[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Notices]
[Pages 51379-51385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25272]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-588-837


Large Newspaper Printing Presses and Components Thereof, Whether 
Assembled or Unassembled, From Japan: Preliminary Determination To 
Rescind the Administrative Review, in Part, To Revoke the Order, in 
Part, and Results of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary determination to rescind the 
administrative review, in part, to revoke to order, in part and results 
of antidumping duty administrative review.

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SUMMARY: In response to a request by the petitioner and one producer/
exporter of the subject merchandise, the Department of Commerce is 
conducting an administrative review of the antidumping duty order on 
large newspaper printing presses and components thereof, whether 
assembled or unassembled, from Japan. This review covers two 
manufacturers/exporters of the subject merchandise to the United States 
(Mitsubishi Heavy Industries, Ltd. and Tokyo Kikai Seisakusho, Ltd.). 
The period of review is September 1, 1999 through August 31, 2000.
    We have preliminarily found that no sales of subject merchandise by 
Tokyo Kikai Seisakusho, Ltd. have been made below normal value. If 
these preliminary results are adopted in our final results of 
administrative review, we will instruct the Customs Service not to 
assess antidumping duties on entries of the subject merchandise 
exported by Tokyo Kikai Seisakusho, Ltd. covered by this review. 
Furthermore, if these preliminary results are adopted in our final 
results of this administrative review, we intend to revoke the 
antidumping duty order with respect to Tokyo Kikai Seisakusho, Ltd., 
based on three consecutive review periods of sales at not less than 
normal value (see 19 CFR 351.222(b)(i)). See Intent to Revoke section 
of this notice. We also have preliminarily determined that the review 
of Mitsubishi Heavy Industries, Ltd. should be rescinded.

EFFECTIVE DATE: October 9, 2001.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Kate Johnson, 
AD/CVD Enforcement Group I, Office 2, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4136 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Period of Review

    The period of review (POR) is September 1, 1999 through August 31, 
2000.

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 to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to 19 CFR part 351 (2000).

Background

    During the previous administrative review period, covering sales of 
the subject merchandise for the period September 1, 1998 through August 
31, 1999, Tokyo Kikai Seisakusho, Ltd. (TKS) requested that it defer 
reporting a sale to Dow Jones & Company (Dow Jones) until the next 
administrative review because, although TKS entered into a Large 
Newspaper Printing Presses

[[Page 51380]]

(LNPP) sales contract with Dow Jones during the POR, the entries 
relating to this sale would not have been fully delivered and installed 
by the conclusion of the POR. See TKS's letter to the Department dated 
December 14, 1999. On December 21, 1999, we notified TKS that it may 
report data on the Dow Jones sale after it is completed, during the 
next administrative review (1999-2000 review).
    On September 20, 2000, the Department published in the Federal 
Register a notice advising of the opportunity to request an 
administrative review of this order for the period September 1, 1999, 
through August 31, 2000 (65 FR 56868).
    On September 22, 2000, in accordance with 19 CFR 351.213(b), we 
received a request for a review and revocation of the antidumping duty 
order from TKS. On September 29, 2000, the petitioner, Goss Graphic 
Systems, Inc., requested an administrative review of the antidumping 
duty order for the following producers/exporters of LNPP: Mitsubishi 
Heavy Industries, Ltd. (MHI) and TKS. The petitioner also requested 
that the Department determine whether antidumping duties have been 
absorbed by MHI and TKS. On September 7, 2001, the Department requested 
proof that unaffiliated purchasers will ultimately pay the antidumping 
duties to be assessed on entries during the review period. See 
discussion in the ``Duty Absorption section,'' below.
    We published a notice of initiation of this review on October 30, 
2000. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, Requests for Revocation in Part, and Deferral 
of Administrative Reviews, 65 FR 64662.
    On October 25, 2000, we issued antidumping questionnaires to the 
two respondents. On December 11, 2000, MHI notified the Department that 
it had not made any U.S. sales or entries of subject merchandise during 
the POR. See the ``Partial Rescission of Administrative Review'' 
section of the notice below. The Department received a response to the 
questionnaire from TKS in January and February 2001.
    On March 22, 2001, the Department extended the time limit for the 
preliminary results in this review until October 1, 2001. See Large 
Newspaper Printing Presses, and Components Thereof, from Germany and 
Japan: Notice of Extension of Time Limits for Antidumping Duty 
Administrative Reviews, 66 FR 16040.
    We issued supplemental questionnaires to TKS in May and June 2001, 
and received responses to these questionnaires in June 2001. TKS 
submitted updates and revisions to its responses in August 2001, as 
well as a post-verification submission in September 2001.
    Pursuant to section 782(i)(2) and (3) of the Act, we conducted 
verification of TKS's sales and cost responses in Japan in August 2001. 
The verification report will be issued following the issuance of these 
preliminary results.

Scope of the Order

    The products covered by the order are large newspaper printing 
presses, including press systems, press additions, and press 
components, whether assembled or unassembled, whether complete or 
incomplete, that are capable of printing or otherwise manipulating a 
roll of paper more than two pages across. A page is defined as a 
newspaper broadsheet page in which the lines of type are printed 
perpendicular to the running of the direction of the paper or a 
newspaper tabloid page with lines of type parallel to the running of 
the direction of the paper.
    In addition to press systems, the scope of the order includes the 
five press system components. They are: (1) A printing unit, which is 
any component that prints in monocolor, spot color, and/or process 
(full) color; (2) a reel tension paster, which is any component that 
feeds a roll of paper more than two newspaper broadsheet pages in width 
into a subject printing unit; (3) a folder, which is a module or 
combination of modules capable of cutting, folding, and/or delivering 
the paper from a roll or rolls of newspaper broadsheet paper more than 
two pages in width into a newspaper format; (4) conveyance and access 
apparatus capable of manipulating a roll of paper more than two 
newspaper broadsheet pages across through the production process and 
which provides structural support and access; and (5) a computerized 
control system, which is any computer equipment and/or software 
designed specifically to control, monitor, adjust, and coordinate the 
functions and operations of large newspaper printing presses or press 
components.
    A press addition is comprised of a union of one or more of the 
press components defined above and the equipment necessary to integrate 
such components into an existing press system.
    Because of their size, large newspaper printing press systems, 
press additions, and press components are typically shipped either 
partially assembled or unassembled, complete or incomplete, and are 
assembled and/or completed prior to and/or during the installation 
process in the United States. Any of the five components, or collection 
of components, the use of which is to fulfill a contract for large 
newspaper printing press systems, press additions, or press components, 
regardless of degree of assembly and/or degree of combination with non-
subject elements before or after importation, is included in the scope 
of this order. Also included in the scope are elements of a LNPP 
system, addition, or component, which taken altogether, constitute at 
least 50 percent of the cost of manufacture of any of the five major 
LNPP components of which they are a part.
    For purposes of the order, the following definitions apply 
irrespective of any different definition that may be found in Customs 
rulings, U.S. Customs law or the Harmonized Tariff Schedule of the 
United States (HTSUS): (1) the term ``unassembled'' means fully or 
partially unassembled or disassembled; and (2) the term ``incomplete'' 
means lacking one or more elements with which the LNPP is intended to 
be equipped in order to fulfill a contract for a LNPP system, addition 
or component.
    This scope does not cover spare or replacement parts. Spare or 
replacement parts imported pursuant to a LNPP contract, which are not 
integral to the original start-up and operation of the LNPP, and are 
separately identified and valued in a LNPP contract, whether or not 
shipped in combination with covered merchandise, are excluded from the 
scope of this order. Used presses are also not subject to this scope. 
Used presses are those that have been previously sold in an arm's-
length transaction to a purchaser that used them to produce newspapers 
in the ordinary course of business.
    Also excluded from the scope, in accordance with the Department's 
determination in a changed-circumstances antidumping duty 
administrative review of the order which resulted in the partial 
revocation of the order with respect to certain merchandise, are 
elements and components of LNPP systems, and additions thereto, which 
feature a 22 inch cut-off, 50 inch web width and a rated speed no 
greater than 75,000 copies per hour. See Large Newspaper Printing 
Presses Components Thereof, Whether Assembled or Unassembled, from 
Japan: Final Results of Changed Circumstances Antidumping Duty 
Administrative Review and Intent to Revoke Antidumping Duty Order, In 
Part, 64 FR 72315 (Dec. 27, 1999). In addition to the specifications 
set out in this paragraph, all of which must be met in order for the 
product to be excluded

[[Page 51381]]

from the scope of the order, the product must also meet all of the 
specifications detailed in the five numbered sections following this 
paragraph. If one or more of these criteria is not fulfilled, the 
product is not excluded from the scope of the order.
    1. Printing Unit: A printing unit which is a color keyless blanket-
to-blanket tower unit with a fixed gain infeed and fixed gain outfeed, 
with a rated speed no greater than 75,000 copies per hour, which 
includes the following features:
     Each tower consisting of four levels, one or more of which 
must be populated.
     Plate cylinders which contain slot lock-ups and blanket 
cylinders which contain reel rod lock-ups both of which are of solid 
carbon steel with nickel plating and with bearers at both ends which 
are configured in-line with bearers of other cylinders.
     Keyless inking system which consists of a passive feed ink 
delivery system, an eight roller ink train, and a non-anilox and non-
porous metering roller.
     The dampener system which consists of a two nozzle per 
page spraybar and two roller dampener with one chrome drum and one form 
roller.
     The equipment contained in the color keyless ink delivery 
system is designed to achieve a constant, uniform feed of ink film 
across the cylinder without ink keys. This system requires use of 
keyless ink which accepts greater water content.
    2. Folder: A module which is a double 3:2 rotary folder with 160 
pages collect capability and double (over and under) delivery, with a 
cut-off length of 22 inches. The upper section consists of three-high 
double formers (total of 6) with six sets of nipping rollers.
    3. RTP: A component which is of the two-arm design with core drives 
and core brakes, designed for 50 inch diameter rolls; and arranged in 
the press line in the back-to-back configuration (left and right hand 
load pairs).
    4. Conveyance and Access Apparatus: Conveyance and access apparatus 
capable of manipulating a roll of paper more than two newspaper 
broadsheets across through the production process, and a drive system 
which is of conventional shafted design.
    5. Computerized Control System: A computerized control system, 
which is any computer equipment and/or software designed specifically 
to control, monitor, adjust, and coordinate the functions and 
operations of large newspaper printing presses or press components.
    Further, this order covers all current and future printing 
technologies capable of printing newspapers, including, but not limited 
to, lithographic (offset or direct), flexographic, and letterpress 
systems. The products covered by this order are imported into the 
United States under subheadings 8443.11.10, 8443.11.50, 8443.30.00, 
8443.59.50, 8443.60.00, and 8443.90.50 of the HTSUS. Large newspaper 
printing presses may also enter under HTSUS subheadings 8443.21.00 and 
8443.40.00. Large newspaper printing press computerized control systems 
may enter under HTSUS subheadings 8471.49.10, 8471.49.21, 8471.49.26, 
8471.50.40, 8471.50.80, and 8537.10.90. Although the HTSUS subheadings 
are provided for convenience and customs purposes, our written 
description of the scope of the order is dispositive.

Partial Rescission of Administrative Review

    MHI notified the Department that it had not made any U.S. sales or 
entries of subject merchandise during the POR. Based on Customs Service 
information obtained to date, we find no indication of entries of 
subject merchandise by MHI. See Memorandum to the File dated September 
28, 2001.
    Therefore, consistent with the Department's practice, we 
preliminarily determine to rescind this review with respect to MHI. See 
Stainless Steel Bar From India: Preliminary Results of Antidumping Duty 
Administrative Review and New Shipper Review, and Partial Rescission of 
Administrative Review, 65 FR 12209 (March 8, 2000); Persulfates From 
the People's Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, and Partial Rescission of Administrative Review, 
65 FR 18963 (Apr. 10, 2000).

Duty Absorption

    On September 29, 2000, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides for the Department, if requested, 
to determine during an administrative review initiated two or four 
years after the publication of the order, whether antidumping duties 
have been absorbed by a foreign producer or exporter, if the subject 
merchandise is sold in the United States through an affiliated 
importer. In this case, TKS sold to the United States through an 
importer that is affiliated within the meaning of section 771(33) of 
the Act.
    Because this review was initiated four years after the publication 
of the antidumping duty order, we will make a duty absorption 
determination in this segment of the proceeding.
    On September 7, 2001, the Department requested proof that 
unaffiliated purchasers will ultimately pay the antidumping duties to 
be assessed on entries during the review period. On September 17, 2001, 
TKS responded to the Department's request stating that it has not 
entered into any written agreement with its U.S. customers whereby the 
customer would agree to pay any antidumping duties. As we have found 
preliminarily that there is no dumping margin for TKS with respect to 
its U.S. sales under this review, we find preliminarily that there is 
no duty absorption.

Fair Value Comparisons

    To determine whether TKS's sales of LNPPs to the United States were 
made at less than normal value, we compared constructed export price 
(CEP) to the normal value, as described in the ``Constructed Export 
Price'' and ``Normal Value'' sections of this notice.
    Although TKS's home market was viable, in accordance with section 
773 of the Act and our past practice in this proceeding and in the 
companion proceeding involving Germany, we based normal value on 
constructed value because we determined that, even though the general 
product characteristics of LNPP systems are comparable enough for them 
to be considered a foreign like product, the physical differences in 
the sub-component specifications between LNPPs sold in the United 
States and the home market are so great that meaningful price-to-price 
comparisons cannot be made. See Large Newspaper Printing Presses and 
Components Thereof, Whether Assembled or Unassembled, from Japan: 
Preliminary Results of Antidumping Duty Administrative Reviews, 65 FR 
62700, 62702 (October 19, 2000) (1998-1999 Preliminary Results), 
followed in Large Newspaper Printing Presses and Components Thereof, 
Whether Assembled or Unassembled, from Japan: Final Results of 
Antidumping Duty Administrative Review, 66 FR 11555 (February 26, 2001) 
(1998-1999 Final Results); and Large Newspaper Printing Presses and 
Components Thereof: Whether Assembled or Unassembled, from Germany: 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Reviews and Final Determinations of Scope Inquiries, 65 
FR 62695, 62697 (October 19, 2000), followed in Large Newspaper 
Printing Presses and Components Thereof, Whether Assembled or 
Unassembled,

[[Page 51382]]

from Germany: Final Results of Antidumping Duty Administrative Review, 
66 FR 11557 (February 26, 2001).

Constructed Export Price

    We based the U.S. price on CEP, in accordance with sections 772(b), 
(c), and (d) of the Act, because the sales contracts were executed by 
TKS's affiliated sales agent in the United States.
    We calculated CEP based on the packed, installed price to 
unaffiliated customers in the United States. We made deductions from 
the starting price, where appropriate, for foreign inland freight to 
port in Japan, foreign brokerage and handling, international freight 
expenses, freight and marine insurance, U.S. Customs duty, U.S. 
brokerage and handling, and unloading expenses, in accordance with 
section 772(c)(2)(A) of the Act.
    We made additional deductions from CEP, where appropriate, for 
warranty, imputed credit, direct training expenses, testing expenses, 
other technical service expenses, and U.S. indirect selling expenses 
incurred by TKS and its U.S. affiliate associated with economic 
activity occurring in the United States, in accordance with section 
772(d)(1) of the Act.
    TKS reported warranty expenses based on actual warranty expenses 
incurred through August 2001. These expenses reflect services under 
TKS's standard warranty. However, TKS occasionally provides additional 
warranty coverage based on design or fabrication errors, as noted, for 
example, on page 25 of TKS's June 29, 2001, supplemental Section C 
questionnaire response. Such expenses are not included in the actual 
warranty expenses reported to the Department, but are reflected in the 
historical warranty expense information reported at Exhibit C-18 of the 
February 9, 2001, Section C response. Therefore, in order to estimate 
the warranty expense incurred on the sale of the subject merchandise, 
it is necessary to add both the actual warranty expense and the 
historical warranty experience. Accordingly, we have deducted from the 
CEP an additional amount, based on the historical warranty experience, 
to reflect the additional, post-warranty period expense.
    As in prior segments of this proceeding, we calculated an imputed 
credit expense by multiplying an interest rate by the net balance of 
production costs incurred, and progress payments made, during the 
construction period. In accordance with the revised methodology 
discussed at Comments 7 and 8 to the Decision Memorandum in the 1998-
1999 Final Results, we used the Japanese yen short-term interest rate 
for the production period, and the U.S. dollar short-term interest rate 
for the post-production imputed credit portion. TKS used the contract 
acceptance date to mark the end of the production period, rather than 
the installation date as requested in our supplemental questionnaire. 
For purposes of the preliminary results, we have accepted the imputed 
credit calculation using the contract acceptance date. However, we may 
consider this part of the methodology further in our final results.
    In addition, we deducted the cost of any further manufacturing or 
assembly expenses in accordance with section 772(d)(2) of the Act. 
Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit, to arrive at CEP. In accordance 
with section 772(e) of the Act, we calculated the CEP profit rate using 
the expenses incurred by TKS and its affiliate on their sales of the 
subject merchandise in the United States and the foreign like product 
in the home market and the profit associated with those sales.

Normal Value

    As noted above under the ``Fair Value Comparisons'' section of this 
notice, we based normal value on constructed value in accordance with 
section 773 of the Act because we determined that the unique, custom-
built nature of each LNPP sold does not permit proper price-to-price 
comparisons, even though the home market was viable for TKS.

Cost of Production Analysis and Constructed Value

    Pursuant to section 773(b)(2)(A)(ii) of the Act, there are 
reasonable grounds to believe or suspect TKS made sales in the home 
market at prices below its cost of production (COP) in this review 
because the Department disregarded certain sales made by TKS during the 
less-than-fair-value (LTFV) investigation and during the previous 
administrative reviews pursuant to a finding that sales failed the cost 
test. See 1998-1999 Final Results. As a result, the Department 
initiated an investigation to determine whether TKS made home market 
sales during the POR at prices below the COP within the meaning of 
section 773(b) of the Act.
    We calculated the COP based on the sum of TKS's cost of materials 
and fabrication for the foreign like product, plus amounts for general 
and administrative (G&A) and financial expenses, in accordance with 
section 773(b)(3) of the Act.
    We compared the COP figures to home market prices of the foreign 
like product, as required under section 773(b) of the Act, in order to 
determine whether these sales had been made at prices below the COP. On 
a contract-specific basis, we compared the COP to home market prices, 
less any applicable movement charges, direct and indirect selling 
expenses, and packing expenses. As discussed above under ``Constructed 
Export Price,'' TKS's reported warranty expenses included only actual 
warranty expenses incurred through August 2001, and did not include 
post-warranty period expenses that may occur. Accordingly, we have 
deducted an additional amount from the home market price based on the 
historical warranty expense reported in the response to estimate the 
post-warranty period expenses. We also deducted payments for non-
subject merchandise included in the contract price for certain sales.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined whether such sales were made: (1) In 
substantial quantities within an extended period of time; and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time in the normal course of trade. See section 773(b)(1) of 
the Act.
    The results of our cost test for TKS indicated that certain home 
market sales were at prices below COP within an extended period of 
time, were made in substantial quantities, and would not permit the 
full recovery of all costs within a reasonable period of time. In 
accordance with section 773(b)(1) of the Act, we therefore excluded the 
below-cost sales from our analysis and used the remaining sales as the 
basis for determining selling expenses and profit. In accordance with 
section 773(e) of the Act, we calculated constructed value based on the 
sum of TKS's cost of materials, fabrication, selling, general and 
administrative (SG&A) expenses and U.S. packing costs. In accordance 
with section 773(e)(2)(A), we based SG&A expenses and profit on the 
amounts incurred and realized by TKS in connection with the production 
and sale of the foreign like product in the ordinary course of trade, 
for consumption in the foreign country.
    We relied on TKS's reported COP and constructed value amounts 
except for G&A, where we applied a revised rate, based on information 
developed at verification and submitted for the record by TKS on 
September 10, 2001, at Tab C.

[[Page 51383]]

CEP to Constructed Value Comparisons

    For CEP to constructed value comparisons, where appropriate, we 
deducted imputed credit, in accordance with sections 773(a)(6)(C)(iii) 
and 773(a)(8) of the Act. We calculated imputed credit for constructed 
value purposes in accordance with the methodology explained in the 
``Constructed Export Price'' section of this notice.
    We also made a CEP offset adjustment to normal value, as explained 
below, in accordance with section 773(a)(7)(B) of the Act, by deducting 
the home market indirect selling expenses up to the amount of indirect 
selling expenses incurred on U.S. sales.

Level of Trade and CEP Offset

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate normal value based on sales 
at the same level of trade (LOT) as the export price or CEP 
transaction. Sales are made at different LOTs if they are made at 
different marketing stages (or their equivalent). See 19 CFR 
351.412(c)(2). Substantial differences in selling activities are a 
necessary, but not sufficient, condition for determining that there is 
a difference in the stages of marketing. See, id.; see also Notice of 
Final Determination of Sales of Less Than Fair Value: Certain Cut-to-
Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 
(November 19, 1997) (Steel Plate). In order to determine whether the 
comparison sales were at different stages in the marketing process than 
the U.S. sales, we reviewed the distribution system in each market 
(i.e., the ``chain of distribution''),\1\ including selling functions, 
class of customer (customer category), and the level of selling 
expenses for each type of sale.
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    \1\ The marketing process in the United States and comparison 
markets begins with the producer and extends to the sale to the 
final user or consumer. The chain of distribution between the two 
may have many or few links, and the respondents' sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of the respondent to properly 
determine where in the chain of distribution the sale occurs.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for export and comparison market sales (i.e., normal value based on 
either home market or third country prices \2\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \2\ Where normal value is based on constructed value, we 
determine the normal value LOT based on the LOT of the sales from 
which we derive selling expenses, G&A and profit for constructed 
value, where possible.
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    When the Department is unable to match sales of the foreign like 
product in the comparison market at the same LOT as the export price or 
CEP, the Department may compare the U.S. sale to sales at a different 
LOT in the comparison market. In comparing export price or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales only, if a normal value LOT is more remote 
from the factory than the CEP LOT and we are unable to make a LOT 
adjustment, the Department shall grant a CEP offset, as provided in 
section 773(a)(7)(B) of the Act. See Steel Plate, 62 FR at 61731, 
61732.
    TKS claims that it made home market sales at only one level of 
trade (i.e., direct sales to end users), which is more advanced than 
the level of trade in the U.S. market (i.e., CEP sales to the U.S. 
affiliate). According to TKS, the level of trade in the home market is 
not comparable to the CEP level of trade because the majority of the 
selling functions with respect to its home market sales were performed 
by TKS in Japan at a more advanced level of trade than those selling 
functions relating to its U.S. sales, which are generally performed by 
its U.S. affiliate. TKS claims that the selling functions between the 
two markets differ even further once the applicable selling expenses 
are deducted from the CEP starting price. Therefore, TKS requested that 
the Department grant it a CEP offset under section 773(a)(7)(B) of the 
Act.
    In order to determine whether normal value was established at a 
different LOT than CEP sales, we examined stages in the marketing 
process and selling functions along the chain of distribution between 
the respondent and its home market customers. We compared the selling 
functions performed for home market sales with those performed with 
respect to the CEP transactions, exclusive of economic activities 
occurring in the United States, pursuant to section 772(d) of the Act, 
to determine if the home market level of trade constituted a different 
and more advanced stage of distribution than the CEP level of trade.
    TKS reported that it sold through one channel of distribution in 
the home market, and through a different channel in the United States. 
In Japan, TKS sold subject merchandise directly to unaffiliated 
customers, while in the United States, TKS sold the subject merchandise 
through its affiliate TKS (U.S.A.), who then sold the subject 
merchandise directly to unaffiliated purchasers.
    We compared the selling functions and the level of activity in each 
distribution channel and found that several of the functions performed 
in the comparison market either were not performed in connection with 
the U.S. sale at the export level of trade, or were performed at a 
significantly lower level of activity on the part of TKS.
    Moreover, as we have determined that installation expenses incurred 
on the U.S. sales should be treated as further manufacturing expenses, 
the CEP after deduction for all expenses under section 772(d) of the 
Act reflects an uninstalled LNPP. Supporting this contention is the 
fact that many of the same selling functions that are performed at the 
comparison market level of trade are performed not at the export level 
of trade, but by TKS's U.S. affiliate. Based on this analysis, we 
conclude that the comparison market and U.S. channels of distribution 
and the sales functions associated with each are sufficiently different 
so as to constitute two different levels of trade, and we find that the 
comparison market sales are made at a more advanced level of trade than 
are CEP sales. Because TKS made sales in the home market at only one 
level of trade, the difference in the level of trade cannot be 
quantified. Further, we do not have information which would allow us to 
examine pricing patterns based on TKS's sales of other products, and 
there are no other respondents or other record information on which 
such an analysis could be based. Accordingly, because the data 
available do not form an appropriate basis for making a level of trade 
adjustment, but the level of trade in the home market is at a more 
advanced stage of distribution than the level of trade of the CEP, we 
have made a CEP offset to normal value in accordance with section 
773(a)(7)(B) of the Act.

Currency Conversion

    We made currency conversions, in accordance with section 773A(a) of 
the Act, based based on the official exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank of New 
York.

Intent To Revoke

    On September 22, 2000, TKS requested that, pursuant to 19 CFR 
351.222(b), the Department revoke the antidumping duty order in the 
above-referenced proceeding with respect to TKS at the conclusion of 
this administrative review. TKS submitted

[[Page 51384]]

along with its revocation request a certification stating that: (1) The 
company sold subject merchandise at not less than normal value during 
the POR, and that in the future it would not sell such merchandise at 
less than normal value (see 19 CFR 351.222(e)(1)(i)); (2) the company 
has sold the subject merchandise to the United States in commercial 
quantities during each of the past three years (see 19 CFR 
351.222(e)(1)(ii)); and (3) the company agrees to immediate 
reinstatement of the order, if the Department concludes that the 
company, subsequent to revocation, sold the subject merchandise at less 
than normal value (see 19 CFR 351.222(e)(1)(iii)).
    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Act. 
While Congress has not specified the procedures that the Department 
must follow in revoking an order, the Department has developed a 
procedure for revocation that is described in 19 CFR 351.222. This 
regulation requires, inter alia, that a company requesting revocation 
must submit the following: (1) A certification that the company has 
sold the subject merchandise at not less than normal value in the 
current review period and that the company will not sell at less than 
normal value in the future; (2) a certification that the company sold 
the subject merchandise in each of the three years forming the basis of 
the request in commercial quantities; and (3) an agreement to 
reinstatement of the order if the Department concludes that the 
company, subsequent to the revocation, sold subject merchandise at less 
than normal value. (See 19 CFR 351.222(e)(1).) Upon receipt of such a 
request, the Department may revoke an order, in part, if it concludes 
that: (1) The company in question has sold subject merchandise at not 
less than normal value for a period of at least three consecutive 
years; (2) the company has agreed to immediate reinstatement of the 
order if the Department concludes that the company, subsequent to the 
revocation, sold subject merchandise at less than normal value, and (3) 
the continued application of the antidumping duty order is not 
otherwise necessary to offset dumping. See 19 CFR 351.222(b)(2). See 
also Professional Electric Cutting Tools From Japan: Final Results of 
the Fifth Antidumping Duty Administrative Review and Revocation of the 
Antidumping Duty Order, in Part, 64 FR 71411 (December 21, 1999); and 
Final Results of Antidumping Duty Administrative Review and 
Determination Not To Revoke Order in Part: Pure Magnesium from Canada, 
64 FR 12977, 12982 (March 16, 1999).
    We received no comments from the petitioner on TKS's request for 
revocation.
    Upon review of the three criteria outlined at Sec. 351.222(b) of 
the Department's regulations and the evidence in the record, we have 
preliminarily determined that the Department's requirements for 
revocation have been met. Based on the preliminary results in this 
review and the final results of the two preceding reviews, TKS has 
preliminarily demonstrated three consecutive years of sales at not less 
than normal value. Furthermore, we find that TKS's aggregate sales to 
the United States have been made in commercial quantities during all 
segments of this proceeding. TKS also agreed in writing to the 
immediate reinstatement of the antidumping duty order if the Department 
concludes that, subsequent to the partial revocation, TKS sold the 
subject merchandise at less than normal value.
    Based on the above facts, and absent a determination that the 
continued application of the antidumping duty order is otherwise 
necessary to offset dumping, we preliminarily intend to revoke the 
antidumping duty order with respect to TKS. If these preliminary 
findings are affirmed in our final results, we intend to revoke the 
order with respect to all LNPP produced by TKS that are also exported 
by TKS. In accordance with 19 CFR 351.222(f)(3), we will terminate the 
suspension of liquidation for any such merchandise entered, or 
withdrawn from warehouse, for consumption on or after the first day 
after the period under review, and will instruct the Customs Service to 
refund any cash deposit.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margin exists for the period September 1, 1999, through 
August 31, 2000:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/exporter                        margin
------------------------------------------------------------------------
Tokyo Kikai Seisakusho, Ltd..................................       0.00
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the date of publication of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of publication. See 19 CFR 351.310(c). If 
requested, a hearing will be held 44 days after the publication of this 
notice, or the first workday thereafter.
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs and rebuttal briefs. See 19 CFR 351.310(c). Case 
briefs from interested parties and rebuttal briefs, limited to the 
issues raised in the respective case briefs, may be submitted not later 
than 30 days and 35 days, respectively, from the date of publication of 
these preliminary results. See 19 CFR 351.309(c) and (d). Parties who 
submit case briefs or rebuttal briefs in this proceeding are requested 
to submit with each argument (1) a statement of the issue and (2) a 
brief summary of the argument. Parties are also encouraged to provide a 
summary of the arguments not to exceed five pages and a table of 
statutes, regulations, and cases cited.
    The Department will issue the final results of these administrative 
reviews, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed.

Assessment Rates

    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. If these preliminary results are 
adopted in our final results, we will instruct the Customs Service to 
liquidate all entries subject to this review without regard to 
antidumping duties.
    If these preliminary results are not adopted in the final results, 
we will instruct the Customs Service to assess antidumping duties on 
all appropriate entries covered by this review if any importer-specific 
assessment rates calculated in the final results of this review are 
above de minimis (i.e., at or above 0.5 percent). For assessment 
purposes, we intend to calculate importer-specific assessment rates for 
the subject merchandise by aggregating the antidumping duty margins 
calculated for all U.S. sales examined

[[Page 51385]]

and dividing the amount by the total entered value of the sales 
examined.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of LNPP from Japan that are entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(2)(c) of the Act: (1) No cash deposit will be required for LNPP 
from Japan that are produced by TKS and that are also exported by TKS 
(unless the margin established for the company in the final results of 
this review is above de minimis); (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 58.69 percent, the ``All Others'' rate made effective by the LTFV 
investigation. These requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) 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 published in accordance 
with section 751(a)(1) of the Act and 19 CFR 351.221.

    Dated: October 1, 2001.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-25272 Filed 10-5-01; 8:45 am]
BILLING CODE 3510-DS-P