This section of the FEDERAL REGISTER

contains documents other than rules or

proposed rules that are applicable to the

public. Notices of hearings and investigations,

committee meetings, agency decisions and

rulings, delegations of authority, filing of

petitions and applications and agency

statements of organization and functions are

examples of documents appearing in this

section.

Notices Federal Register

386

Vol. 62, No. 2

Friday, January 3, 1997

DEPARTMENT OF COMMERCE

International Trade Administration

Determination Not to Revoke

Antidumping Duty Orders and

Findings Nor to Terminate Suspended

Investigations

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Determination not to revoke

antidumping duty orders and findings

nor to terminate suspended

investigations.

SUMMARY: The Department of Commerce

is notifying the public of its

determination not to revoke the

antidumping duty orders and findings

nor to terminate the suspended

investigations listed below.

EFFECTIVE DATE: January 3, 1997.

FOR FURTHER INFORMATION CONTACT:

Michael Panfeld or the analyst listed

under Antidumping Proceeding at:

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street & Constitution

Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION: The

Department of Commerce (the

Department) may revoke an

antidumping duty order or finding or

terminate a suspended investigation,

pursuant to 19 CFR 353.25(d)(4)(iii), if

no interested party has requested an

administrative review for four

consecutive annual anniversary months

and no domestic interested party objects

to the revocation or requests an

administrative review.

We had not received a request to

conduct an administrative review for

the most recent four consecutive annual

anniversary months. Therefore,

pursuant to § 353.25(d)(4)(i) of the

Department’s regulations, on November

4, 1996, we published in the Federal

Register a notice of intent to revoke

these antidumping duty orders and

findings and to terminate the suspended

investigations and served written notice

of the intent to each domestic interested

party on the Department’s service list in

each case. Within the specified time

frame, we received objections from

domestic interested parties to our intent

to revoke these antidumping duty orders

and findings and to terminate the

suspended investigations. Therefore,

because domestic interested parties

objected to our intent to revoke or

terminate, we no longer intend to revoke

these antidumping duty orders and

findings or to terminate the suspended

investigations.

Antidumping Proceeding

A–357–405

Argentina

Barbed Wire & Barbless Fencing Wire

Objection Date: November 18, 1996,

November 19, 1996

Objector: Insteel Industries, Inc.,

Keystone Steel & Wire Company

Contact: Tom Killiam at (202) 482–2704

A–357–007

Argentina

Carbon Steel Wire Rods

Objection Date: November 26, 1996,

November 27, 1996

Objector: North Star Steel, Atlantic Steel

Company

Contact: Tom Killiam at (202) 482–2704

A–559–502

Singapore

Light-Walled Rectangular Pipe & Tube

Objection Date: November 27, 1996

Objector: Hannibal Industries, Inc.

Contact: Tom Killiam at (202) 482–2704

A–570–811

The People’s Republic of China

Tungsten Ore Concentrates

Objection Date: November 26, 1996

Objector: U.S. Tungsten Corporation

Contact: Andrea Chu at (202) 482–4733

A–588–090

Japan

Certain Small Electric Motors of 5 to 150

Horsepower

Objection Date: November 25, 1996

Objector: Reliance Electric Industrial

Company

Contact: Jacqueline Winbush at (202)

482–1374

Dated: December 17, 1996.

Barbara R. Stafford,

Deputy Assistant Secretary for AD/CVD

Enforcement.

[FR Doc. 97–74 Filed 1–2–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–588–823]

Professional Electric Cutting Tools

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 September 4, 1996, the

Department of Commerce (the

Department) published the preliminary

results of its administrative review of

the antidumping duty order on

professional electric cutting tools

(PECTs) from Japan. This review covers

the period of July 1, 1994 through June

30, 1995.

We gave interested parties an

opportunity to comment on our

preliminary results. Based on our

analysis of the comments received, we

have changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: January 3, 1997.

FOR FURTHER INFORMATION CONTACT:

Rebecca Trainor or Maureen Flannery,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington,

DC 20230; telephone: (202) 482–4733.

Applicable Statutes and Regulations

Unless otherwise stated, 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).

SUPPLEMENTARY INFORMATION:

Background

On September 4, 1996, we published

in the Federal Register (61 FR 46624)

the preliminary results of administrative

review of the antidumping duty order

on PECTs from Japan (58 FR 37461; July

12, 1993). We received case briefs from

the respondent, Makita Corporation and
Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices 387

Makita U.S.A., Inc. (Makita) and the

petitioner, Black and Decker (U.S.), Inc.

(Black & Decker) on October 18, 1996.

Petitioner and respondent submitted

rebuttal briefs on October 24, 1996. We

held a public hearing on October 29,

1996. We are conducting this

administrative review in accordance

with section 751 of the Act.

Scope of the Review

Imports covered by this review are

shipments of PECTs from Japan. PECTs

may be assembled or unassembled, and

corded or cordless.

The term ‘‘electric’’ encompasses

electromechanical devices, including

tools with electronic variable speed

features. The term ’’assembled‘‘

includes unfinished or incomplete

articles, which have the essential

characteristics of the finished or

complete tool. The term ‘‘unassembled’’

means components which, when taken

as a whole, can be converted into the

finished or unfinished or incomplete

tool through simple assembly operations

(e.g., kits).

PECTs have blades or other cutting

devices used for cutting wood, metal,

and other materials. PECTs include

chop saws, circular saws, jig saws,

reciprocating saws, miter saws, portable

bank saws, cut-off machines, shears,

nibblers, planers, routers, joiners,

jointers, metal cutting saws, and similar

cutting tools.

The products subject to this order

include all hand-held PECTs and certain

bench-top, hand-operated PECTs. Handoperated tools are designed so that only

the functional or moving part is held

and moved by hand while in use, the

whole being designed to rest on a table

top, bench, or other surface. Bench-top

tools are small stationary tools that can

be mounted or placed on a table or

bench. The are generally distinguishable

from other stationary tools by size and

ease of movement.

The scope of the PECT order includes

only the following bench-top, handoperated tools: cut-off saws; PVC saws;

chop saws; cut-off machines, currently

classifiable under subheading 8461 of

the Harmonized Tariff Schedule of the

United States (HTSUS); all types of

miter saws, including slide compound

miter saws and compound miter saws,

currently classifiable under subheading

8465 of the HTSUS; and portable band

saws with detachable bases, also

currently classifiable under subheading

8465 of the HTSUS.

This order does not include:

professional sanding/grinding tools;

professional electric drilling/fastening

tools; lawn and garden tools; heat guns;

paint and wallpaper strippers; and

chain saws, currently classifiable under

subheading 8508 of the HTSUS.

Parts or components of PECTs when

they are imported as kits, or as

accessories imported together with

covered tools, are included within the

scope of this order.

‘‘Corded’’ and ‘‘cordless’’ PECTs are

included within the scope of this order.

‘‘Corded’’ PECTs, which are driven by

electric current passed through a power

cord, are, for purposes of this order,

defined as power tools which have at

least five of the following seven

characteristics:

1. The predominate use of ball,

needle, or roller bearings (i.e., a majority

or greater number of the bearings in the

tool are ball, needle, or roller bearings;

2. Helical, spiral bevel, or worm

gearing;

3. Rubber (or some equivalent

material which meets UL’s

specifications S or SJ) jacketed power

supply cord with a length of 8 feet or

more;

4. Power supply cord with a separate

cord protector;

5. Externally accessible motor

brushes;

6. The predominate use of heat treated

transmission parts (i.e., a majority or

greater number of the transmission parts

in the tool are heat treated); and

7. The presence of more than one coil

per slot armature.

If only six of the above seven

characteristics are applicable to a

particular ‘‘corded’’ tool, then that tool

must have at least four of the six

characteristics to be considered a

‘‘corded’’ PECT.

‘‘Cordless’’ PECTs, for the purposes of

this order, consist of those cordless

electric power tools having a voltage

greater than 7.2 volts and a battery

recharge time of one hour or less.

PECTs are currently classifiable under

the following subheadings of the

HTSUS: 8508.20.00.20, 8508.20.00.70,

8508.20.00.90, 8461.50.00.20,

8465.91.00.35, 85.80.00.55,

8508.80.00.65 and 8508.80.00.90.

Although the HTSUS subheading is

provided for convenience and customs

purposes, the written description of the

merchandise under review is

dispositive.

This review covers one company and

the period July 1, 1994 through June 30,

1995.

Analysis of the Comments Received

Comment 1: Makita argues that the

Department’s usage of the term

‘‘professional’’ to define the scope of the

subject merchandise is inaccurate, and

that power tools cannot be

distinguished by the terms

‘‘professional’’ or ‘‘non-professional.’’

Makita claims that, in the less-than-fairvalue (LTFV) investigation, the

Department used an arbitrary and

shifting set of physical characteristics,

not recognized by producers, consumers

or end-users in the tool industry, in its

effort to create a generally-accepted

definition of the subject merchandise.

Petitioner argues that Makita

submitted its views on the scope of the

order to the Department during the

LTFV investigation, and that the

Department rejected Makita’s argument

that there is no distinction between

professional and consumer electric

cutting tools. Petitioner asserts that

Makita has not submitted any valid

grounds on which the scope issue

should be reopened. Furthermore,

petitioner argues, the Department

should not reconsider this matter until

the Court of International Trade (CIT)

has reached its decision on issues

related to the LTFV investigation.

Department’s Position: Makita’s

argument that we should reconsider the

scope of the order is unpersuasive, as

there is nothing on the record of this

review to suggest that our scope is

incorrect. During the LTFV

investigation, we gave all parties an

opportunity to present their views

concerning the scope. Makita appealed

our determination of the scope, among

other issues concerning the LTFV

investigation, to the CIT. The CIT has

not yet issued its determination on these

matters, and thus altering the scope at

this time is unwarranted.

Comment 2: Makita argues that, in

failing to use average-to-average price

comparisons in the calculation of the

dumping margin, the Department

ignored the changes to the U.S.

antidumping law pursuant to the World

Trade Organization’s Agreement on

Implementation of Article VI of the

General Agreement on Tariffs and Trade

(‘‘WTO Antidumping Agreement’’) and

the Department’s own practice. Makita

states that, prior to the WTO-mandated

amendments to the antidumping law,

the Department had the discretion to

use averaging in both investigations and

administrative reviews pursuant to 19

U.S.C. § 1677f–1(a)(1). With the

amendments to the law, however,

Makita argues that the Department is

now required to use either average-toaverage or transaction-to-transaction

price comparisons in investigations,

with a preference for the average-toaverage approach.

Although the new law does not

specifically provide for the use of

average-to-average price comparisons

during administrative reviews, Makita

argues that the Department is required
388 Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices

to use this methodology in reviews for

the following reasons: (1) the new law

does not specifically except

administrative reviews from the

requirement of using average-to-average

price comparisons; (2) administrative

reviews and investigations are identical

proceedings, different in name only; and

(3) there is no justification or logical

reason for the application of different

standards to investigations and reviews.

Makita asserts that the argument that

average-to-average price comparisons

may mask targeted dumping is not a

justification for failing to use this

methodology in reviews when it is used

in investigations, because the likelihood

of targeted dumping is equally present

in both investigations and reviews.

Makita argues that, in general, the

application of a different methodology

in administrative reviews than was used

in LTFV investigations will result in

higher margins in reviews than were

found in investigations, with the effect

that exporters will not be able to rely on

margins established in the investigation

as a guide for future corrective conduct.

Citing Shikoku Chemicals Corp. v. U.S.,

795 F.Supp. 417, 421 (CIT 1992)

(Shikoku ), Makita further states that it

has a right to rely on the consistent and

fair application of methodologies from

one proceeding to the next. The fact that

the Department did not use average-toaverage price comparisons in the LTFV

investigation in this case is, according to

Makita, irrelevant for the reasons stated

above.

In support of its contention that

Congress intended for average-toaverage price comparisons to be used in

both investigations and administrative

reviews, Makita states that Congress did

not expressly or implicitly disapprove

of the Department’s longstanding

practice under the earlier antidumping

law of using the same price comparison

methodology in both investigations and

reviews. Thus, Congress intended for

the Department to continue this

practice. Makita cites Harris v. Sullivan,

968 F.2d 263, 265 (2nd Cir. 1992)

(Harris). Makita asserts that the fact that

the Statement of Administrative Action

(SAA) may suggest otherwise is

irrelevant, since the SAA is not law, nor

is it appropriate to use it to interpret a

statutory provision that is neither vague

nor ambiguous, pursuant to Marcel

Watch Co. v. U.S., 11 F.3d 1054, 1058

(Fed. Cir. 1992). See SAA, House Doc.

103–316, Vol. 1, 103d Cong. 2nd Sess.,

September 27, 1994.

Furthermore, Makita argues, the SAA

itself may be in violation of the WTO

Antidumping Agreement, because using

a different price comparison

methodology in reviews than was used

in investigations may by itself increase

antidumping duties in a manner not

contemplated by the WTO.

Petitioner states that the correctness

of the Department’s approach in the

preliminary results is confirmed by the

statute, the SAA, and the Department’s

proposed regulations, and that Makita’s

arguments are based on an incorrect

reading of the law. Petitioner cites the

SAA at 843, and Antidumping Duties:

Proposed Rule, 61 FR 7308, 7348,

section 351.414 (February 27, 1996)

(Proposed Regulations).

Petitioner argues that Makita’s

reliance on Shikoku and Harris is

misplaced. The Department has not

changed a long-standing practice; rather,

Congress has mandated a new approach,

which requires different price

comparison methodologies in

investigations and reviews. As evidence

that Congress intended to treat

investigations separately from reviews,

petitioner points out that 19 U.S.C.

§ 1677f–1(d) contains different

provisions for investigations and

reviews: section (d)(1) deals with

investigations, and requires the

Department to compare weighted

average normal values (NVs) to

weighted-average export prices, with the

alternative of comparing transaction-bytransaction prices on both sides of the

equation, while section (d)(2) deals with

reviews, and requires the Department to

compare weighted average NVs to

individual export prices, as the

Department did in this case.

Another justification for treating

investigations and reviews differently,

according to petitioner, is that

respondents should be held to higher,

stricter standards in reviews, since by

the time of the administrative review,

they are on notice that further dumping

will be penalized. Petitioner argues that

Makita’s case confirms this proposition,

since Makita has failed to correct its

dumping practices since issuance of the

LTFV determination, and should

therefore be held to a higher standard

during the administrative review.

Department’s Position: We agree with

petitioner. The Act, as amended by the

URAA, distinguishes between price

comparison methodologies in

investigations and reviews. Section

777A(d)(1) states that in investigations,

generally the Department will make

price comparisons on an average-toaverage or transaction-to-transactionspecific basis. See also SAA at 842–43;

Proposed Regulations at 7348–49 and

Proposed Rule 351.414.

However, the language of 777A(d)(2)

reflects Congress’s understanding that

the Department would use a monthly

average NV to a U.S. transaction-specific

methodology during reviews, in keeping

with the Department’s past practice, and

both the SAA and the Department’s

proposed regulations expressly state

that the monthly average-to-transactionspecific comparison is the preferred

methodology in reviews. See SAA at

843; Proposed Regulations at 7348–49.

Hence, the Department is under no legal

obligation to apply an average-toaverage approach in a review merely

because 777A(d)(1) permits such a

comparison in investigations. However,

in appropriate circumstances, such as in

the case of highly perishable products,

for example, average-to-average price

comparisons may be used. See Floral

Trade Council of Davis v. United States,

606 F. Supp. 695,703 (CIT 1991). Makita

has not demonstrated that similar

circumstances exist with respect to the

sale of PECTs that would warrant a

departure from our stated preference of

making monthly average-to-transactionspecific price comparisons in reviews.

Moreover, contrary to Makita’s

assertion, an LTFV investigation and an

administrative review are not ‘‘identical

proceedings,’’ but are two distinct

segments of a single antidumping

proceeding. The Act expressly

distinguishes between investigations

and reviews. See § 733; 735; 751; 19

CFR 353.2(l). They differ in several

respects, such as initiation requirements

and outcome—an investigation may or

may not end upon the issuance of an

antidumping duty order, while only a

review will result in the actual

assessment of duties. Further,

investigations and reviews are based on

different sets of sales, and both are

subject to separate judicial review.

The WTO Antidumping Agreement

also distinguishes between

investigations and reviews in

antidumping matters. (See also

Comment 3). Article 2.4.2 of the WTO

Antidumping Agreement explicitly

requires that an average-to-average price

comparison be used in the

‘‘investigation phase’’ of an

antidumping proceeding. The SAA

elucidates the intent of the WTO

Antidumping Agreement that the

Department continue to treat

investigations and reviews differently

with respect to price comparisons. As

the SAA states:

The Agreement reflects the express intent

of the negotiators that the preference for the

use of an average-to-average or transaction-totransaction comparison be limited to the

‘‘investigation phase’’ of an antidumping

proceeding. Therefore, as permitted by

Article 2.4.2, the preferred methodology in

reviews will be to compare average to

individual export prices.

SAA at 843.
Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices 389

Finally, Makita claims that it has a

right to rely on the consistent and fair

application of methodologies from one

segment of a proceeding to the next.

Makita argues that by not applying an

average-to-average comparison in this

review, the Department is not consistent

with what it is required to do under the

new law for investigations—make

average-to-average price comparisons.

Hence, following Makita’s logic, the

Department must now apply an averageto-average methodology in this review

to be consistent with the new

methodology used in investigations.

Makita is incorrect in two respects. The

law now requires the Department to

apply an average-to-average price

comparison in investigations only.

Secondly, by comparing monthly

average NVs to transaction-specific U.S.

prices in this review, we are being

consistent with our longstanding

practice, which was not changed by the

passage of the URAA, as discussed

above. Moreover, during the

investigation of this order, which

occurred under the old law, we did

compare average foreign market values

(FMVs) to transaction-specific U.S.

prices. Thus, we are being consistent

from one segment of the proceeding to

another.

Finally, Makita’s reliance on Shikoku

is misplaced. That case dealt with a

situation in which the Department

failed to follow a particular case-specific

calculation methodology that it had

repeatedly used in several reviews with

respect to the sales of a particular

respondent. Here, there has been no

change in methodology, as discussed

above.

Comment 3: Makita argues that, if the

Department had used average-to-average

price comparisons in the preliminary

results, Makita’s margin would have

been de minimis pursuant to the 2

percent de minimis standard mandated

by Article 5.8 of the WTO Antidumping

Agreement (see 19 U.S.C. §§ 1673b(b)(3)

and 1673(a)(4)). Since the WTO

Antidumping Agreement makes no

distinction between investigations and

administrative reviews, Makita argues,

the 2 percent de minimis standard

should also apply to reviews, for the

same reasons Makita discussed with

respect to using average-to-average price

comparisons in reviews.

Makita argues that no basis can be

found in either the WTO Antidumping

Agreement, or in U.S. law or policy, for

using 0.5 percent as the de minimis

standard for reviews, since there is no

mention of this particular figure in any

of the relevant documents. Makita

asserts that using a stricter standard for

reviews than for investigations is

illogical if the underlying purpose is to

punish exporters who are caught

dumping, since it would make more

sense to apply a stricter standard in the

investigation phase. Finally, Makita

claims that this practice could by itself

result in increased dumping liability for

exporters, and is a possible violation of

the WTO by the United States.

Petitioner argues that Makita misreads

the law, which requires that the new de

minimis level of two percent be applied

in investigations only. Thus, the

Department must continue to use its

regulatory standard of 0.5 percent

during reviews, as stated in the SAA

and the Department’s proposed

regulations (61 FR 7308, 7355).

Department’s Position: We disagree

with respondent that the 0.5 percent de

minimis standard set forth in 19 CFR

353.6 should not continue to apply to

reviews. Article 5.8 of the WTO

Antidumping Agreement explicitly

requires signatories to apply the two

percent de minimis standard only in

antidumping investigations. See Article

5.8. There is no such requirement

regarding reviews. Moreover, Makita is

incorrect in claiming that the WTO

Antidumping Agreement makes no

distinction between investigations and

administrative reviews. See eg., Article

5; Article 11.

In conformity with Article 5.8 of the

WTO Antidumping Agreement, sections

733(b) and 735(a) of the Act were

amended by the URAA to require that,

in investigations, the Department treat

the weighted average dumping margin

of any producer or exporter which is

below two percent ad valorem as de

minimis. Hence, pursuant to this

change, the Department is now required

to apply a two percent de minimis

standard during investigations initiated

after January 1, 1995, the effective date

of the URAA (see sections 733(b)(3) and

735(a)(4)). However, the Act does not

mandate a change to the Department’s

regulatory practice of using a 0.5

percent de minimis standard during

administrative reviews. As discussed

above, the WTO Antidumping

Agreement, the Act, the SAA and the

Department’s regulations recognize

investigations and reviews to be two

distinct segments of an antidumping

proceeding.

The SAA also clarifies that ‘‘[t]he

requirements of Article 5.8 apply only

to investigations, not to reviews of

antidumping duty orders or suspended

investigations.’’ See SAA at 845. The

SAA further states ‘‘* * * in

antidumping investigations, Commerce

[shall] treat the weighted-average

dumping margin of any producer or

exporter which is below two percent ad

valorem as de minimis.’’ SAA at 844.

Likewise, ‘‘[t]he Administration intends

that Commerce will continue its present

practice in reviews of waiving the

collection of estimated cash deposits if

the deposit rate is below 0.5 percent ad

valorem, the existing regulatory

standard for de minimis.’’ SAA at 845

(emphasis added). See Proposed

Regulations at 7355, Proposed Rule

351.106; see also High-Tenacity Rayon

Filiment Yarn from Germany; Final

Results of Antidumping Duty

Administrative Review, 61 FR 51421

(October 2, 1996).

Comment 4: Makita claims that the

Department’s preliminary margin

calculation program misapplied the

sales below cost test by deducting from

the gross unit price certain costs which

were included in the total cost against

which the net price is compared. As a

result, the number of sales below cost

was overstated in the preliminary

results. Petitioner did not comment on

this issue.

Department’s Position: We agree with

Makita, and have made the requested

corrections to the margin calculation

program for the final results.

Comment 5: Makita claims that the

Department’s computer program

incorrectly calculated constructed value

(CV) and constructed export price (CEP)

profit, based on only those home market

sales that were used as matches for U.S.

sales. Makita argues that, since the

profit calculations must be made on the

basis of all sales of the foreign like

product, using this reduced home

market database results in overstated

profit rates for both CV and CEP profit.

Makita argues that the law does not

intend for profit to be calculated using

only the products in the home market

which are the closest matches to models

sold in the United States. Makita cites

to the Department’s explanation of its

proposed regulations, with respect to

section 351.405(b), which states that

this would ‘‘undermine the

predictability of the statute’’ by giving

the Department ‘‘the discretion to pick

and choose the sale of the foreign

product from which profit and SG&A

would be taken’’ (61 FR 7335).

With respect to CEP profit, Makita

points out that the law is clear that the

calculation is to be based on total

expenses ‘‘incurred with respect to the

subject merchandise sold in the United

States and the foreign like product sold

in the exporting country.’’ 19 U.S.C.

§ 1677a(f)(2)(C)(i).

Petitioner argues that the Department

correctly calculated CEP profit based on

data for the foreign like product.

Petitioner claims that the term foreign

like product is defined by the statute as
390 Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices

the sales used as a basis of comparison

with sales to the United States (19

U.S.C. § 1677b(a)). Petitioner notes that

19 U.S.C. § 1677(16)(A)(B)(C) requires

the Department to select as the foreign

like product merchandise that is, in the

first instance, identical to that sold in

the United States. If identical

merchandise does not exist, the

Department may select similar

merchandise as the foreign like product,

the objective being to develop a pool of

comparable products, the prices of

which are used to calculate NV.

Petitioner cites Koyo Seiko Co., Ltd. v.

United States, 66 F.3d 1204, 1209

(C.A.Fed. 1995) (Koyo Seiko) in support

of its contention that the pool of

matched models is the foreign like

product from which the home market

portion of the CEP profit is derived.

Petitioner concludes that if the foreign

like product is expanded beyond the

pool of matched models to include all

similar products, as respondent

requests, the resulting profit figure

would be unrepresentative of the

products that were used to determine

NV.

Department’s Position: We agree that

we incorrectly limited the home market

data base to those models used as

matches for U.S. sales for the purposes

of calculating CV and CEP profit in the

preliminary results. For the final results,

we have used all sales of the foreign like

product for the purposes of calculating

CV and CEP profit.

Newly amended sections 772(f) and

773(e)(2)(A) now require that the

Department calculate CV and CEP profit

based on a respondent’s actual profits

made from home market sales of the

foreign like product, provided the home

market is found viable. While neither

side disputes that actual profits will be

used in this regard, petitioner believes

that the Department should disregard its

past practice of determining profit for

CV based on sales in the home market

on an aggregated basis, i.e., based on

sales of the same general class or kind

as the merchandise under consideration.

See 773(e)(1)(B) of the pre-URAA

statute. Instead, petitioner argues that

newly amended 771(16) now requires

that the Department arrive at the actual

home market profit using only those

home market sales which can be

matched most closely to the subject

merchandise applying the descending

hierarchy of 771(16).

For purposes of calculating CV and

CEP profit, we interpret the term

‘‘foreign like product’’ to be inclusive of

all merchandise sold in the home

market which is in the same general

class or kind of merchandise as that

under consideration. We do not believe

the change in terminology from ‘‘such or

similar merchandise to ‘‘foreign like

product’’ was intended as a substantive

change in this regard. Thus, ‘‘foreign

like product’’ includes all of the

merchandise covered by the descending

hierarchy of section 771(16) (A), (B) &

(C). This comports with our past

practice. Moreover, were we to adopt

petitioner’s view, the Department would

have the discretion to pick and choose

the sale of the foreign like product from

which profit would be taken, which

would undermine the prodictability of

the statute, as Makita correctly points

out. See Proposed Regulations at 7335.

In this case, since all models of PECTs

comprise the same general class or kind

of merchandise, regardless of whether

they were matched to U.S. sales in the

margin calculation, we determine the

foreign like product to include all of

Makita’s reported home market models.

See Professional Electric Cutting Tools

and Professional Electric Sanding/

Grinding Tools from Japan: Final

Determinations of Sales at Less Than

Fair Value, 58 FR 30144 (May 26, 1993)

(the Department determined that PECTs

comprise one class or kind). See also

Large Newspaper Printing Presses and

Components Thereof, Whether

Assembled or Unassembled, from Japan;

Final Determination of Sales at Less

Than Fair Value Investigation, 61 FR

38139 (July 23, 1996).

Petitioner confuses section 771(16)’s

hierarchy of what encompasses the

foreign like product with how the

Department uses this hierarchy for

purposes of model-matching to arrive at

a comparison based on the most

physically similar merchandise.

Petitioner’s reliance on Koyo Seiko is

misplaced, as that case dealt with the

issue of the model-matching hierarchy

set out for such or similar merchandise

under the old law. (‘‘Congress has

implicitly delegated authority to

Commerce to determine and apply a

model-match methodology necessary to

yield ‘such or similar’ merchandise

under the statute.’’) However, here we

are concerned with calculating actual

profits under the newly amended law

for CV and CEP, and whether home

market profits and SG&A should be

inclusive of all sales of the foreign like

product in making this calculation.

We note that for calculating the actual

selling, general and administrative

expenses for the purposes of CV for

these final results, we have also based

said expenses on all of Makita’s home

market sales of PECTs, for the same

reasons set out above.

Lastly, petitioner’s concern that

basing the CEP profit calculation on a

larger group of models than is used to

calculate NV will result in an

unrepresentative profit figure is

unfounded. As the SAA states, even if

the Department determined total profit

on the basis of a broader product line

than the subject merchandise, no

distortion in the profit allocable to U.S.

sales is created, because the total

expenses are also determined on the

basis of the same expanded product

line. See SAA at 825.

Comment 6: Petitioner claims that the

Department’s margin calculation

program incorrectly subtracted home

market indirect selling expenses from

NV. Petitioner points out that indirect

selling expenses are only properly

deducted under certain limited

circumstances, such as an offset for

selling commissions in the United

States and as an offset to CEP.

Makita argues that the deduction of

indirect selling expenses from NV was

not a mistake, since it satisfies the

requirements for establishing a ‘‘fair

comparison’’ as required by the WTO

Antidumping Agreement and 19 U.S.C.

§ 1677b(a). Makita states that, according

to the new law, the Department must

reduce NV by the amounts included in

the price that are ‘‘attributable to any

additional costs, charges, and

expenses.’’ 19 U.S.C. § 1677b(6)(B).

Reducing NV by the amount of indirect

selling expenses, Makita claims, would

therefore be appropriate.

Makita argues that, since greater

selling expenses for a specific service

are incurred in the home market than

are incurred for the same service for

products destined for the U.S. market,

deducting direct selling expenses from

NV, while not also deducting indirect

selling expenses, does not represent a

‘‘fair comparison’’ under the new law.

Finally, Makita asserts that there is no

reasonable basis for arriving at any

relevant or meaningful distinction

between ‘‘direct’’ and ‘‘indirect’’ selling

expenses.

Department’s Position: We agree with

petitioner that our deduction of indirect

selling expenses from NV was a clerical

error. The amended statute permits the

deduction of indirect selling expenses

from NV as a CEP offset only when a

level-of-trade (LOT) adjustment is

warranted, but the data available do not

provide an appropriate basis to

determine a LOT adjustment. See

§ 773(a)(7)(B). In addition, the SAA

clearly states that the CEP offset is to be

used in lieu of a LOT adjustment. See

SAA at 829. In the preliminary results,

we made a LOT adjustment to NV in

accordance with § 773(a)(7)(B).

Therefore, we have not deducted

indirect selling expenses from NV in our

final margin calculation.
Federal Register / Vol. 62, No. 2 / Friday, January 3, 1997 / Notices 391

Makita’s reliance on 773(a)(6)(B) in

support of its position that the new law

now requires that all expenses be

deducted from NV is erroneous. This

statutory provision explicitly provides

for the deduction of all movement

expenses from NV, but not for the

deduction of all expenses in general,

and indirect selling expenses in

particular, as Makita suggests. Were we

to do so, we would clearly be in

violation of the Act. Moreover, we

disagree with Makita’s assertion that the

language in 773(a) stating that a ‘‘fair

comparison’’ shall be made between the

export price or CEP and NV now

requires the Department to make

additional adjustments to NV not

specifically set out in 773(a). Rather,

773(a) expressly states that, in order to

achieve a ‘‘fair comparison,’’ NV will be

determined as set out in 773(a), which

we have followed in this review.

Comment 7: Petitioner argues that the

Department should correct an error in

the computer program involving the

difference in merchandise (difmer)

adjustment. Petitioner points out that,

according to the Department’s

methodology, the difmer is found by

subtracting the variable manufacturing

costs in the U.S. market from the

variable manufacturing costs in the

home market. If the U.S. manufacturing

costs exceed the home market

manufacturing costs, the difference

should be added to NV in accordance

with the procedures described in the

Import Administration Antidumping

Manual (see Chapter 8 at 44, July 1993

Rev.) Petitioner points out that the

Department’s computer program

incorrectly deducted from NV the

positive amount by which U.S. costs

exceed home market costs.

Makita states that, in most cases, the

difmer should not be added to NV.

However, in this case, no difmer

adjustment should be made at all,

pursuant to 19 U.S.C. § 1677b(a), which

requires the Department to make fair

comparisons. Makita claims that the

main physical characteristics of the

merchandise at issue should not result

in any difmer adjustment because they

are not amenable to precise

measurement for purposes of arriving at

price differences. Since all physical

differences are minor variations or

features mandated to meet U.S. and

Japanese technical and safety standards,

their inclusion was a necessary

condition to Makita’s sale of the subject

merchandise in both the U.S. and Japan.

Makita argues that price comparisons

within antidumping proceedings should

focus on the voluntary action of a

respondent in raising or not raising its

U.S. prices rather than on issues relating

to the technical need for additional

costly features of the product. Makita

requests that the Department disregard

differences in voltage, amperage, and

wattage in its application of the difmer.

Department’s Position: We agree with

petitioner that we made a clerical error

by adding difmer to NV instead of

subtracting it. We have made the

necessary correction to our margin

calculations for the final results.

When we make price comparisons

based on similar models, it is our

longstanding practice to adjust NV for

the differences in the variable costs

associated with manufacturing those

products. See e.g., 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 Review and Revocation

in Part of an Antidumping Finding, 61

FR 57629 (November 7, 1996). We

calculated difmer based on the variable

cost information Makita provided in its

questionnaire response. In choosing to

sell its products to the United States,

Makita made the decision to adapt the

models sold to U.S. voltage and

amperage requirements. Makita admits

that there are legitimate cost differences

between home market models and U.S.

models. For our purposes, the reasons

behind why there are cost differences

are irrelevant. It is well-established law

that establishing an intent to dump is

not required under the Act. (See USX v.

United States, 682 F.Supp. 6068 (CIT,

1988).

Final Results of Review

As a result of our review, we have

determined that the following margins

exist:

Manufacturer/

exporter Time period

Margin

(percent)

Makita Corporation ........ 7/1/94–6/30/95 4.36

The Department shall determine, and

the Customs service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

United States price and 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 upon

publication of this notice of final results

of review for all shipments of PECTs

from Japan entered, or withdrawn from

warehouse, for consumption on or after

the publication date, as provided by

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

deposit rate for the reviewed company

will be that established in these final

results of this administrative review; (2)

for previously reviewed or investigated

companies not listed above, the cash

deposit rate will continue to be the

company-specific rate published for the

most recent period; (3) if the exporter is

not a firm covered in this or a previous

review or the LTFV investigation, but

the manufacturer is, the cash deposit

rate will be the most recent rate

established 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

54.52 percent, the all others rate

established in the LTFV investigation.

These deposit requirements, when

imposed, shall remain in effect until

publication of the final results of the

next administrative review.

This notice also serves as a 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 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

section 353.22 of the Department’s

regulations.

Dated: December 24, 1996.

Jeffrey P. Bialos,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–73 Filed 1–2–97; 8:45 am]

BILLING CODE 3510–DS–P