalize RK and other respondents by creating margins where
none exist. RK submits that the Department must abandon its newly
proposed model matching methodology and, for this review, continue to
use the previously unquestioned, longstanding model matching
methodology for defining identical and similar merchandise that it has
always used in prior segments of this proceeding.
DOC Position
We agree in part with all parties regarding the issue of additional
model match criteria. For purposes of calculating normal value (NV),
section 771(16) of the Act defines ``foreign like product'' as
merchandise which is either (1) identical or (2) similar to the
merchandise sold in the United States. See section 771(16); see also 19
CFR 351.411(a). In cases where we do not find that the identical
products were sold in the home or other foreign market, we will then
identify, using a product matching methodology, the product sold in the
foreign market that is most similar to the product sold in the United
States. See section 773 (a)(6)(C)(ii) of the Act.
In identifying which physical characteristics should be given the
most weight in our determination of appropriate product comparisons, we
consider comments from all parties. We then develop a product matching
methodology based on the physical characteristics of the merchandise.
This process is designed to give the parties a predictable and accurate
basis for determining possible product matches in current as well as
future administrative reviews. (See, e.g., Tapered Roller Bearings and
Parts Thereof, Finished or Unfinished, from Japan, (52 FR 30700, 30703,
August 17, 1987) (Tapered Roller Bearings)). Further, for those non-
identical or most similar products which are identified based on the
Department's product matching criteria, we make a DIFMER adjustment to
the home market (HM) sales price to account for the actual physical
differences between the products sold in the United States and the home
market. See id.
As background to our position in the present review, we note that
prior to the 1992-1993 POR, the Department used a model match
methodology based on multiple matching criteria. (See, e.g.,
Questionnaire 1989-1990) (using thirteen-factor model match).
Commencing in the 1992-1993 POR, we shifted to a different methodology
based on only three characteristics, allowing each respondent to
provide its own product concordance (See, e.g., Notice of Final Results
of Antidumping Administrative Review, and Determination not to Revoke
in Part: Roller Chain, other than Bicycle, from Japan 62 FR 64322,
(December 4, 1996) (Final Results 1994-1995) (using three-factor model
match).
The respondents have, in their comments in the present review,
characterized our post-1992-1993 approach as a ``traditional method.''
We disagree and note that there have been two model match methodologies
used in previous segments of this proceeding.
Regarding the present review, as we explained in our preliminary
results, where we found no sales of identical merchandise in the home
market to compare to U.S. sales, we compared U.S. sales to the next
most similar foreign like product, based on the three product
characteristics stated in the antidumping questionnaire, listed in
order of importance: (1) type of roller chain (e.g., industrial, leaf,
or motorcycle); (2) number of strands (e.g., single, etc.); and (3)
finish (e.g., carbon steel, etc.), (i.e., the three-factor model match
test). See Antidumping Questionnaire, POR April 1, 1995 through March
31, 1996, Sections B and C (June 20, 1996) (Questionnaire 1995-1996).
Our questionnaire instructed the respondents to provide data
regarding the three product characteristics specified above for all
reported U.S. and HM sales, and informed the respondents that they
could report additional product characteristics which they believed the
Department should consider in performing product comparisons. The
questionnaire further instructed any respondent that chose to report
additional product characteristics to describe why it believed the
Department should consider the additional characteristics in defining
identical and similar merchandise. (See Questionnaire 1995-1996 at B-6
and C-6).
As we explained in our preliminary results, it was apparent to us
from the model match databases submitted by all respondents that they
had considered product characteristics beyond the three in the
Department's questionnaire. However, based on their questionnaire
responses, no additional product characteristics were specifically
identified by Daido Kogyo, Enuma, or Izumi. See Preliminary Results at
25167. Thus, we were unable to determine what additional
characteristics these respondents relied upon in identifying unique
products. Although RK identified additional product characteristics in
its questionnaire response, it did not explain why it believed the
Department should consider these additional characteristics in
identifying identical and similar merchandise in this review. See id.
Consequently, we rejected the parties' model match databases based
on our determination that it was appropriate to make the analysis in
this proceeding consistent with the Department's current practice of
defining identical and similar merchandise based only on the product
characteristics outlined in the antidumping questionnaire. Id.
In our preliminary results, we also requested interested parties to
comment on the matching criteria enumerated in the questionnaire and to
provide comments on whether we should consider additional criteria
beyond the three used in the preliminary results. We further requested
that the comments include explanations as to why a
[[Page 60475]]
proposed characteristic is essential in defining identical and similar
merchandise, how the product characteristics relate to both the cost of
manufacturing and the selling price of the merchandise, and how the
product characteristic has been captured in the respondent's reported
product control numbers. See Preliminary Results at 25167-68.
Based on the written comments submitted, the hearing, and previous
segments of this proceeding, we believe that additional product
characteristics should be considered beyond the three-factor model
match test in order to properly identify identical and similar
merchandise. To continue to rely on the three-factor model match
methodology used in our preliminary results would in some cases yield
absurd results in terms of product matching, as it would group
physically diverse chain together as identical or similar merchandise.
For these reasons, for these final results, we return to the model
match methodology of constructing a concordance based on the model code
numbering originally reported by respondents, which we have used in
prior segments of this proceeding. This is consistent with the model
match methodology used in the last three reviews. See, e.g., Final
Results 1994-1995 at 64327.
With respect to Izumi's comment that the Department's possible use
of price-to-price comparisons for these final results would cause
erroneous results, we note that our decision to use constructed value
(CV) as the basis for NV for Izumi in these final results renders
Izumi's comment moot. See ``DOC Position'' to ``Comment 2: Izumi,''
below.
Further, with respect to the petitioner's request that we provide a
``pre-final'' disclosure for all parties in this review in order to
review the computer programs and printouts, we note that it is our
practice after issuing the final results to afford disclosure to any
party to the proceeding who files such a request within five business
days of the date of publication of the relevant final results. See 19
CFR Secs. 353.22 (c)(9) and 353.28. Parties receiving disclosure are
required to submit comments concerning ministerial errors within five
business days of either the date of release of disclosure documents or
the date of any disclosure meeting, whichever is earlier. See id.
However, since we are reverting to the model-match methodology that we
used in the three prior reviews, we are using programming language that
has already been reviewed for accuracy by all parties. Therefore, we
are not persuaded that we should depart from our normal practice.
Finally, we intend to use the model match comments we have received
in this proceeding as a starting point for determining the appropriate
model match methodology to be employed in future reviews. In
particular, we intend to carefully revisit the three-factor model match
with a view toward supplementing it with additional relevant factors in
order to arrive at a proper methodology for use in future reviews.
Comment 2: Facts Available
Izumi
The petitioner disagrees with the Department's characterization
that Izumi acted to the best of its ability to comply with the
Department's information requests regarding its downstream HM sales.
The petitioner argues that the Department should have applied adverse
facts available (FA) to Izumi because Izumi's affiliated home market
reseller's refusal to supply relevant data must be treated as a refusal
by Izumi itself, given that this reseller is affiliated with Izumi.
Moreover, the petitioner argues that accepting Izumi as cooperative
could allow foreign manufacturers to ``screen out'' high-priced HM
sales from the calculation of NV simply by telling affiliated resellers
not to respond, as there would be no penalty to the respondent.
Therefore, the petitioner maintains that the Department erred in using
CV to calculate Izumi's margin given that Izumi had sought to have its
margin based on CV comparisons.
Further, the petitioner argues that if the roller chain sold to the
affiliated reseller was ultimately resold to U.S. customers, those
sales must be reported and used in the calculation of Izumi's margin.
The petitioner maintains that the Department should require the
affiliated reseller to certify whether or not it resold Izumi chain to
the United States. If there were such sales, they must be reported. If
the affiliated reseller refuses to provide the information, petitioner
states that this should be taken into account when determining whether
it is appropriate to assign adverse FA to Izumi. In this case, given
the nature of the affiliation between Izumi and the reseller and the
significance of the data to the overall calculation of Izumi's margin,
the petitioner argues that an adverse inference is fully warranted.
Specifically, as adverse FA, the petitioner contends that the
Department should assign Izumi a margin of 43.29 percent, the highest
rate ever calculated for a party subject to the roller chain finding.
In addition, the petitioner expresses its concern that a portion of
the Izumi chain sold to the affiliated reseller has been resold to the
United States. Therefore, the petitioner requests the Department to
seek confirmation from the affiliated reseller that it did not resell
Izumi roller chain to the United States during the POR. The petitioner
contends that a non-response from the affiliated reseller should be
taken into account when determining whether to assign an adverse FA
margin to Izumi. In addition, the petitioner advocates that the
Department apply the highest possible margin, 43.29 percent, as adverse
FA in these final results.
Izumi contends that the Department's decision to use FA was neither
reasonable nor necessary since Izumi neither possessed the data nor
could compel the affiliated customer to provide it to the Department.
Izumi contends that it lacks control over this customer whose actions
cannot be legally attributed to Izumi. Izumi asserts that this refusal
to provide the sales data cannot be interpreted as a refusal by Izumi
itself. Further, Izumi argues that since the petitioner's request for
review for the period of review 1996-1997 expressly designated this
affiliated customer as a reseller, this precludes the Department from
considering Izumi to be the actual seller.
If the Department persists in using FA for Izumi's sales, Izumi
contends that it cooperated to the best of its ability and that no
adverse inference is warranted. Izumi points to the Department's final
determination in the 1994-1995 POR, where the Department found, in
light of similar facts, that Izumi had acted to the best of its ability
with respect in its attempts to obtain this sales data. (See Final
Results 1994-1995 at 64324).
Assuming that the Department continues to use non-adverse FA, Izumi
contends that the Department should continue to use CV or to select an
alternative rate based on sales to its unaffiliated customers.
Izumi argues that the petitioner's claim that Izumi sold
merchandise to the affiliated customer destined for the United States,
or with knowledge that it was so destined, has no basis in the current
record and amounts to speculation. Izumi asserts that no record
evidence exists that it had knowledge of the ultimate destination of
any of its HM sales. Izumi points to the Department's previous final
determinations where, based on similar facts, we found the same
allegations by petitioner to be unsupported. (See Notice of Final
Results of Antidumping Duty
[[Page 60476]]
Administrative Review: Roller Chain, other than Bicycle, from Japan 58
FR 52264, October 7, 1993; and Final Results 1994-1995). Izumi further
argues that its sales of merchandise to the affiliated customer,
contrary to the petitioner's contention, do not constitute constructed
export price (CEP) or export price (EP) sales based on the current
record.
Izumi argues that the petitioner's request that Izumi's affiliated
customer certify that it did not sell merchandise purchased from Izumi
to the United States is, contrary to the petitioner's contention,
neither legally supported nor required by the Department's previous
practice.
DOC Position
We disagree with both the petitioner and Izumi. Although in the
preliminary results we characterized our use of CV as FA, it is more
appropriate to characterize the use of CV as merely a sequential step
in the choice of the appropriate basis for NV. Section 773(a)(5) of the
Act authorizes the Department to determine NV by using the prices at
which foreign like products are sold by an affiliated party to
unaffiliated customers (i.e., the prices of downstream sales). As we
explained in the preliminary results, the total quantity of Izumi's
sales to unaffiliated parties during the POR was extremely small, a
significant portion of Izumi's total HM sales was to an affiliated
reseller, and certain models were sold only to this affiliated
customer, resulting in an insufficient number of unaffiliated party
sales to provide a meaningful comparison to affiliated party sales. See
Preliminary Results at 25170. In other words, we concluded that the
small number of Izumi's remaining HM sales to unaffiliated customers
did not provide a sufficient basis on which to test whether sales to
the affiliated reseller were made at arm's-length prices. As explained
below, we next attempted to obtain downstream sales. Only after
concluding that Izumi was unable to compel its affiliated customer to
provide this information, we excluded all HM sales from the calculation
of NV and calculated NV based on CV in accordance with section
773(a)(4) of the Act. See id.
Section 776(b) of the Act requires that if an interested party
fails to cooperate by not acting to the best of its ability to comply
with the Department's request for information, the Department may use
an adverse inference in selecting from the facts otherwise available.
Here, however, upon examining the circumstances surrounding Izumi's
failure to provide HM downstream sales information, we disagree with
the petitioner's characterization of Izumi as non-cooperative. In the
preliminary results, we noted that Izumi did make attempts to obtain
this sales information from its affiliated customer and otherwise
complied with all of the Department's information requests. Id. In our
view, the record supports Izumi's claim that, despite its efforts, it
was not in a position to compel the affiliated customer to produce the
information requested by the Department. See the April 30, 1997
Memorandum from Holly A. Kuga to Jeffrey P. Bialos, regarding the
application of FA. As a result, for these final results we are
satisfied that Izumi acted to the best of its ability to comply with
the Department's requests for information.
Finally, there is no evidence on the record to indicate that
merchandise Izumi sold to its affiliated customer was subsequently
resold to the United States, or that Izumi had knowledge that such
merchandise was destined for export to the United States. However, we
are putting Izumi on notice that we intend to review this issue, as
well as Izumi's affiliations, more closely in the next administrative
review, if additional information comes to light.
In conducting our margin calculations for Izumi for these final
results, we discovered a number of sales to the United States for which
there was no matching CV model information. Since Izumi did not provide
this CV information, we are unable to calculate a margin for Izumi's
unmatched U.S. sales and must use the facts available, in accordance
with section 776(a) of the Act. We received no comments from interested
parties on this issue. We did not alert Izumi to the deficiency in its
response pursuant to section 782(d) and we therefore have not applied
an adverse inference as FA. As FA for the unmatched U.S. sales at
issue, we have applied the weighted-average margin calculated for
Izumi's U.S. sales for which CV data was reported (i.e., 2.66 percent).
Pulton
The petitioner argues that due to Pulton's continued refusal to
provide requested DIFMER information and because Pulton's own model
match test was deficient, the Department was fully justified in
concluding that Pulton's response was so incomplete that it could not
serve as a reliable basis for the Pulton margin determination.
Therefore, the petitioner argues that the Department should continue to
assign Pulton a margin of 43.29 percent. In addition, regarding
corroboration of this margin, the petitioner states that the Department
need only satisfy itself that the margin has probative value. The
petitioner contends that Pulton's assertion that the 43.29 percent
margin is not a final properly calculated rate is a reiteration of
arguments raised and rejected in the 1993-1994 administrative review.
Pulton states that the Department should use the information
submitted in its questionnaire response to perform margin calculations.
According to Pulton, if the five factors listed in Section 782(e) of
the Act are satisfied, the Department may not decline to consider the
information submitted by a respondent which is in some way deficient.
Pulton submits that as these conditions were met in this case, the
Department was not justified in disregarding its questionnaire
response.
Further, Pulton maintains that if the Department does not use the
information contained in its questionnaire response, then it should not
use an adverse inference in selecting FA. According to Pulton, Section
776(b) of the Act permits the Department to use an adverse inference in
applying FA only if the Department finds that an interested party has
failed to cooperate by not acting to the best of its ability to comply
with a request for information. Pulton asserts that the facts of this
review demonstrate that it did cooperate to the best of its ability and
that the Department's use of adverse inference in applying FA is not
warranted.
Moreover, Pulton contends that if the Department does use an
adverse inference it should not use the 43.29 percent rate because the
rate has no probative value. Pulton states that the Department's
decision memorandum, dated April 15, 1997, explains that in
corroborating secondary information the Department examines the
reliability and the relevance of the information used. Pulton argues
that the 43.29 percent rate is neither reliable nor relevant. It states
that it is not reliable because the rate was not a final properly
calculated rate and that it is not relevant because the rate is not
indicative of commercial practices in the roller chain industry.
DOC Position
We disagree with Pulton that it has satisfied the five factors
listed in Section 782(e) of the Act. Section 782(e) states inter alia
that the Department shall not decline to use information in reaching a
determination if ``the information is not so incomplete that it cannot
serve as a reliable basis for reaching the applicable determination''
and if the ``interested party has demonstrated that it acted to the
best of its ability in providing the
[[Page 60477]]
information and meeting the requirements established by the Department
with respect to the information.'' Section 782(d) requires that before
the Department declines to consider information that the Department
notify the person submitting the information of the nature of the
deficiency and, to the extent practicable, provide that person with an
opportunity to remedy or explain the deficiency.
In this case, the information provided by Pulton is so incomplete
that it cannot serve as a reliable basis for our determination. Pulton
did not report its sales of all HM models. On several occasions, we
notified Pulton of the deficiencies in its response, requested the
DIFMER for the unreported HM sales, and provided Pulton with the
opportunity to provide the information. On each occasion Pulton failed
to provide the requested data, declined to provide an explanation for
the deficient nature of its responses, and failed to provide the
Department with any suggested alternatives for the requested data. See
Preliminary Results at 25166. In accordance with Section 782(e) of the
Act, Pulton's failure to report the DIFMER data requested by the
Department, despite several warnings by the Department regarding the
consequences of such an action and despite the Department granting
Pulton several opportunities to remedy the deficiencies, authorizes the
Department to decline to use Pulton's response.
Pulton's failure to provide the requested DIFMER data has left the
Department without information which is essential to our determination.
We do not have complete information on sales of identical merchandise
and are unable to determine whether any of Pulton's unreported HM
models passed the Department's 20 percent DIFMER test. Pulton also did
not provide CV information. All of this information, which Pulton was
in control of, is vital to our dumping calculations because it is
required in order to calculate NV. See Antifriction Bearings (Other
Than Tapered Roller Bearings) and Parts Thereof From France, et. al. 62
FR 2081, 2088 (January 15, 1997) (AFBs VI). For these reasons, we are
compelled to apply FA to Pulton as the Department cannot be left with
trying to make its determinations based only on the information that
the respondent chooses to provide. See Olympic Adhesives Inc. v. United
States, 899 F.2d 1565, 1571-72 (Fed. Cir. 1990).
We also disagree with Pulton's argument that the Department should
not use an adverse inference in selecting FA. Section 776(b) of the Act
provides that adverse inferences may be used against a party that has
failed to cooperate by not acting to the best of its ability to comply
with requests for information. As discussed, Pulton has failed to
cooperate to the best of its ability in this review. Although Pulton
requested that it be allowed to disregard Section B of the
questionnaire asking for HM sales, the Department informed Pulton that
it should respond to this portion of the questionnaire and that failure
to do so would be at its own risk. (See Memorandum to the File from Ron
Trentham, July 26, 1996). Additionally, the questionnaire asked Pulton
to provide DIFMER data for its home sales. As established above, this
is an integral element of the questionnaire because this information is
necessary for the Department to confirm which U.S. and HM sales match.
Further, this is a standard element of the questionnaire and requests
information which Pulton should have expected it would be asked to
provide, given its participation in numerous roller chain reviews. See
AFBs VI, at 2088. Nevertheless, as Pulton asked the Department if it
could simplify its reporting requirements because it might be
overburdened in meeting its full reporting requirements, the Department
did offer Pulton an alternative. Specifically, the Department submitted
to Pulton a list of specific model numbers and advised Pulton that, at
a minimum, it should report the DIFMER data for these models. See
Department Letter to Pulton, February 5, 1997. The number of models the
Department submitted was substantially less than the number of models
Pulton sold in the home market, significantly reducing Pulton's
reporting burden. Pulton, however, failed to provide even this
information. Its failure to cooperate with even this minimal request
cannot be characterized as acting to the best of its ability.
Moreover, we disagree with Pulton's contention that the Department
should not use the 43.29 percent rate as adverse FA because it has no
probative value. Because the FA information which we are using in this
review constitutes secondary information, we are required under section
776(c) of the Act to corroborate, to the extent practicable, the facts
available from independent sources reasonably at our disposal. The
Statement of Administrative Action (SAA) provides that ``corroborate''
means simply that the Department will satisfy itself that the secondary
information to be used has probative value. (See SAA at 870). To
corroborate the secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. The only source for calculated
margins is administrative determinations. Thus, in an administrative
review, if the Department chooses as total adverse facts available a
calculated dumping margin from a prior segment of the proceeding, it is
not necessary to question the reliability of the margin for that time
period. With respect to the relevance aspect of corroboration, however,
the Department will consider information reasonably at its disposal as
to whether there are circumstances that would render a margin not
relevant. Where circumstances and facts indicate that the selected
margin is not appropriate as adverse facts available, the Department
will disregard the margin and determine an appropriate margin. See
Fresh Cut Flowers From Mexico; Final Results of Antidumping
Administrative Review, 61 FR 6812 (June 18, 1996).
In the instant case, the Department is satisfied that the 43.29
percent adverse FA rate is relevant to the current period. It is a
final calculated rate affirmed by the Court of International Trade. See
Roller Chain, Other Than Bicycle, From Japan; Preliminary Results of
Administrative Review of Antidumping Finding, 46 FR 17068, 17070 (March
17, 1981); Roller Chain, Other Than Bicycle, From Japan; Final Results
of Administrative Review of Antidumping Finding, 46 FR 44488 (September
4, 1981); Roller Chain, Other Than Bicycle, from Japan; Final Results
of Antidumping Administrative Review, 52 FR 18004 (May 13, 1987);
Roller Chain, Other Than Bicycle, from Japan; Final Results of
Antidumping Duty Administrative Review, 57 FR 43697 (September 22,
1992); Sugiyama Chain Co., Ltd., v. United States, 852 F. Supp. 1103,
1114 (CIT 1994). The 43.29 percent inarguably relates to past practices
in the industry as it is an actual margin of dumping found to have
existed in the roller chain industry. Pulton has provided the
Department with no evidence that would call into question the relevance
of this rate. Absent such evidence, the 43.29 percent rate represents
an appropriate adverse inference regarding the level of dumping during
the current period. Furthermore, in employing adverse inferences, the
SAA authorizes the Department to consider the extent to which a party
may benefit from its own lack of cooperation. SAA at 870. The
[[Page 60478]]
Department concludes that assigning a 43.29% rate to Pulton will
prevent it from benefitting from its failure to respond to the
Department's requests for information. In sum, the Department is
satisfied that it has met the corroboration requirement of section
776(c) and can apply this rate to Pulton as adverse FA in this review.
Enuma
Enuma argues that the Department should not use a FA dumping margin
in its final determination. Rather, the Department should calculate a
dumping margin for Enuma using either the November 15, 1996, Daido
Tsusho and Daido Corporation U.S. sales questionnaire response or the
June 12, 1997, Enuma U.S. sales questionnaire response. According to
Enuma, the Department now has the information on the record to
calculate dumping margins regardless of whether the Department
determines that Enuma and Daido Tsusho are affiliated or unaffiliated.
Enuma contends that the condition which the Department relied on to use
FA in the preliminary determination, i.e., necessary information is not
available on the record, no longer exists.
Further, Enuma points out that in the notice of preliminary
results, the Department expressed concern over the possible integrity
of Enuma's post-preliminary results submission. According to Enuma
there are three reasons why the integrity of this submission should be
no more in doubt than the integrity of any other documents submitted by
Enuma or any other respondent prior to the preliminary determination.
First, Enuma has provided the corporate and attorney certification as
to the accuracy of its June 12, 1997, response. Second, the June 12,
1997, submission is potentially subject to verification. Third, all
adjustment data submitted with the June 12, 1997, submission has been
previously included in one of the earlier questionnaire responses and
was potentially subject to verification as part of the earlier
questionnaire responses, as well as part of the June 12, 1997,
submission.
Based on Enuma's response to issues raised in the petitioner's case
brief, the petitioner now concurs that the Department should calculate
an actual margin for Enuma rather than applying FA.
DOC Position
We agree with Enuma and have calculated a dumping margin for this
final determination using Enuma's original HM sales questionnaire
response and its June 12, 1997, U.S. sales questionnaire response. In
our preliminary determination, we found that Enuma is not affiliated
with either Daido Tsusho or Daido Corporation and stated that we
believed that the appropriate U.S. transactions to be reviewed were
those between Enuma and Daido Tsusho. Section 776(a) of the Act
authorizes the Department, subject to section 782(d), to use FA when
necessary information is not available on the record. Given that Enuma
had not reported its sales to Daido Tsusho in the U.S. sales listing,
we could not calculate United States price with respect to Enuma.
Therefore, we were compelled to use FA. However, because we did not
specifically request that Enuma provide this data in its supplemental
questionnaires, we applied non-adverse FA.
Subsequently, we requested that Enuma report all U.S. sales made to
Daido Tsusho, and provide additional explanations and/or clarifications
regarding the nature of the affiliation and any forms of control
between these companies. Based on our analysis of Enuma's submissions
of June 12, 1997 and July 10, 1997, we have determined for purposes of
the final results that the appropriate U.S. transactions to be reviewed
are those between Enuma and Daido Tsusho.
We used EP in accordance with subsections 772(a) of the Act because
the subject merchandise was sold directly to the first unaffiliated
purchaser in the United States prior to importation and CEP methodology
was not otherwise warranted based on the facts of the record. We
calculated EP based on packed prices to the first unaffiliated customer
in the United States. In accordance with section 772(c)(2)(A) of the
Act, we made a deduction for inland freight plant/warehouse to
customer.
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 HM sales of the foreign like product
to the volume of U.S. sales of the subject merchandise in accordance
with section 773(a)(1) (B) and (C) of the Act. Since respondent's
aggregate volume of HM sales of the foreign like product was greater
than five percent of its aggregate volume of U.S. sales for the subject
merchandise, we based NV on HM sales.
We made deductions, where appropriate, from the starting price for
inland freight. In addition, we made a circumstance-of-sale adjustment
for credit in accordance with section 773(a)(6)(C)(iii) of the Act. We
deducted HM packing costs and added U.S. packing cost in accordance
with sections 773(a)(6) (A) and (B) of the Act.
Sales to an affiliated customer in the home market which were
determined not to be at arm's-length were excluded from our analysis.
To test whether these sales were made at arm's-length, we compared the
starting prices of sales of comparison products to affiliated and
unaffiliated customers, net of all movement charges, direct and
indirect selling expenses, discount, and packing. Pursuant to 19 CFR
353.45(a) and in accordance with our practice, where the price to the
affiliated party was less than 99.5 percent or more of the price to the
unaffiliated party, we determined that the sales made to the affiliated
party were not at arm's-length. See Final Results 1994-1995 at 64322,
64327.
In our initial questionnaire, we stated that if for each product
Enuma sold during the POR to the United States it sold the identical
product in the comparison market, it was not necessary to supply
information regarding the DIFMER. However, we also stated that if Enuma
elected not to supply this information and we later determined for any
reason that a United States sale should be compared to a sale of a
similar product in the comparison market, we might have to resort to
FA. In response, Enuma stated that it believed that a matching HM model
existed for every U.S. model. In a supplemental questionnaire dated
February 13, 1997, we again informed Enuma that if we determined that
there was not a contemporaneous sale in the home market of an identical
model for every model of chain sold in the United States, or that these
sales could not be used as a basis for NV for any reason, and Enuma
failed to report its HM sales of the most similar merchandise, we may
apply FA in making our determinations. Enuma provided no response
except to state that no answer was required. Further, we noted that
Enuma had not reported CV for any of the models sold in the United
States during the POR and we subsequently informed Enuma that if it
chose not to report CV and we were unable to make price-to-price
comparisons for any reason, we might apply FA in making our
determinations. Enuma responded again that no answer was required.
Moreover, in its revised section C response submitted to the Department
on July 10, 1997, Enuma failed to provide DIFMER claiming that it had
made sales in Japan of roller chain identical to that which it sold in
the United States during the POR. However, contrary to Enuma's claims,
in conducting our margin calculations for Enuma we discovered a number
of sales
[[Page 60479]]
to the United States for which there were no contemporaneous sales of
identical merchandise in the home market.
Since Enuma failed to provide DIFMER information and did not
provide CV information, we are unable to calculate a margin for Enuma's
unmatched U.S. sales. Therefore, we are compelled to use FA with regard
to these sales for purposes of the final results.
Enuma's failure to report DIFMER data, information which it
controlled, despite our request for that information and our warnings
regarding the consequences of such an action, demonstrates that Enuma
failed to cooperate to the best of its ability in this review. Thus, in
accordance with 776(b), in selecting among the FA for Enuma, an adverse
inference is warranted. As FA we have selected 43.29 percent, which we
established above in the FA section regarding Pulton. This rate
represents the highest calculated rate for any respondent from any
prior segment of this proceeding and, for the reasons stated above in
the FA section regarding Pulton, meets the corroboration requirements
of section 776(c) of the Act.
Daido Kogyo
The initial questionnaire and supplemental questionnaire which we
sent to Daido Kogyo were identical to those sent to Enuma as described
above. In response to our initial questionnaire, Daido Kogyo stated
that it believed that a matching HM model existed for every U.S. model.
In response to our supplemental questionnaire dated February 13, 1997
requesting DIFMER data, Daido Kogyo responded that no answer was
required. Finally, in response to our May 19, 1997 letter requesting
DIFMER data, Daido Kogyo declined to provide this data, stating that it
believed that there would be few, if any, unmatched U.S. sales. Similar
to our notice to Enuma, we notified Daido Kogyo that we may have to
apply FA in making our determinations if its claims later proved
inaccurate. Contrary to Daido Kogyo's claims, in conducting our margin
calculations for Daido Kogyo, we discovered a number of sales to the
United States for which there were no contemporaneous sales of
identical merchandise in the home market. Since Daido Kogyo failed to
provide DIFMER information and did not provide CV information, we are
unable to calculate a margin for Daido Kogyo's unmatched U.S. sales.
Just as in the situation of Enuma, described above, Daido Kogyo's
failure to report this information, despite our information requests
and our warnings regarding the consequences of such an action,
demonstrates that Daido Kogyo failed to cooperate to the best of its
ability in this review. Therefore, as required by section 776(a) of the
Act, we are compelled to apply adverse FA to these sales for the same
reasons and in the same manner as we determined above for Enuma.
Comment 3: Level of Trade/CEP Offset
Daido Kogyo argues that in finding that no difference in the level
of trade (LOT) existed and in denying it a CEP offset, the Department
misinterpreted the facts and the law, producing a result unfair to
Daido Kogyo. Daido Kogyo contends that because a difference in LOT
exists, even if no LOT adjustment can be made, it is still entitled to
a CEP offset.
Daido Kogyo asserts that because the Department incorrectly defined
the CEP sale, this error led to the mistaken conclusion that there is
no difference in LOT between CEP and HM sales. Daido Kogyo further
argues that we further misinterpreted the CEP offset provision, section
773(a)(7)(B) of the Act, by misidentifying the relevant CEP sales
transaction.
According to Daido Kogyo, the relevant CEP sales transaction to be
examined for LOT analysis is the point at the company's factory door.
Daido Kogyo bases this assertion on its interpretation that the statute
requires all costs to be deducted back to the factory door. Daido Kogyo
asserts that not only is our preliminary determination in error, but
that the Department's regulations are as well. Daido Kogyo further
asserts that the Department erroneously collapsed Daido Kogyo, Daido
Tsusho, and Daido Corporation into one company for purposes of LOT
analysis.
Daido Kogyo also contends that the Department omitted, overlooked,
or misunderstood certain facts on the record regarding Daido Kogyo's
selling functions, in particular its HM sales practices. Specifically,
Daido Kogyo asserts that the Department missed major differences
between the selling functions Daido Kogyo performed for HM customers
and those it performed for CEP sales.
The petitioner maintains that, consistent with the Department's
preliminary results, Daido Kogyo is not entitled to a LOT adjustment or
a CEP offset. Specifically, the petitioner states that Daido Kogyo sold
roller chain to the United States through Daido Tsusho. Accordingly,
once U.S. selling expenses and U.S. profit are deducted, the
merchandise is not at the factory door, but rather at the same LOT as
Daido Tsusho's EP sales. For example, the petitioner maintains that the
Department did not make a deduction for the profit earned by Daido
Tsusho on the CEP transactions. Furthermore, the petitioner argues that
Daido Kogyo's argument concerning the appropriate starting point for
comparing CEP and home market transactions was previously considered
and rejected by the Department in formulating the new antidumping
regulations.
Moreover, the petitioner argues that in case the Department were to
revisit its preliminary results position on this issue, it should
include a determination as to whether Daido Kogyo has cooperated to the
best of its ability in providing data to the Department that would
permit it to make a traditional LOT adjustment. Specifically, the
petitioner objects to Daido Kogyo's assertion that there is only one
LOT in the home market even though the company sells roller chain to
OEMs, trading companies, and local distributors.
DOC Position
We agree with the petitioner that Daido Kogyo has not demonstrated
eligibility for a CEP offset. Daido Kogyo's position is at odds with
the Department's determination in several significant respects: (1) how
the Department defined the starting price of the CEP sale and
determined whether U.S. and HM sales were made at different points in
the channels of distribution; (2) whether the selling functions
performed for Daido Kogyo's CEP sales were sufficiently different from
those performed for HM sales; (3) whether HM and CEP sales were at
different stages of marketing, and (4) whether the Department created
an artificial distinction between HM and CEP sales.
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same LOT as the EP or CEP. The NV LOT is that of the starting-price
sales in the comparison market or, when NV is based on CV, that of the
sales from which we derive selling, general and administrative (SG&A)
expenses and profit. For EP, the U.S. LOT is the level of the starting-
price sale, which is usually from exporter to importer. For CEP, it is
the level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and
[[Page 60480]]
the unaffiliated customer. If the comparison-market sales are at a
different LOT, and that difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Act (the CEP offset provision). See Certain Welded Carbon Steel
Standard Pipes and Tubes From India: Preliminary Results of New Shipper
Antidumping Duty Administrative Review, 62 FR 23760, 23761 (May 1,
1997); see also Antifriction Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof From France, et. al. 62 FR 54043, 54056
(October 17, 1997) (AFBs VII).
First, as to Daido Kogyo's argument that the Department erroneously
defined the CEP sale, we agree with petitioner that the relevant
transaction is at the point after U.S. selling expenses and U.S. profit
are deducted, and not at the factory door. With respect to section
773(a)(7)(B) of the Act, Daido Kogyo argues that the ``only realistic
interpretation of the statute is that the LOT for CEP sales is at the
factory door.'' See Daido Kogyo Brief at 24 (Brief). Yet, Daido Kogyo
itself acknowledged that the statute lends itself to ``two possible
interpretations of the phrase `level of trade of the constructed export
price,' '' the ex-factory price or the price from the affiliated
importer to an unaffiliated U.S. customer. See id. (emphasis added).
However, the crux of Daido Kogyo's argument is that it disagrees
with the Department's regulations under the statute, apart from our
preliminary determination. Specifically, Daido Kogyo asserts that the
regulations fail to distinguish between a HM price which includes those
expenses which are deducted under section 772(d) and a CEP price
lacking such expenses. See Brief at 19. While Daido Kogyo's
disagreement with the Department's regulations on this issue is outside
our present purview, we disagree with Daido Kogyo's interpretation as
to how CEP is defined. Pursuant to section 773(a)(7)(A) of the Act, the
Department's practice has been to examine the relevant selling
functions included in the CEP after making deductions under section
772(d) of the Act. See SAA at 823; see also Gray Portland Cement and
Clinker from Mexico, Final Results of Antidumping Administrative
Review, 62 FR 17148, 17156, (April 9, 1997) (Mexican Cement).
Daido Kogyo additionally argues that the selling functions it
performed for CEP sales were different from those performed for HM
sales. Our practice, as reflected in the new regulations, is that
differences in selling activities are a necessary but not, in
themselves, a sufficient condition for finding a difference in
marketing stages. See 19 CFR 351.412 (c)(2); see also Mexican Cement at
17157. We analyzed all of the selling functions (or activities)
included in the CEP after making deductions under section 772(d) of the
Act, and compared them to the ones performed for HM sales. We
considered all selling activities of all affiliated parties for CEP
sales (i.e., Daido Kogyo and Daido Tsusho), after disregarding selling
activities associated with the selling expenses deducted under section
772(d) of the Act. We noted that Daido Kogyo itself stated that Daido
Tsusho was a selling organization for CEP sales (see Brief at 33) and
found that Daido Kogyo and/or Daido Tsusho performed selling functions
for CEP sales, in addition to those selling functions performed by
Daido Corporation, which included the following: preparing chain for
export shipment, arranging its transportation from plant to a Japanese
port, carrying or maintaining inventory in Japan, and export sales
administration and billing. We note that Daido Kogyo's selling
functions performed with respect to sales to HM customers are not
significantly different from those performed with respect to CEP sales.
Further, we note that the facts as to Daido Kogyo's distribution
process are virtually the same as in a prior segment of this
proceeding, the 1994-1995 POR, where we determined on these facts that
there were no significant differences between selling activities
performed for HM sales and those performed for CEP sales and thus
determined that there was no difference in LOT (see Final Results 1994-
1995 at 64326-27).
In addition, based on our analysis of Daido Kogyo's responses, we
identified a single marketing stage in the home market, that of
distributor. In the CEP market, we also identified a single stage of
marketing to a distributor, from Daido Tsusho to Daido Corp. Therefore,
we concluded that Daido Kogyo's home market and CEP sales were
therefore at the same marketing stage.
Finally, we turn to Daido Kogyo's argument that the Department,
erroneously and contrary to Congressional intent, created an artificial
distinction between companies which export directly to the United
States and those which export through an affiliated trading company. We
find, on the contrary, that to ignore the selling functions performed
by Daido Tsusho as a selling organization for CEP sales would result in
the very sort of distorted results which Daido Kogyo seeks to avoid. No
new facts have been introduced since our preliminary results that would
warrant a reversal of our preliminary results.
Based on the above, we do not consider Daido Kogyo's sales in the
home market and in the U.S. market to be at a different LOT.
Consequently, we determined that Daido Kogyo is not entitled to a LOT
adjustment. Thus, no CEP offset has been granted for the final results.
Comment 4: Commission Offset
Daido Kogyo claims that the Department, in calculating NV,
erroneously denied it a commission offset adjustment. Daido Kogyo
argues that this offset should have included its total indirect selling
expenses, including HM sales commissions not separately claimed. Daido
Kogyo urges the Department to deduct, in the manner of a commission
offset, its total indirect selling expenses in the home market as Daido
Kogyo had originally reported, which included HM commissions as part of
this amount and not as a separate deduction.
The petitioner disagrees that Daido Kogyo is entitled to this
commission offset. The petitioner notes that Daido Kogyo states that it
paid commissions to unaffiliated sales representatives in the United
States but did not claim these commissions as a deduction to U.S.
price. Further, the petitioner also notes that Daido Kogyo actually
made commission payments in the home market, which it reported as part
of HM indirect selling expenses, rather than transaction-specific
amounts for each HM sale where applicable. Moreover, the petitioner
argues that there is no basis for assuming that had commissions been
reported for each of these HM transactions, they would have been
compared to U.S. sales where commissions were paid. Therefore, the
petitioner contends that Daido Kogyo should not benefit from its
failure to follow the Department's instructions.
DOC Position
We agree with the petitioner that sales commissions were in fact
paid by Daido Kogyo in both the home market and in the United States.
When a respondent has incurred commission costs in both
[[Page 60481]]
the U.S. and home markets, it is standard Departmental practice to
simply deduct the commission amounts from the reported HM and U.S.
prices to calculate NV and CEP. (See Antidumping Manual, Import
Administration, International Trade Administration, Department of
Commerce (Antidumping Manual), Chapter 8, p. 30). However, in this
instance, Daido Kogyo has failed to report its HM commission expenses
in an appropriate manner for us to make this deduction. Despite our
request for transaction-specific HM commission expenses, Daido Kogyo
stated that because the commission amounts paid in the home market were
very small, it ``has elected not to claim a direct expense deduction
for'' this item. See Daido Kogyo's Supplemental Questionnaire Response,
March 10, 1997 at 28. The only commission information which Daido Kogyo
reported was in aggregate form for the POR and lacked any explanation
of how the figure related to sales of subject merchandise.
In addition, we agree with the petitioner that a respondent should
not benefit from its failure to follow the Department's instructions.
Accordingly, because we are unable to determine what portion of Daido
Kogyo's commission expense is related to the sale of subject
merchandise, we have not made any deduction from HM price for
commission in the margin calculation program for Daido Kogyo in these
final results.
Further, we disagree with Daido Kogyo's argument that, in lieu of a
direct HM commission deduction, we should use indirect selling expenses
as a basis for granting a commission offset adjustment. Such an offset
adjustment is only made when commission expenses are incurred in one
market and not in the other. (See Antidumping Manual, Chapter 8, p.
31). Since this is not the case here, we have removed the commission
offset adjustment from the margin calculation program for Daido Kogyo,
(at line numbers 547-558), for these final results.
Final Results of Review
As a result of our analysis of the comments received, we determine
that the following margins exist for the period April 1, 1995 through
March 31, 1996:
------------------------------------------------------------------------
Weighted-average margin
Manufacturer/exporter percentage
------------------------------------------------------------------------
Daido Kogyo.............................. 6.84
Enuma.................................... 1.57
Izumi.................................... 2.66
Pulton................................... 43.29
(adverse FA)
R.K. Excel............................... 0.17
------------------------------------------------------------------------
Intent Not To Revoke
As we noted in our preliminary results, Daido Kogyo and Enuma
submitted a request in accordance with 19 CFR 353.25 (b) to revoke the
order with respect to its sales of roller chain in the United States.
(See Preliminary Results at 25171). In these final results and those of
our most recently completed administrative review of this order, the
margins calculated for Daido and Enuma were greater than de minimis.
See Final Results 1994-1995 at 64327. Therefore, we determine that
Daido Kogyo and Enuma do not qualify for revocation at this time.
Cash Deposit Requirements
The following deposit requirements shall be effective upon
publication of this notice of final results of administrative review
for all shipments of the subject merchandise from Japan that are
entered or withdrawn from warehouse, for consumption on of after the
publication date, as provided for by section 751(a)(1) of the Act: (1)
the cash deposit rate for the reviewed companies will be the rates
listed above, except that for RK Excel whose weighted-average margin is
less than 0.5 percent and therefore de minimis, the Department shall
require a zero deposit of estimated antidumping duties; (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
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacture of
the merchandise; and (4) the cash deposit rate for all other
manufacturers or exporters will continue to be 15.92 percent, the all
others rate based on the first review conducted by the Department in
which a ``new shipper'' rate was established in the final results of
antidumping finding administrative review (48 FR 51801, November 14,
1983).
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. For assessment
purposes, we have calculated exporter/importer-specific assessment
rates for roller chain.
Where entered value or entered quantity data is not available, we
have divided for both EP and CEP sales, where applicable, the total
dumping margins (calculated as the difference between NV and EP (or
CEP)) for each importer by the total number of units sold to the
importer. We will direct Customs to assess the resulting unit dollar
amount against each unit of subject merchandise entered by the importer
during the POR.
This notice serves as a final reminder to importers of their
responsibility under 19 CFR 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 notice also serves as a final reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
the 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.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. Sec. 1675(a)(1)) and 19 CFR
353.22.
Dated: October 31, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-29630 Filed 11-7-97; 8:45 am]
BILLING CODE 3510-DS-P