[Federal Register Volume 67, Number 45 (Thursday, March 7, 2002)]
[Notices]
[Pages 10363-10365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5473]


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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, In-Part

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

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 
respondents, Komatsu, Ltd. (Komatsu) and Hitachi Zosen Corp. (HZC) and 
its subsidiary Hitachi Zosen Fukui Corporation, doing business as H&F 
Corporation (H&F). This review covers shipments of this merchandise to 
the United States during the period of February 1, 2000 through January 
31, 2001. We have preliminarily determined that U.S. sales have not 
been made below normal value (NV). We also intend, preliminarily, to 
revoke the order, in part, with respect to Komatsu because we find that 
Komatsu has met all of the requirements set forth in section Section 
351.222(b) of the regulations for revocation. If these preliminary 
results are adopted in our final results, we will instruct the U.S. 
Customs Service to liquidate entries without regard to antidumping 
duties. 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.

EFFECTIVE DATE: March 7, 2002.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Sally Gannon, 
Antidumping/Countervailing Duty Enforcement, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington DC 20230; telephone 
(202) 482-0666 or (202) 482-0162, respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the Tariff Act of 1930 (the Act), as amended. In 
addition, unless otherwise indicated, all citations to the Department's 
regulations are to the regulations codified at 19 CFR part 351 (2001).

Background

    The Department published an antidumping duty order on MTPs from 
Japan on February 16, 1990 (55 FR 5642). On March 22, 2001, we 
published a notice initiating an administrative review of MTPs (66 FR 
16037). The review covers three producers/exporters, Komatsu, HZC, and 
HZC's subsidiary, H&F, which requested the review.
    Due to complicated issues in this case, on October 2, 2001, the 
Department extended the deadline for the preliminary results of this 
antidumping duty administrative review until no later than February 28, 
2002. See Mechanical Transfer Presses From Japan: Extension of Time 
Limit for Preliminary Results of Antidumping Administrative Review, 66 
FR 52107 (October 2, 2001).

Scope of Review

    Imports covered by this review include MTPs currently classifiable 
under Harmonized Tariff Schedule of the United States (HTSUS) item 
numbers 8462.99.8035, 8462.21.8085, and 8466.94.5040. The HTSUS 
subheadings are provided for convenience and Customs purposes only. The 
written description of the scope of this order is dispositive. 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 
3, 1996.)

Verification

    As provided in section 782(i) of the Act, we verified the sales and 
cost information provided by Komatsu using standard verification 
procedures, including on-site inspection of the manufacturer's 
facilities and the examination of relevant sales and financial records. 
Our verification results are outlined in the public and proprietary 
versions of the verification report, which are on file in the Central 
Records Unit of the Department.

Intent To Revoke

    In its timely submission of February 28, 2001, Komatsu requested, 
pursuant to 19 CFR 351.222(e)(1), partial revocation of the order with 
respect to its sales of MTPs. Komatsu certified that (1) it sold the 
subject merchandise in commercial quantities at not less than NV for a 
period of at least three consecutive years; (2) in the future it will 
not sell the subject merchandise at less than NV; and, (3) it agreed to 
its immediate reinstatement under the order if the Department 
determines that, subsequent to revocation, it has sold the subject 
merchandise at less than NV.
    Based upon the preliminary results in this review and the final 
results of the two preceding reviews, Komatsu has preliminarily 
demonstrated three consecutive years of sales at not less than normal 
value. Furthermore, we have determined that Komatsu's aggregate sales 
to the United States have been made in commercial quantities during 
these three segments of this proceeding. The company also agreed in 
writing that it will not sell the subject merchandise at less than NV 
in the future and to the immediate reinstatement of the antidumping 
order, as long as any exporter or producer is subject to the order, if 
the Department concludes that, subsequent to the partial revocation, 
Komatsu has sold the subject merchandise at less than normal

[[Page 10364]]

value. Based on the above facts, and absent a determination that the 
continued application of the antidumping order is otherwise necessary 
to offset dumping, the Department preliminarily determines that partial 
revocation with respect to Komatsu is warranted.
    In order to determine that Komatsu sold subject merchandise at 
commercial quantities, we requested that Komatsu submit sales quantity 
and value information for all years in which the order has been in 
place. During the past three review periods, Komatsu had sales in 
amounts comparable to both its home market sales and third country 
sales. Its sales were higher during these three periods than at any 
earlier time during the course of the order. Therefore, we determine 
that Komatsu made sales in commercial quantities to the United States 
during the three review periods in which it was found not to have sold 
MTPs at less than normal value.
    Therefore, if these preliminary results are affirmed in our final 
results, we intend to revoke the order in part with respect to 
merchandise produced and exported by Komatsu. 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 
after February 1, 2001.

Affiliation of HZC and H&F

    Based on HZC's ownership interest in H&F (73.01 percent), we 
preliminarily find HZC and H&F to be affiliated pursuant to sections 
771(33)(E) and (G) of the Act.

Collapsing HZC and H&F

    Section 351.401(f) of the Department's regulations outlines the 
criteria for collapsing (i.e., treating as a single entity) affiliated 
producers. Pursuant to section 351.401(f), the Department will treat 
two or more affiliated producers as a single entity where (1) those 
producers have production facilities for similar or identical products 
that would not require substantial retooling of either facility in 
order to restructure manufacturing priorities, and (2) the Department 
concludes that there is a significant potential for the manipulation of 
price or production. Pursuant to section 351.401(f)(2), in identifying 
a significant potential for the manipulation of price or production, 
the Department may consider the following factors:
    (i) The level of common ownership;
    (ii) the extent to which managerial employees or board members of 
one firm sit on the board of directors of an affiliated firm; and,
    (iii) whether operations are intertwined, such as through the 
sharing of sales information, involvement in production and pricing 
decisions, the sharing of facilities or employees, or significant 
transactions between the affiliated producers.
    To establish the first prong of the collapsing test, pursuant to 
section 351.401(f)(1), the producers must have production facilities 
equipped to manufacture similar or identical products that would not 
require substantial retooling of either facility to restructure 
manufacturing priorities. H&F maintains a production facility that 
produces MTPs in Fukui Prefecture, and another facility at Kanazu Town 
that produces press accessories. HZC owns two subsidiaries that 
sometimes fabricate significant MTP components. One of these two 
subsidiaries, which is wholly-owned by HZC, is capable of manufacturing 
complete MTPs, according to HZC's response.
    With regard to common ownership, which is one of the factors to be 
considered under 19 CFR 351.401(f)(2)(i), HZC owns 73.01 percent of 
H&F's voting stock.
    With respect to the extent to which there is a management overlap 
between HZC and H&F, under 19 CFR 351.401(f)(2)(ii), while there are no 
common board members between the two companies, we conclude that there 
is significant management overlap between HZC and H&F. See Memorandum 
to Sally Gannon from Mark Hoadley, Analysis of HZC and H&F, dated 
February 28, 2002, for a discussion of the business proprietary facts 
underlying this conclusion.
    Finally, with regard to 19 CFR 351.401(f)(2)(iii), there are 
intertwined operations between companies. According to the response, 
HZC and H&F ``press businesses were integrated in July 1999. As part of 
the integration process, {HZC} transferred its press sales staff and 
engineers to H&F. The former {HZC} engineers have found their home in a 
newly created Large Presses Department.'' Moreover, HZC ``sometimes 
acts as the nominal `reseller' for H&F's MTPs * * * For these 
`resales,' {HZC} does not perform any selling functions; it merely 
allows H&F to use its name for consideration in order to inspire the 
customer's confidence.''
    Based upon a review of the totality of the circumstances, we 
preliminarily find that collapsing of these two entities is appropriate 
in this case under 19 CFR 351.401(f).

Normal Value Comparisons

    To determine whether respondents' exports of the subject 
merchandise to the United States were made at less than NV, we compared 
export price to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice.

Export Price

Komatsu

    We calculated an export price (EP) in accordance with section 
772(a) of the Act. We calculated EP for Komatsu based on the packed, 
freight prepaid price to the U.S. customer. We made deductions from the 
starting price for Japanese inland freight and insurance, brokerage and 
handling, international freight, marine insurance, U.S. inland freight, 
duties, and supervision, in accordance with section 772(c)(2) of the 
Act.

HZC and H&F

    We calculated EP in accordance with section 772(a) of the Act. We 
calculated EP for HZC and H&F based on the packed, freight prepaid 
price to the U.S. customer. We made deductions from the starting price 
for Japanese inland freight and insurance, brokerage and handling, 
international freight, marine insurance, U.S. inland freight, and 
supervision, in accordance with section 772(c)(2) of the Act.

Normal Value

Komatsu

    We preliminarily determine that the use of constructed value (CV) 
is warranted to calculate NV for Komatsu, in accordance with section 
773(a)(4) of the Act. While the home market is viable, sales made to 
the United States do not permit appropriate price-to-price comparisons 
with sales made in the home market because the MTPs, each of which is 
sold for millions of dollars, are made to each customer's 
specifications, resulting in significant differences among machines. 
Therefore, we have resorted to the use of CV. This decision is 
consistent with Department precedent in this proceeding. See, e.g., 
Mechanical Transfer Presses From Japan; Preliminary Results of 
Antidumping Duty Administrative Review, and Intent To Revoke Order in 
Part, 63 FR 11211, 11213 (March 6, 1998); and Mechanical Transfer 
Presses From Japan; Final Results of Antidumping Duty Administrative 
Review and Revocation of Antidumping Duty Administrative Order in Part, 
63 FR 37331 (July 10, 1998).
    We note that, in past proceedings involving large, custom-built 
capital equipment, in addition to prior reviews

[[Page 10365]]

of this order, we have normally resorted to CV. See, e.g., Large 
Newspaper Printing Presses and Components Thereof, Whether Assembled or 
Unassembled, From Japan: Preliminary Results of Antidumping Duty 
Administrative Review, 65 FR 62700, 62702 (October 19, 2000); Large 
Power Transformers from France: Final Result of Antidumping 
Administrative Review, 61 FR 40403, (August 2, 1996). CV consists of 
cost of design, direct materials, direct labor, variable overhead, 
fixed overhead, product-line R&D, and loss on disposals of inventories 
(yielding total cost of manufacturing), plus selling, general and 
administrative expenses, net interest expense, profit, and U.S. packing 
expenses. We subtracted home market direct selling expenses 
(warranties, commissions, and credit). We added to CV amounts for 
direct selling expenses (U.S. tax, warranties, and credit) for 
merchandise exported to the United States. In calculating CV profit, we 
subtracted from home market gross unit price, warranties, indirect 
selling expenses, total cost of manufacturing, general and 
administrative expenses, net interest expense, and movement expenses 
(including supervision expenses).

HZC and H&F

    We preliminarily determine that the use of CV is warranted to 
calculate NV for HZC and H&F, in accordance with section 773(a)(4) of 
the Act. While the home market is viable, sales made to the United 
States do not permit proper price-to-price comparisons with sales made 
in the home market, as discussed above. Therefore, we have resorted to 
the use of CV for HZC and H&F, as well as Komatsu. CV consists of 
direct materials, direct labor, variable overhead, fixed overhead 
(yielding total cost of manufacturing), plus selling, general and 
administrative expenses, net interest expense, profit, and U.S. packing 
expenses. We subtracted home market direct selling expenses (warranties 
and credit). We added to CV amounts for direct selling expenses 
(warranties and credit) for merchandise exported to the United States. 
In calculating CV profit, we subtracted from home market gross unit 
price, warranties, commissions, indirect selling expenses, cost of 
goods sold, general and administrative expenses, net interest expense, 
and movement expenses (including installation and supervision 
expenses).

Preliminary Results of Review

    We preliminarily determine that the following dumping margins 
exist:

------------------------------------------------------------------------
                                                              Margin
    Manufacturer/exporter             Time period            (percent)
------------------------------------------------------------------------
Komatsu, Ltd................  02/01/00-01/31/01.........            0.00
Hitachi Zosen Corp/Hitachi    02/01/00-01/31/01.........            0.00
 Zosen Fukui Corp.
------------------------------------------------------------------------

    The Department will disclose, in accordance with 19 CFR 351.224(b), 
its calculations to interested parties within 5 days of the date of 
public announcement of these results, or if no public announcement, 
within 5 days of publication of this notice. Any interested party may 
request a hearing within 30 days of publication in accordance with 19 
CFR 351.310(c). Any hearing, if requested, will be held 37 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 in accordance with 19 CFR 351.309(c)(1)(ii). 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 35 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 U.S. 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 
rate 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) For 
Komatsu (except if the order is revoked in part), HZC and HZFC, the 
cash deposit rate 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 be the company-specific rate 
established 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 (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 subject merchandise; and (4) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
shall be the rate established in the LTFV investigation, which is 14.51 
percent. See Notice of Final Determination of Sales at Less Than Fair 
Value and Antidumping Duty Order: Mechanical Transfer Presses from 
Japan, 55 FR 5642 (February 16, 1990). These deposit rates, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review. If the order covering MTPs from 
Japan is revoked in-part for Komatsu, we will instruct Customs to 
terminate the suspension of liquidation for the merchandise covered by 
the revocation on the first day after the period under review (February 
1, 2001), in accordance with 19 CFR 351.222(f)(3).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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 issued in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) and 
19 U.S.C 1677f(i)(1)).

    Dated: February 28, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-5473 Filed 3-6-02; 8:45 am]
BILLING CODE 3510-DS-P