[Federal Register Volume 62, Number 49 (Thursday, March 13, 1997)]
[Notices]
[Pages 11820-11823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6382]


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DEPARTMENT OF COMMERCE
[A-588-810]


Mechanical Transfer Presses From Japan; Final Results of 
Antidumping Administrative Review

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

ACTION: Notice of final results of antidumping duty administrative 
review; mechanical transfer presses from Japan

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SUMMARY: On November 6, 1996, the Department of Commerce (the 
Department) published the preliminary results of review of the 
antidumping duty order on mechanical transfer presses (MTPs) from 
Japan. The review covers three manufacturers/exporters of the subject 
merchandise to the United States and the period February 1, 1995 
through January 31, 1996. We gave interested parties an opportunity to 
comment on the preliminary results of review. We received comments from 
petitioners, Verson Division of Allied Products Corp., the United 
Autoworkers of America, and the United Steelworkers of America (AFL-
CIO/CLC) (petitioners). We received rebuttal comments from Aida 
Engineering, Ltd. (Aida). Based on our analysis, we have changed the 
final results from those presented in the preliminary results of 
review. We have determined that sales have not been made below normal 
value (NV).

EFFECTIVE DATE: March 13, 1997.

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

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Background

    On November 6, 1996, the Department published the preliminary 
results of the review of the antidumping duty order on MTPs from Japan 
(61 FR 57387, November 6, 1996). The Department has now completed this 
administrative review in accordance with section 751 of the Act.

Scope of Review

    Imports covered by this review include MTPs currently classifiable 
under Harmonized Tariff Schedule (HTS) item numbers 8462.99.0035 and 
8466.94.5040. The HTS numbers are provided for convenience and for U.S. 
Customs purposes. The written description remains dispositive of the 
scope of the order.
    The term ``mechanical transfer presses'' refers to automatic metal-
forming machine tools with multiple die stations in which the work 
piece is moved from station to station by a transfer mechanism designed 
as an integral part of the press and synchronized with the press 
action, whether imported as machines or parts suitable for use solely 
or principally with these machines. These presses may be imported 
assembled or unassembled. This review does not cover certain parts and 
accessories, which were determined to be outside the scope of the 
order. (See ``Final Scope Ruling on Spare and Replacement Parts,'' U.S. 
Department of Commerce, March 20, 1992; and ``Final Scope Ruling on the 
Antidumping Duty Order on Mechanical Transfer Presses (MTPs) from 
Japan: Request by Komatsu, Ltd.,'' U.S. Department of Commerce, October 
1, 1996.)
    This review covers three manufacturers/exporters of MTPs, and the 
period February 1, 1995 through January 31, 1996.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received comments from petitioners 
and rebuttal comments from Aida.

Comment 1

    Petitioners contend that the Department should exclude below-cost 
sales from the calculation of constructed value profit (CV profit). 
Petitioners argue that the Department's decision to include below-cost 
sales in CV profit is contrary to the statute, the Department's current 
practice, and the Statement of Administrative Action (SAA) accompanying 
the URAA. Petitioners note that, in the preliminary results, the 
Department determined that Aida's home market is viable, but that the 
particular market situation requires that NV be based on constructed 
value (CV) due to the many differences in specifications between the 
various presses, and because no merchandise sold in the home market or 
to a third country is identical to the merchandise sold to the United 
States. Petitioners note that, consequently, the Department calculated 
SG&A and profit based on home market sales of MTPs in accordance with 
section 773(e)(2)(A) of the Act.
    Petitioners state that section 773(e)(2)(A) of the Act requires the 
Department to add to CV:

the actual amounts incurred and realized by the specific exporter or 
producer being examined in the investigation or review of selling, 
general, and administrative expenses, and for profits, in connection 
with the production and sale of a foreign like product, in the 
ordinary course of trade, before consumption in the foreign country, 
or * * *,

and that section 771(15) of the Act defines the term ``ordinary course 
of trade'' as excluding sales determined to be below cost under section 
773(b)(1) of the Act. Petitioners argue that sales below cost are not 
in the ordinary

[[Page 11821]]

course of trade and must be excluded from CV. Petitioners contend that 
in the 1994-1995 review the Department determined that sales were not 
actually disregarded under section 773(b) of the Act, and therefore 
were not outside the ordinary course of trade, because petitioners had 
not filed a cost allegation and consequently Commerce had not 
investigated below-cost sales. Petitioners argue that, from the 
original less-than-fair value investigation, NV in MTP cases has always 
been based on CV, and that there was no need for them to file a sales-
below-cost allegation, since all the cost information necessary to 
conduct such an investigation was already before the Department. In 
addition, petitioners argue, the Department has determined, in CV 
cases, that a formal cost allegation by petitioners or initiation of a 
cost investigation by the Department pursuant to section 773(b) of the 
Act is not required for the Department to have ``reasonable grounds to 
believe or suspect'' that sales of a foreign like product are made at 
prices less than the cost of production, and, therefore, are outside 
the ordinary course of trade.
    Petitioners argue that the Department addressed this issue in the 
investigation of sales at less than fair value of large newspaper 
printing presses (LNPPs), another CV case involving custom-made, large 
machines. See Notice of Final Determination of Sales at Less-Than-Fair 
Value: Large Newspaper Printing Presses from Japan, 61 FR 38139 (July 
23, 1996) (LNPPs from Japan). Petitioners argue that, in LNPPs from 
Japan, the Department determined that, as with MTPs, because of the 
unique specifications and custom-built nature of this product, the 
Department would base NV on CV, and would calculate selling, general, 
and administrative expenses and profit in accordance with section 
773(e)(2)(A) of the Act. Petitioners note that in LNPPs from Japan 
petitioners filed a cost allegation, but the Department did not 
formally initiate a cost investigation. Petitioners argue that the 
Department acknowledged the unique cost reporting aspects of CV, 
stating that it:

In effect * * * conducted a cost investigation and our analysis 
revealed evidence that there were home market sales of merchandise 
within the purview of this investigation which were below-cost. 
Section 771(15) provides that sales and transactions considered 
outside the ordinary course of trade include ``among others'' below-
cost sales disregarded under Section 773(b)(1). The Department 
interprets this provision to apply to the exclusion of below-cost 
sales, even if such sales were not formally disregarded pursuant to 
Section 773(b)(1) of the Act.

Petitioners argue that LNPPs from Japan is analogous to the present 
review of MTPs, but contend that the Department reached the opposite 
conclusion in LNPPs from Japan, and excluded below-cost sales from the 
CV profit calculation as outside the ordinary course of trade. 
Petitioners argue that, likewise, in Certain Welded Carbon Steel Pipes 
and Tubes from Thailand: Final Results of Antidumping Duty 
Administrative Review, 61 FR 56515 (November 1, 1996) (Pipe and Tube 
from Thailand), the Department excluded below-cost sales from the 
calculation of CV profit. Petitioners cite to Secretary of Agriculture 
v. United States, 347 U.S. 645, 652-53 (1954) and argue that it is 
axiomatic that an agency must conform its decisions to its prior 
practice or explain the reasons for its departure from that prior 
practice, and that, in this review of MTPs, the Department has failed 
to explain its departures from its prior practice in LNPPs from Japan 
and Pipe and Tube from Thailand. Petitioners conclude that, based on 
the foregoing, for the final results the Department should exclude 
below-cost sales from the CV profit calculation for Aida.
    Petitioners argue that, in the administrative review of MTPs from 
Japan covering the period February 1, 1994 through January 31, 1995 
(1994-1995 review), the Department's final results were also contrary 
to the statute and Department practice. Petitioners contend that, in 
the 1994-1995 review, the Department excluded below-cost sales in its 
profit calculation for its preliminary results, then reversed this 
preliminary determination, even though the parties had not briefed the 
issue.
    Aida contends that the Department properly included all of Aida's 
home market sales in calculating CV profit. Aida argues that section 
773(e)(2)(A) of the Act provides for the calculation of profit based 
on:

the actual amounts * * * realized by the specific exporter or 
producer being examined in the * * * review * * * for profits, in 
connection with the production and sale of the foreign like product, 
in the ordinary course of trade, for consumption in the foreign 
country.

    Aida states that section 771(15)(A) of the Act, which defines the 
ordinary course of trade, provides that sales disregarded under section 
773(b)(1) may be treated as outside the ordinary course of trade; 
section 773(b)(1), in turn, states that, whenever the Department has 
reasonable grounds to believe or suspect that sales of the foreign like 
product have been made below cost, it shall determine whether this is 
the case and whether certain other conditions have been met. Aida 
argues that, if the Department resolves these issues in the 
affirmative, such sales may be disregarded in the determination of NV. 
Aida notes that section 773(b)(2) states that there are reasonable 
grounds to believe that below-cost sales were made if (1) An interested 
party made an allegation of below-cost sales or (2) the Department 
disregarded as below cost some or all of the exporter's sales in a 
prior review. Aida states that no below-cost allegation was submitted 
in this review pursuant to section 353.31(c), the Department did not 
make any determination of below-cost sales under section 773(b)(1), and 
no sales were disregarded under section 773(b)(1). Aida also disagrees 
with petitioners' argument that below-cost sales per se are outside the 
ordinary course of trade. Aida asserts that this is not what the 
statute says; rather, Aida states, the definition of ordinary course of 
trade refers specifically to sales disregarded under section 773(b)(1), 
and a determination to disregard sales under section 773(b)(1) is a 
statutory prerequisite to excluding below-cost sales from the ordinary 
course of trade and from the CV profit calculation. Aida argues that 
section 773(b) is not applicable in the present proceeding, since there 
was no allegation of sales below cost and home market sales were not 
considered as the basis for NV. Aida argues that, accordingly, the 
conditions for treating any sales as outside the ordinary course of 
trade have not been met.
    Aida argues that the Department's inclusion of below-cost sales in 
the CV profit calculation is not inconsistent with its decisions in 
LNPPs from Japan and Pipe and Tube from Thailand. Aida argues that, in 
LNPPs from Japan, the petitioner had filed a timely and proper cost 
allegation, and the Department conceded that it should have formally 
addressed the sales-below-cost allegation, but stated that it did not 
foresee the implications of a formal initiation of a sales-below 
investigation would have on the CV profit and SG&A calculations. Aida 
argues that the issue faced by the Department in LNPPs from Japan does 
not exist here and the Department's decision in LNPPs from Japan is 
inapplicable. Aida argues that, in Pipe and Tube from Thailand, the 
Department initiated a below-cost investigation pursuant to section 
773(b)(2), and as a result of that investigation disregarded certain 
home market sales under section 773(b)(1).
    Aida further contends that petitioners argument that Aida's sales 
are outside the ordinary course of trade is not supported by the SAA. 
Aida notes that,

[[Page 11822]]

with regard to section 773(e)(2)(A), cited by petitioner, the SAA 
states that ``under section 773(e)(2)(A), in most cases, Commerce would 
use profitable sales as the basis for calculating profit for purposes 
of constructed value,'' and argues that this statement clearly 
recognizes that in certain circumstances below-cost sales should be 
included in the profit calculation. SAA at 170, House Doc. 103-316 at 
840. Aida contends that such circumstances exist in this case.
    Aida points out that the Department noted in LNPPs from Japan that:

this being one of the first cases under the new law, we are still 
developing our practice for computing profit and SG&A in accordance 
with the new law.

Aida argues that, in this context, and in view of the petitioner's 
below-cost allegations, the Department stated in LNPPs from Japan that 
below-cost sales could be excluded ``even if such sales were not 
formally disregarded pursuant to section 773(b)(1) of the Act.'' Aida 
contends that the Department apparently relied upon the phrase ``among 
others'' in section 771(15), which defines ordinary course of trade, as 
the basis for this statement, and argues that that provision is 
inapplicable in the present case. Aida contends that in explaining 
``among others'' the SAA states:

    Commerce may consider other types of sales or transactions to be 
outside the ordinary course of trade when such sales have 
characteristics that are not ordinary as compared to sales or 
transactions generally made in the same market.

Examples of such sales include ``merchandise produced to unusual 
product specifications, merchandise sold at aberrational prices, or 
merchandise sold pursuant to unusual terms of sale.'' SAA at 164, House 
Doc. 103-316 at 834. Aida argues that there is no evidence in the 
record that Aida's below-cost sales fell into any such category or 
otherwise were outside the ordinary course of trade.
    Aida contends that, even if the requisite conditions for 
disregarding home market sales had been met, the Department was within 
its discretion in not excluding such sales from CV profit. Aida argues 
that section 773(b)(1) states that, when sales are found to meet the 
conditions set forth therein, such sales may be disregarded in the 
determination of NV, but that such sales are not automatically 
disregarded. Aida further argues that, even if sales are disregarded 
under section 773(b)(1), the SAA makes clear that they are neither 
automatically outside the ordinary course of trade nor automatically 
excluded from CV profit.
    Aida argues that there was no reason for the Department to make any 
determination as to whether any home market sales should be disregarded 
under section 773(b)(1) since it concluded at the outset of the review 
that NV should be based on CV. Aida also notes that no allegation of 
sales below cost was received by the Department. Aida maintains that 
the Department properly determined that the conditions were not met for 
treating below-cost home market sales as outside the ordinary course of 
trade and properly included all home market sales of MTPs in its 
calculation of CV.
    Aida disagrees with petitioners contention that the Department's 
decision on this point in the 1994-1995 review is contrary to the 
statute, Department practice, and the SAA. Aida argues that in the 
1994-1995 review the Department concluded that there was no basis for 
excluding below-cost sales from the CV profit calculation because the 
Department did not receive an allegation that home market sales were 
made at prices below the cost of production, and did not determine that 
any home market sales were outside the ordinary course of trade.
    Department's Position: As both petitioners and Aida note, section 
773(e)(2)(A) requires that sales used as the basis of CV profit be made 
in the ordinary course of trade. Section 771(15) of the Act defines the 
ordinary course of trade as:

the conditions or practices which, for a reasonable time prior to 
the exportation of the subject merchandise, have been normal in the 
trade under consideration with respect to merchandise of the same 
class or kind.

Section 771(15) further provides that sales and transactions considered 
outside the ordinary course of trade include, ``among others,'' below-
cost sales disregarded under section 773(b)(1). Section 773(b)(1) 
directs the Department to disregard sales made at less than the cost of 
production that have been made within an extended period of time (i.e., 
normally one year, but not less than six months) in substantial 
quantities, and at prices which do not permit recovery of all costs 
within a reasonable period of time.
    MTPs are large custom-built capital equipment, where the 
merchandise produced for each sale is unique. In such cases, the 
Department often resorts to the use of CV rather than conducting price-
to-price comparisons. In this case, the Department determined to go 
directly to CV because, while the home market was viable, the 
particular market situation, which requires that the subject 
merchandise be built to each customer's specifications, did not permit 
proper price-to price comparisons in either the home market or third 
countries. See Mechanical Transfer Presses From Japan; Preliminary 
Results of Antidumping Duty Administrative Review, 61 FR 57387 
(November, 6, 1996). As a result, we did not require that Aida provide 
home market sales data. Neither party has contested the use of CV.
    In order to calculate profit pursuant to section 773(e)(2)(A) of 
the Act, we asked Aida to provide aggregate cost and sales data for its 
home market sales of MTPs. Aida, however, provided us with a detailed 
cost build-up, a total cost of production, a comparison sales price, 
and a resulting loss for certain of its home market sales. Based on 
this information, the Department had reasonable grounds to believe that 
home market sales of the foreign like product were made at prices below 
the cost of production. Because each MTP is custom-built, differs 
significantly in specifications, and is essentially a discrete model, 
we performed the cost test on a sale-by-sale basis. The Department 
found that some home market models were sold at prices below the cost 
of production in substantial quantities, within an extended period of 
time, and at prices which do not permit recovery of cost within a 
reasonable period of time.
    We conclude, therefore, that in this review it is appropriate to 
exclude these sales from the profit calculation as outside the ordinary 
course of trade, pursuant to section 771(15) of the Act. The fact that 
technically we did not ``disregard'' such sales in a price-based 
determination of NV as provided in section 771(15) of the Act, does not 
prevent the Department from finding these sales to be outside the 
ordinary course of trade when we have, in effect, conducted a cost test 
on the sales and found that they have failed. We would have disregarded 
these sales, pursuant to section 773(b)(1) of the Act, if we were using 
price-to-price comparisons, and, as a result, we believe it is 
appropriate to do so here. With respect to petitioner's comments 
regarding the final results of review for the 1994-1995 period, those 
results are in litigation before the Court of International Trade, and 
should properly be addressed in the context of that litigation.

Final Results of the Review

    We determine that the following dumping margins exist:

[[Page 11823]]



------------------------------------------------------------------------
                                                                Margin  
           Manufacturer/exporter               Time period     (percent)
------------------------------------------------------------------------
Aida Engineering, Ltd.....................   2/1/95--1/31/96        0.00
Hitachi-Zosen.............................   2/1/95--1/31/96    \1\ 0.00
Ishikawajima-Harima Heavy Industries, Ltd.   2/1/95--1/31/96   \1\ 0.00 
------------------------------------------------------------------------
\1\ No shipments subject to this review. Rate is from the last segment  
  of the proceeding in which the firm had shipments.                    

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of these final results for all shipments of MTPs from Japan 
entered, or withdrawn from warehouse, for consumption on or after the 
publication date, as provided for by section 751(a)(2)(c) of the Act: 
(1) The cash deposit rate for reviewed companies will be the rate 
established in these final results; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review or the original less-than-fair-value investigation, but 
the manufacturer is, the cash deposit rate will be the rate established 
for the most recent period for the manufacturer of the merchandise; and 
(4) for all other producers and/or exporters of this merchandise, the 
cash deposit rate shall be the rate established in the investigation of 
sales at less than fair value, which is 14.51 percent. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.
    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 subsequent assessment 
of double antidumping duties.

Notification to Interested Parties

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: March 6, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-6382 Filed 3-12-97; 8:45 am]
BILLING CODE 3510-DS-P