5592 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

antidumping duties on all appropriate

entries. Individual differences between

U.S. price and normal value (NV) may

vary from the percentage stated above.

The Department will issue appraisement

instructions directly to the Customs

Service.

Furthermore, the following deposit

requirements will be effective for all

shipments of the subject merchandise

entered, or withdrawn from warehouse,

for consumption on or after the

publication date of these final results of

administrative review, as provided by

section 751(a)(1) of the Tariff Act: (1)

The cash deposit rate for Ausimont will

be 17.73 percent; (2) for merchandise

exported by manufacturers or exporters

not covered in this review but covered

in the original less than fair value

(LTFV) investigation or a previous

review, the cash deposit will continue

to be the most recent rate published in

the final determination or final results

for which the manufacturer or exporter

received a company-specific rate; (3) if

the exporter is not a firm covered in this

review, a previous review, or the

original investigation, but the

manufacturer is, the cash deposit rate

will be that established for the

manufacturer of the merchandise in the

final results of this review or the LTFV

investigation; and (4) if neither the

exporter nor the manufacturer is a firm

covered in this or any previous review,

the cash deposit rate will be 46.46

percent, the ‘‘all others’’ rate established

in the LTFV investigation (50 FR 26019,

June 24, 1985).

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 the only

reminder to parties subject to

administrative protective orders (APOs)

of their responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34(d)(1). 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 Tariff Act (19 U.S.C. 1675(a)(1))

and section 353.22 of the Department’s

regulations (19 CFR 353.22 (1996)).

Dated: January 27, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–2881 Filed 2–5–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–588–703]

Certain Internal-Combustion Industrial

Forklift Trucks From Japan; Final

Results of Antidumping Duty

Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

review.

SUMMARY: On August 2, 1996, the

Department of Commerce published the

preliminary results of administrative

review of the antidumping duty order

on certain internal-combustion

industrial forklift trucks from Japan. The

review covers three manufacturers/

exporters. The period of review is June

1, 1994 through May 31, 1995.

Based on our analysis of the

comments received, we have made

changes, including corrections of certain

inadvertent programming and clerical

errors, in the margin calculation for

Toyota Motor Corporation. Therefore,

the final results differ from the

preliminary results. The final weightedaverage dumping margins for the

reviewed firms are listed below in the

section entitled ‘‘Final Results of the

Review.’’

EFFECTIVE DATE: Febraury 6, 1997.

FOR FURTHER INFORMATION CONTACT:

Thomas O. Barlow, Davina Hashmi or

Kris Campbell, at Import

Administration, International Trade

Administration, U.S. Department of

Commerce, Washington, D.C. 20230;

telephone: (202) 482–4733.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Act), are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (URAA). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to

the current regulations, as amended by

the interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

Background

On August 2, 1996, the Department of

Commerce (the Department) published

the preliminary results of administrative

review of the antidumping duty order

on certain internal-combustion

industrial forklift trucks from Japan (61

FR 40400)(Preliminary Results). The

review covers three manufacturers/

exporters. The period of review (the

POR) is June 1, 1994, through May 31,

1995. We invited parties to comment on

our Preliminary Results. We received

briefs and rebuttal briefs on behalf of

NACCO Materials Handling Group, Inc.

(petitioners), and Toyota Motor

Corporation and Toyota Motor Sales,

U.S.A., Inc. (Toyota). At the request of

Toyota, a hearing was scheduled but

was subsequently canceled at Toyota’s

request. The Department has conducted

this administrative review in

accordance with section 751 of the Act.

Scope of Review

The products covered by this review

are certain internal-combustion,

industrial forklift trucks, with lifting

capacity of 2,000 to 15,000 pounds. The

products covered by this review are

further described as follows: Assembled,

not assembled, and less than complete,

finished and not finished, operatorriding forklift trucks powered by

gasoline, propane, or diesel fuel

internal-combustion engines of off-thehighway types used in factories,

warehouses, or transportation terminals

for short-distance transport, towing, or

handling of articles. Less-than-complete

forklift trucks are defined as imports

which include a frame by itself or a

frame assembled with one or more

component parts. Component parts of

the subject forklift trucks which are not

assembled with a frame are not covered

by this order.

Imports of these products are

classified under the following

Harmonized Tariff Schedules (HTS)

subheadings: 8427.20.00, 8427.90.00,

and 8431.20.00. The HTS item numbers

are provided for convenience and

Customs purposes. The written

descriptions remain dispositive.

This review covers the following

firms: Toyota, Nissan Motor Company

(Nissan), and Toyo Umpanki Company,

Ltd. (Toyo).

Use of Facts Available

In accordance with section 776 of the

Act, we have determined that the use of

facts available is appropriate for certain

portions of our analysis of Toyota’s data.

For a discussion of our application of

facts available, see Comments 1 through

3, below.
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5593

1We address Toyota’s specific comments

regarding the use of facts available with regard to

certain selling expenses and home market credit

revenue in Comments 2 and 3, respectively.

Changes Since the Preliminary Results

Based on our analysis of comments

received, we have made certain

corrections that changed our results. We

have corrected certain programming and

clerical errors in our Preliminary

Results, where applicable; they are

discussed in the relevant comment

sections below.

Analysis of Comments and Responses

Issues raised in the case and rebuttal

briefs by parties to this administrative

review are addressed below.

Toyota’s Comments

Comment 1

Toyota provided the following general

comments regarding the Department’s

use of the facts available in this review.1

Toyota asserts that the Department’s use

of facts available for the Preliminary

Results is punitive and is

disproportionate to any perceived

deficiencies at verification. Toyota

suggests that the facts available are not

corroborated—and in fact are

contradicted—by available evidence,

contrary to law and Department

precedent.

Toyota asserts that the Department’s

use of facts available is governed by a

two-step inquiry (citing Preliminary

Results of Antidumping Duty

Administrative Review: Certain Welded

Carbon Steel Pipe and Tube From

Turkey, 61 FR 35188, 35189 (1996), and

Final Determination of Sales at Less

Than Fair Value: Certain Pasta from

Turkey, 61 FR 30309, 30312) (Pasta

from Turkey)). First, Toyota states that

section 776(a)(2)(D) of the Act allows

use of facts otherwise available if an

interested party provided information

but it cannot be verified and notes that

the SAA directs that such facts available

must be ‘‘reasonable to use under the

circumstances’’ (citing the SAA at 869).

Second, Toyota states that section

776(b) provides that, in selecting from

facts available, adverse inferences may

be drawn only if the ‘‘interested party

has failed to cooperate by not acting to

the best of its ability to comply with a

request for information * * *.’’ Toyota

argues that perceived deficiencies in the

verification of its reported information

are not sufficient to allow the

Department to resort to

disproportionately punitive adverse

inferences, given that Toyota’s

deficiencies are far from a general

failure to cooperate with requests for

information.

Toyota asserts that it responded fully

and timely to questionnaires in this

review, prepared a substantial amount

of documentation for the verification,

and made every effort to provide

requested documents. Toyota asserts

that the Department has no basis for

concluding that Toyota failed to

cooperate and the Department should

not use adverse inferences and punitive

facts available.

Toyota states that a comparison of the

perceived deficiencies in Toyota’s

responses with past occasions in which

the Department has been confronted

with deficiencies, but did not draw

adverse inferences, illustrates that the

use of adverse facts available against

Toyota was unwarranted (citing, among

others, Chrome-Plated Lug Nuts From

Taiwan; Preliminary Results of

Antidumping Duty Administrative

Review and Termination in Part, 61 FR

35724, 35725 (1996)).

Toyota further states that a

comparison of the perceived

deficiencies in its response with past

occasions where the Department has

drawn adverse inferences against

interested parties also illustrates that

adverse inferences against Toyota in this

case were unwarranted. First, Toyota

asserts that it did not fail to submit a

questionnaire response (citing adverse

inferences drawn as a result of failure to

submit a response in, among others,

Final Determination of Sales at Less

Than Fair Value: Large Newspaper

Printing Presses and Components

Thereof, Whether Assembled or

Unassembled, From Germany, 61 FR

38166, 38167 (1996) (LNPP from

Germany)).

Second, Toyota notes that its response

was not wholly unverifiable (citing

adverse inferences drawn as a result of

the complete failure of verification in

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From France, et al; Preliminary

Results of Antidumping Duty

Administrative Reviews, Termination of

Administrative Reviews, and Partial

Termination of Administrative Reviews,

61 FR 35713, 31716 (1996)).

Third, Toyota states that it has never

refused to provide information to the

Department (citing adverse inferences

drawn due to a respondent’s refusal to

provide information in Pasta from

Turkey, 61 FR 30309, 30312 (1996).

Toyota concludes that, given these

facts and precedent, neither the statute

nor the Department’s practice permit the

use of adverse inferences against

Toyota; therefore, to the extent the

Department uses facts available, the

Department must select facts which are

reasonable under the circumstances

(citing LNPP from Germany, 61 FR at

38179, and the SAA at 869).

Petitioners respond that the record

indicates clearly that the Department

was unable to verify a substantial

portion of Toyota’s home market sales

questionnaire response. Petitioners

assert that, by the express terms of the

statute, if the Department could not

verify Toyota’s data, the Department

was not permitted by law to rely on the

information to calculate Toyota’s

dumping margins (citing section 776 of

the Act). Petitioners contend that the

Department, therefore, must base its

determination on the facts otherwise

available.

Petitioners argue that the cases Toyota

cites as instances where the Department

applied adverse inferences do not

support Toyota’s claim that the

Department was overly punitive in this

case. Petitioners assert that, in those

instances, the Department generally

selected the highest rate from another

respondent or prior review; conversely,

in this case the Department did not

completely reject Toyota’s response

even though it could not verify a

substantial portion of it. Petitioners

assert that, under these circumstances,

the Department was not making an

adverse inference but instead was

simply following the requirements of

the statute. Petitioners conclude that

Toyota’s claim that the Department

made an unnecessarily punitive adverse

inference when it relied on the facts

otherwise available is not valid.

Department’s Position

We disagree with Toyota with respect

to its general comments regarding the

use of the facts available in this review.

Our determination in this regard is

consistent with the statute and our

practice. We determined, in accordance

with section 776(a) of the Act, that the

use of facts available for certain home

market selling expenses and home

market credit revenue is appropriate for

Toyota because we were unable to verify

the accuracy of the information Toyota

submitted. As our discussions in

response to Comments 2 and 3, below,

make clear, despite our efforts at

verification, we were unable to verify

the information in question sufficiently

to accept it for our analysis.

In addition, we have determined that,

by not providing certain basic

verification documents that were

essential to the establishment of the

accuracy of the data submitted (e.g.,

expense ledgers for certain selling

expenses and an affiliated company’s

(Toyota Finance Corporation, ‘‘TFC’’)

financial statements), Toyota did not

cooperate to the best of its ability to
5594 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

comply with our requests for such

information. Accordingly, our resort to

an adverse inference with respect to

these items is appropriate and fully in

accord with law. See section 776(b) of

the Act.

Contrary to Toyota’s contention that

this result is overly punitive, we have

used in our analysis all data submitted

by the company that we were able to

verify. While we have determined that

Toyota has not cooperated to the best of

its ability with respect to the selling

expense and credit revenue items, we

find that the nature and extent of the

deficiencies in Toyota’s information do

not undermine the credibility of other

information that it submitted during this

review. Accordingly, we have calculated

Toyota’s dumping rate using all data it

submitted except for the specific

information that we were unable to

verify.

The cases Toyota cites do not

demonstrate that we have departed from

our practice in applying the facts

available in this review. These cases

illustrate that, consistent with the SAA,

we resolve such matters on a case-bycase basis by examining the nature and

extent of any deficiencies and the level

of cooperation by respondent (see SAA

at 868–870). After such an examination

we determine whether to apply adverse

inferences. Neither the statute nor our

practice limits our use of adverse

inferences to completely unresponsive

firms. Rather, we may draw such

inferences whenever a party fails to

cooperate by not acting to the best of its

ability to comply with a request for

information. As discussed below, the

information requests at issue were

routine verification requests that in no

way constituted an unreasonable burden

on Toyota and, therefore, we

determined that an adverse application

of facts available is appropriate for these

items.

Comment 2

Toyota asserts that the Department’s

use of the facts available with respect to

the company’s reported home market

indirect selling expenses, home market

direct advertising, and U.S. direct

selling expenses incurred in Japan is

inappropriately punitive. Toyota notes

that, with regard to home market

indirect selling expenses and direct

advertising, Toyota prepared the

necessary documentation in support of

the expenses, and the Department

verified the expenses with no

discrepancies, but Toyota was simply

unable to provide further details

requested on site. With regard to direct

U.S. selling expenses incurred in Japan,

Toyota notes that it only had sufficient

time to correct an error it detected in

preparing for verification and did not

have sufficient time to prepare the

reconciliation between the actual

expenses and its financial statements.

Toyota claims that it has gone through

two successful verifications and states

that it prepared for verification in this

review in light of the information and

level of documentation examined at

previous verifications. Toyota contends

that, when the Department requested

additional documentation not

anticipated by Toyota, the company was

not always able to obtain the requested

documents in the time permitted.

Toyota argues that, where a company

prepares a substantial amount of

information for verification and acts to

the best of its ability to obtain

documents requested at verification, but

is unable to obtain such in the limited

time-frame of verification, it is not

appropriate to penalize the company

through use of punitive facts available.

Toyota claims that its home market

expenses are significant and states that

the Department’s level-of-trade analysis

confirms that the company performs

extensive selling functions and incurs

significant selling expenses in

connection with sales in the home

market. Toyota asserts that the

Department’s analysis for the

Preliminary Results pretends these

significant expenses do not exist only in

those parts of the analysis when it is

detrimental to Toyota, while assuming

they do exist whenever such an

assumption is detrimental to the

company. Toyota states that this

resulted in the following significant

punitive and compounding adjustments:

(1) By not adjusting normal value (NV)

downward by the amount of these

expenses, dumping duties were

increased on each U.S. truck equivalent

to these expenses; (2) by not including

these expenses in the calculation of the

company-wide profit used in the

constructed export price (CEP) profit

calculation, the resulting CEP profit was

increased; (3) by including these

expenses in the calculation of

constructed value (CV) and then

deducting from CV only the much

smaller amount of direct and indirect

selling expenses in deriving the

adjusted CV for comparison to CEP, the

CV was increased; and (4) by deducting

these expenses from the home market

prices used in the cost test, the number

of sales found to be below cost

increased. Toyota contends that these

calculations demonstrate that, without

regard to any reasonable determination

about the accuracy of the expenses, at

various steps in its calculations the

Department applied whatever number

was adverse to Toyota, effectively

compounding the penalty several times

through internally inconsistent

applications of the adjustments. Toyota

argues that this is an excessive and

duplicative penalty out of proportion

with perceived deficiencies, particularly

since the Department reviewed

substantial documents that supported

the reported expenses at verification.

Petitioners contend that the

Department’s decision to reject a certain

portion of Toyota’s selling expenses was

not punitive and notes that Toyota has

proposed no reasonable alternatives.

Petitioners note that the Department

cannot accept Toyota’s data simply

because the company attempted to

comply with requests for information

and, given there were no other

reasonable options to take, the

Department correctly rejected the

claimed expenses.

Petitioners argue that the

Department’s reliance on the reported

expenses for purposes of conducting the

cost test and calculating CV was proper

and that Toyota cannot expect to benefit

from its inability to pass verification.

Furthermore, the alteration of Toyota’s

cost of production (COP) data in a way

to benefit Toyota as a result of a failed

verification would be grossly unfair and

would contradict the fundamental

purpose of the verification provisions of

the statute.

Department’s Position

We disagree with Toyota. In light of

Toyota’s inability to establish the

accuracy of the data that it submitted

regarding its home market direct

advertising and home market indirect

selling expenses, we were unable to

include these reported expenses as

adjustments to home market price in

determining the NV. However, we

included these expenses in our analysis

for purposes of establishing the adjusted

home market price for use in the cost

test and in the calculation of CV, and we

used Toyota’s reported direct

advertising expenses incurred on U.S.

sales in our calculation of CEP, because

by not doing so we would have

rewarded Toyota for its failure to

establish the accuracy of these expenses

at verification.

This approach is consistent with the

Department’s practice in other cases.

For instance, in Antifriction Bearings

(Other Than Tapered Roller Bearings)

and Parts Thereof From France, et al:

Final Results of Antidumping Duty

Administrative Reviews, 62 FR 2081,

2090–2092 (January 15, 1997) (AFBs 6),

we stated, ‘‘Where we have found that

a company has not acted to the best of

its ability in reporting the adjustment
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5595

* * *, we have made an adverse

inference in using the facts available

with respect to this adjustment,

pursuant to section 776(b) of the Tariff

Act * * *. The treatment of positive

[home market] billing adjustments as

direct adjustments is appropriate

because disallowing such adjustments

would provide an incentive to report

positive billing adjustments on an

unacceptably broad basis in order to

reduce NV and margins.’’ This approach

is clearly sanctioned by the SAA at 870:

‘‘Where a party has not cooperated,

Commerce * * * may employ adverse

inferences about the missing

information to ensure that the party

does not obtain a more favorable result

by failing to cooperate than if it had

cooperated fully. In employing adverse

inferences, one factor the agencies will

consider is the extent to which a party

may benefit from its own lack of

cooperation.’’

The same approach with respect to

Toyota’s selling expenses is appropriate,

given Toyota’s failure to provide basic

source documentation at verification.

The expenses at issue concern Toyota’s

reported home market indirect selling

expenses, home market direct

advertising and direct advertising

expenses incurred in Japan attributable

to U.S. sales. The verification report

states clearly that, with regard to its

claimed indirect selling expenses and

direct advertising expenses, Toyota

could not go below the level of a semiannual detail report to support its

claimed expenses (Verification of Home

Market and Certain U.S. Sales, August

12, 1996, at 2 (Report)). With regard to

its direct U.S. selling expenses incurred

in Japan, the report states ‘‘Toyota could

not provide supporting documentation

as a bridge between the * * * expenses

* * * and its financial statements.’’

Report at 2. It is standard Department

practice to review source

documentation at a level of detail

greater than a semi-annual report and to

require documentation that ties reported

expenses to a company’s financial

statements. Accordingly, we were

unable to verify the accuracy of these

claimed expenses.

Our verification report reveals that,

while Toyota succeeded in providing

detailed support documentation for

other expenses, it was unprepared to

provide sufficient and necessary

documentation to support the expenses

at issue. Our verification report also

discusses Toyota’s lack of preparation

which resulted in delays in completing

certain segments, even though we

extended our verification in an attempt

to cover as many topics as possible.

Report at 3.

Thus, as we made clear in the report,

Toyota was unprepared to provide

support for certain claimed expenses.

This is true despite clear instructions in

the Department’s verification outline of

the need to be prepared to provide such

documentation. Accordingly, we do not

find persuasive Toyota’s statements that

it prepared for verification based on the

information and level of documentation

examined at previous verifications and

that the company was unfairly surprised

by the Department’s information

requests. Each review is a separate,

independent segment of the proceeding;

what may or may not be required at a

particular verification does not override

the verification outline and does not

govern what is expected of a respondent

at a subsequent verification. The

verification outline we provided to

Toyota for this review made very clear

that certain documents would be

required (see Sales Verification Outline,

Toyota Motor Corporation, Toyota

Motor Sales, USA, Inc., May 1, 1996).

As noted in response to Comment 1,

because we could not verify the relevant

information, the use of facts available

for these expenses is an appropriate

measure in this review. In addition, in

light of Toyota’s failure to provide basic

source documentation regarding the

expenses at issue, along with the fact

that the company was given sufficient

notice that such documentation would

be required at verification, we have

determined that Toyota has failed to

cooperate by not acting to the best of its

ability to comply with our requests for

information. Therefore, we have

resorted to adverse facts available with

regard to these expenses. Because we

have no other reasonable options under

these circumstances, we have

maintained our treatment of these

expenses for purposes of the final

results. Accordingly, we have denied

the relevant expenses as adjustments to

NV and have used the expenses as

reported for purposes of establishing the

adjusted home market price used in the

cost test and for the calculation of CV.

In addition, we have used the reported

direct advertising expenses incurred in

Japan attributable to U.S. sales in our

calculation of CEP.

Finally, because Toyota provided this

information in this administrative

review and it is, therefore, not

secondary information, we are not

required to corroborate this information

(see section 776(c) of the Act).

Comment 3

Toyota contends that the Department

was wrong to impute to home market

sales, as facts available, an amount for

credit revenue because Toyota did not

earn such revenue and because it

cooperated to the best of its ability at

verification in establishing the absence

of such revenue. Toyota also contends

that, even if the Department is justified

in imputing credit revenue, the amount

imputed is excessive. (In the

Preliminary Results, the Department

added, as facts available, the total credit

revenue earned on relevant U.S. sales to

NV.)

Toyota states that materials and oral

information presented to the

Department at verification support the

fact that TFC, an affiliated company, did

not provide financing for the sale of

subject merchandise to Toyota’s

customers in Japan. Toyota claims that

the verification report indicates that

TFC officials were unable, not

unwilling, to provide a copy of TFC’s

financial statements, which the

Department requested in order to verify

the absence of credit revenue earned by

Toyota or its affiliates on home market

sales. Toyota states that it was not given

any advance notice that TFC’s financial

statements would have to be provided at

verification but that these documents

were simply requested at verification.

Toyota asserts that TFC is a separate

corporation, TFC has no involvement in

the sales under consideration, and TFC

was unable to obtain necessary

clearances to release these confidential

documents in the time available, but it

was able to make its officials and certain

other documents available on short

notice. Consequently, the Department

was wrong to penalize Toyota.

Toyota also argues that it is improper

to impute any credit revenue to home

market sales, particularly since under

the new law any profit earned by Toyota

Motor Sales U.S.A., Inc. (TMS) on its

credit revenue is deducted from CEP

and, given that the new law already

neutralizes to a degree any impact of

credit revenue earned in the United

States, there is no need for the

Department to make any adjustments to

NV to accomplish this purpose.

Toyota suggests that, even if the

Department insists on adjusting home

market prices upward, the adjustment is

punitive to a degree that is

disproportionate to the inability to

provide TFC’s financial statements.

Toyota points out that the adjustment

goes beyond simply neutralizing the

benefit of U.S. credit revenue because (i)

the credit total revenue on relevant U.S.

sales was offset to a significant degree

by a credit expense, and (ii) because the

Department calculated the profit to

deduct from CEP without regard to the

substantial credit expenses associated

with the credit revenues, the
5596 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

Department’s approach resulted in

additional duties.

Petitioners respond that there is no

dispute that the Department requested

TFC’s financial statements and did not

receive them. Petitioners cite the

verification outline and their preverification comments to support their

claim that Toyota should have been well

aware that a document as basic as TFC’s

financial statements would be required

at verification. Petitioners claim that

Toyota’s apparent inability to produce

such a basic document cannot absolve it

of facing the consequences of this

omission.

Petitioners dispute Toyota’s

contention that the Department

responded to Toyota’s failure to produce

the financial statements with an adverse

inference by claiming that if the

Department was drawing an adverse

inference, it would have made an

adjustment to NV based on the largest

credit revenue reported on any U.S.

sale, which it did not do. Petitioners

also argue that the Department should

not adjust the U.S. gross revenue

applied to relevant home market sales

with an offsetting adjustment for the

associated U.S. credit expense because

the Department already made an

adjustment for credit expense in the

home market in its analysis and such an

adjustment would provide Toyota with

a double deduction.

Department’s Position

We disagree with Toyota. Toyota

reported that it did not earn credit

revenue on home market sales. Whether

Toyota in fact earned such revenue was

a legitimate inquiry for us to pursue at

verification. As discussed further below,

based on the verification outline,

petitioners’ pre-verification comments,

and our specific requests at verification,

Toyota should have been prepared to

provide us with TFC’s financial

statements, a basic source document

necessary to explore this issue. By not

providing Department officials with the

financial statements, Toyota did not

provide the Department with the

opportunity to ascertain for itself

whether the financial statements

contained information relevant to our

inquiry.

Where an interested party fails to

cooperate by withholding information

that we have requested, we may resort

to the use of the facts available, drawing

inferences adverse to the party. See

sections 776(a)(2)(A) and 776(b) of the

Act. Because Toyota failed to provide us

with TFC’s financial statements, we

have determined that Toyota failed to

act to the best of its ability with respect

to this issue by withholding

information. Therefore, we have relied

on an inference that is adverse to the

interests of Toyota. Accordingly, as facts

available, we applied the transactionspecific gross revenue earned by Toyota

Motor Credit Corporation (TMCC) on

relevant U.S. sales (revenue without the

corresponding offsetting credit expense)

to the weighted-average home market

price of matched sales.

Based on the record of this review,

Toyota cannot reasonably claim that it

had no advance notice that we would

not request an examination of TFC’s

financial statements. The verification

outline clearly indicated that this type

of document would be subject to review.

Given that TFC is a consolidated

subsidiary of TMC, Toyota should have

made such a document available to

Department officials for inspection. In

addition, petitioners’ pre-verification

comments included a request that the

Department review TFC’s financial

statements (see Petitioners’ Comments,

May 9, 1996 at 10). While such preverification comments do not direct the

Department’s inquiry at verification, the

issue of TFC’s involvement in home

market transactions has been a recurring

one in administrative reviews of this

order, and petitioners’ request provided

Toyota with additional notice that the

issue was subject to inquiry.

We note that the information Toyota

provided at verification did not allow us

to establish the accuracy of Toyota’s

claim that it did not earn credit revenue

on home market sales. The written

material it provided at verification, and

to which Toyota refers in its comments,

is limited to ‘‘a brochure given to

dealers which describes the activities

provided by TFC to dealers.’’ Report at

11. This brochure is the only written

material Toyota provided at verification.

The TFC officials we interviewed to

discuss the relevant issue, as the

verification report indicates, ‘‘were

unable to provide us with TFC’s

financial statements nor any other

documentation to show the breakout of

activities engaged in by TFC.’’ Report at

11. Therefore, the interview was of

limited value in establishing the

accuracy of Toyota’s claim that TFC is

not involved in the financing of

merchandise in the home market.

We further note that our purpose is

not to neutralize the benefit Toyota

obtained on financing certain U.S. sales,

but rather is a response to Toyota’s

failure to comply with a specific request

to produce a document that would

permit us to ascertain whether TFC was

involved in home market transactions.

Toyota’s arguments that the new law

accounts for profits earned and that it

was required to report revenue earned

on U.S. sales are irrelevant, given our

purpose for applying adverse facts

available. Finally, we agree with

petitioners that adjusting the U.S. gross

revenue for the credit expense portion

of the U.S. sale would provide Toyota

with two adjustments for credit expense

because we have a credit expense

already in our calculation of NV.

Comment 4

Toyota contends that the Department

applied the cost test on an overly

narrow product basis by performing a

separate 80–20 ‘‘substantial quantities’’

test for each individual forklift sold in

the home market instead of performing

it on the group or category of products

that are under consideration for the

determination of normal value. Toyota

asserts that, as a result of this

misapplication of the 80–20 test, if any

single truck was found to be below cost,

it was automatically excluded from the

database because 100 percent of the

home market sales of that truck were

below cost. Toyota argues that applying

the test to each individual truck makes

no sense and effectively writes the

‘‘substantial quantities’’ provisions of

section 773(b) out of the law.

Toyota claims that the law favors

price-to-price comparisons over CV.

Toyota asserts that the Department’s

current practice is to apply the test on

a model-specific basis (citing the SAA at

832). Toyota further asserts that the

Department has defined ‘‘model’’ as the

such or similar merchandise as defined

under section 771(16) of the Act, and

claims that this indicates that the

Department should not treat each truck

as a unique model. Toyota notes that the

Department applied the cost test on a

broader category in prior reviews.

Toyota concludes that the Department

should apply the 80–20 test to all home

market trucks within each of the loadcapacity categories defined by the

questionnaire because these are the

categories from which similar

merchandise is selected as a basis for

NV.

Petitioners respond that, based on its

practice for the past several years, the

Department properly applied the 80–20

test not on the basis of broad such or

similar categories but on the basis of the

comparison products (i.e., the products

that would actually be used to calculate

NV). Petitioners acknowledge that the

Department applied the test to a broader

category of products in the 1989–90

administrative review, but assert that it

has since altered its approach and

applies the test on the basis of the

comparison products even when there

are very few or even a single

comparison model available (citing
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5597

Certain Cut-to-Length Steel Plate from

Sweden; Final Results of Antidumping

Review of Antidumping Duty Order, 61

FR 15772, 15775 (April 9, 1996)).

Petitioners conclude that, based on

established practice, the Department

properly applied the 80–20 test to the

comparison models and assert that this

practice should be maintained for the

final results.

Department’s Position

We disagree with Toyota that we

should apply the cost test to a broader

category of product than to each unique

model for this administrative review.

While we recognize that, in the 1989–

90 review, we applied the cost test on

a broader basis, upon reconsideration

we have determined that it is more

appropriate to apply the cost test, as set

forth in section 773(b) of the Act, to

each unique model sold in the home

market. This methodology is in

accordance with our current practice

and the SAA (at 832) and with our

practice of applying the cost test to

unique models regardless of the

potential for a particular model to be

grouped in a ‘‘family’’ for calculation of

NV. See generally AFBs. The statute

does not require that we employ a

different methodology where, as here,

each of the reported home market sales

involved a unique product.

We note further that it would neither

be appropriate to base the test on all

selected comparison models (all models

identified in the concordance) or each of

the individual comparison groups

selected in accordance with section

771(16) of the Act for each U.S. model,

as both would encompass more than a

single model. We disagree that we have

defined a ‘‘model’’ as those products

selected for comparison under section

771(16). In addition, basing the test on

the individual comparison groups could

result in testing one model two or more

times. A given home market model

could be an appropriate match to more

than one U.S. sale, in which case it

would be included in more than one

home market comparison group on the

concordance. In such cases

administering the cost test on a

‘‘comparison group’’ basis could result

in the home market model being

excluded as below cost with respect to

one U.S. sale (if more than 20 percent

of the relevant comparison group sales

are below cost) but included with

respect to a different U.S. sale (if less

than 20 percent of the comparison group

sales are below cost). Therefore, in order

to avoid such an anomolous result and

in accordance with our practice, we

have applied the cost test to each

unique model sold in the home market.

Comment 5

Toyota asserts that, where the

Department removed home market sales

that failed the below-cost test from the

concordance, so that the concordance

contained no remaining matches to a

given U.S. sale, the Department

improperly resorted to CV instead of

attempting to find other price-based

matches within the contemporaneity

period which Toyota reported on the

home market sales database. Toyota

claims that resorting to CV when

acceptable above-cost sales exist in the

home market sales database and are

available as a basis for establishing NV,

is contrary to the statute. Toyota argues

that the concordance contained the best,

but not the only, NV candidates based

on the Department’s matching method.

Toyota concludes that the appropriate

solution is to apply the cost test to each

foreign like product group, as defined in

the questionnaire, and to match to

similar above-cost sales as listed in the

home market database before resorting

to CV.

Petitioners respond that the law does

not require that, where 100 percent of

the comparison-model sales are below

cost, the Department must seek out less

similar sales before resorting to CV.

Rather, petitioners claim, the law

simply requires the Department to use

any above-cost sales that are most

similar to the U.S. sale (citing Notice of

Proposed Rulemaking and Request for

Public Comments, 61 FR 7308, 7338,

7339) (Proposed Regulations)).

Petitioners conclude that, under the old

and new laws, when the Department

rejects all of the most similar home

market sales because they were below

cost, it is required to rely on CV rather

than seek a sale of a less similar model,

a practice that has been upheld by the

CIT and should be maintained.

Department’s Position

We disagree with Toyota. In those

situations where we disregarded all of

the most similar matches, as identified

on the concordance file, as below-cost

sales, we properly resorted to CV

without attempting to find other, less

appropriate, matches remaining in the

home market database.

Due to the nature of this product,

which involves unique models, and the

resulting complexity of determining

appropriate home market and U.S.

matches, we have developed a detailed

set of instructions in our reviews of this

order regarding the development of the

concordance file. These instructions

ensure the accurate reporting of

information while minimizing, to the

extent possible, the reporting burdens

on the parties. We developed the

product-matching criteria with input

from parties, including Toyota, in prior

segments of this proceeding. In our

questionnaire in this review, we

permitted Toyota to limit its

concordance matches to the most

similar home market sales made in the

closest month in the contemporaneity

window as that of each U.S. sale. We

did not require Toyota to provide

further matches in the contemporaneous

period. Otherwise, the matching

analysis that Toyota would have had to

perform would constitute a significant

burden on the company without

substantially increasing the accuracy of

our analysis since, relative to total U.S.

sales, the number of U.S. sales for which

we resorted to CV (because we had

disregarded the selected model as below

cost) was extremely small. Such an

approach clearly assisted Toyota in

preparing its response. Toyota in fact

acknowledges in its comments in this

review, that analyzing large databases

can be costly and inefficient. For these

reasons, we have maintained our

approach for the final results.

Comment 6

Toyota contends that, because the

Department improperly disregarded

certain sales as below cost by applying

the 20-percent ‘‘substantial quantity’’

threshold on an overly narrow product

basis, the CV-profit calculation, which

includes only sales that did not fail the

cost test, is also flawed. Toyota claims

that the Department should include in

the CV-profit calculation sales that it

improperly disregarded as below cost.

Petitioners respond that the

Department properly applied the cost

test and that the SAA specifically

provides that CV profit should be based

only on the amount incurred in

connection with sales in the ordinary

course of trade. Therefore, petitioners

conclude, in keeping with the SAA the

Department properly excluded all

below-cost sales when calculating CV

profit.

Department’s Position

We disagree with Toyota. Our

application of the 20-percent

‘‘substantial quantities’’ threshold

portion of the cost test was in

accordance with law and our practice.

Based on our application of this test, we

disregarded certain home market sales

as below-cost sales, which the statute

considers to be outside the ordinary

course of trade. See section 771(15) of

the Act. Therefore, because we must

calculate CV profit using only sales

made within the ordinary course of

trade, in accordance with section
5598 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

773(e)(2)(A) of the Act, we excluded

sales that failed the cost test from our

calculation of CV profit.

Comment 7

Toyota contends that the Department

should base CV profit on sales of large

trucks (over 7,000-pound load capacity)

only and should exclude small trucks

from its CV-profit analysis. Toyota

asserts that profit and selling expenses

calculated for CV should not be based

on the entire universe of home market

sales, i.e., ‘‘class or kind’’, but on a

subset of this universe—the class of

products in the home market that is

most similar to the U.S. sale, i.e.,

‘‘foreign like product’’ under the new

law or ‘‘such or similar’’ of the pre-1995

law (citing section 773(e)(2)(A) of the

Act). Toyota states that the Department

did not follow this provision for the

preliminary results when it calculated

profit and selling expenses for CV using

all home market merchandise regardless

of whether the merchandise was ‘‘like’’

the merchandise sold in the United

States.

Toyota asserts that it sold only large

trucks in the United States and that,

while it sold large trucks in the home

market, it sold many more small trucks

in that market. Therefore, Toyota argues,

because the profit on small trucks

differs from the profit on large trucks,

the CV profit was unfairly inflated.

Petitioners respond that the

Department has addressed the issue

raised by Toyota in its proposed

regulations (citing Proposed Regulations

at 61 FR 7335). Petitioners assert that it

is the Department’s practice to use

aggregate figures to calculate profit and

SG&A, based on an average of the profits

of foreign like products sold in the

ordinary course of trade. Therefore,

petitioners contend, the Department

properly calculated profit based on the

profits of all like products sold in the

ordinary course of trade in the home

market and should maintain this

methodology for purposes of the final

results.

Department’s Position

We disagree with Toyota. The foreign

like product in this case consists of all

potential matches to U.S. sales. That is,

for purposes of calculating profit (and

SG&A) for CV, we generally use, as we

have here, aggregate data that

encompasses all foreign like products

under consideration for determining

NV. During the POR, Toyota sold both

small and large trucks in the United

States. While only a small quantity of

small trucks were sold in the United

States, home market sales of trucks in

this category are nonetheless potential

matches. Accordingly, both small and

large trucks are a foreign like product.

Therefore, we have included the small

capacity trucks in the calculation of CV

profit for the final results.

Comment 8

Toyota contends that, contrary to the

directives of the statute, the Department

calculated a CEP profit amount that is

disproportionately based on profit on

home market, not U.S., sales. Toyota

acknowledges that the Department

applied the CEP-profit formula in

section 772(f) of the Act literally, but

argues that, where the application of the

formula to a particular set of facts leads

to an absurd result directly at odds with

the stated goal of the statute, the

Department should exercise its

discretion by limiting the CEP profit to

the actual profit for U.S. sales.

Toyota argues in the alternative that,

in the event that the Department

continues to calculate profit as it did in

the preliminary results, it should

exercise its well-established authority

under section 773(6)(iii) of the Act to

make adjustments to NV for other

differences in circumstances of sale.

Toyota states that the difference in

circumstance of sale would be the profit

differential between the United States

and home market. Toyota notes that,

under the pre-URAA law, the

Department used its discretionary

authority to avoid unfair results in the

context of the creation and application

of the exporter’s sales price (ESP) offset

and asserts that a similar adjustment

should be made in this review (citing

Brother Industries, Ltd. v. United States,

3 CIT 125, 540 F.Supp. 1341 (1982),

aff’d 713 F.2d 1568 (Fed.Cir. 1983), cert.

denied, 465 U.S. 1022 (1984) (Brother)).

Petitioners respond that Toyota

admits the plain language of the statute

requires the Department to base CEP

profit on total actual profit, which

includes the profit on both home market

and U.S. sales. Therefore, petitioners

argue, the Department does not have the

discretion Toyota proposes and the

Department applied the explicit

requirements of the statute properly

when calculating CEP profit.

Petitioners further assert that Toyota

is incorrect in suggesting in the

alternative that, based on Brother, the

Department should make a

circumstances of sale (COS) adjustment

to NV to account for differences

between U.S. and home market profit.

Petitioners contend that, in so doing, the

Department would first be calculating

CEP profit using the methodology

required by the statute, then nullifying

the explicit statutory requirement by

making an offsetting adjustment to NV.

Petitioners assert that the Department

cannot implement a procedure that

would lead to a result in conflict with

the requirements of the statute.

Petitioners add that Toyota’s analogy to

the ESP offset is incorrect because,

unlike Toyota’s recommendations

regarding CEP profit, the ESP offset was

designed to correct a perceived

omission in the statute.

Department’s Position

We agree with petitioners. Section

772(d)(3) of the Act directs us to deduct

an amount of allocated profit in deriving

the CEP. Section 772(f) describes in

detail the methodology for calculating

the profit, which Toyota acknowledges

we followed. In particular, the statute

explicitly directs us to calculate a ‘‘total

actual profit’’ amount, where possible,

based on both sales of the foreign like

product in the comparison market and

on U.S. sales. See sections 772(f)(2) (C)

and (D). The statute then directs us to

allocate a portion of this total actual

profit to CEP sales based on the level of

U.S. selling and further-processing

expenses. Toyota’s proposal to calculate

profit in a different manner would be in

clear conflict with this provision of the

statute.

We also decline to make a COS

adjustment in the manner suggested by

Toyota to account for the allegedly

disproportionate influence of home

market profits on the total actual profit

calculation. As noted above, the CEPprofit provision in the statute provides

a detailed methodology for the

calculation of total actual profit. Given

the detailed nature of this provision, it

is not appropriate to impute a

‘‘disproportionate home market profit’’

standard on the calculation of total

actual profit, such that we must make an

adjustment to account for such alleged

disproportionality. Moreover,

differences in profits are not differences

in the circumstances of sale. Profit

differentials, if any, are what remain

after different circumstances of sale

have been accounted for. Therefore, we

have not changed our CEP-profit

calculation for the final results.

Comment 9

Toyota argues that the Department

should calculate CEP profit based on the

prices and expenses of large trucks (over

7,000-pound load capacity) only, not

large and small trucks, because large

trucks were the only merchandise

Toyota sold in the United States during

the POR. Toyota contends that section

772(d) of the Act requires that total

actual profit be calculated based on

sales of subject merchandise sold in the

United States and the foreign like
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5599

product sold in the exporting country.

Toyota cites to the statutory definition

of foreign like product in section

771(16) of the statute in arguing that

‘‘foreign like product’’ corresponds to

the ‘‘such or similar’’ category of the

pre-URAA law and not to the broader

‘‘class or kind’’ of merchandise category.

Toyota argues that the foreign like

product in this case is limited to large

trucks because, with the exception of a

de minimis number of small trucks, it

sold only large trucks to the United

States. (Toyota states that its request in

this Comment pertains only to the profit

calculation for U.S. sales of large trucks

and does not pertain to the profit

calculated on the de minimis U.S. sales

of small trucks.) Toyota argues that,

because the profit on smaller trucks is

greater than the profit on large trucks

and because many more small trucks

than large trucks were sold in the home

market, significant distortions in the

calculation are created by including the

smaller trucks.

Toyota argues that, while the

Department recently denied a

respondent’s request to calculate profit

derived from ‘‘different rates for

different pools of products within the

foreign like product’’ (citing 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,

38146 (1996) (LNPP from Japan)), in this

case it is proper to calculate profit based

upon the foreign like product as defined

by load capacity because: (1) The

Department has conducted its entire

review on the premise that foreign like

product was defined by several load

capacity ranges, and (2) Toyota has not

asked the Department to change its

determination of foreign like product, as

respondent did in LNPP from Japan.

Petitioners respond that, in keeping

with the explicit requirements of the

statute, the Department properly based

CEP profit on the total actual profit

realized on all of Toyota’s sales of the

subject merchandise, which includes

large and small trucks.

Department’s Position

We disagree with Toyota. In

accordance with our practice as

described in the Proposed Regulations

(at 7382), we have used the aggregate of

expenses and profit for all subject

merchandise sold in the United States

and all foreign like products sold in the

exporting country. During the POR,

Toyota sold both small and large trucks

in the United States. While only a small

quantity of small trucks were sold in the

United States, home market sales of

trucks of these categories are

nonetheless potential matches.

Accordingly, the foreign like product in

this review encompasses both small and

large trucks. Therefore, we have

included the small capacity trucks in

the calculation of CEP profit for the final

results.

The statute does not require separate

CEP-profit calculation based on the

narrow interpretation of the term

‘‘foreign like product’’ advanced by

Toyota. As we noted in AFBs 6,

‘‘[n]either the statute nor the SAA

require us to calculate CEP profit on a

basis more specific than the subject

merchandise as a whole. Indeed, while

we cannot at this time rule out the

possibility that the facts of a particular

case may require division of CEP profit,

the statute and SAA, by referring to ‘the’

profit, ‘total actual profit’ and ‘total

expenses,’ imply that we should prefer

calculating a single profit figure.’’ AFBs

6 at 2125–2126. Further, such a

subdivision as Toyota proposes would

be more susceptible to manipulation of

the profit rate, a particular concern

noted by Congress. See Id. and S. Rep.

103–412, 103d Cong., 2d Sess. at 66–67.

Comment 10

Toyota asserts that, notwithstanding

the methodological CEP-profit

calculation issues it has already

addressed, the Department incorrectly

calculated the CEP-profit amount by: (1)

Including all home market sales revenue

while excluding certain home market

selling expenses, and (2) calculating the

total actual profit without regard to

imputed expenses while allocating a

portion of this amount to CEP sales

using a U.S. selling expense pool that

includes imputed expenses.

With respect to the first issue, Toyota

claims that the home market values for

the CEP-profit calculation incorrectly

excludes the home market selling

expenses the Department disallowed as

an adjustment to NV because of

perceived difficulties at verification.

Toyota states that this results in a higher

home market profit, which becomes part

of the total actual profit, a portion of

which, in turn, is allocated as CEP profit

and deducted from the starting price

used to derive the CEP. With respect to

the second issue, Toyota asserts that it

is mathematically incorrect to apply an

‘‘actual cost’’ profit ratio to a U.S.

selling expense pool that includes

actual plus imputed costs because this

methodology allocates substantially

more profit to U.S. sales than exists,

particularly with respect to transactions

with significant imputed credit and

inventory carrying costs.

Petitioners respond that the

Department correctly included imputed

credit and inventory carrying costs in

the U.S. selling expense pool used to

calculate CEP profit for individual U.S.

sales. Petitioners note that the

Department calculated total profit for

Toyota’s sales based on the difference

between the total revenues and total

expenses and that the Department

omitted imputed credit and inventory

carrying costs from the total profit

amount because the expense amounts

the Department used in the total actual

profit calculation include an amount for

actual interest expenses. Petitioners

assert that, if the Department included

imputed expenses in the total actual

profit calculation, the result would

double-count Toyota’s interest costs.

Petitioners further note that CEP selling

expenses do not include an amount for

actual interest expense and, thus, if the

Department does not include imputed

credit and inventory carrying costs in

the formula it uses to calculate CEP

profit for Toyota’s individual U.S. sales,

the CEP-profit figure would not account

for the profit attributable to the

expenses Toyota incurred to carry

forklifts in inventory in the United

States or to extend credit to its U.S.

customers. Therefore, petitioners argue,

the Department should continue to

include imputed credit and inventory

carrying expenses in the CEP selling

expenses used to calculate CEP profit

for Toyota’s U.S. sales.

Department’s Position

We disagree with Toyota. With

respect to Toyota’s argument that the

home market values for the CEP-profit

calculation improperly exclude selling

expenses we disallowed due to

problems encountered at verification, as

we stated in its response to Comment 2,

we properly employed an adverse

inference regarding information with

respect to which Toyota failed to act to

the best of its ability to provide. This

ensures that Toyota does not obtain a

more favorable result by failing to

cooperate fully. See SAA at 870.

Regarding Toyota’s claim that we

treated imputed expenses inconsistently

in calculating CEP profit, we addressed

this issue in detail in AFBs 6 at 2126–

2127 as follows:

Sections 772(f)(1) and 772(f)(2)(D) of the

Act state that the per-unit profit amount shall

be an amount determined by multiplying the

actual profit by the applicable percentage

(ratio of total U.S. expenses to total expenses)

and that the total actual profit means the total

profit earned by the foreign producer,

exporter, and affiliated parties. In accordance

with the statute, we base the calculation of

the total actual profit used in calculating the
5600 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

per-unit profit amount for CEP sales on

actual revenues and expenses recognized by

the company. In calculating the per-unit cost

of the U.S. sales, we have included net

interest expense. Therefore, we do not need

to include imputed interest expenses in the

‘‘total actual profit’’ calculation since we

have already accounted for actual interest in

computing this amount under 772(f)(1).

When we allocated a portion of the actual

profit to each CEP sale, we have included

imputed credit and inventory carrying costs

as part of the total U.S. expense allocation

factor. This methodology is consistent with

section 772(f)(1) of the statute which defines

‘‘total United States Expense’’ as the total

expenses described under section 772(d)(1)

and (2). Such expenses include both imputed

credit and inventory carrying costs. See

Certain Stainless Wire Rods from France, 61

FR 47874, 47882 (September 11, 1996).

As this statement of our practice makes

clear, our calculation of CEP profit is in

accordance with the statute and the

SAA. Therefore, we have maintained

our treatment for the final results.

Comment 11

Toyota argues that the Department

should exclude certain ‘‘used’’ forklifts

sold in the United States from its

analysis or, in the alternative, the

Department should adjust its

calculations to avoid the distortions

created by the comparison of these used

trucks with new trucks sold in the home

market. Toyota asserts that there were a

small number of U.S. sales of used

merchandise, sold out of the ordinary

course of trade at significant discounts

and under ‘‘fire sale’’ conditions due to

their use as demonstration units. Toyota

asserts that all of the trucks were

imported new but were in ‘‘used’’

condition when sold to the first

unaffiliated purchaser in the United

States. Toyota asserts that, in the lessthan-fair-value (LTFV) investigation,

petitioners explicitly excluded imports

of used trucks from the investigation

and argues that the principle that a used

truck is excluded should not change

because the truck was used not in Japan,

but in the United States, before being

sold.

Toyota argues in the alternative that

the Department should adjust the

margin calculation to avoid the

distortions created by the comparison of

the used trucks with new trucks sold in

the home market. Toyota asserts that,

otherwise, the comparison is

unreasonable and amounts to an

undeserved adverse inference against

Toyota (citing, among others, Porcelainon-Steel Cooking Ware From Mexico;

Final Results of Antidumping Duty

Administrative Review, 58 FR 43327,

43328 (1993) (Cookware)). Toyota

asserts that, because there are no sales

of similarly used trucks in the home

market, the Department should look to

facts otherwise available in making an

adjustment that will allow for

reasonable comparisons and proposes

several ways to make such an

adjustment.

Petitioners respond that Toyota’s

claim should be rejected for a variety of

reasons. First, Toyota has admitted the

trucks were new when imported and the

scope of the order excludes only trucks

that were used at the time of entry.

Petitioners add that the exact nature and

disposition of the trucks is unclear from

Toyota’s questionnaire responses.

Petitioners note that, in Toyota’s initial

questionnaire response, it reported that

some of the trucks were used, others

were damaged, and others were

mistakenly ordered with unsalable

specifications, while in its brief Toyota

only discusses used trucks. Therefore,

petitioners assert, even if the

Department decided to exclude ‘‘used’’

trucks as opposed to other ‘‘off-spec’’

trucks, the Department would be unable

to do so because Toyota failed to

distinguish between used trucks and offspec trucks in its sales listing.

Second, petitioners assert that the

Department has made clear that it will

not exclude any U.S. sales that involve

a transfer of ownership even if the sales

are aberrational and states that the age

or condition of a truck is not relevant to

whether the product has been dumped

(citing Polyethylene Terephthalate Film,

Sheet, and Strip from the Republic of

Korea: Final Results of Antidumping

Duty Administrative Review, 60 FR

42835 (Aug. 17, 1995), comment 29).

With respect to Toyota’s alternative

argument that the Department should

make an adjustment to the margin

calculation if it includes such ‘‘used’’

trucks in the dumping analysis,

petitioners assert that the cases Toyota

cited to support such an adjustment are

factually distinct from the situation in

this case because, unlike those cases,

the merchandise at issue is not scrap,

seconds or substandard. Petitioners add

that in the cited cases the Department

did not make an adjustment to account

for differences in quality but instead

sought to match U.S. sales of inferior

quality to merchandise of similar

quality in the home market (citing

Cookware at 43328). Petitioners argue

that, if merchandise with similar

specifications had been sold in the

home market, the model-match

methodology would have resulted in a

match of similar off-spec trucks.

Furthermore, petitioners assert, Toyota

never specifically identified whether

any home market sales were similarly

off-spec and could have been matched

and conclude that any deficiency in

matching is solely Toyota’s fault.

Department’s Position

We agree with petitioners. The scope

of the order only excludes trucks that

were ‘‘used’’ at the time of entry. The

order does not exclude trucks that are

damaged, ‘‘off-spec,’’ or used after

importation. We noted in our

Preliminary Results analysis

memorandum that ‘‘trucks imported

new and used by the importer prior to

sale’’ are not excluded from the scope of

the order. Memo, July 26, 1996, at 6. In

the LTFV investigation we determined

that a forklift could be considered

‘‘used’’ and excluded from the order if,

at the time of entry into the United

States, the importer can demonstrate to

the satisfaction of the U.S. Customs

Service that the forklift was

manufactured in a calendar year at least

three years prior to the year of entry into

the United States. Final Determination

of Sales at Less Than Fair Value;

Certain Internal-Combustion Industrial

Forklift Trucks From Japan, 53 FR

12552 (April 15, 1988). Toyota admits

the relevant trucks were imported new.

Therefore, they are properly subject to

review and we cannot exclude them

from our analysis based on this

exclusion.

Moreover, Toyota has not established

the trucks were used to an extent that

an adjustment is warranted nor

provided information that would permit

us to quantify and make such an

adjustment. Therefore, our treatment of

these trucks remains unchanged from

the preliminary results.

Comment 12

Toyota claims that the Department

incorrectly classified the reported

indirect selling expenses that Toyota’s

U.S. affiliate, TMCC, incurred in

financing sales of subject merchandise

as direct expenses. Toyota asserts that

the selling expenses are indirect because

they are fixed and are incurred

regardless of whether a particular sale is

made.

Petitioners respond that, while they

do not believe the Department should

make any adjustment for credit revenue

TMCC earned, if the Department

decides credit revenue is related

directly to the sale, it must also

recognize that expenses TMCC incurred

may also be related directly to the sale.

Petitioners assert that Toyota did not

meet its burden of proof that these

expenses are not directly related to the

sales (citing 19 CFR 353.54). Petitioners

suggest that, although Toyota now

alleges that these expenses are fixed and

are incurred by TMCC regardless of
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5601

whether a sale is made, there is nothing

in Toyota’s questionnaire response to

support such a claim. Petitioners

conclude that Toyota’s description of

these expenses is not sufficiently

detailed to allow the Department to

determine the exact nature of the

expenses and, accordingly, the

Department should treat these expenses

as direct selling expenses for the final

results.

Department’s Position

We agree with Toyota and have

treated these expenses as indirect

expenses for the final results. In

reporting sales where payment was

made through TMCC, Toyota reported a

sale-specific credit revenue and a salespecific credit expense. Toyota also

allocated a portion of TMCC’s overhead

to the sales as indirect selling expenses.

With respect to direct U.S. selling

expenses that TMCC incurred, Toyota

stated that TMCC ‘‘does not pay

commissions to its employees related to

financing, and does not incur variable

expenses for credit investigations or for

preparing and processing documents.’’

Supplemental Sales Questionnaire at

58–60. In addition, Toyota disclosed

that TMCC incurred a filing fee for a

number of transactions which the

Department treated as direct in the

Preliminary Results. Because the record

reveals that the relevant expenses are

fixed expenses (not variable) and

because it is clear that Toyota reported

those expenses that were variable and

associated with sales of subject

merchandise, we have treated TMCC’s

reported expenses as indirect expenses

for the final results.

Comment 13

Toyota asserts that the Department’s

proposed method for assessing duties

will result in the calculation and

assessment of duties on lease

transactions, despite the Department’s

determination that Toyota’s operating

leases are not subject to review. Toyota

notes that the Preliminary Results

indicate that the Department calculated

an importer-specific ad valorem duty

assessment rate, based on the ratio of

the total amount of duties calculated for

the examined sales during the POR to

the total customs value of the sales used

to calculate the duties, which the

Customs Service will assess uniformly

on all entries during the POR. Toyota

asserts that the Department should

calculate an assessment rate with

respect to all merchandise reported by

taking the total antidumping duties for

sold and leased trucks (which will be

zero for the latter) divided by the total

customs value of the sold and leased

trucks, which Customs should then

apply to all forklift trucks entered

during the POR.

Petitioners assert that Toyota

misconstrues the purpose of the

proposed assessment method, which is

to eliminate the problems caused by

assessing duties on individual entries

through the creation of a ‘‘master list.’’

Petitioners assert that lowering overall

duties on subject trucks would defeat

the purpose of the antidumping law to

assess duties to offset the unfair trade

practice with respect to sales subject to

the order, which would not be

accomplished if the Department

decreased the assessment on products

covered while imposing duties on

merchandise not covered by the order.

Petitioners contend that lowering the

assessment duty rate would allow a

respondent to manipulate the prices of

entries that would never be subject to

analysis so as to lead to a total lower

assessment of antidumping duties.

Petitioners assert that the solution to

any perceived problem is to ensure that

the Department only assesses duties on

trucks subject to review and Toyota is

aware of which trucks were sold and

which were leased. Petitioners contend

that the Department could eliminate the

total entered value of leased trucks from

the total entered value of all trucks to

arrive at the total entered value for

trucks subject to the order in its

calculation of the appraisement rate,

which Customs can then apply to the

total entered value for trucks subject to

the order. Petitioners further assert that,

regardless of the method the Department

uses to accomplish the task, it should

make no change in its calculation of the

cash deposit rate.

Department’s Position

We agree with petitioners that, by

using an assessment-rate methodology,

we are able to eliminate the problems

caused by assessing duties on

individual entries through the creation

of master lists. However, we agree with

Toyota that, short of creating a master

list, its proposal is reasonable and in

accordance with our practice. In

Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From

Japan and Tapered Roller Bearings,

Four Inches or Less in Outside

Diameter, and Components Thereof,

From Japan; Final Results of

Antidumping Duty Administrative

Reviews and Revocation in Part of an

Antidumping Finding (61 FR 57629

(November 7, 1996) (TRBs)), we were

confronted with the issue of establishing

an assessment rate for bearings where

some bearings were not subject to

assessment under the principles

formulated in Roller Chain Other Than

Bicycle From Japan, 48 FR 51804

(November 14, 1983). Given that leased

trucks are potentially subject to

assessment of antidumping duties upon

entry, a similar treatment is appropriate

here. In TRBs we determined that the

assessment rate should take into

account the value of ‘‘Roller Chain’’

merchandise. Accordingly, we included

the value of the ‘‘Roller Chain’’

merchandise in the denominator when

we calculated an assessment rate.

Likewise, in this case, we have included

the customs value of the leased trucks

in the denominator. While this will

have the effect of reducing the

percentage assessment relative to the

rate that we would calculate by

excluding these values, this lower

assessment rate, when applied against

all POR entries, will allow Customs to

collect the appropriate amount of

antidumping duties due and will

effectively exclude the lease trucks from

assessment. Finally, we agree with

petitioners that a change in the

calculation of the cash deposit rate is

not appropriate.

Petitioners’ Comments

Comment 1

Petitioners assert that the Department

is required by statute to verify all of the

information it relies on in reaching its

final results and, therefore, the

Department should have verified

Toyota’s cost data, difference-inmerchandise data (difmer), U.S. sales

data, and U.S. value-added data.

Petitioners assert that, while the

Department may not be required to

verify every item of data submitted, it

cannot simply eliminate whole sections

of a questionnaire response when

conducting verification.

Petitioners add that, beyond the

statutory requirement for a complete

verification, the following two reasons

make verification of the above items

essential: (1) The Department found

major problems with Toyota’s home

market sales data, and (2) the record

reveals glaring deficiencies with

Toyota’s cost data, which have never

been verified, and its U.S. sales data.

With regard to Toyota’s cost data,

petitioners allege the following

problems with Toyota’s data which

warrant complete verification: In

reporting difmer data, Toyota used

different costs for its home market than

for its U.S. merchandise; there are

differences between Toyota’s difmer

data and its COP data; Toyota failed to

demonstrate adequately that its

transactions with affiliated suppliers

were at arm’s length; and Toyota gave
5602 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

only a cursory explanation of its method

for accruing costs.

Toyota responds that the Department

fulfilled its obligation under section

782(i) of the Act to verify respondent’s

factual information. Toyota argues that

petitioners’’ position that the

Department is required to verify every

single piece of information submitted,

and not just the factual information it

deems relevant and sufficient, is

untenable and would place the

Department in an impossible situation.

Toyota concludes such a construction of

the law is unrealistic and unworkable.

Citing §§ 353.36(a)(2) and 353.36(c),

Toyota asserts that the Department’s

regulations are clear that, it is not

necessary for the Department to verify

every piece of data. Toyota concludes

that the law required verification of

Toyota’s response and the Department

fulfilled this requirement, using its

judgment as to the adequate level of

examination.

Toyota further asserts that

petitioners’’ claim that there is

‘‘contradictory and incomplete

information’’ in Toyota’s cost and U.S.

sales data are untrue. Toyota notes that

its costs were verified thoroughly in the

first administrative review. Toyota

asserts that, as it explained in a prior

submission to the Department, its

material costs will differ for forklifts in

Japan and the United States because: (1)

They are built to different specifications

(e.g., the parts used may conform to

different specifications, such as a ULListing), and (2) the criteria used by the

Department for its 21-point comparison

do not define all aspects and features of

all forklifts.

Toyota asserts that petitioners’’

comments concerning the accuracy of

Toyota’s data, particularly Toyota’s

difmer and cost data, are unfounded

and, as the Department conducted the

required verification, there is no basis

for asserting the verification was legally

inadequate.

Department’s Position

We disagree with petitioners. We have

fulfilled the statutory requirement of a

verification of Toyota’s data in this

review. Because we had not verified

Toyota’s data during the two

immediately preceding reviews, we

were required to conduct a verification

of Toyota in this administrative review.

See section 782(i) of the Act. Our

verification concerned Toyota’s home

market sales response and portions of its

U.S. sales response. Such a verification

fulfills the statutory requirement

regarding verification and, as noted

below, is in conformity with our

regulations and past practice. This

practice reflects the reality that it is

administratively impossible for the

Department to verify at every site and

on every topic.

The Department’s regulations provide

for significant flexibility in conducting

verifications by permitting the

verification of a sample of respondents

in a review and providing for the review

of documents and personnel the

Department considers relevant to factual

information submitted. 19 CFR

353.36(a)(2) and (c). In addition, the CIT

has long recognized the Department’s

discretion regarding the topics to be

selected for verification. See, e.g.,

Monsanto Co. v. United States, 12 CIT

937, 698 F.Supp. 275, 280 (citing

Hercules, Inc. v. United States, 11 CIT

710, 673 F.Supp. 454,469 (1987))

(‘‘Verification is a spot check and is not

intended to be an exhaustive

examination of the respondent’s

business. ITA has considerable latitude

in picking and choosing which items it

will examine in detail.’); Bomont

Industries, v. United States, 14 CIT 208,

209, 733 F. Supp. 1507 (1990) (‘‘Of

course, verification is like an audit, the

purpose of which is to test information

provided by a party for accuracy and

completeness. Normally, an audit

entails selective examination rather than

testing of an entire universe.‘‘).

Contrary to petitioners’ assertions, the

problems we encountered at the home

market verification with regard to

certain portions of Toyota’s response do

not establish the necessity for a

verification of additional portions of the

response. Toyota did not fail its

verification in this review; rather, it was

unable to demonstrate the reliability of

certain selling expenses and was unable

to establish that it did not gain credit

revenue on its home market sales. As a

result, pursuant to our established

practice regarding our verification

findings, we have disallowed the

adjustments in question and have

calculated a home market credit revenue

amount using the facts available. This is

an appropriately tailored response to the

problems we encountered at

verification. Because we found that,

other than the items cited above, the

data submitted by Toyota was accurate,

we have no reason to disregard the other

portions of its response (e.g., Toyota’s

data regarding its material costs or its

product liability expenses).

Comment 2

Petitioners assert that Toyota’s

variable cost of manufacture (VCOM)

difmer data, as reported on the U.S. and

home market sales listings, are not

acceptable because: (1) They are not

consistent with Toyota’s COP/CV data,

and (2) they are based on costs for

certain components and on price or

market value for other components.

Therefore, petitioners argue, the

Department should reject Toyota’s

difmer data and use the VCOM amounts

reported in the COP and CV data to

make difmer adjustments for the final

results.

Petitioners claim that case precedent

indicates that VCOM amounts reported

for the difmer adjustment and for COP/

CV should not differ (citing Notice of

Final Determination of Sales at Less

Than Fair Value: Stainless Steel Bar

from Spain, 59 FR 66,931, 66938

(December 28, 1994)). Petitioners further

assert that the antidumping

questionnaire and the SAA (at 828)

indicate that any claimed difference-inmerchandise adjustment should be

limited to differences in variable costs,

without regard to prices. Petitioners

note that Toyota acknowledges the data

are inconsistent.

Petitioners state that allowing a

respondent to report different VCOM

amounts for purposes of the difmer

adjustment and for COP/CV allows for

the possibility of manipulation of the

dumping analysis. For instance, if a

respondent reports a higher home

market VCOM for the difmer adjustment

than for its COP reporting, adjustments

to foreign market value will generally be

downward, thereby providing

respondent with a favorable adjustment

when comparing home market sales to

U.S. sales. Therefore, petitioners argue

the Department should reject Toyota’s

difmer data and use the variable cost of

manufacture data in Toyota’s COP and

CV database to determine the difmer

adjustment.

Toyota responds that petitioners’

arguments are groundless. Toyota

asserts that the Department specifically

approved of Toyota’s method of

reporting difmer data in the original

investigation and in the first and second

administrative reviews. Toyota states

that it reported difmer data consistent

with its reporting in prior segments of

the proceedings.

Toyota states that the record is clear

that, given its accounting system, it

could submit the data in a form slightly

different from that which the

Department requested by including the

invoice prices of certain options and

attachments instead of their variable

costs of production. Toyota asserts that

19 CFR 353.57 supports its approach as

it states the Department ‘‘normally will

consider differences in the cost of

production but, where appropriate, may

also consider differences in the market

value.’’ Toyota indicates that, because

the prices of the attachments are based
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5603

on uniform price lists, the differences in

such prices represent differences in

market value. Toyota disputes

petitioners’ assertion that such an

approach is subject to manipulation and

points out that the prices are published

in Toyota’s price list.

Finally, Toyota notes that it used its

difmer data to generate the concordance

on which the Department relied for

product matching and suggests that to

change the values now would require

Toyota to rematch its sales and revise

the concordance. Toyota argues that,

given that the difmer values are

appropriate and accurate and reflect a

methodology acceptable in prior

reviews in selecting similar home

market sales and adjusting those sales,

there is no compelling reason to change

these data now.

Department’s Position

We agree with petitioners, in part, and

have utilized Toyota’s reported cost

information (COP and CV) to calculate

the difmer adjustment for the final

results. However, we do not agree with

petitioners that it was inappropriate for

Toyota to submit its difmer data, based

in part on invoice prices, at the time of

its original questionnaire submission,

and we have used this data for matching

purposes.

When we issued the questionnaire,

we had not yet initiated a cost

investigation of Toyota. Therefore,

based on prior experience with Toyota

in the investigation and administrative

reviews, in which we recognized the

difficulties in collecting variable cost

information for small attachments, we

determined that it was acceptable for

Toyota to derive and present its difmer

data as it had presented the information

in prior segments of this proceeding.

However, unlike prior segments of this

proceeding, in this review we initiated

a cost investigation of Toyota’s sales and

obtained complete cost information,

including costs for the attachments for

which Toyota was previously only able

to give prices.

The VCOM data from the sales listing,

which Toyota used to develop the

concordance according to our

instructions, is sufficiently precise to

allow us to determine which U.S. and

comparison-market merchandise ‘‘may

reasonably be compared.’’ See section

771(16)(C)(iii) of the Act. Further,

Toyota calculated the VCOMs that we

compared in making this determination

using the same methodology for both

markets, i.e., VCOMs that are generally

cost-based with the exception of certain

attachments that Toyota valued using

invoice prices to its customers.

Therefore, we have used the

concordance Toyota submitted for salesmatching purposes and do not find it

necessary to revise the concordance in

order to take into account the COP/CV

information.

However, as a result of our cost

investigation, we have more precise

VCOM data, because Toyota provided

cost-based values for its attachments.

Accordingly, we have used the COP/CV

data to make the difmer adjustment in

our calculations. The difmer adjustment

to NV is mandated by the statute to

account for differences between the U.S.

and home market products under

comparison. See section 773(a)(6)(C) of

the Act. Given that the more precise,

cost-based information is on the record

of this review, it is more appropriate to

use the COP/CV data for the actual

adjustment where sales of non-identical

merchandise are compared. Therefore,

in the final results we have used

Toyota’s reported VCOM data as

reported in the COP and CV databases

to adjust for physical differences in the

merchandise.

Comment 3

Petitioners claim that, in providing its

cost data, Toyota failed to supply

complete information that would

demonstrate that its transactions with

affiliated suppliers are at arm’s length.

Rather, petitioners claim, Toyota

submitted costs for a single

‘‘representative’’ model. Petitioners

contend this is insufficient to

demonstrate that Toyota’s transactions

with these affiliated suppliers are all at

arm’s length and cite to Hyster Co. v.

United States, 848 F.Supp. 178, 187

(CIT 1994) (Hyster).

Petitioners assert that Toyota’s claim

that its transactions with affiliated

suppliers are always at arm’s length and

that Toyota cannot obtain access to its

supplier’s cost data is directly

contradicted by information the

Department gathered in the

investigation of New Minivans from

Japan (Initiation of Antidumping Duty

Investigation: New Minivans from

Japan, 56 FR 29221 (June 26, 1991)

(Minivans)). Citing the record in

Minivans, petitioners state that Keiretsu

have group members known to

exchange information and to price

transfers at below-market levels to

maximize profit. Thus, petitioners

contend, Toyota’s unsupported claims

are in conflict with information the

Department already possesses.

Petitioner argues that, other than

rejecting Toyota’s questionnaire

response, the Department must request

supplemental information concerning

its transfer prices and then verify the

data.

Toyota maintains that the information

it submitted demonstrates that

transactions between Toyoda Automatic

Loom Works Ltd. (TAL) and its

affiliated suppliers are at arm’s length

and that TAL engages in competitive

bidding and negotiation processes with

its suppliers. Toyota asserts that the

statute does not mandate that evidence

of an arm’s-length transaction be

derived exclusively from a respondent’s

suppliers’ cost data and argues that

Toyota has met its burden of

demonstrating that TAL’s transactions

with its affiliated suppliers are at arm’s

length by providing detailed

information on its competitive bidding

and negotiation processes. Toyota

contends that it properly based its COP

calculations on prices TAL paid instead

of on TAL’s suppliers’ COP. Toyota

claims that TAL did not generally

purchase identical parts during the

same period from different suppliers

and, because it engages in arm’s-length

negotiations with suppliers, it does not

have access to information on sales or

prices of identical parts by its suppliers

to other parties or the suppliers’ COP.

Toyota describes the bidding process

TAL used to source parts and provides

examples of situations where it decided

to source such components from

unaffiliated suppliers instead of

established affiliated suppliers after

engaging in such competitive bidding.

Toyota states that, despite its detailed

explanation of why it cannot obtain its

suppliers’ cost data, petitioners

continue to rely on a memorandum in

the record of the Minivans investigation

which, contrary to petitioners’

assertions, does not contradict Toyota’s

statements that it cannot obtain access

to its suppliers’ cost data. Toyota further

states that the memorandum is largely

irrelevant to this administrative review

of forklift trucks. Toyota concludes that,

while TAL may be able to persuade

these suppliers in which it holds

majority ownership to provide cost

information in a limited fashion for

limited uses, TAL is not able to force its

other related suppliers to provide such

costs for any purpose.

Department’s Position

We do not agree with petitioners that

Toyota failed to establish that TAL’s

transactions with its affiliated suppliers

were at arm’s-length prices. With

respect to major inputs, Toyota

provided the transfer prices and cost

information for each such input it used

in the production of the trucks sold in

the United States and home market. The

information Toyota provided with

regard to TAL’s suppliers of major

inputs is sufficient to determine that the
5604 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

amount represented as the value of such

input is not less than the cost of

production of such input, as required by

section 773(f)(3) of the Act. In addition,

because these are unique inputs, there

were no comparable purchases from

unaffiliated suppliers. Accordingly, we

have relied on Toyota’s reported cost

information based on transfer prices for

the major inputs in our cost

calculations.

We have also determined that Toyota

has established the arm’s-length nature

of other (non-major) inputs supplied by

TAL’s affiliated suppliers. Section

773(f)(2) of the Act states that ‘‘[a]

transaction directly or indirectly

between affiliated persons may be

disregarded if, in the case of any

element of value required to be

considered, the amount representing

that element does not fairly reflect the

amount usually reflected in sales of

merchandise under consideration in the

market under consideration.’’ For its

affiliated suppliers of minor inputs,

Toyota responded that it could not

provide market-value sales prices

between affiliated suppliers and third

parties, or between TAL and unaffiliated

parties of the same inputs because the

information was not obtainable or such

transactions did not exist. Toyota did,

however, supply cost information for a

number of minor inputs supplied by

affiliated parties. It is the Department’s

practice to permit limited reporting in

appropriate circumstances, such as a

case like this where there are scores of

parts used in the production of a forklift

truck, there are no third-party

transactions on which to rely, and the

respondent is unable to obtain cost

information or prices to other

purchasers from its suppliers. We

disagree with petitioner that Hyster

requires the Department to obtain more

complete cost information. Unlike

Hyster, there is no information on the

record that prompts the Department to

make further inquiry. The court in

Hyster did not appear to rule out

completely our reliance on a

representative sample of information.

Id. at 187. In addition, to support its

position that TAL deals with its

suppliers at arm’s length and, therefore,

that the amount for the relevant input

‘‘fairly reflect[s] the amount[s] usually

reflected in sales of merchandise under

consideration in the market under

consideration,’’ TAL provided internal

documents that evidence competitive

bidding practices on the part of its

affiliated and unaffiliated suppliers. The

documents establish that Toyota selects

its suppliers using a competitive

bidding process and that Toyota is not

averse to switching from an affiliated

supplier to an unaffiliated supplier

based on price. This is further evidence

that Toyota deals with suppliers, both

affiliated and unaffiliated, at arm’s

length. We are satisfied that the

information on inputs Toyota provided

supports its claim that it deals with

affiliated suppliers on an arm’s-length

basis.

Finally, we agree with Toyota that the

Minivans memorandum petitioners cite

is not relevant to this proceeding. That

dealt with a different case with a

different record. The record in this

review does not suggest that we draw

any conclusions based on such

observations.

Comment 4

Petitioners allege that Toyota

improperly reported its affiliated parties

for purposes of the CV and COP

calculations. Petitioners state that, as

section 773(f)(2) of the Act makes clear,

indirect affiliations as well as direct

relationships may cause the Department

to disregard transactions that are not at

arm’s length. Petitioners assert that, in

identifying its affiliated suppliers,

Toyota only identified the

manufacturer’s (TAL) affiliated

suppliers and did not identify its

indirect affiliation with suppliers

through TMC. Petitioners argue that the

interrelationship between TMC and

TAL cannot be questioned and that any

suppliers under the control of or

affiliated with TMC should be

considered affiliated with TAL.

Toyota responds that it has complied

with section 771(33) of the Act and

Department practice with respect to

providing information on suppliers who

meet one of the statutory affiliation

criteria with respect to TAL.

Department’s Position

We disagree with petitioners. Section

773(f)(2) states that, in calculating COP

or CV, the Department may disregard ‘‘a

transaction directly or indirectly

between affiliated persons.’’ Thus,

contrary to petitioners’ argument, the

direct/indirect language refers to the

nature of the transaction, not the

affiliation. Toyota has stated in this

review that it applied the affiliatedparty definition contained at section

771(33) of the Act, as requested in our

questionnaire. During the home market

verification, we examined Toyota’s

corporate structure and did not find any

deficiencies in its reporting. Further,

petitioners have not provided any

information regarding other, unreported,

affiliated parties. Accordingly, we have

accepted Toyota’s reporting of its

affiliated parties for the final results.

Comment 5

Petitioners claim that the Department

should not include the interest income

Toyota Motor Credit Corporation

(TMCC), a separately incorporated U.S.

affiliate of TMS, received for loans it

made to dealers that purchased Toyota

forklift trucks as an offset to the credit

expense TMS incurred in selling trucks

in the United States. Petitioners argue

that the loan a customer obtained

constitutes a separate transaction from

the negotiation process related to the

sale of a forklift truck and, therefore,

under the express terms of the statute

and the Department’s longstanding

practice, income earned or expenses

incurred that are not related to the sales

negotiation process cannot be taken into

consideration in the dumping analysis.

Petitioners provide a number of

examples in Toyota’s questionnaire

response to support their position that

payment terms are separate and have no

impact on the sales negotiation process

between TMS and the dealer. Petitioners

also refer to certain business proprietary

passages from TMS’s financial

statements which, they argue, conflict

with Toyota’s position that TMCC

simply operates as an arm of TMS.

Petitioners assert that the notes to the

financial statements raise serious

questions as to the accuracy of Toyota’s

calculation of the expense, given the

possibility of prepayments and credit

losses which may not have been

factored into its calculations. For all the

above stated reasons, therefore, the

Department should reject Toyota’s claim

for an adjustment for interest income

TMCC received.

Toyota argues, first, that it is the

Department’s longstanding practice to

include credit revenues and to deduct

credit expenses in its calculation of

CEP. Second, Toyota argues that it is

nonsensical and irrelevant to claim that

financing does not affect the selling

price of a truck because the customer

pays a price that includes credit revenue

which TMCC earns. Toyota points to the

record evidence that, in the relevant

transactions, TMCC receives the

payment from the first unrelated

customer, which is a price that includes

credit revenue, and TMS receives only

an intra-party transfer from TMCC, a

payment that can not serve as the basis

for CEP under section 772(b) of the Act.

Toyota states that the ‘‘separate nature’’

of the financing transaction is belied by

the facts in Toyota’s questionnaire

response.

Toyota maintains that it is irrelevant

that TMCC is separately incorporated

and uses its income for various

purposes and, therefore, the
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Department’s determination to treat

TMCC and TMS as a single entity was

correct. Toyota further maintains that

petitioners’ argument that TMS and

TMCC are ‘‘separate legal entities’’ is

contradicted by the reality of the

relationship, given that they are 100-

percent affiliated entities, share a

common address, and share certain

operational structures. Toyota also

claims its method of applying assets and

income has no relevance at all to

whether credit revenue Toyota received

is properly part of CEP. Toyota adds, in

conclusion, that petitioners’ speculation

that Toyota’s credit revenue might not

be accurate, based on broad statements

in TMCC’s financial statements, is

unfounded.

Department’s Position

We disagree with petitioners that we

should reject Toyota’s claimed

adjustment for credit revenue. We have

addressed this issue in prior reviews

and in our October 9, 1996, Final

Results of Redetermination Pursuant To

Court Remand, NACCO Materials

Handling Group, Inc., v. United States,

Slip Op. 96–99 (June 18, 1996)

(NACCO), which we have put on the

record of this review.

In NACCO, we explained that, in our

antidumping analysis, ‘‘we examine

thoroughly the corporate structure of

respondents in order to capture all

expenses and revenues incurred by

related companies that pertain to sales

of subject merchandise. In (NACCO),

Toyota’s revenue and expense pertain

directly to the particular sales in

question, whether deemed part of the

same transaction or not, and must be

included in our dumping analysis.’’ Id.

at 23–24. We further stated that ‘‘[t]he

inclusion of TMCC’s credit expense and

credit revenue in the dumping analysis

is not dependent on whether or not

ostensibly separate transactions are

combined. Such inclusion is required

because, otherwise, the Department

would be unable to fulfill its statutory

mandate to capture all U.S. selling

expenses in its analysis, as required by

section 772(d) of the Act.’’ Id. at 26. The

essential mechanics of the relevant

transactions in this review do not differ

materially from those in NACCO.

Petitioners’ arguments concerning the

separateness of the transactions and the

corporate separateness of the entities are

irrelevant, given that ‘‘the expenses and

revenues that derive from the financing

arrangement are related to the sales in

question and are relevant, therefore, to

the calculation’’ of CEP. Id. at 31.

References by petitioners to Toyota’s

description of the process (i.e., where a

dealer may decide separately how it will

pay, is not obligated to use payment

terms offered by TMCC, etc.) do not

alter the conclusion that, for purposes of

section 772 of the Act, the revenues and

expenses pertain directly to the

particular sales in question and are

appropriately part of our dumping

analysis. As we concluded in NACCO,

‘‘TMC, TMS, and TMCC together

constitute the exporter and have

provided financing services in selling

the subject merchandise * * *, it is

necessary to focus on the expenses that

relate to sales of subject merchandise,

regardless of which related entity incurs

the expenses, in the interest of accuracy

and in order to prevent the

manipulation of the dumping analysis

through shifting expenses to

subsidiaries.’’ Id. at 29. Although the

statutory definition of ‘‘exporter’’

applied in that remand has been

repealed, TMC, TMS and TMCC are

‘‘affiliated persons’’ within the meaning

of the new definition at section 771(33)

of the Act. Therefore, we consider our

analysis and conclusions in NACCO to

be directly relevant to the facts of this

review and petitioners have not

advanced any argument that would alter

this conclusion.

Petitioners’ arguments based on

portions of TMS’ financial statements

are also not persuasive. As explained

above, arguments concerning the

corporate separateness based on certain

descriptions of ostensibly independent

activities in which the entities engage

are not relevant and, therefore, whether

TMCC simply operates as an arm of

Toyota does not alter our analysis.

Furthermore, petitioners’ suggestion

that, based on Toyota’s financial

statements, Toyota’s reported credit

revenue might not be accurate, because

of the possibility of prepayment of

leases and because Toyota might not

have accounted for credit losses,

constitutes unfounded speculation.

Moreover, this speculation is irrelevant

to petitioners’ position that credit

revenue should not be recognized

because the transactions are separate.

Nonetheless, with regard to whether it

factored credit losses into its

calculations, Toyota refers to a prior

submission wherein it stated ‘‘TMCC

has an account for bad debts on its

financing, which, if included in the

indirect expenses of TMCC, increases

these expenses slightly.’’ February 29,

1996, submission at 8. Toyota later

included this item in its calculations. In

addition, nothing in the record

contradicts Toyota’s statement that

prepayments are not relevant to forklift

financing. In a February 8, 1996,

submission in the 1993–94

administrative review of this order,

Toyota stated (at 4) that ‘‘the referenced

comment in Toyota’s financial

statements applies primarily to

automobile installment contracts and

leases, and not to forklift leases, which

are rarely paid off early.’’ This

explanation supports our conclusion to

accept Toyota’s claimed adjustment for

credit revenue.

Comment 6

Petitioners claim that the payment

terms for loans and leases can range

from one to five years and thus

constitute long-term, not short-term,

financing. Therefore, petitioners

contend, the Department should

consider the credit expense Toyota

incurred as long-term debt and should

not base the calculation on the shortterm borrowing rate Toyota reported.

Petitioners argue that, in the absence of

information from Toyota on long-term

interest rates, the Department should

rely on facts otherwise available.

Toyota argues that the Department has

a well-established practice of using

short-term interest rates to calculate

credit expense and believes that the

Department should adhere to this

practice.

Department’s Position

We agree with Toyota. Maintaining

our approach is reasonable and we have

not altered our practice of using a

company’s short-term borrowing rate to

calculate imputed credit expense. The

Department’s position is buttressed by

the fact that ‘‘TMCC’s issuance of shortterm commercial paper contributes to

the pool of funds used to finance all

transactions, regardless of credit term’’

and that ‘‘there are only ten occasions

in which reported credit terms exceed

one year’’ (see Toyota’s Submission,

February 29, 1996, at 9). Therefore, we

have not adjusted Toyota’s reported

credit expenses by using a long-term

interest rate as petitioners propose.

Comment 7

Petitioners maintain that it is the

Department’s consistent practice to use

the date of the final results as the date

of payment for U.S. sales where there is

no reported date of payment (citing

Certain Stainless Steel Wire Rods from

France; Final Results of Antidumping

Duty Administrative Review (September

3, 1996)). Petitioners suggest that,

whenever Toyota has reported a

payment date of March 31, 1996, the

Department should instead use the date

of the final results to calculate Toyota’s

credit expense.

Toyota explains that, for certain U.S.

sales for which it had not yet received

payment by the time it was preparing its
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supplemental questionnaire for filing on

May 3, 1996, it reported a payment date

of March 31, 1996, the closing date for

the data in the supplemental response.

Toyota asserts that the relevant

transactions consist of sales with

extended payment terms that include

credit revenue. Toyota argues that, if the

Department changes the reported date of

payment to the date of the final results

to recalculate the credit expense, the

Department would likewise have to

revise the calculation of credit revenue.

Toyota contends that, because credit

revenue is not calculated but is based on

actual payments received, Toyota would

have to submit these amounts to the

Department. Toyota states that, although

it has no objection in principle to

revising both credit expense and

revenue (given that Toyota would gain

more in credit revenue than it loses in

credit expense), due to the

complications of resubmitting new

information at this late stage of review,

the company requests that the

Department maintain the current

‘‘default’’ payment date.

Department’s Position

We disagree with petitioners. Use of

the date of the final results to calculate

credit expense and credit revenue for

those sales for which payment has not

yet been received is not appropriate

because there is no evidence to suggest

that this date will provide greater

accuracy in the calculation of either

credit expense or credit revenue. Due to

the nature of the credit expense and

credit revenue at issue, it is not possible

to derive exact expense and revenue

amounts for certain transactions within

the time permitted for responding to our

information requests. In addition,

because Toyota calculated its credit

expense and credit revenue using the

same period, any adjustment to one will

require a corresponding adjustment to

the other. Accordingly, we have not

adopted petitioners’ proposal for the

final results.

Comment 8

Petitioners state that Toyota never

stated for the record that all of its U.S.

technical services were actually indirect

expenses. Petitioners claim that Toyota

reported the expenses as indirect

expenses because Toyota was unable to

segregate them from other expenses, and

petitioners argue that Toyota cannot be

allowed to benefit from its alleged

inability to isolate these expenses.

Petitioners assert that Toyota bears the

burden of demonstrating that these

expenses are indirect pursuant to 19

CFR 353.54 and argue that the

Department should treat the expenses as

direct selling expenses.

Toyota disputes petitioners’ assertion

that it classified technical service

expenses as ‘‘indirect’’ because the

expenses could not be separately

quantified. Toyota asserts that the

record is clear that these expenses are

all fixed and do not relate to specific

sales.

Department’s Position

We disagree with petitioners. In

Toyota’s initial questionnaire response,

the company reported that its

‘‘[t]echnical services in the United

States were allocated and included in

selling expenses.’’ Toyota also

explained that ‘‘[t]hese are not recorded

separately in TMS’s records, and,

therefore, cannot be isolated.’’ October

16, 1995 Questionnaire Response at C–

51. In response to our request that

Toyota state whether any of the

technical services it performed could be

tied to specific sales and to report

variable technical service expenses

separately from fixed expenses, Toyota

stated that its technical service expenses

are all fixed expenses and do not relate

to specific sales. Questionnaire

Response at C–65–66. Based on the

record of this review, we find no reason

to dispute Toyota’s characterization of

its reported technical service expenses

as indirect. The fact that Toyota is

unable to break out a particular expense

does not suggest that this

characterization is inaccurate.

Accordingly, we have maintained our

treatment of these expenses as indirect

selling expenses in the final results.

Comment 9

Petitioners maintain that the

Department’s treatment of Toyota’s U.S.

servicing commissions as indirect

selling expenses is not consistent with

the statute or with the Department’s

practice in the 1987–89 administrative

review. Petitioners contend that these

expenses are in fact value-added

expenses. Petitioners state that section

772 of the Act provides that the

Department will derive CEP by reducing

the starting price by the cost of any

further manufacture or assembly, but

section 772 does not provide that U.S.

value-added expenses be included in

the pool of U.S. indirect selling

expenses which, in turn, establishes the

limit of the CEP offset. Petitioners claim

further that, in the 1987–89 review, the

Department included Toyota’s servicing

commission payments in U.S. valueadded costs. Petitioners note that, in

that review, the Department determined

that Toyota’s servicing ‘‘commissions’’

are payments to a third party, the dealer,

and considered them as a cost of further

manufacturing because the expenses

involved preparing, servicing, and

delivering a forklift truck to the

customer, all of which are operations

that add value to the forklift.

Toyota responds that these

commissions are different from a direct

payment to subcontracted value-added

activities. Toyota asserts that the law

and regulations describe how

commissions are to be treated and that

commissions are always paid to third

parties to compensate for some service

or activity. Toyota argues that the fact

that some of these activities may involve

certain servicing obligations does not

render them value-added expenses.

Department’s Position

We agree with Toyota. Based on the

record of this review, we do not

consider these payments to be for

specific further-manufacturing activity.

Based on Toyota’s description of the

purpose of these payments, while they

may potentially involve such activity or

obligations, they are more akin to

payments that we treat as commissions.

In its sales questionnaire response

Toyota stated that ‘‘these commissions

are paid to unaffiliated forklift dealers

for National Account transactions in

their territories . * * *’’ October 16,

1995 Questionnaire Response at C–40.

In a January 30, 1996, submission to the

Department, Toyota stated (at 11) that

‘‘these commissions may or may not be

related to modifying the truck—in fact,

most are not— and in any case do not

relate to any activities performed by

Toyota.’’ Toyota’s description of these

payments indicates that they are

generally not for further-manufacturing

activities, but rather are primarily

intended to compensate dealers for

servicing obligations they may be called

upon to provide.

We have previously considered

similar payments to be commissions. In

TRBs (at 57638), respondent ‘‘explained

in its response that, as a means of

compensating (its U.S. affiliate) for

expenses it incurred with respect to

services it provided for certain of

(respondent’s) purchase price sales,

(respondent) made ‘‘commission’’

payments to (its U.S. affiliate).’’ While

the ‘‘commission’’ concerned payments

to a related party on purchase price

sales and were ultimately decided to not

have been at arm’s length, the case

stands for the proposition that the

Department will consider such

payments to be commissions.

There is nothing on the record to

support petitioners’’ position that these

commissions were related directly to

specific further-manufacturing
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activities. Therefore, for purposes of the

final results, we have maintained our

treatment of Toyota’s servicing

commissions as ‘‘commissions.’’

Comment 10

Petitioners note that, at verification,

Toyota informed the Department that it

miscalculated inland freight and

proposed an alternate methodology to

calculate the freight cost on the basis of

units shipped rather than on the basis

of weight. Petitioners assert that such a

methodology is improper because it

understates the amount of inland freight

expense for larger trucks while

allocating a disproportionately greater

expense to smaller trucks. Petitioners

propose an alternate methodology using

the total weight of individual trucks and

the freight factor Toyota provided in its

May 3, 1996 supplemental response.

Toyota responds that petitioners

misunderstand the issue because

Toyota’s yen/kg inland freight factor

itself is incorrect. Toyota states that,

contrary to its initial belief, there is no

way to calculate a yen/kg inland freight

factor because its records only permit

the calculation of a per-unit amount for

inland freight based on the total units

shipped and the total payments made.

Toyota asserts that this is an accurate

way of allocating the expense because

Toyota is charged by the truckload

regardless of the number of trucks

shipped.

Department’s Position

We agree with Toyota. Petitioners’’

proposed methodology would be based

on a freight factor that Toyota

determined, in preparing for

verification, was flawed. We verified

that the original methodology was

flawed. Toyota apprised the Department

of this error prior to verification and

calculated a per-unit expense by taking

the total expense for the POR and

allocating it over the total units it

shipped. We verified the bases of

Toyota’s proposed methodology.

This methodology is the most feasible

manner in which Toyota can report this

expense based on its records, which

only permit the calculation of per-unit

amounts using the total units shipped

and total payments made. Further, we

consider this to be an accurate and

reasonable method of allocating the

expense, given that Toyota is charged by

the truckload, not by the weight.

Accordingly, we have accepted Toyota’s

methodology for the final results.

Comment 11

Petitioners assert that Toyota failed to

provide verification documents to

support its home market warranty

payments, yet the Department

inadvertently allowed Toyota an

adjustment for home market warranty

expense in the Preliminary Results.

Petitioners argue that there is no basis

to allow Toyota an adjustment for home

market warranty expense given that

Toyota failed to demonstrate that it

made the warranty payments and,

therefore, failed verification of this

expense. Petitioners conclude that the

Department should disallow an

adjustment for Toyota’s home market

warranty expense for the final results.

Toyota responds that petitioners are

incorrect in recommending that the

Department deny Toyota’s home market

warranty expense. Toyota notes that the

Department’s verification report and

verification exhibits related to Toyota’s

claimed warranty expense show clearly

that the verification of this expense,

including traces to numerous

documents supporting the fact that

Toyota incurred and paid the reported

warranties. Toyota claims that the only

document it could not provide was one

showing that it made a specific warranty

payment to a dealer, a document that

Toyota’s accounting system does not

produce. Toyota asserts that all of the

documentation that Toyota does have,

and which the Department examined,

supports the fact that it made these

payments. Therefore, Toyota contends,

the Department was justified in

determining the expenses were real.

Toyota argues that any decision to deny

this expense would be an inappropriate

use of adverse facts available.

Department’s Position

We disagree with petitioners. We do

not accept petitioners’ assertions that

we could not verify Toyota’s reported

home market warranty expense and that

we inadvertently overlooked Toyota’s

failure to verify this expense in the

Preliminary Results.

While it is true that Toyota was

unable to demonstrate that it made these

warranty payments through the use of

specific documents, e.g., a bank-funds

transfer statement, the verification of

this expense included the review of

numerous other documents that

supported the expense. See Report at

17–18. Unlike Toyota’s failure to

respond to the Department’s requests

with regard to the verification of certain

selling expenses, Toyota was able to

provide numerous interrelated

documents to support the reported

warranty expense. Therefore, we have

allowed Toyota’s home market warranty

claim for the final results.

Comment 12

Petitioners state that the Department

has provided no justification for a

departure from its standard practice for

determining whether transactions with

affiliated parties are at arm’s length

based on its 99.5 percent test.

Petitioners claim that they performed an

affiliated-party test and, given that the

evidence of record indicates that

Toyota’s prices to its affiliated dealers

are not at arm’s length, the Department

must require Toyota to submit complete

home market sales data.

Petitioners note that the Department

confirmed at verification that TMC’s

price list makes no distinction between

prices charged to affiliated and

unaffiliated dealers, but argues that

price lists alone cannot determine

whether sales are at arm’s length

because certain affiliated dealers might

receive higher rebates, better payment

terms, or any other number of benefits

that result in a lower net price than that

which unaffiliated dealers pay.

Toyota responds that the Department

should not require Toyota to submit

sales information on sales by affiliated

dealers to unrelated end-users because

all of its sales are at arm’s length. Toyota

adds that petitioners’ own analysis

demonstrates that sales to affiliated

dealers are at arm’s length, since this

analysis reveals that affiliated dealers

paid prices slightly above and slightly

below the average price to unaffiliated

dealers. Toyota states that this very

narrow range of deviation from the

average does not suggest that prices to

affiliated dealers are not at arm’s length

and adds that the small deviation is

created solely by a deficiency in

petitioners’ method of analysis, whereby

petitioners adjusted the prices by the

costs of the attachments and options.

Toyota provides three examples

indicating that differences in prices are

attributable to differences in the number

of options/attachments, credits for

removal of certain equipment, and

differences in the types of attachments.

Toyota states that petitioners wrongly

tried to compensate for the different

attachments through cost adjustments;

petitioners should have used the prices

for the attachments which the

Department verified were identical to

affiliated and unaffiliated dealers.

Toyota states that the Department has

recognized in each of its prior reviews

that Toyota’s sales are all at arm’s length

and neither Toyota’s business practices

nor the law have changed and,

therefore, there is no basis for the

Department to alter its analysis for this

review.
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Department’s Position

We disagree with petitioners. As we

stated in our verification report,

Toyota’s sales prices to affiliated and

unaffiliated dealers in the home market,

for the basic truck and parts, were based

on published price lists. See Report at

11. At verification, we noted no

deviation from the price lists for sales to

affiliated or unaffiliated dealers for

either the basic truck or parts.

In addition, while petitioners claim

that the arm’s-length test they

conducted appears to indicate that

Toyota’s sales to affiliated dealers fail

our 99.5% arms-length-test, we note

that, due the unique nature of this

product, where differences between

products beyond the basic truck

(options, attachments, etc.) can be

significant and where these differences

are not always individually

distinguished in the submitted data, an

arm’s-length test is not always feasible.

Petitioners’’ methodology in their arm’slength test for calculating average

variances for options does not

adequately account for all such

differences. Therefore, based on the

verified fact that both affiliated and

unaffiliated dealers purchased trucks

and parts based on the same price lists,

we have determined that Toyota’s sales

to affiliated dealers in the home market

form a proper basis for consideration

and the calculation of NV.

Comment 13

Petitioners argue that the

Department’s level-of-trade analysis is

incorrect. Petitioners claim that, rather

than examining the actual level of trade

at which Toyota’s sales to unaffiliated

purchasers in the United States

occurred, the Department began its

level-of-trade analysis with a price

reduced of expenses which Toyota’s

U.S. affiliate incurred. Petitioners assert

that, by excluding these expenses, the

Department failed to recognize that the

CEP sales were at a more advanced level

than Toyota’s home market sales and,

therefore, that an upward adjustment to

NV was warranted.

Petitioners assert that there is no legal

justification for adjusting CEP prior to

determining the level of trade of the

U.S. sale. Petitioners claim that the

statute requires the Department to make

a comparison of CEP with NV at the

same level of trade. Petitioners assert

that nothing in the statute nor the SAA

requires the Department to compare the

level of trade of a CEP with an

unadjusted home market price and that,

in doing so, the Department has

misinterpreted the law. Petitioners point

to the Department’s longstanding

practice of comparing sales in the

relevant markets at a common point in

the chain of commerce (citing, among

others, Cookware at 43330).

Petitioners claim that the flaw in the

Department’s analysis is indicated by

the results it reached in this case.

Petitioners assert that the U.S. sales are

accompanied by similar and more

extensive selling activities than those in

the home market, yet the Department

created distinct and commercially

unrealistic levels of trade in the two

markets with its adjustments to CEP.

Petitioners refer to other cases where the

Department’s analysis yielded

anomalous results and artificial

differences in levels of trade between

markets (citing Stainless Steel Wire Rod

from France, 61 FR 8915, 8916 (1996),

and LNPP from Japan, at 38142).

Petitioners conclude that the

Department should begin its level-oftrade analysis with an unadjusted CEP

starting price. Once the Department

does that it becomes apparent that

Toyota’s U.S. sales are at a more

advanced level of trade than its home

market sales and that an upward

adjustment to NV for the difference in

levels of trade is warranted.

Toyota responds that petitioners’’

argument that the Department should

compare unadjusted prices is incorrect,

contradicted by the statute, and

premised upon a fundamental

misperception of CEP. Toyota asserts

that there is no such thing as an

unadjusted CEP; CEP is by definition an

adjusted price, while ‘‘normal value’’ is

an unadjusted price. Toyota further

asserts that the level-of-trade provision

refers only to a comparison of NV with

a CEP. Toyota concludes that use of an

unadjusted CEP in determining the level

of trade of the U.S. sale is contradicted

by the definition of CEP at section

772(b), the definition of normal value at

section 773(a)(1), and the level-of-trade

provision at section 773(a)(7)(A) of the

Act.

Toyota notes that its U.S. sales are

indisputably CEP sales. Toyota claims

that the U.S. level of trade is a single,

very-little-advanced level, from an

exclusive distributor (TMC) to an

affiliated purchaser in the United States

(TMS). In contrast, all of its sales in

Japan are at a more remote level, that of

a distributor (TMC) to dealers.

Consequently, there is no level of trade

in Japan comparable to that of the U.S.

sales and no information available in

Japan on which to make the price-based

level-of-trade adjustment anticipated by

section 773(a)(7)(A) of the Act.

Therefore, the Department correctly

made a CEP-offset adjustment as

permitted by section 773(a)(7)(B) of the

Act. Toyota adds that, since its home

market level of trade is more remote,

there is no justification for adjusting

home market prices upwards. Toyota

notes, in conclusion, that the

Department refuted arguments identical

to petitioners’’ suggestions in its

proposed regulations (at 7347).

Department’s Position

We disagree with petitioners that our

level-of-trade analysis must begin with

the unadjusted price of the U.S. sales.

We base the level of trade of CEP sales

on the CEP, i.e., the price in the United

States, net of the deductions required by

the statute. It is that price, not the

starting price, that is compared to the

normal value. Petitioners’ position is

contrary to the SAA, the statute, and our

practice under the URAA.

We agree with Toyota that the statute

is clear that the CEP by definition is an

adjusted price while normal value in a

level-of-trade analysis is based on an

unadjusted price. Section 772(b) of the

Act states that ‘‘constructed export

price’’ means the price at which the

subject merchandise is first sold * * *,

as adjusted under subsections (c) and

(d)’’ (emphasis added). Normal value is

defined as ‘‘the price at which the

foreign like product is first sold * * *

for consumption in the exporting

country * * * at the same level of trade

as the * * * constructed export price.’’

Section 773(a)(1)(B)(i) of the Act. The

SAA similarly specifies that normal

value will be calculated, to the extent

practicable, at the same level of trade as

the CEP. SAA at 827. Section 773(7)(A)

of the Act further indicates that ‘‘[t]he

price described in paragraph (1)(B) shall

be increased or decreased to make due

allowance for any difference (or lack

thereof) between the * * * constructed

export price and the price described in

paragraph (1)(B) * * * that is shown to

be wholly or partly due to a difference

in level of trade between the * * *

constructed export price and normal

value * * *’’ It is clear that the statute

speaks of an adjusted price for CEP and

an unadjusted price for NV.

Our practice, in examining level of

trade, has been to use an adjusted

starting price (i.e., the CEP) in

accordance with the statute. In LNPP

from Japan, we stated ‘‘[i]n those cases

where [a level-of-trade] comparison is

warranted and possible, then for CEP

sales the level of trade will be evaluated

based on the price after adjustments are

made under section 772(d) of the Act.

As stated in Aramid Fiber ‘‘the level of

trade of the U.S. sales is determined by

the adjusted CEP rather than the starting

price.’’ ’ LNPP from Japan at 38143

(emphasis added).
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5609

More recently, in AFBs 6, we stated:

[t]he statutory definition of ‘constructed

export price’ contained in section 772(d) of

the Tariff Act indicates clearly that we are to

base CEP on the U.S. resale price as adjusted

for U.S. selling expenses and profit. As such,

the CEP reflects a price exclusive of all

selling expenses and profit associated with

economic activities occurring in the United

States. See SAA at 823. These adjustments

are necessary in order to arrive at, as the term

CEP makes clear, a ‘constructed’ export price.

The adjustments we make to the starting

price, specifically those made pursuant to

section 772(d) of the Tariff Act (‘‘Additional

Adjustments for Constructed Export Price’’),

normally change the level of trade.

Accordingly, we must determine the level of

trade of CEP sales exclusive of the expenses

(and concomitant selling functions) that we

deduct pursuant to this subsection.

AFBs 6 at 2107.

Because the statute, the SAA, and our

practice support our use of an adjusted

CEP to determine level of trade,

petitioners’ comparisons between the

activities provided for Toyota’s home

market sales and those provided for its

U.S. sales to unaffiliated customers are

not relevant. We consider the

appropriate comparison of selling

functions, selling expenses, and class of

customer between markets to be sales

determined by the adjusted starting

price (constructed export price) for U.S.

sales and the unadjusted starting price

for home market sales (normal value)

i.e., Toyota’s sales to its U.S. affiliate

and its home market sales to affiliated

and unaffiliated dealers.

Comment 14

Petitioners assert that, even if the

Department begins the level-of-trade

analysis with an adjusted CEP, the

evidence of record does not establish

that different levels of trade exist in the

home and U.S. markets. Petitioners

claim that the selling functions

provided on U.S. sales by TMC and TAL

(exclusive of those provided by TMS)

are sufficiently similar to the verified

selling functions incurred on home

market sales by TMC and TAL to

consider the sales at the same level of

trade.

Petitioners note that the home market

expenses the Department examined at

verification included inland freight and

insurance, rebates, discounts,

warranties, direct advertising, credit,

product liability, TAL home market

indirect expenses (quality assurance)

and TMC home market indirect

expenses (incentives, indirect selling,

indirect advertising, wage and salary

and G&A and inventory carrying costs).

Petitioners argue that rebates, discounts

and incentives do not reflect selling

activities and cannot serve as the basis

for distinguishing levels of trade.

Petitioners claim that the Department

was unable to verify either home market

direct or indirect advertising, part of the

indirect selling expense claims, and

Toyota’s warranty claims and argue that,

given this inability, the Department

should neither adjust for, nor consider,

these to be distinct functions in its

level-of-trade analysis.

Petitioners assert that other expenses

applying to home market sales appear to

be applicable to U.S. sales. In particular,

petitioners claim that Toyota has

focused only on selling functions TMC

provided with respect to U.S. sales and

has ignored those TAL provided (citing

as examples TAL’s quality assurance,

engineering services and technical

advice). Petitioners note that Toyota

admits TAL incurs expenses related to

the selling functions provided with

respect to U.S. sales. Petitioners assert

that the statute does not limit the selling

functions to be examined to those

provided by the exporter and notes that,

while the degree of the particular

service may vary on a given group of

sales, the statute merely looks to

whether the function provided is the

same. Petitioners conclude that there are

no verified bona fide selling expenses

that were incurred in the home market

that were not also incurred with respect

to U.S. sales and, therefore, there is no

rational basis for differentiating between

levels of trade in this case.

Toyota responds that petitioners

ignore evidence of record establishing

different levels of trade and maintains

that the Department’s disallowance of

certain expenses was unwarranted.

Toyota argues that, even if the

Department’s disallowance of these

expenses was lawful, it does not follow

that the selling functions which gave

rise to the expenses should be

eliminated from the level-of-trade

analysis because the Department was

able to verify the selling functions, if not

the precise expense amounts. Toyota

notes that the Department stated

unequivocally in the preliminary results

that it verified the presence of home

market selling functions and that the

home market level of trade constituted

a more advanced stage of distribution

than the level of the CEP.

Toyota further asserts that petitioners’

implication that TAL’s provision of

selling functions requires a finding that

there are no differences in selling

functions is not valid since: (1) The

differences in TMC’s selling functions

in the two markets is sufficient to satisfy

the Department’s level-of-trade analysis,

(2) the record states in several places

that, while there was some overlap in

the functions TAL performed in the two

markets, there were nevertheless

quantitative and qualitative differences

in the functions performed, and (3) the

Proposed Rules state that ‘‘overlap

between functions is not necessarily

determinative of whether two levels of

trade are distinct.’’ Notice of Proposed

Rulemaking and Request for Public

Comments, 61 FR 7308, 7347 (February

27, 1996), citing SAA at 830. Toyota

argues that the substantial differences in

the degree of the performance of a

similar function in the two markets

constitute ‘‘the performance of different

selling activities’’ pursuant to section

773(a)(7)(A)(i) of the Act.

Department’s Position

We disagree with petitioners. In the

course of this review, we obtained

information concerning the selling

functions Toyota performed for its

respective markets. In addition, in the

process of verifying this information, we

interviewed company officials

concerning the functions performed for

the various markets. Based on our

analysis of this information, we

determined that TMC’s and TAL’s

selling activities directed at the home

market level of trade were more

extensive. See Preliminary Results

Analysis Memo, July 26, 1996, at 2–5;

see also Report at 9–10. Our

determination for the final results

remains unchanged.

We disagree with petitioners that

rebates, discounts and incentives do not

reflect selling activities and do not serve

as a basis for distinguishing levels of

trade. Contrary to petitioners’ assertion,

these expenses may involve selling

functions that are appropriate for us to

consider in our level-of-trade analysis

and contribute to our level-of-trade

determination. We further disagree with

petitioners that we were unable to verify

Toyota’s claimed home market warranty

expense (see comment 11).

We also disagree with petitioners that

Toyota failed to provide information on

selling functions TAL performed with

respect to sales to the respective

markets. As we stated in our

Preliminary Results Analysis Memo at

3–4, ‘‘[i]n addition, the functions

performed on behalf of U.S. sales by

TAL, while similar in some instances to

those provided in the home market, are

much less extensive and limited to

quality assurance, engineering services

and technical advice.’’

Finally, we disagree with petitioners

that our inability to substantiate certain

selling expenses, by tracing reported

amounts to the level of detail required

for a successful verification of a topic,

precludes us from recognizing that

Toyota provided the functions for sales
5610 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

to the particular markets. We obtained

confirmation that these functions were

performed in other ways, e.g., through

interviews with company officials and

review of organizational charts. See,

e.g., Report at 9–10.

Comment 15

Petitioners argue that Toyota should

be denied a CEP-offset adjustment to NV

because it failed to provide information

on a level-of-trade adjustment (citing

LNPP from Japan at 38142). Petitioners

assert that Toyota has made no effort to

quantify a level-of-trade adjustment but

has assumed it is entitled automatically

to a CEP offset. Petitioners assert that

the SAA (at 830) provides that, where

information on different levels of trade

by the same company and same product

is unavailable for the POR, the level-oftrade adjustment may be based on (i)

sales of other products by the same

company, (ii) the experience of other

producers, or (iii) sales of the same

product by the same company in

different time periods. Petitioners claim

that Toyota has not attempted to

provide such information, given its

assumption a CEP offset is automatic.

Petitioners further assert that the

Department found the information

Toyota provided to quantify the CEP

offset to be deficient and not verifiable.

Toyota responds that, in the

preliminary results, the Department

properly determined that Toyota’s sales

in the home market were at a different,

more advanced level of trade than its

sales in the United States. Toyota claims

that the wide range of selling activities

to the home market level has an obvious

and substantial effect on price

comparability with the U.S. level of

trade. Toyota asserts that, because it

sells at only one level in the home

market, it cannot demonstrate a

‘‘consistent pattern of differences

between levels of trade’’ (citing Certain

Stainless Steel Wire Rods From France;

Preliminary Results of Antidumping

Duty Administrative Review, 61 FR

8915, 8916 (March 6, 1996)). Toyota

claims that it provided all of the

information necessary for the

Department to calculate the CEP offset,

and states that, in the preliminary

results of review, the Department

properly adjusted Toyota’s home market

prices due to differences in levels of

trade through a CEP offset. Toyota

asserts that the Department properly

resorted to the CEP offset after analyzing

other statutorily directed alternatives to

account for the necessary adjustment for

differences in levels of trade. Toyota

states that petitioners’ citation to LNPP

from Japan is misleading because, in

that case, the Department denied a CEP

offset because a respondent provided no

level-of-trade information.

Department’s Position

We disagree with petitioners. We

agree that a respondent must establish

entitlement to a level-of-trade

adjustment. However, where the data

necessary to calculate an adjustment is

unavailable, the CEP offset is warranted.

With respect to the quantification

necessary for a level-of-trade

adjustment, in this case the respondent

sells to only one level in the home

market and this level is at a more

advanced stage of distribution than the

level of the CEP. Therefore, neither we

nor Toyota can quantify such an

adjustment and there is no further

requirement to establish entitlement to

a CEP-offset adjustment.

Comment 16

Petitioners claim that the

Department’s failure to deduct from CEP

Toyota’s indirect selling expenses

incurred in the country of manufacture

to sell the product to the United States,

and Toyota’s inventory carrying costs

incurred from the time of production in

the foreign country through the time of

entry into the United States, was a

direct violation of the statute and

should be corrected in the final results.

Petitioners contend that the plain

meaning of section 772(d) of the Act

indicates that the Department cannot

limit adjustments to CEP based on the

geographical area in which such

expenses are incurred and that, when

Congress amended the statute in the

URAA, it did not change the operative

language of section 772(e) by limiting

the selling expenses the Department is

to deduct. Petitioners further contend

that, under prior law, the Department

was required to deduct selling expenses

from Exporter’s Sales Price (ESP)

regardless of where incurred

geographically and, citing Silver Reed

America, Inc. v. United States, 683 F.

Supp. 1393 (CIT 1988) (Silver Reed),

state that the relevant question is

whether the selling expenses relate to

U.S. sales. Petitioners further state that

the court recognized the loophole that

would be created if expenses incurred

abroad for U.S. sales were not deducted

from ESP (the predecessor to CEP).

Petitioners maintain that the

Department should deduct these

expenses from CEP because the record

establishes that they relate explicitly to

the U.S. economic activity. Petitioners

cite in support of their position LNPP

from Germany (at 38173–74), and Notice

of Final Determination of Sales at Less

Than Fair Value: Certain Pasta from

Italy, 61 FR 30326, 30352 (June 14,

1996) (Pasta from Italy).

Toyota answers that the petitioners

would have the Department calculate a

distorted CEP that is not the equivalent

of what the export price would have

been if the affiliated foreign seller and

U.S. reseller were unaffiliated.

Moreover, petitioners claim that the

Department limited CEP deductions

based on where they occurred is

factually in error as the Department

deducted from CEP direct advertising

TMC incurred in Japan. Citing the

Notice of Proposed Rulemaking and

Request for Public Comments, 61 FR

7308, 7331 (February 27, 1996), Toyota

maintains the Department properly

limited deductions by whether such

expenses were selling expenses

associated with economic activities in

the United States, as required by the

statute. Regarding the indirect selling

expenses referred to by petitioners,

these were not deducted because they

are general in nature, do not relate

specifically to U.S. commercial activity,

and are incurred, if at all, with respect

to the sale by an affiliated purchaser. To

support its position, Toyota cites

Calcium Aluminate Flux From France;

Preliminary Results of Antidumping

Duty Administrative Review, 61 FR

40396, 40397 (August 2, 1996) (Calcium

Aluminate Flux), and argues that the

relevant expenses relate to commercial

activity in Japan, not U.S. commercial

activity and, therefore, the Department

properly did not deduct them in

calculating CEP.

Department’s Position

We disagree with petitioners. In

accordance with the SAA, we deducted

from CEP only those expenses

associated with economic activities in

the United States. The SAA indicates

that ‘‘constructed export price is now

calculated to be, as closely as possible,

a price corresponding to an export price

between non-affiliated exporters and

importers.’’ SAA at 823. Therefore, we

did not deduct either of the expenses

referred to by petitioners from CEP. We

have only deducted expenses associated

with commercial activities in the United

States in our calculation of CEP. Our

proposed regulations reflect this logic at

351.402(b): ‘‘(t)he Secretary will make

adjustments to constructed export price

under 772(d) for expenses associated

with commercial activities in the United

States, no matter where incurred.’’ Id. at

179.

With regard to the TMC and TAL

export selling expenses Toyota allocated

to U.S. sales, we consider these

expenses not to be specifically related to

economic activities in the United States.
Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices 5611

As these figures cover salaries and fixed

expenses, which expenses are general in

nature and are not related specifically to

commercial activity in the United

States, they are not properly part of the

calculation of CEP. In Calcium

Aluminate Flux, at 40397, we declined

to deduct indirect selling expenses (i.e.,

administrative expenses, inventory

carrying costs, personnel costs for

technicians) incurred in the country of

manufacture because we deemed such

expenses not to be specifically related to

commercial activity in the United

States. While these expenses arguably

may be similar to those we deducted in

LNPP from Germany, we have

determined subsequently, as indicated

by our position in Calcium Aluminate

Flux, that such expenses are not

specifically associated with commercial

activities in the United States.

Regarding petitioners’ assertion that

we should deduct Toyota’s inventory

carrying costs incurred in the country of

manufacture, such inventory carrying

costs are not associated with economic

activities in the United States. See AFBs

6 at 2125. Therefore, we have not

deducted either of these expenses for

purposes of the final results because

neither of the expenses is specifically

associated with economic activities in

the United States and, therefore, is not

an appropriate deduction in calculating

CEP.

Comment 17

Petitioners argue that the

Department’s verification report and

Toyota’s supplemental questionnaire

response indicate that Toyota

misreported the date of sale for both its

U.S. and home market sales. Petitioners

note that Toyota explained in its

supplemental questionnaire response

that a dealer may modify an order by

changing the configuration of the truck

between 10–15 percent of the time, but

that the Department determined at

verification the frequency instead

ranged from 4.3 to 7.5 percent.

Petitioners assert that the low frequency

of changes fails to justify Toyota’s

decision to base date of sale on date of

shipment when the majority of sales are

established on the order date; further,

the changes to certain attachments do

not alter the essential terms of sale

between Toyota and its customer.

Petitioners state that it is likely there

would be a set price for the particular

attachments or changes in configuration

of the truck and, although a purchaser

may request different attachments, the

basic truck and negotiated price would

not be altered after the order is placed.

Toyota responds that the date the

basic terms of the contract are agreed to

is the date of shipment, which is

generally on or about the date of

invoice. Toyota notes that, under the

Department’s proposed regulations, the

invoice date is considered the date of

sale. Toyota contends that customers

can request modifications in payment

terms, configuration, and price up to the

date of shipment. Toyota states, further,

that the date of order is not a date of sale

in Toyota’s records, is not significant

enough to record on a systematic basis

and, even where recorded, the order

may or may not describe the

merchandise actually shipped. Toyota

notes that this is not a case in which the

date of sale is substantively significant

to the final results, given that Toyota’s

sales are relatively even over the period

and there are no factors such as

hyperinflation that would cause the date

of sale to affect the analysis.

Consequently a different date of sale

would shift the universe of reported

sales slightly and not change the

outcome particularly since the

Department plans to assess duties on all

trucks entered during the POR.

Department’s Position

We agree with Toyota. The date of

shipment is the appropriate date of sale

for home market sales in this case for

the following reasons. First, the reported

date of sale, which is based on shipment

date, closely corresponds to invoice date

in this case and is in accord with our

current practice and with the date-ofsale methodology in our proposed

regulations, where invoice date is

considered the appropriate date of sale.

Second, we verified that certain basic

sales terms (such as configuration and

price) can change up to the date of

shipment. While Toyota initially

reported that orders were changed 10–

15 percent of the time and we

determined at verification that the

frequency of changes instead ranged

from 4.3 to 7.5 percent, the potential for

configurations and prices to change for

the reported sales supports a sale date

based on the shipment date. Third,

Toyota records the date of shipment as

the date of sale for financial reporting

and internal purposes, and it records the

sales transaction as complete upon

shipment (e.g., payment is due from a

dealers based on this date—see Report

at 11–12, Sale Date, and 19, Credit

Expense).

Comment 18

Petitioners contend that the

Department failed to deduct Toyota’s

U.S. inventory carrying costs (calculated

from the date of entry to the date of

shipment from the distribution facility

in the United States) from CEP.

Petitioners assert that these expenses are

related to commercial activities in the

United States and therefore, should be

deducted.

Toyota argues that the Department

properly considered inventory carrying

costs incurred in connection with

Japanese exports to the United States to

be general export expenses broadly

attributable to the sale to the

unaffiliated purchaser, which should

not be deducted from CEP. Toyota

notes, however, that to the extent the

Department deducts any inventory

carrying expenses from CEP, the

expenses should also be included in

U.S. indirect selling expenses and the

Department should deduct

corresponding home market inventory

carrying costs from NV.

Department’s Position

We agree with petitioners. The

inventory carrying costs Toyota

incurred in the United States are an

indirect expense related to commercial

activity in the United States and,

therefore, are appropriately deducted

from the CEP starting price. Therefore,

we have deducted the reported expense

from the starting price and included it

in U.S. indirect selling expenses for

purposes of the final results.

Comment 19

Petitioners note that, in the

preliminary results, the Department

treated Toyota’s repacking costs as a

circumstance-of-sale (COS) adjustment

and added the sum of packing and

repacking to NV in dollars. Petitioners

argue that the statute directs the

Department to adjust NV for costs and

expenses incident to placing the subject

merchandise in condition packed ready

for shipment to the United States and,

therefore, the Department should not

include repacking costs in the

adjustment for differences in packing,

but rather should subtract them from

Toyota’s starting price as an adjustment

to CEP (citing section 772(d) and

Federal-Mogul Corporation v. United

States, Slip Op. 96–68 at 25 (April 19,

1996)).

Toyota asserts that section

772(c)(1)(A) provides that the

Department should increase CEP by an

amount for ‘‘packing,’’ and notes that

this provision does not limit this term

to home market packing. Toyota

maintains, therefore, that the

Department’s approach was reasonable.

Department’s Position

We agree with petitioners. As noted in

our response to comment 16, we deduct

expenses related to economic activities

in the United States in calculating CEP.
5612 Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / Notices

Because U.S. repacking costs are clearly

related to such activities, we have

deducted these expenses from the

starting price to calculate CEP for the

final results.

Comment 20

Petitioners claim that the Department

uniformly reduced Toyota’s home

market sales prices by reported inland

freight expenses, which is inappropriate

because Toyota’s reported home market

prices were exclusive of inland freight

for certain sales. Petitioners assert that

deducting these amounts resulted in an

understatement of NV for those sales for

which the price did not include

delivery.

Toyota responds that it reported, and

the Department verified, inland freight

amounts only where the prices were

inclusive of inland freight. Toyota

asserts that the Department’s

Preliminary Results accomplish exactly

what petitioners claim is proper.

Department’s Position

We agree with petitioners. Toyota

reported that its reported home market

gross unit price ‘‘includes inland freight

only where the sales term is c.&f.’’

(October 16, 1995 response at B–22) and

indicated that for a particular sale ‘‘the

sales term is FOB, that is, it does not

include charges for inland freight’’ (May

3, 1996 supplemental response at Supp.

29). We have ensured that our

calculations reflect the information

Toyota provided in its response

concerning this expense.

Final Results of Review

We determine that the following

weighted-average margins exist for the

period June 1, 1994, through May 31,

1995:

Manufacturer/exporter Margin

(percent)

Toyota ....................................... 50.34

Nissan ....................................... 1 7.36

Toyo .......................................... 1 4.48

1 No shipments or sales subject to this review. Rate is from the last relevant segment of

the proceeding in which the firm had shipments/sales.

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. We have calculated an exporter/

importer-specific assessment rate for

Toyota. For Toyota’s CEP sales we

divided the total dumping margins for

the reviewed sales by the total entered

value of those reviewed sales and the

entered value of leased trucks not

subject to review (see our response to

Toyota comment 10). We will direct

Customs to assess the resulting

percentage margin against the entered

Customs values for the subject

merchandise on each of Toyota’s entries

during the review period. While the

Department is aware that the entered

value of sales during the POR is not

necessarily equal to the entered value of

entries during the POR, use of entered

value of sales as the basis of the

assessment rate permits the Department

to collect a reasonable approximation of

the antidumping duties which would

have been determined if the Department

had reviewed those sales of

merchandise actually entered during the

POR.

Furthermore, the following deposit

requirements will be effective upon

publication of this notice of final results

of administrative review for all

shipments of forklift trucks entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication, as provided by section

751(a)(1) of the Act: (1) The cash deposit

rates for the reviewed companies will be

the rates shown above; (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 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 be the ‘‘All Others’’ rate

of 39.45 percent made effective by the

final results of review in Certain

Internal-Combustion Industrial Forklift

Trucks From Japan; Final Results of

Antidumping Duty Administrative

Review, 59 FR 1374,1384 (January 10,

1994).

These deposit requirements shall

remain in effect until publication of the

final results of the next administrative

review.

This notice also 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 the only

reminder to parties subject to

administrative protective orders (APO)

of their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.34(d).

Failure to comply is a violation of the

APO.

This administrative review and this

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: January 29, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–2877 Filed 2–5–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–201–817]

Oil Country Tubular Goods From

Mexico: Notice of Panel Decision,

Amended Order and Final

Determination of Antidumping Duty

Investigation in Accordance With

Decision Upon Remand

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of panel decision and

amendment to final determination of

antidumping duty investigation in

accordance with decision upon remand.

SUMMARY: As a result of a remand from

a Binational Panel (the Panel), convened

pursuant to the North American Free

Trade Agreement (NAFTA), the

Department of Commerce (the

Department) is amending its final

determination in the antidumping duty

investigation of Oil Country Tubular

Goods from Mexico. The Department

has determined, in accordance with the

instruction of the Panel, the dumping

margin for entries of Oil Country

Tubular Goods from Mexico to be 21.70

percent.

EFFECTIVE DATE: February 6, 1997.

FOR FURTHER INFORMATION CONTACT:

Jennifer Stagner, Office of AD/CVD

Enforcement II, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone

(202) 482–1673.

SUPPLEMENTARY INFORMATION:

Background

On June 28, 1995, the Department

published in the Federal Register (60

FR 33567) the final determination of

sales at less than fair value for Oil

Country Tubular Goods from Mexico

(OCTG from Mexico). On August 11,

1995, the Department published the

antidumping duty order on OCTG from

Mexico. 60 FR 41056.