[Federal Register Volume 63, Number 44 (Friday, March 6, 1998)]
[Notices]
[Pages 11211-11214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5864]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-588-810]


Mechanical Transfer Presses From Japan; Preliminary Results of 
Antidumping Duty Administrative Review, and Intent To Revoke Order in 
Part

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review, and intent to revoke order in part; mechanical 
transfer presses from Japan.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on mechanical 
transfer presses (MTPs) from Japan in response to a request by 
petitioners, Verson Division of Allied Products Corp., the United 
Autoworkers of America, and the United Steelworkers of America (AFL-
CIO/CLC); and by respondent Aida Engineering, Ltd. (Aida). This review 
covers shipments of this merchandise to the United States during the 
period February 1, 1996 through January 31, 1997.
    We have preliminarily determined that sales have not been made 
below normal value (NV). If these preliminary results are adopted in 
our final results, we will instruct U.S. Customs to liquidate entries 
without regard to antidumping duties. Based on Aida's three consecutive 
years of de minimis margins, we intend to revoke the order with respect 
to Aida.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument are requested to submit with each 
argument: (1) A statement of the issue, and (2) a brief summary of the 
argument.


[[Page 11212]]


EFFECTIVE DATE: March 6, 1998.

FOR FURTHER INFORMATION CONTACT: Elisabeth Urfer or Maureen Flannery, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington D.C. 20230; telephone (202) 482-4733.

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. In addition, unless otherwise indicated, 
all citations to the Department's regulations are to the provisions 
codified at 19 CFR part 353, as they existed on April 1, 1996.

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register an antidumping 
duty order on MTPs from Japan on February 16, 1990 (55 FR 5642). On 
February 3, 1997, we published in the Federal Register (62 FR 4978) a 
notice of opportunity to request an administrative review of the 
antidumping duty order on MTPs from Japan covering the period February 
1, 1996 through January 31, 1997.
    In accordance with 19 CFR 353.25(b)(1) and (2), Aida requested 
revocation of the antidumping duty order with respect to Aida, and 
requested that the Department conduct an administrative review of the 
antidumping order in accordance with Sec. 353.22(a)(2) and 
Sec. 353.25(b) of the regulations. Petitioners requested that we 
conduct a review of Hitachi Zosen Corporation (Hitachi Zosen) and 
Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI). We published a 
notice of initiation of this antidumping duty administrative review on 
MTPs on March 18, 1997 (62 FR 12793).
    Petitioners requested that the Department initiate an investigation 
of sales below the cost of production (COP) with respect to Hitachi 
Zosen. We concluded that an initiation of a COP investigation was not 
warranted. (See memorandum from Maureen Flannery to Edward Yang, 
``Mechanical Transfer Presses from Japan: Allegation of Sales Below 
Cost for Hitachi Zosen Corp.,'' dated September 23, 1997.)
    On June 16, 1997, the Petitioners withdrew their request for an 
administrative review with respect to IHI. IHI likewise requested that 
the Department terminate the administrative review on June 23, 1997. We 
rescinded the review with respect to IHI on November 10, 1997, and 
extended the preliminary results. See Mechanical Transfer Presses From 
Japan: Extension of Time Limits for Preliminary Results of Antidumping 
Duty Administrative Review, and Partial Recission of Administrative 
Review, 62 FR 60471. The Department is conducting this administrative 
review in accordance with section 751 of the Act.

Scope of Review

    Imports covered by this review include MTPs currently classifiable 
under Harmonized Tariff Schedule (HTS) item numbers 8462.99.0035 and 
8466.94.5040. The HTS numbers are provided for convenience and for U.S. 
Customs purposes. The written description remains dispositive of the 
scope of the order.
    The term mechanical transfer presses refers to automatic metal-
forming machine tools with multiple die stations in which the work 
piece is moved from station to station by a transfer mechanism designed 
as an integral part of the press and synchronized with the press 
action, whether imported as machines or parts suitable for use solely 
or principally with these machines. These presses may be imported 
assembled or unassembled. This review does not cover certain parts and 
accessories, which were determined to be outside the scope of the 
order. (See ``Final Scope Ruling on Spare and Replacement Parts,'' U.S. 
Department of Commerce, March 20, 1992; and ``Final Scope Ruling on the 
Antidumping Duty Order on Mechanical Transfer Presses (MTPs) from 
Japan: Request by Komatsu, Ltd.,'' U.S. Department of Commerce, October 
1, 1996.)
    This review covers two manufacturers of MTPs, and the period 
February 1, 1996 through January 31, 1997.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Aida by using standard verification procedures, including 
on-site inspection of the manufacturer's facilities, the examination of 
relevant sales and financial records, and the selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public version of the verification report.

Intent To Revoke

    On February 27, 1997, Aida submitted a request, in accordance with 
19 CFR 353.25(b), to revoke the order covering MTPs from Japan with 
respect to Aida's sales of this merchandise. Aida's request was 
accompanied by the certification required under 19 CFR 353.25(b)(1) and 
the agreement to immediate reinstatement in the relevant antidumping 
order required under 19 CFR 353.25 (a)(2)(iii) and (b)(2).
    In the two prior reviews of this order, we determined that Aida 
sold MTPs from Japan at not less than NV. The Department conducted a 
verification of Aida's response for this review and preliminarily 
determines that Aida sold MTPs at not less than NV during the review 
period. Based on Aida's three consecutive years of zero or de minimis 
margins, the above-mentioned certification, and the absence of any 
evidence to the contrary on the record of this review, we have 
preliminarily determined that it is not likely that Aida will in the 
future sell subject merchandise at less than NV. Therefore, if these 
preliminary findings are affirmed in our final results, we intend to 
revoke the order on MTPs from Japan with regard to Aida.

United States Price (USP)

    Aida and Hitachi Zosen argue that we should use the contract prices 
as our starting price for MTPs under review. However, contract prices 
may include accessories and spare parts. Destack feeders, which are 
accessories, and spare and replacement parts have been found to be 
outside the scope of the order. Aida and Hitachi Zosen cite the Final 
Determination of Sales at Less Than Fair Value: Mechanical Transfer 
Presses from Japan, 55 FR 335, (January, 4, 1990), which states:

    For purposes of the final determination, we have determined that 
the prices charged for spare parts, tooling and other accessories 
associated with the basic machine which are separately identified in 
the contractual sales documentation should not be included in the 
gross price of the MTP * * *.

    Hitachi Zosen argues that, for its MTP sales to the United States, 
the purchase order and the invoice evidence only the price for the 
system or set, and not discrete prices for the components, and that the 
parties intended to buy a press system rather than discrete machines. 
Aida similarly argues that, for all but one of its MTPs sold to the 
United States, the contracted price was a single price that included 
all goods and services covered by the sale. Petitioners argue that it 
is the Department's policy to use the price of the MTP and exclude 
other items that were included in the sale from its analysis. 
Petitioners claim that when sales documents are reviewed it appears 
that the price is broken down into components. At verification of Aida 
we found that, for one of its four sales which Aida claimed could not 
be

[[Page 11213]]

broken out, the price of the components could, in fact, be broken out; 
therefore, we have subtracted out the price of the destack feeder from 
the starting price. We also made a corresponding adjustment to 
constructed value (CV) to account for the cost of the destack feeder. 
We found that, for another MTP, the price of the spare parts could be 
broken out, but we could not break out the cost of the spare parts from 
the CV; therefore, we did not make an adjustment for that sale.

A. Aida

    For sales made by Aida we calculated an export price, in accordance 
with section 772(a) of the Act, because the subject merchandise was 
sold by Aida directly to the first unaffiliated purchasers in the 
United States prior to importation into the United States, and 
constructed export price was not otherwise indicated.
    We calculated export price based on the delivered or f.o.b. price 
to unaffiliated purchasers. We made deductions, where appropriate, for 
rebates, inland insurance, brokerage and handling, foreign inland 
freight, international freight, marine insurance, U.S. inland freight, 
U.S. transportation expenses, and U.S. customs duty.

B. Hitachi Zosen

    For sales made by Hitachi Zosen we calculated an export price, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold by Hitachi Zosen to unaffiliated purchasers in the 
United States prior to importation into the United States, and 
constructed export price was not otherwise indicated.
    We calculated export price based on the delivered prices and ex-
godown prices to unaffiliated purchasers. We made deductions for 
foreign inland freight and inland insurance, and, where appropriate, 
brokerage and handling, international freight, installation, 
supervision and U.S. duty in accordance with section 772(c) of the Act.

Normal Value (NV)

    We preliminarily determine that the use of CV is warranted to 
calculate NV for Aida and Hitachi Zosen, in accordance with section 
773(a)(4) of the Act. While the home market is viable, the particular 
market situation in this case, which requires that the subject 
merchandise be built to each customer's specifications, does not permit 
proper price-to-price comparisons in either the home market or third 
countries.
    Aida and Hitachi Zosen assert that home, third country, and U.S. 
market products are distinguished by the many differences in 
specifications between the various presses, and that no merchandise 
sold in the home market or to a third country is identical to the 
merchandise sold to the United States. Aida and Hitachi Zosen argue 
that it is not possible to determine cost differences because (1) there 
is no baseline specification for comparison purposes; (2) the design of 
a press is dictated throughout by the combination of specifications 
applicable to the press, and it is not possible to isolate the cost 
effect of any single specification; and (3) differences in cost between 
two presses result not only from differences in specifications, but 
also from differences in material costs, processing costs, fiscal 
periods, and production efficiency from press to press.
    Petitioners argue that presses may be sufficiently similar to allow 
for price-to-price comparisons because they are all automotive metal-
forming machine tools with multiple die stations. On June 12, 1997, the 
Department requested additional cost information. In response to this 
request, Aida and Hitachi Zosen put information on the record that 
clearly indicated that the prices of home market and U.S. sales could 
not be compared. See Memorandum from Elisabeth Urfer to Edward Yang, 
dated March 2, 1998. We note that, in past proceedings involving large, 
custom-built capital equipment, including prior reviews of this order, 
we have normally resorted to CV. (See, e.g., Large Power Transformers 
from France; Final Result of Antidumping Administrative Review, 61 FR 
40403, August 2, 1996; Notice of Final Determination of Sales at Less 
Than Fair Value: Large Newspaper Printing Presses and Components 
Thereof, Whether Assembled or Unassembled, From Japan, 61 FR 38139, 
July 23, 1996; and Mechanical Transfer Presses From Japan: Final 
Results of Antidumping Duty Administrative Review, 62 FR 11820, March 
13, 1997.)
    For Aida and Hitachi Zosen, CV consists of the cost of materials 
and fabrication, selling, general and administrative expenses (SG&A), 
profit, and packing. For Aida's purchases of materials from affiliated 
parties, we used the higher of the transfer price or the cost of 
production, as provided for by Section 773(f)(3). Because the parts 
used in the manufacture of MTPs are custom-built, no market values were 
available. We calculated SG&A and profit based on home market sales of 
MTPs in accordance with section 773(e)(2)(A) of the Act. We did not 
include below cost sales in our calculation of profit (see below). We 
used packing costs for merchandise exported to the United States. For 
Aida, we made a circumstance-of-sale adjustment by deducting from CV 
home market direct selling expenses (i.e., warranties, commissions, and 
credit), and adding to CV U.S. direct selling expenses (i.e., 
warranties, commissions, and credit). For Hitachi Zosen, we made a 
circumstance-of-sale adjustment by deducting from CV home market direct 
selling expenses (i.e., warranties), and adding to CV U.S. direct 
selling expenses (i.e., warranties and credit). To calculate imputed 
U.S. credit expense, we used the dollar-denominated interest rates 
submitted by Hitachi Zosen and Aida.
    For Aida, we disregarded below cost home market sales in making the 
CV profit calculation. Section 773(b)(1) provides that, whenever the 
Department has reasonable grounds to believe or suspect that home 
market sales under consideration for the determination of NV have been 
made at below cost prices, it shall determine whether, in fact, there 
were below cost sales. That provision further provides that, if below 
cost sales were made within an extended period of time in substantial 
quantities and not at prices that would recover costs within a 
reasonable period of time, the Department may disregard the below cost 
sales.
    In the prior review of this order, pursuant to section 773(b)(1), 
the Department disregarded below cost home market sales in calculating 
CV profit, i.e., they were disregarded in the determination of NV. 
Therefore, reasonable grounds exist to believe or suspect that Aida 
made below cost home market sales in the current review period. Section 
773(b)(2)(ii). Accordingly, we requested and obtained from Aida the 
cost data necessary to determine whether below cost sales occurred 
during the period of review.
    Because each MTP is custom-built, differs significantly in 
specifications, and is essentially a discrete model, we performed the 
cost test on a sale-by-sale basis. We compared the cost of each model 
sold in the home market to the home market price of that model. The 
Department found that certain home market models were sold at prices 
below the cost of production, and thus in substantial quantities, 
within an extended period of time, and at prices that do not permit 
recovery of cost within a reasonable period of time. Therefore, we have 
disregarded the below cost sales in determining CV profit.
    In calculating the profit value for Aida, we have used home market 
sales submitted by Aida for the period encompassing the period of 
review and

[[Page 11214]]

sales contemporaneous to the U.S. sales. This was done to account for 
the relatively long period of time between the date when the MTP is 
sold and the date when it is completed for shipment.

Preliminary Results of the Review

    We preliminarily determine that the following dumping margins 
exist:

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter                Time period    (percent)
------------------------------------------------------------------------
Aida Engineering, Ltd......................    2/1/96-1/31/97       0.00
Hitachi Zosen Corporation..................    2/1/96-1/31/97       0.00
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 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 publication of this notice, 
or the first workday thereafter. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish a notice of final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments, not later than 120 days 
after the date of publication of this notice.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Upon completion 
of this review, the Department will issue appraisement instructions 
directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of MTPs from Japan entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for reviewed 
companies will be the rate established in the final results of this 
review; (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 
less-than-fair-value 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) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
shall be the rate established in the investigation of sales at less 
than fair value, which is 14.51 percent.
    These deposit rates, 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 CFR 353.25(b) 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 CFR 353.22.

    Dated: March 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5864 Filed 3-5-98; 8:45 am]
BILLING CODE 3510-DS-P