Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20585

provided to the representatives of

Belgium, Canada, Italy, Republic of

Korea, Republic of South Africa, and

Taiwan. We will attempt to provide a

copy of the public version of each

petition to each exporter named in the

petition (as appropriate).

International Trade Commission

Notification

We have notified the ITC of our

initiations, as required by section 732(d)

of the Act.

Preliminary Determinations by the ITC

The ITC will determine by May 15,

1998, whether there is a reasonable

indication that imports of SSPC from

Belgium, Canada, Italy, Republic of

Korea, Republic of South Africa, and

Taiwan are causing material injury, or

threatening to cause material injury, to

a U.S. industry. A negative ITC

determination will, for any country,

result in the investigations being

terminated with respect to that country;

otherwise, these investigations will

proceed according to statutory and

regulatory time limits.

This notice is published pursuant to

Section 777(i) of the Act.

Dated: April 20, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–10997 Filed 4–24–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–570–815]

Notice of Extension of Time Limit for

Antidumping Duty Administrative

Review of Sulfanilic Acid From the

Peoples’ Republic of China

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 27, 1998.

SUMMARY: The Department of Commerce

(the Department) is extending the time

limit for the preliminary results of the

1996–1997 administrative review for the

antidumping order on Sulfanilic Acid

from the PRC, pursuant to the Tariff Act

of 1930, as amended by the Uruguay

Round Agreements Act (hereinafter,

‘‘the Act’’).

FOR FURTHER INFORMATION CONTACT:

Kristin Stevens, Doug Campau or Steven

Presing, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230, telephone:

(202) 482–3793.

SUPPLEMENTARY INFORMATION: Under the

Act, the Department may extend the

deadline for completion of an

administrative review if it determines

that it is not practicable to complete the

review within the statutory time limit of

365 days. In the instant case, the

Department has determined that it is not

practicable to complete the review

within the statutory time limit.

Since it is not practicable to complete

this review within the time limits

mandated by the Act (245 days from the

last day of the anniversary month for

preliminary results, 120 additional days

for final results), in accordance with

Section 751(a)(3)(A) of the Act, the

Department is extending the time limit

as follows:

Product Country Review period Initiation date Prelim due

date

Final due

date*

Sulfanilic Acid (A–570–815) ..................................................... PRC 8/1/96–7/31/97 9/25/97 7/03/98 10/31/98

*The Department shall issue the final determination 120 days after the publication of the preliminary determination.

Dated: April 21, 1998.

Joseph A. Spetrini,

Deputy Assistant Secretary for Enforcement,

Group III.

[FR Doc. 98–11136 Filed 4–24–98; 8:45 am]

BILLING CODE 3510–DS–M

DEPARTMENT OF COMMERCE

International Trade Administration

[A–588–604; A–588–054]

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 Termination in Part

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

reviews and termination in part.

SUMMARY: On May 20, 1996, the

Department of Commerce (the

Department) published the preliminary

results of its 1992–93 and 1993–94

administrative reviews of the

antidumping duty order on tapered

roller bearings (TRBs) and parts thereof,

finished and unfinished, from Japan (A–

588–604), and of the finding on TRBs,

four inches or less in outside diameter,

and components thereof, from Japan (A–

588–054). The review of the A–588–054

finding covers four manufacturers/

exporters and ten resellers/exporters of

the subject merchandise to the United

States during the period October 1,

1993, through September 30, 1994, and

one manufacturer/exporter for the

period October 1, 1992, through

September 30, 1993. The review of the

A–588–604 order covers five

manufacturers/exporters, ten resellers/

exporters, and seventeen firms

identified by the petitioner in this case

as forging producers, and the period

October 1, 1993, through September 30,

1994. The A–588–604 review also

covers one manufacturer/exporter for

the period October 1, 1992, through

September 30, 1993.

We gave interested parties an

opportunity to comment on our

preliminary results. Based upon our

analysis of the comments received we

have changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: April 27, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert James at (202) 482–5222 or John

Kugelman at (202) 482–0649,

Antidumping and Countervailing Duty

Enforcement Group III, Office 8, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW, Washington, D.C. 20230.

APPLICABLE STATUTE AND REGULATIONS:

Unless otherwise indicated, all citations

to the statute and to the Department’s

regulations are in reference to the

provisions as they existed on December

31, 1994.

SUPPLEMENTARY INFORMATION:

Background

On August 18, 1976, the Treasury

Department published in the Federal

Register (41 FR 34974) the antidumping

finding on TRBs from Japan, and on

October 6, 1987, the Department

published the antidumping duty order
20586 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

on TRBs from Japan (52 FR 37352). On

October 7, 1994 (59 FR 51166), the

Department published the notice of

‘‘Opportunity to Request an

Administrative Review’’ for the 1993–94

reviews of both TRBs cases. The

petitioner, the Timken Co. (Timken),

and two respondents requested

administrative reviews. We initiated the

A–588–054 and A–588–604

administrative reviews for the period

October 1993 through September 1994

on November 14, 1994 (59 FR 56459).

On May 20, 1996, we published in the

Federal Register the preliminary results

of the 1993–94 administrative reviews

of the antidumping duty order and

finding on TRBs from Japan (see

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; Preliminary Results of

Antidumping Duty Administrative

Reviews and Termination in Part, 61 FR

25200 (Prelim Results).

The Prelim Results also included the

preliminary results for the 1992–93

administrative reviews of both TRBs

cases for Koyo Seiko Company, Ltd.

(Koyo). While we initiated the 1992–93

reviews of both TRBs cases on

November 17, 1993 (58 FR 60600) and

published our final results of

administrative reviews for the 1992–93

period in the Federal Register on

November 7, 1996, we did not include

Koyo in these 1992–93 reviews (see

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

(TRBs 92–93)). Rather, as explained in

our Prelim Results, we determined that,

because we had yet to make our final

scope determination concerning Koyo’s

rough forgings, rather than delay our

1992–93 results of review for all other

reviewed firms, we would conduct

Koyo’s 1992–93 reviews after making

our final scope determination. On

February 2, 1995, we published in the

Federal Register our final scope

determination in which we found

Koyo’s rough forgings to be within the

scope of the A–588–604 TRBs order (60

FR 6519). We provided Koyo additional

time to submit sales and cost

information concerning its rough

forgings for both the 1992–93 and 1993–

94 administrative reviews and

determined that, due to the timing of

our receipt of this information and the

timing of our 1993–94 administrative

review analysis, it would be appropriate

to conduct the 1992–93 and 1993–94

reviews for Koyo concurrently (see

Prelim Results at 25200). As a result,

both Koyo’s 1992–93 and 1993–94 final

results are included in this instant

notice.

On August 21, 1996, we held a

hearing which covered the 1993–94

reviews of both the A–588–054 and A–

588–604 TRBs cases and the 1992–93

reviews of Koyo in both the TRBs cases.

In addition, the Department re-opened

the administrative record of these

proceedings on March 16, 1998 to afford

Kawasaki an additional opportunity to

submit a complete response to the

Department’s antidumping

questionnaire. On March 23, 1998,

Kawasaki declined to do so.

The Department has now completed

these reviews in accordance with

section 751 of the Tariff Act of 1930, as

amended (the Tariff Act).

Scope of the Review

Imports covered by the A–588–054

finding are sales or entries of TRBs, four

inches or less in outside diameter when

assembled, including inner race or cone

assemblies and outer races or cups, sold

either as a unit or separately. This

merchandise is classified under the

Harmonized Tariff Schedule (HTS) item

numbers 8482.20.00 and 8482.99.30.

Imports covered by the A–588–604

order include TRBs and parts thereof,

finished and unfinished, which are

flange, take-up cartridge, and hanger

units incorporating TRBs, and tapered

roller housings (except pillow blocks)

incorporating tapered rollers, with or

without spindles, whether or not for

automotive use. Products subject to the

A–588–054 finding are not included

within the scope of this order, except for

those manufactured by NTN Bearing

Corporation, Ltd. (NTN). This

merchandise is currently classifiable

under HTS item numbers 8482.99.30,

8483.20.40, 8482.20.20, 8483.20.80,

8482.91.00, 8484.30.80, 8483.90.20,

8483.90.30, and 8483.90.60. In addition,

in accordance with our February 2,

1995, final scope determination

concerning Koyo’s rough forgings,

Koyo’s rough forgings are also included

within the scope of the A–588–604

order.

The HTS numbers listed above for

both the A–588–054 finding and the A–

588–604 order are provided for

convenience and Customs purposes.

The written description remains

dispositive.

The period for each 1993–94 review is

October 1, 1993, through September 30,

1994. These reviews cover TRBs sales

by five TRBs manufacturers/exporters

(Koyo, NSK Ltd. (NSK), NTN, NachiFujikoshi Corporation (Nachi), and

Maekawa Bearing Mfg. Co., Ltd.

(Maekawa)), and ten resellers/exporters

(Honda Motor Company (Honda), Fuji

Heavy Industries, Ltd. (Fuji), Kawasaki

Heavy Industries, Ltd. (Kawasaki),

Yamaha Motor Co., Ltd. (Yamaha),

Sumitomo Corporation (Sumitomo),

Itochu Co., Ltd. (Itochu), Suzuki Motor

Co., Ltd. (Suzuki), Nigata Converter Co.,

Ltd. (Nigata), Toyosha Co., Ltd.

(Toyosha), and MC International (MC

Int’l)). These reviews also cover U.S.

sales/importations of forgings by Koyo,

NTN, and seventeen firms identified by

the petitioner as Japanese forging

producers (Daido Steel Co., Ltd. (Daido

Steel), Asakawa Screw Co., Ltd.

(Asakawa), Fuse Rashi Co., Ltd. (Fuse),

Hamanaka Nut Mfg. Co., Ltd.

(Hamanaka), Ichiyanagi Tekko

(Ichiyanagi), Isshi Nut Industries (Isshi

Nut), Kawada Tekko, Kinki Maruseo

Nut Kogyo Kumiai (Kinki), Kitazawa

Valve Co., Ltd. (Kitz Corp.), Nittetsu

Bolten (Nittstsu), Shiga Bolt, Shinko

Bolt, Sugiura Seisakusho (Sugiura),

Sumikin Seiatsu (Sumikin), Toyo Valve

Co. (Toyo Valve), Unytite Fastener Mfg.

Co., Ltd. (Unytite Kogyo), and Showa

Seiko Co., Ltd. (Showa)).

As explained in the Prelim Results,

we have terminated the 1993–94

reviews of the A–588–604 case for Fuse,

Hamanaka, Kinki, Kitz Corp., Shiga

Bolt, Shinko Bolt, Sugiura, Toyo Valve,

Nittetsu, Sumikin, and Unytite Kogyo

(see Prelim Results at 25202). As also

explained in the Prelim Results, we

used for Nachi, Kawasaki, Daido Steel,

Kawanda Tekko, Asakawa, Ichiyanagi,

and Isshi Nut a first-tier non-cooperative

total best information available (BIA)

rate of 40.37 percent in the A–588–604

case. In addition, we used a first-tier

total BIA rate of 47.63 percent for

Kawasaki and Nachi in the A–588–054

case (see Prelim Results at 25201).

Because Fuji and MC Int’l did not

make any shipments of subject

merchandise during the POR in the A–

588–604 case and because Showa did

not make any shipments of subject

merchandise during the POR in the A–

588–604 case, as explained in our

Prelim Results, we have not assigned a

rate to Fuji and MC Int’l in the A–588–

604 nor to Showa in the A–588–604

case (see Prelim Results at 25202).

Because we determined in the Prelim

Results that Itochu and Sumitomo have

no influence over the sale prices and

quantities of those shipments of TRBs

they made to the United States, we have

determined that the supplier’s rates, and

not unique Sumitomo and Itochu rates,
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20587

should be applied for cash deposit and

appraisement purposes (see Prelim

Results at 25202).

Finally, we have terminated the 1993–

94 A–588–054 review for Honda since

we recently revoked Honda from the A–

588–054 finding in our 1992–93 final

results (see TRBs 92–93 at 57650).

The period for the 1992–93 reviews is

October 1, 1992, through September 30,

1993. The 1992–93 reviews of both the

A–588–054 and A–588–604 cases

included in this notice cover TRBs sales

by Koyo.

Analysis of Comments Received

We received case briefs from Timken,

Koyo, NTN, NSK, Fuji, and Kawasaki.

We received rebuttal briefs from

Timken, Koyo, NTN, and NSK. In

addition, at the request of the presiding

official at the hearing, we received

additional comments from NTN on

August 28, 1996, and additional

comments from Timken on September

9, 1996, regarding the issue of new

information in NTN’s rebuttal brief.

These comments, and those contained

in all of the case and rebuttal briefs, are

addressed below in the following order:

1. Miscellaneous Comments Concerning

Model Match, Set-Splitting, Level of Trade,

Sales Not in the Ordinary Course of Trade,

Arm’s Length Test, Annual Averaging, and

Assessment

2. Adjustments to United States Price (USP)

3. Discounts, Rebates, and Post-Sale Price

Adjustments (PSPAs)

4. Cost of Production (COP) and Constructed

Value (CV)

5. Clerical and Computer Programming Errors

1. Miscellaneous Comments

Comment 1: NTN argues that the

Department incorrectly split home

market TRB sets which are

‘‘unsplittable.’’ NTN claims that,

because certain of its TRB models

contain cups and cones which are never

sold individually in any market, it is

illogical to split such models into

individual cup and cone sales.

Furthermore, NTN states that because

the rationale behind the Department’s

set-splitting methodology is to find

merchandise ‘‘such or similar’’ to

individual cups and cones sold in the

United States, the Department may only

split TRB sets sold in the home market

which contain cups and cones identical

or similar to those cups and cones sold

individually in the United States. NTN

argues that, because cups and cones

contained in its ‘‘unsplittable’’ sets are

never sold individually, they do not

represent merchandise which is

potentially similar to individually sold

cups and cones. Therefore, NTN asserts,

the Department creates, by splitting

such sets, a pool of home market cups

and cones which cannot be fairly

considered as candidates for matching

to cups and cones sold separately in the

United States.

Timken argues that, in accordance

with section 771(16) of the Tariff Act,

the Department’s model-match

methodology reasonably assesses

objective physical criteria and the

variable costs of production when

identifying that home market

merchandise which is such or similar to

merchandise sold in the United States.

Timken asserts that if the cup or cone

split from an ‘‘unsplittable’’ set is

physically identical, or most physically

similar, to a cup or cone individually

sold in the United States, there is no

statutory basis for the Department to

reject such a comparison. Timken

further states that NTN’s argument,

which basically asserts that a cup or

cone sold within a set can never be

found to be such or similar to a cup or

cone that is sold separately, calls for an

additional matching factor which is

unwarranted by the statute. Finally,

Timken argues that if the Department

were not to split NTN’s claimed

‘‘unsplittable’’ sets, the pool of home

market such or similar merchandise

would be narrowed and the

Department’s ability to match U.S. and

home market merchandise would be

curtailed.

Department’s Position: We agree with

Timken. Section 771(16) of the Tariff

Act does not require that such or similar

merchandise be sold in the same

manner as merchandise under review.

TRB components that are sold solely

within sets do not lose their status as

merchandise such or similar to

individually-sold TRB components

simply by virtue of the fact that they are

sold as components of sets instead of as

individual cups and cones. The fact that

a home market cup or cone was never

sold individually in any market does

not preclude the possibility that that

cup or cone may be the most physically

similar merchandise to cups and cones

NTN sold separately in the United

States. Because they may be the most

similar products, it is appropriate to

include this merchandise in the pool of

home market sales and, if such cups and

cones are determined to be the most

similar merchandise to products sold in

the United States, it is appropriate to

use them in our dumping comparisons,

as we have done in past reviews of NTN

and as has been approved by the Court

of International Trade (CIT) (see, e.g.,

NTN Bearing Corp. v. United States, 747

F. Supp. 726, 741 (CIT 1990), NTN

Bearing Corp. v. United States, 924

F.Supp. 200, 206 (CIT 1996) TRBs 1992–

93 at 58631, and Final Results of

Antidumping Duty Administrative

Reviews; 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, 58 FR 64720 (December 9,

1992) (TRBs 1990–92)).

Comment 2: NTN contends that the

Department improperly determined its

reported home market sample and

small-quantity sales to be in the

ordinary course of trade and included

such sales in its margin calculations.

NTN argues that its home market

sample sales cannot be considered as in

the ordinary course of trade because

they are items which enable a customer

to make a buying decision, and

maintains that its reported home market

small-quantity sales cannot be

considered ordinary, given the

extremely small quantities involved.

Citing to past TRBs reviews in which

the Department excluded these sample

and small-quantity sales from its margin

calculations for NTN, NTN asserts that,

in view of the Department’s past

exclusion of such sales as outside the

ordinary course of trade, the Department

should do so in these final results as

well in accordance with Shikoku

Chemicals Corp v. United States, 795 F.

Supp. 417 (CIT 1992) (‘‘At some point

Commerce must be bound by its prior

actions so that parties have a chance to

purge themselves of antidumping

liabilities’’) and in accordance with the

Supreme Court’s observation that ‘‘longcontinued methodologies naturally

serve to provide the basis from which

subjects of agency investigation adjust

their behavior’’ (Id. at 12, n.8. (quoting

United States v. Midwest Oil Co., 236

U.S. 459 (1915)).

Timken argues that, while the

Department did grant NTN’s claim in

some past proceedings, it has denied the

claim in the most recent TRBs reviews

and in several of the reviews of the

antidumping duty order on antifriction

bearings (AFBs) from Japan. In addition,

Timken points out that two of the TRBs

determinations NTN relies on have been

remanded by the CIT, and in both cases

the Department reversed its position

and included NTN’s sample and smallquantity sales within its margin

calculations (the Department’s Final

Remand Results Pursuant to The

Timken Company v. United States,

Court No. 92–03–0061, transmitted to

the CIT on December 13, 1994, and the

Department’s Final Remand Results

Pursuant to The Timken Company v.

United States, Court No. 92–03–00162,

transmitted to the CIT on December 16,

1994). Given these changes, Timken

contends, it is clear that the
20588 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

Department’s preliminary determination

to include these sales in its margin

calculations is in accordance with

established precedent.

Further, Timken argues that it has

been the Department’s long-standing

policy to require a respondent to

provide sufficient evidence to support

any claim for the exclusion of sales as

not in the ordinary course of trade.

Therefore, Timken contends, because

NTN failed to demonstrate that its

alleged small-quantity and sample sales

were outside the ordinary course of

trade, the Department reasonably

determined that NTN failed to meet the

burden of demonstrating that the sales

in question were outside the ordinary

course of trade.

Department’s Position: We agree with

Timken. Section 773(a)(1)(A) of the

Tariff Act states that the Department is

required to compare the price of the

merchandise imported into the United

States to the price of the merchandise

sold or offered for sale ‘‘in the principal

markets of the country from which

exported in the usual commercial

quantities and in the ordinary course of

trade for home market comparison.’’ As

defined in section 771(15) of the Tariff

Act, ordinary course of trade means the

‘‘conditions and practices which, for a

reasonable time prior to exportation of

the merchandise which is the subject of

an investigation, have been normal in

the trade under consideration with

respect to merchandise of the same class

or kind.’’

Generally, when determining whether

home market sales are within the

ordinary course of trade, the Department

applies the standards set forth in Murata

Mfg. Co., Ltd. v. United States, 820 F.

Supp. 603, 606 (CIT 1993) (Murata),

Nachi-Fujikoshi Corp. v. United States,

798 F. Supp. 716, 718–719 (CIT 1992)

(Nachi), and Mantex, Inc., et. al., v.

United States, 841 F. Supp. 1290, 1305–

1309 (CIT 1993) (Mantex). In Murata the

CIT quoted with approval the

Department’s statement in Certain

Welded Steel Standard Pipes and Tubes

from India; Final Results of

Antidumping Duty Administrative

Reviews, 56 FR 64753 (1991), that the

Department, in determining whether

home market sales are in the ordinary

course of trade, does not rely on one

factor considered in isolation, but rather

considers all circumstances of the sales

in question. In addition, the CIT noted

that in other cases the Department

determined that sales were outside the

ordinary course of trade based not only

on the presence of small quantities or

high prices, but also because the

Department found other factors that

supported the outside-the-ordinarycourse-of-trade categorization (see

Murata at 9). In Nachi the CIT held that

the Department must make

determinations regarding sample sales

by examining the relevant facts of each

individual case and that the burden of

proof to demonstrate that such sales are

outside the ordinary course of trade lies

with the respondent (see Nachi at 718).

In Mantex the CIT restated its previous

opinion in Nachi (see Mantex at 1306).

In its response NTN described its

sample sales as sales of items to a

customer which are used by the

customer to determine whether or not to

buy the product. NTN explained that,

through statements and other

representations the customer makes,

NTN determines the ‘‘sample’’ nature of

the sale and codes the sale accordingly.

Concerning its small-quantity sales

reported as not in the ordinary course of

trade, NTN explained that for each

transaction where the total quantity was

three units or less, and the total number

of transactions during the POR was

seven or less, NTN searched back to

fiscal year 1990 and, if certain

conditions were met, it considered the

sale as outside the ordinary course of

trade. The only other information on the

record regarding these sales are NTN’s

computer data files in which it reported

such sales separately from the rest of its

home market data base.

In accordance with Murata, we

attempted to examine all factors

surrounding NTN’s reported sample and

small-quantity sales to determine if they

were outside the ordinary course of

trade. However, NTN provided us with

little information other than a general

description of these sales upon which to

base such a determination. The

administrative record contains no other

narrative explanation, supporting

documentation, or other evidence to

demonstrate why these sales are not

representative of NTN’s normal

practices in selling TRBs in Japan, or

otherwise demonstrates the

‘‘aberrational’’ nature of these sales. For

example, we have no evidence

supporting the notion that NTN’s

sample sales were sold only for the

purpose of allowing the customer to

make a decision to buy. Likewise, we

have no evidence supporting NTN’s

categorization of its ‘‘small-quantity’’

sales as abnormal, other than the fact

that they were small-quantity sales. In

accordance with Nachi, the burden of

proving that its sales are outside the

ordinary course of trade lies clearly with

the respondent, and in this instance

NTN has failed to meet that burden.

Furthermore, this is not the first

review or the first case in which we

have rejected NTN’s categorization of

certain of its sales as not in the ordinary

course of trade. In our last three TRBs

reviews we clearly explained that we

applied the Murata and Nachi standards

to our determination of whether such

sales were indeed outside the ordinary

course of trade (see TRBs 92–93 at 57639

and TRBs 90–92 at 64732). In those

reviews we determined that NTN did

not supply sufficient evidence to allow

us to determine that these sales were

outside the ordinary course of trade. As

a result, NTN has had clear notice prior

to these current reviews that its

response failed to demonstrate the ‘‘notin-the-ordinary-course-of-trade’’ status

of its sample and small-quantity sales.

However, NTN took no steps to improve

its response regarding this issue, but

rather provided only the same general

information with little other

explanation.

Therefore, for the reasons stated

above, and in accordance with our

established practice, we have not

changed our treatment of NTN’s sample

and small-quantity home market sales

for these final results. Rather, we have

again determined these sales to be

within the ordinary course of trade and

we have included them in our margin

calculations.

Comment 3: NSK argues that the

Department must apply the ordinary

meaning of ‘‘sale’’ to the antidumping

law (which involves not only the

transfer of ownership, but the payment,

or promise, of consideration), and

should exclude from its analysis those

free samples NSK reported as given

away to its customers in the United

States. NSK claims that it has provided

evidence demonstrating that this free

U.S. merchandise constitutes

promotional samples, and contends

that, by including this promotional

merchandise in its analysis, the

Department fails to recognize the

normal business practice of giving away

free samples and calculates distortive

margins. Finally, NSK argues that, in

accordance with the Torrington

Company v. United States, 926 F. Supp.

1151 (CIT 1996), for the purpose of

calculating antidumping duties, the

Department reviews sales, not entries.

Therefore, NSK concludes, there is no

basis for including this merchandise in

the Department’s margin calculations.

Timken argues that not only does the

statute require the Department to

calculate a value for each U.S. entry of

subject merchandise, but, if the

Department accepts NSK’s arguments, it

would allow NSK to evade the law by

providing zero-priced merchandise as

gifts while raising its prices on other

subject merchandise identified as sales.
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20589

Department’s Position: On June 10,

1997, the CAFC held that the term

‘‘sold’’ requires both a transfer of

ownership to an unrelated party and

consideration. NSK Ltd. v. United

States, 115 F.3d 965, 975 (Fed. Cir.

1997) (NSK). The CAFC determined that

samples which NSK had given to

potential customers at no charge and

with no other obligation lacked

consideration. Moreover, the CAFC

found that, since free samples did not

constitute ‘‘sales,’’ they should not have

been included in calculating U.S. price.

In light of the CAFC’s opinion, we

have revised our policy with respect to

samples. The Department will now

exclude from its dumping calculations

sample transactions for which a

respondent has established that there is

either no transfer of ownership or no

consideration.

This new policy does not mean that

the Department automatically will

exclude from analysis any transaction to

which a respondent applies the label

‘‘sample.’’ It is well-established that the

burden of proof rests with the party

making a claim and in possession of the

needed information (see, e.g., NTN

Bearing Corporation of America v.

United States, 997 F.2d 1453, 1458–59

(CAFC 1993), (citing Zenith Elecs. Corp.

v. United States, 988 F.2d 1573, 1583

(CAFC 1993), and Tianjin Mach. Import

& Export Corp. v. United States, 806 F.

Supp. 1008, 1015 (CIT 1992)). When

respondents fail to support their sample

claim, we did not exclude the alleged

samples from our margin analysis.

In light of the policy above, we have

determined that the record indicates

that NSK’s reported sample transactions

did not involve consideration.

Accordingly, pursuant to the CAFC’s

decision in NSK, we have excluded

NSK’s reported U.S. sample sales from

the U.S. sales database.

In addition, with regard to assessment

rates, in order to ensure that we collect

duties only on sales of subject

merchandise, we included the entered

values and quantities of the sample

transactions in our calculation of NSK’s

assessment rate and set the dumping

duties due for such transactions to zero.

We have done this because U.S.

Customs will collect the ad valorem

duties on all entries of subject

merchandise whether or not the

merchandise was a sample transaction.

However, to ensure that sample

transactions do not dilute the cash

deposit rates, we excluded both the

calculated U.S. prices and quantities for

sample transactions from our

calculation of the cash deposit rates.

Comment 4: NTN claims that the

Department’s sum-of-the-deviations

model-match methodology

inconsistently treats the Y2 factor

variable. Specifically, NTN questions

why the Department sets the variable

‘‘Y2H’’ equal to ‘‘Y2DEV’’ when the

Department sets the deviation for the

outside diameter (OD) variable equal to

zero.

Timken argues that the Department’s

sum-of-the-deviations model-match

methodology properly reflects the

reality of bearing characteristics. For

example, Timken states, because thrust

TRBs have a zero Y2 factor, when

comparing thrust to non-thrust TRBs,

the Department correctly set the Y2

factor deviation equal to the non-zero

Y2 factor value because the difference

between a zero and non-zero value will

always be the non-zero value. Timken

further asserts that, because the

Department only compares TRB cups to

cups and TRB cones to cones, if the

inside diameter (ID) or OD for the U.S.

TRB is zero, the value for the ID or OD

for the home market TRB being

compared will automatically be zero.

Therefore, Timken concludes, if the ID

or OD for the U.S. TRB is zero, and the

ID or OD for the home market TRB is

also zero, the ID or OD deviation

between the U.S. and home market cups

or cones compared will automatically be

zero.

Department’s Position: We agree with

Timken. In order to determine the home

market merchandise most similar to

U.S. merchandise, we apply our sum-ofthe-deviations model-match

methodology using five physical criteria

of TRBs: ID, OD, width, load rating, and

the Y2 factor. Because each of these

criteria are quantitatively measured, we

compare the value for each criterion for

the U.S. model to that for the home

market merchandise and calculate the

difference. Once we determine the

deviation for each criterion, we derive

the overall sum of the deviations for all

five criteria and use this value to rank

the most similar home market

merchandise.

When we first developed this

methodology we realized that, in certain

instances, the ID, OD, or Y2 factor of a

TRB would be equal to zero. For

example, TRB cups do not have an ID,

TRB cones do not have an OD, and

thrust TRBs may not have a Y2 factor.

Because we only compare U.S. cups to

home market cups and U.S. cones to

home market cones, the ID for each U.S.

and home market cup compared would

be equal to zero and the OD for each

U.S. and home market cone compared

would be equal to zero. As a result, the

ID deviation for cup comparisons would

automatically equal zero and the OD

deviation for cone comparisons would

automatically equal zero. In order to

account for this in our sum-of-thedeviations model-match methodology, if

the ID or OD of the U.S. TRB is equal

to zero, we automatically set the ID or

OD deviation equal to zero.

In contrast to the above, we do not

compare U.S. thrust TRBs to only home

market thrust TRBs (see TRBs 92–93 at

57631 and TRBs 90–92 at 64721).

Therefore, if the Y2 factor for the U.S.

model is equal to zero, the Y2 factor for

the comparison home market model will

not automatically be equal to zero.

Because we calculate the deviation

between U.S. and home market criteria

as the absolute value of one minus the

home market TRBs criterion value

divided by the value of the U.S. TRBs

criterion, if the U.S. Y2 factor value is

equal to zero, we would, in effect, be

dividing by zero in our computer

program. Therefore, to ensure the proper

calculation of the Y2 factor deviation

when the U.S. model’s Y2 factor is equal

to zero, we automatically set the Y2

deviation equal to the home market

TRBs value.

Comment 5: Both Fuji and Kawasaki

argue that, because merchandise which

meets the criteria for the application of

the ‘‘Roller Chain’’ principle is outside

the scope of the Japanese TRBs order

and finding, the Department should

adopt an assessment strategy which

would ensure that antidumping duties

are not assessed on this ‘‘Roller Chain’’

merchandise.

Fuji proposes that one method would

be for the Department to assess duties

on an entry-by-entry basis. Fuji claims

that not only would this ensure proper

assessment of Fuji’s entries, but it

would be administratively easy for the

Department to do given the fact that Fuji

has provided the Department with its

entry numbers. Alternatively, Fuji

suggests that, because all of those TRBs

which qualify for exclusion under the

‘‘Roller Chain’’ principle were imported

by a single related importer, SubaruIsuzu Automotive, Inc. (SIA), the

Department should assess duties on an

importer-specific basis and apply zero

duties to all SIA imports. Fuji adds that

if the Department selects this option it

should also adjust the cash deposit rate

it calculates for Fuji to take into account

the ‘‘Roller Chain’’ merchandise by

including the value of the ‘‘Roller

Chain’’ merchandise in the cash deposit

rate calculation denominator. Finally,

Fuji proposes that, if the Department

rejects these first two proposals, the

Department should, at a minimum,

adjust both the cash deposit and

assessment rates it calculates for Fuji by

including the value of the TRBs meeting

the ‘‘Roller Chain’’ criteria in the
20590 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

denominators used when calculating

these rates.

Kawasaki contends that not only is

there sufficient evidence on the record

to demonstrate that all A–588–054 TRBs

imported by Kawasaki Motors

Manufacturing Corporation (KMM) meet

the ‘‘Roller Chain’’ principle, but there

is also sufficient evidence allowing the

Department to identify the total value of

KMM’s A–588–054 TRB imports. Thus,

Kawasaki asserts, the Department has

the information necessary to calculate

an A–588–054 assessment rate for

Kawasaki which would effectively

exclude KMM’s entries of TRBs from

antidumping duty assessment.

With regard to Fuji, Timken argues

that if the Department decides to apply

a single assessment rate to all of Fuji’s

imports, and recalculates Fuji’s

assessment rate to take into account

Fuji’s ‘‘Roller Chain’’ merchandise, the

Department should first be certain that

liquidation was suspended and

antidumping duty deposits were paid

on Fuji’s ‘‘Roller Chain’’ merchandise. If

Fuji’s ‘‘Roller Chain’’ entries were

suspended, Timken argues, the

Department should not use the

assessment rate Fuji proposed in its

comments. Rather, Timken asserts,

because duties are assessed on entered

value, the Department should calculate

Fuji’s assessment rate by including in

the calculation denominator the sum of

the entered values of both Fuji’s non-

‘‘Roller Chain’’ and ‘‘Roller Chain’’

merchandise.

In response to Fuji’s contention that

the Department should apply to Fuji

cash deposit and assessment rates

which are identical, Timken argues that,

while the statutory scheme requires

estimates of antidumping duties to be as

accurate as possible, it is not necessary

that cash deposit rates be absolutely

accurate (Badger-Powhatan, a Division

of Figgie International, Inc. v. United

States, 633 F. Supp. 1364, appeal

dismissed, 808 F.2d 823 (Fed. Cir.

1986)). Timken therefore urges the

Department to apply to all of Fuji’s

entries a cash deposit rate equal to the

final margin rate the Department

calculates for Fuji’s non-‘‘Roller Chain’’

merchandise.

With regard to Kawasaki, Timken

contends that the Department cannot

make a determination that any of

Kawasaki’s entries were subject to the

‘‘Roller Chain’’ principle not only

because the record lacks the information

necessary for the Department to do so,

but also because Kawasaki was an

uncooperative respondent to which the

Department applied a first-tier total BIA

rate in both the A–588–054 and A–588–

604 reviews. Timken contends that the

Department applied total adverse BIA to

Kawasaki because it submitted only

partial information in response to the

Department’s questionnaire, which was

insufficient for the Department to

conduct its analysis. Timken claims

that, the Department cannot accept

partial data because to do so would

place control of the review in the hands

of Kawasaki by permitting Kawasaki to

selectively provide information. Timken

argues that this reasoning was upheld in

Persico Pizzamiglio, S.A. v. United

States, 18 CIT 299, Slip. Op. 94–61

(April 14, 1994) (Persico), in which the

CIT explained that the acceptance of

partial submissions will only encourage

respondents to selectively disclose only

that information which would serve to

decrease a dumping margin based on

BIA. Therefore, Timken states, the

Department should assess Kawasaki’s

entries of A–588–054 TRBs at a rate

equivalent to the total adverse BIA rate

it assigns to Kawasaki in these final

results and not make any adjustments to

this rate to effectively exclude KMM’s

entries of TRBs.

Department’s Position: We agree with

the petitioner and in part with the

respondents. It is important to first

clarify that merchandise which meets

the criteria of the ‘‘Roller Chain’’

principle is not out-of-scope

merchandise. Our determination in an

administrative review that the ‘‘Roller

Chain’’ principle is applicable to certain

merchandise is not equivalent to a

determination that the merchandise is

non-scope merchandise. To the

contrary, in these TRBs reviews, that

merchandise which we have deemed to

be ‘‘Roller Chain’’ merchandise clearly

falls within the scope of the A–588–054

finding and the A–588–604 order, as

described earlier in this notice. Based

on section 772(e)(3) of the Tariff Act and

the applicable legislative history, we

have developed a practice whereby we

do not calculate and do not assess

antidumping duties on subject

merchandise which is imported by a

related party and which is further

processed where the subject

merchandise comprises less than one

percent of the value of the finished

product sold to the first unrelated

customer in the United States (see, e.g.,

Roller Chain Other Than Bicycle From

Japan, 48 FR 51804 (November 14,

1983), and TRBs 92–93 at 57548)). The

statute provides for the assessment of

antidumping duties only to the extent of

the dumping that occurs. If there can be

no determination of any dumping

margin where the imported

merchandise is an insignificant part of

the product sold, then there is no

dumping to offset and antidumping

duties are not appropriate. Therefore,

we do not consider ‘‘Roller Chain’’

merchandise as non-scope merchandise,

but rather as scope-merchandise which

is not subject to duty assessment.

We disagree with Fuji that our cash

deposit rates should somehow take into

account merchandise meeting the

‘‘Roller Chain’’ criteria because we have

no way of knowing at the time of entry

whether any particular entry qualifies

under the ‘‘Roller Chain’’ principle for

exclusion from assessment of

antidumping duties. Our decision to

exclude any merchandise is made on a

case-by-case basis within the course of

an administrative review, which takes

place after the actual entry of the

potentially excludable merchandise. For

this reason, at the time of entry we must

require cash deposits of estimated

antidumping duties on all entries,

including those entries of merchandise

potentially excludable from assessment

under the ‘‘Roller Chain’’ principle.

Furthermore, cash deposit rates are

estimates of dumping liability. Because

at the time of entry we have no idea of

the value of merchandise which we may

ultimately determine meets the ‘‘Roller

Chain’’ criteria, we cannot alter our cash

deposit rate to effectively compensate

for the value of the ‘‘Roller Chain’’

merchandise in the current review,

which may be a value significantly

different from that in the future.

We also disagree with Fuji that entryby-entry assessment is a viable option

for its assessment. Entry-by-entry

assessment requires the traditional

appraisement instructions which list

each entry and the margin calculated for

it. The disadvantages of such

assessment are numerous. For example,

because our dumping analysis focuses

on sales, it is necessary for us to

associate reviewed sales with entries in

some way. However, companies are

generally unable to make such a link. In

addition, such appraisement

instructions are burdensome, timeconsuming, and at risk for error. It is

therefore the position of the Department

that assessment rates applicable to all

covered entries are preferable. In

comparison to entry-by-entry

assessment, the use of an assessment

rate which applies to all entries during

the POR is far less burdensome and

time-consuming, and the risk of

incorrect assessment is minimized. In

general, we have tried to calculate

assessment rates on an importer-specific

basis to prevent one importer from

paying antidumping duties attributable

to margins found on sales to a different

importer. However, this concern for

importer-specific rates is limited to
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20591

those instances where the importer is

not related to the foreign exporter.

Where the importer is related to the

foreign exporter, we consider the related

parties to constitute one corporate entity

and the use of manufacturer/exporterspecific assessment rates to be

appropriate. Therefore, we also reject

Fuji’s proposal that we adopt an

importer-specific rate for SIA, its related

U.S. subsidiary, and we will calculate

one rate for Fuji’s related importers.

We have determined that Fuji’s final

proposal, that the assessment rate take

into account the value of the ‘‘Roller

Chain’’ merchandise, is the most viable

assessment option and would ensure

that antidumping duties are not

assessed on that merchandise we

determined to meet the ‘‘Roller Chain’’

principle criteria. As explained above,

we do not agree that the cash deposit

rate should be altered in any way.

Therefore, after ensuring that

liquidation was suspended for SIA’s

entries of TRBs, we will ensure that

assessment does not occur on this

‘‘Roller Chain’’ merchandise by

including the total entered value of

Fuji’s ‘‘Roller Chain’’ merchandise in

our assessment rate calculation

denominator. This will have the effect

of lowering the percentage assessment

rate so that, even though antidumping

duties will be assessed on all entries,

the lower percentage assessment rate

(which will still result in the collection

of the actual amount of antidumping

duties owed) will effectively exclude

the ‘‘Roller Chain’’ merchandise from

assessment.

Concerning Kawasaki’s alleged

‘‘Roller Chain’’ merchandise, as the

record for these reviews demonstrates,

Kawasaki only provided a response to

the general information section of our

questionnaire (section A) and included

within this partial response a statement

indicating that it declined to provide the

information requested in the remaining

sections of the questionnaire. Because

the information Kawasaki declined to

provide was its detailed home market

and U.S. sales and adjustment

information, we were unable to conduct

an analysis of, or calculate a margin for,

Kawasaki. Therefore, Kawasaki’s refusal

to provide a response to the additional

sections of our questionnaire

significantly impeded our ability to

conduct a review for Kawasaki and we

used a total first-tier uncooperative BIA

rate of 40.47 for Kawasaki in the A–588–

604 review and of 47.63 percent in the

A–588–054 review (see Prelim Results at

25201).

Kawasaki now argues that, because it

submitted information demonstrating

that all of KMM’s entries of A–588–054

TRBs during the POR met the

requirements of the ‘‘Roller Chain’’

principle, the Department should not

assess duties against this merchandise.

Kawasaki, therefore, makes an argument

identical to Fuji’s third proposal in that

it calls for the recalculation (i.e.,

lowering) of its A–588–054 assessment

rate such that duties will not be

assessed against KMM’s entries of TRBs.

Kawasaki’s argument, however, not

only overlooks the fact that the

information it wants the Department to

rely on to ensure that duties are not

assessed on KMM’s entries represented

only a partial response to the

questionnaire, but it ignores the fact that

it was an uncooperative respondent that

refused to provide the information

necessary for us to conduct an analysis.

Furthermore, our March 16, 1998 letter

requesting once more that Kawasaki

provide a complete response to our

questionnaire stated specifically that

failure to do so would result in our

proceeding on the basis of total BIA,

including issuing appraisement

instructions to Customs to liquidate all

Kawasaki entries, including those

allegedly subject to the ‘‘Roller Chain’’

principle, at the appropriate BIA rate.

On March 23, 1998, Kawasaki stated for

a third time that it would not provide

the requested information necessary to

complete our analysis and calculate

dumping margins for Kawasaki.

The CIT has ruled on several

occasions that the use of a respondent’s

incomplete questionnaire response

would only reward the respondent for

failing to report requested information.

For example, in Persico, the case cited

by Timken in its comments, the CIT

rejected the argument that the

Department should have used some of

the information submitted by the

respondent instead of relying on other

information as BIA. The CIT stated:

‘‘If the court were to accept Persico’s

argument, such result might encourage

respondents to analyze information

Commerce would employ as BIA should that

agency ignore a questionnaire response for

being unresponsive or incomplete.

Presumably, the respondent would then

selectively disclose only that information

which would decrease a dumping margin

calculated from BIA. . . . In this way, it

would be in a respondent’s best interest to

only partially respond to Commerce’s

inquiry. . . . By allowing Commerce to

reject a submission in toto, the court

encourages full disclosure by the respondent,

because only full disclosure will lead to a

dumping margin lower than that established

by employing BIA.’’

(See Persico at 23). In Nippon Pillow

Block Sales Co., Ltd. and FYH Bearing

Units USA, Inc. v. United States, 903 F.

Supp 89 (CIT 1995) (Nippon), the CIT,

applying the same reasoning as in

Persico, stated that ‘‘if Commerce were

required to use the small portion of the

requested information that Nippon

submitted, there would be no incentive

for Nippon to provide Commerce with

complete information since the

submission of partial information would

result in a decreased dumping margin.’’

See Nippon at 95.

In the instant case, the partial

information submitted by Kawasaki

allegedly demonstrates that KMM’s

imports met the requirements of the

‘‘Roller Chain’’ principle. If we were to

take this information into account, as

Kawasaki argues, Kawasaki’s assessment

rate would be reduced and duties would

not be assessed on a significant portion

of its TRBs entries. As a result, this

uncooperative respondent, who refused

to provide the information necessary for

us to conduct an analysis, would

actually benefit from its refusal to

provide the Department with a complete

response. In this way, we would

encourage Kawasaki to selectively

disclose only that information which

would benefit its position, and control

over the proceedings would effectively

move from the Department to the

respondent. Furthermore, because

Kawasaki was an uncooperative

respondent to which we assigned a firsttier total adverse BIA rate in the reviews

of both TRBs cases, there was no basis

on which to verify the limited

information Kawasaki submitted.

Therefore, given Kawasaki’s

uncooperativeness, we have no basis

upon which to conclude that the limited

information in Kawasaki’s partial

submission is accurate and reliable. For

these reasons we disagree with

Kawasaki that, because information on

the record allegedly demonstrates that

KMM’s entries of TRBs were subject to

the ‘‘Roller Chain’’ principle, we have

an obligation to take that information

into account for assessment purposes.

Rather, we will assess duties for

Kawasaki in both the TRBs cases at rates

equivalent to the first-tier total BIA rates

we assigned to Koyo for these final

results.

Comment 6: Fuji argues that the

Department failed to make a differencein-merchandise (difmer) adjustment

when it compared Fuji’s U.S. TRBs to

most similar, rather than identical,

home market TRBs. Fuji asserts that

because it is a reseller, the acquisition

costs it provided to the Department are

its variable costs and the Department

should calculate a difmer adjustment

based on the difference in acquisition

costs between U.S. merchandise and the

non-identical comparison home market

merchandise.
20592 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

While Timken does not object to the

Department making a difmer adjustment

for Fuji based on Fuji’s acquisition

costs, Timken contends that the

computer programming language Fuji

included in its brief demonstrating how

the Department should incorporate the

adjustment into Fuji’s computer

program is deficient because it applies

the adjustment to comparisons of

identical U.S. and home market

merchandise and does not properly

convert the adjustment from yen to U.S.

dollars.

Department’s Position: We agree with

Fuji that a difmer adjustment is

warranted and have based that

adjustment on the difference in Fuji’s

reported acquisition costs. However, we

also agree with Timken that Fuji’s

suggested programming language is

deficient. Therefore, we have

incorporated the difmer adjustment into

our computer program for Fuji by using

computer programming language which

ensures that the adjustment is (1) only

applied to comparisons between U.S.

merchandise and the most similar,

rather than identical, home market

merchandise, and (2) is properly

converted from yen to U.S. dollars.

Comment 7: Fuji argues that because

it is a reseller which does not have

access to the variable costs of

manufacturing (VCOM) and total costs

of manufacturing (TCOM) of the TRBs it

resells in the U.S. and home markets, it

agrees with the Department’s use of its

acquisition costs as the basis for the 20

percent difmer test. Fuji contends that

in those cases where VCOM and TCOM

are available, the Department allows

non-identical home market models to be

included within the pool of potential

home market matches if the difference

in the VCOMs between the U.S. and

home market models is less than 20

percent of the U.S. model’s TCOM. In

other words, Fuji states, the Department

uses the U.S. model’s costs as the

benchmark for its comparison. However,

Fuji asserts, rather than use the U.S.

model’s acquisition cost as the

benchmark for the 20 percent difmer

test the Department conducted for Fuji,

the Department incorrectly used the

home market model’s acquisition costs

as the basis for the 20 percent difmer

comparison.

Department’s Position: We agree with

Fuji. In our margin calculation

computer program for Fuji we

inadvertently used programming

language which incorrectly applied the

20 percent difmer test. We have

corrected this error for these final

results.

Comment 8: Fuji argues that the

Department’s 99.5 percent arm’s-length

test, in which it calculates home market

customer-specific weighted-average

related/unrelated price ratios and

excludes from its margin calculations all

sales to a home market customer if its

ratio is not greater than 99.5 percent, is

too restrictive and inappropriately

rejects bona fide sales to related home

market customers that are made at the

same prices as sales to unrelated home

market customers. Fuji asserts that, even

though it sold from the same price list

at the same prices to all home market

customers during the POR for any given

product during any given month, the

Department’s arm’s-length test

nevertheless resulted in the exclusion of

a large percentage of its related

customer sales from the Department’s

preliminary margin calculations.

For example, Fuji asserts that the

Department’s reliance on POR weightedaverage prices results in the exclusion of

related party sales simply because

different quantities may have been

purchased by a related party after a

monthly price change took effect, even

though the prices charged to related and

unrelated customers during any given

month were the same. In addition, Fuji

contends that, even if the same number

of units are sold to both the related and

unrelated customer, all sales to the

related customer will fail the test even

if a majority of the sales to the related

customer during the POR were priced

higher than the sales of the identical

product to the unrelated customer.

Fuji claims that, to avoid these

inaccuracies, the Department should

adopt a new arm’s-length test in which

individual transactions to related

customers are determined to be at arm’s

length unless the prices to the related

customer deviate from the weightedaverage prices to unrelated customers by

more than two standard deviations. Fuji

asserts that this method not only better

reflects commercial reality, but it

eliminates abnormally high and low

priced sales while still ensuring that

only those related-customer sales prices

which are statistically comparable to

unrelated-party sales prices are

included in the Department’s margin

calculations.

Fuji further asserts that, if the

Department does not adopt this new

test, it should at least modify its existing

arm’s-length test such that it would use

the same methodology, but apply it on

a monthly, rather than a POR, basis. Fuji

explains that if the Department

compares the average monthly

weighted-average price of a product sold

to an related customer to the monthly

weighted-average sales prices of the

same product to an unrelated customer,

it would capture the fact that Fuji’s

monthly average sales prices to related

and unrelated customers are the same.

In this way, Fuji concludes, the

Department will avoid the arbitrary

results produced by its current test and

correctly include within its margin

calculations those sales to related home

market customers which were clearly at

arm’s length.

Timken argues that Fuji’s arguments

are hypothetical in nature and fail to

demonstrate that the Department’s

methodology actually produced

distortive results. In addition, Timken

asserts, given that the Department

employed a reasonable methodology,

there is no basis for the Department to

change it’s arm’s-length analysis.

Finally, Timken states that it is the

Department, and not an interested party,

who makes the determination as to what

methodology should be used (NTN

Bearing Corp. v. United States, 747 F.

Supp. 726 (CIT 1990)).

Department’s Position: We agree with

Timken. While Fuji argues that our 99.5

percent arm’s-length test produces

arbitrary results, it failed to provide a

single example from its own data

supporting its assertions. Fuji presents

only theoretical examples of why the

arm’s-length test is distortive and we

have no basis upon which to conclude

that our test is unreasonable.

Furthermore, not only is our 99.5

percent arm’s-length test methodology

well established (see, e.g., Certain Cutto-Length Carbon Steel Plate from

Sweden; Final Results of Antidumping

Duty Administrative Review, 61 FR

15772 (April 9, 1996)), but the CIT has

repeatedly sustained this methodology

(see e.g., Usinor Sacilor v. United States,

872 F. Supp. 1000 (CIT 1994) (Usinor),

Micron Technology, Inc. v. United

States, 893 F. Supp. 21 (CIT 1995)

(Micron), and NTN Bearing Corp. of

America, Inc. v. United States, 905 F.

Supp. 1083 (CIT 1995)). Consistent with

our view that a party must provide

evidence of distortion in order for us to

verify its allegations that our arm’slength test is distortive, in Usinor the

CIT specifically stated that ‘‘[g]iven the

lack of evidence showing any distortion

of price comparability, the court finds

the application of Commerce’s arm’slength test reasonable.’’ See Unisor at

1004. Likewise, in Micron, because the

CIT found that the plaintiff/respondent

failed to ‘‘demonstrate that Commerce’s

customer-based arm’s length test inquiry

is unreasonable’’ and failed to ‘‘point to

record evidence which tends to

undermine Commerce’s conclusion,’’

the CIT sustained the 99.5 percent

arm’s-length test based on the lack of

evidence showing a distortion of price

comparability (see Micron at 45–46).
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20593

1For example, if our three-step price stability test

reveals that price variations have no relation to

time, we eliminate from our multiple searches for

contemporaneous home market such or similar

merchandise. This results in a dramatic

simplification of the highly complex TRBs sum-ofthe-deviations model-match methodology and

ensures less errors in computer programs and

margin calculations.

Therefore, for these final results we

have not altered our 99.5 percent arm’slength test for Fuji, and have continued

to apply the test as we have in other

cases upheld by the CIT and as we did

in our preliminary results.

Comment 9: Fuji contends that,

because it changes its home market

prices only at the beginning of a month,

the Department’s use of annual

weighted-average home market prices

fails to capture the monthly fluctuations

in its prices. Therefore, Fuji asserts, the

Department should calculate monthly

weighted-average home market prices.

Fuji contends that not only would this

change be a minimal burden on the

Department, but such a change would

ensure greater accuracy in the

Department’s margin calculations for

Fuji. Fuji further asserts that, if the

Department chooses not to rely on

monthly weighted-average home market

prices, it should at least calculate

semiannual home market weightedaverage prices based on the two periods

within the POR which reflect the timing

of Fuji’s price changes.

Timken argues that not only did the

Department conduct a detailed analysis

which demonstrated that Fuji’s home

market prices were stable over the POR

such that the calculation of annual

weighted-average home market prices

was reasonable, but there is no evidence

on the record indicating that the use of

monthly weighted-average home market

prices for Fuji would be more accurate

or reasonable than annual weightedaverage prices.

Department’s Position: We agree with

Timken. Pursuant to the law in effect

prior to January 1, 1995, although it is

our normal practice to calculate

monthly weighted-average home market

FMVs, it has been our established

practice in TRBs reviews to conduct a

three-step price stability test in order to

determine if a respondent’s pricing

practices in the home market were

sufficiently stable throughout the POR

such that we may reasonably calculate

annual weighted-average home market

FMVs. (see, e.g., Tapered Roller

Bearings, Four Inches or Less in Outside

Diameter, and Certain Components

Thereof, From Japan; Final Results of

Antidumping Duty Administrative

Review, 56 FR 65228 (December 16,

1991) (054 TRBs 88–89), and Tapered

Roller Bearings, Four Inches or Less in

Outside Diameter, and Certain

Components Thereof, From Japan; Final

Results of Antidumping Duty

Administrative Review, 56 FR 26054

(June 6, 1991) (054 TRBs 87–88)). We

began this practice in an effort to

simplify our TRBs calculations which

involve extremely large data bases and

complex, time-consuming analysis.1

Although Fuji’s 1993–94 databases were

less voluminous than other respondents’

databases, the amount of data Fuji

submitted, as well as the overall

complexity of the analysis we

conducted for Fuji, prompted us to

determine if annual weighted-average

FMVs were appropriate for our

calculations. Therefore, consistent with

section 777A of the Act, we determined

whether the use of annual weightedaverage FMVs was appropriate by

performing our established three-step

price stability test. First, we compared

the annual/POR weighted-average home

market price for each home market TRB

model with each of the model’s 12

monthly weighted-average prices during

the POR. We then calculated the

proportion of each model’s sales for

which the annual weighted-average

price did not vary more than plus or

minus 10 percent from the monthly

weighted-average prices. Second, we

compared the volume of sales of all

models for which annual weightedaverage prices did not vary more than

plus or minus 10 percent from the

monthly weighted-average prices with

the total volume of sales of TRBs.

Because the annual weighted-average

price of at least 90 percent of Fuji’s

home market TRBs sales did not vary

more than plus or minus 10 percent

from the monthly weighted-average

prices, we considered Fuji’s annual

weighted-average prices to be

representative of the transactions under

consideration. Finally, we tested

whether there was any correlation

between price and time for each model

by calculating a Pierson coefficient.

Because the correlation coefficient we

calculated for Fuji was less than 0.05

(where a coefficient approaching 1.0

indicates a direct correlation between

price and time), we concluded that there

was no significant relationship between

price and time.

Because this three-step analysis

demonstrated that over 90 percent of

Fuji’s annual weighted-average prices

were within 10 percent of its monthly

weighted-average prices and that there

was no relationship between Fuji’s

pricing practices and time, we

concluded that Fuji’s home market

pricing practices were sufficiently stable

over time such that annual FMVs were

representative of home market prices.

Therefore, while Fuji argues that

monthly weighted-average FMVs would

be more accurate, our analysis and all

the evidence on the record indicate that

our use of annual weighted-average

FMVs for Fuji produced accurate and

reliable results.

We also disagree with Fuji that we

should, at a minimum, rely on FMVs

based on certain semiannual weightedaverages. Since we have confirmed that

annual weighted-average FMVs will not

differ significantly from monthly

weighted-average FMVs, we have no

reason to suspect that annual weightedaverage FMVs would differ significantly

from weighted-average FMVs calculated

on a greater-than-one-month or

semiannual basis. Furthermore, Fuji has

provided no evidence supporting its

contention that its proposed semiannual

weighted-average FMVs would produce

results more accurate than those we

achieved by using annual weightedaverage FMVs. Therefore, we have

continued to rely on annual weightedaverage FMVs for Fuji for these final

results.

Comment 10: In its responses for both

the 1992–93 and 1993–94 reviews, Koyo

reported four different categories of

sales in the home market: (1) sales to

original equipment manufacturers

(OEM) for the OEM market, (2) sales to

OEM customers for the after-market

(AM), (3) sales to AM customers for the

OEM market, and (4) sales to AM

customers for the AM market. In order

to determine whether any of these four

categories of sales represented distinct

levels of trade (LOT), we conducted an

analysis in which we calculated and

compared the weighted-average prices

for each category in order to determine

if patterns of pricing differences existed

between these categories. Based on our

analysis we concluded that sales in

category 1 clearly represented an OEM

LOT while sales in category 4 clearly

represented an AM LOT. However,

because sales within categories 2 and 3

did not clearly reflect distinct LOTs, we

examined whether sales in these two

categories were more appropriately

defined as within the category 1 OEM

LOT or the category 4 AM LOT. Based

on further analysis we concluded that

sales in category 2 were most similar to

those in category 1 and sales in category

3 were most like the sales in category 4.

Therefore, we collapsed sales categories

1 and 2 into one OEM LOT and sales

within categories 3 and 4 into one AM

LOT.

Koyo contends that, in all its

questionnaire responses since the 1990–

92 TRBs reviews (where the Department
20594 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

first recognized the complexity of the

bearing distribution system), it has

explained its distribution system and

identified the identical four home

market sales categories as in these 1992–

93 and 1993–94 reviews. Koyo states

that in the most recently completed

final results for Koyo ( the 1990–92

TRBs reviews), the Department

determined that category 1 was the OEM

LOT, and collapsed categories 2, 3, and

4 into a single AM LOT. Koyo asserts

that because (1) no party ever objected

to the Department’s determination and

(2) Koyo has not changed its

distribution system or its explanation of

this system for these reviews, there is no

reason for the Department to change its

LOT identification for these 1992–93

and 1993–94 reviews.

Koyo also argues that the

Department’s LOT analysis was flawed

because the Department relied on an

over-inclusive pool of sales when

calculating the weighted-average prices

it used to identify Koyo’s home market

LOTs. Koyo asserts that the Department

calculated weighted-average prices for

categories 1, 2, 3, and 4 by including all

models sold rather than eliminating

from the calculation those models sold

only in a given category but not sold to

the category being compared. As a

result, Koyo contends, the Department’s

analysis is distorted. Based on its own

analysis Koyo argues that, by removing

from the calculation of each category’s

weighted-average price those sales of

models which were sold only in that

category, the comparison of the revised

weighted-average prices for each

category reveals that categories 2 and 3

are most similar to category 4, and

categories 2, 3, and 4 are distinctly

different from category 1. Therefore,

Koyo concludes, the Department should

have collapsed categories 2, 3, and 4

into a single AM LOT and treated

category 1 as the distinct OEM LOT.

Timken argues that the elaborate

analysis Koyo presented in its

comments is flawed because it lacks any

support on the record explaining why

sales have been put into sub-categories

within the OEM and AM LOTs. Timken

asserts that, absent an explanation as to

why there should be distinctions within

the OEM and AM LOTs, Koyo’s analysis

is nothing more than a post-hoc

rationalization of its original,

unsupported LOT designations. Timken

concludes that, regardless of any

possible flaws in the Department’s

analysis, given the lack of information

on the record, the Department should

continue to categorize categories 1 and

2 as a single OEM LOT and categories

3 and 4 as a single AM LOT.

Department’s Position: We agree in

part with both the petitioner and the

respondent. As explained above, in its

1992–93 and 1993–94 responses Koyo

claims two distinct LOTs in the home

market, an OEM LOT and an AM LOT.

However, Koyo reported four separate

home market categories of sales based

on the customer category (OEM or AM)

and market in which the sale was made

(OEM or AM). Because Koyo’s response

lacked both a detailed explanation of

these four subgroups and an explanation

whether these four subgroups

represented distinct LOTs, we

determined that it was necessary to

conduct a detailed analysis using Koyo’s

reported home market pricing data to

identify any pricing patterns and

determine whether these categories

reflected distinct LOTs. As also

indicated above, our analysis revealed

that four separate LOTs did not exist,

and we concluded that certain

categories of sales should be collapsed

into two separate LOTs. Therefore, we

agree with Timken that Koyo’s

responses lacked the information

necessary to demonstrate four distinct

LOTs. However, we disagree with

Timken that Koyo’s comments and

analysis are an attempt to argue that

four separate LOTs exist. Rather, in its

comments Koyo only asserts that

inherent flaws in the Department’s LOT

analysis resulted in the Department’s

improper combining of category 1 sales

with category 2 sales and category 3

sales with category 4 sales.

In light of Koyo’s comments we have

reexamined our LOT analysis for Koyo

in both the 1992–93 and 1993–94

reviews and have determined that the

computer analysis we used to identify

Koyo’s home market LOTs produced

accurate and reliable results. For

example, we began our analysis by

calculating an overall weighted-average

price for each of Koyo’s four categories

and compared these prices to one

another. We relied on this comparison

as a means to ascertain the general

pricing trends that existed between

Koyo’s categories such that we would

have some basis upon which to proceed

with a more detailed model-specific

comparison. In other words, while this

macro-comparison did allow us to draw

some general conclusions, we

recognized that it was not detailed

enough to provide conclusive results

concerning each category and its

relationship, if any, to the other three

categories. Therefore, in order to

identify Koyo’s LOTs and resolve the

issue of whether categories 2 and 3

reflected distinct and separate LOTs or

were more like category 1 or 4 such that

they should be collapsed with category

1 or 4 in some way, we conducted a

model-specific analysis in which we

calculated and compared the modelspecific weighted-average prices for

each model sold in each category. For

example, we compared the modelspecific weighted-average prices for

each model sold in categories 1 and 2,

1 and 3, 3 and 4, and 2 and 4. In doing

so, we compared only the weightedaverage prices for those models which

were sold in two categories. For

example, when we compared the

pricing practices between categories 1

and 2, we only compared the prices for

models sold to both categories 1 and 2.

As a result, contrary to Koyo’s assertion,

we did not rely on our macrocomparison as the basis of our overall

LOT determinations and we did not

base our analysis on an over-inclusive

pool of models. Rather, we conducted a

more detailed model-specific analysis in

which we excluded from our

comparisons those models which were

not sold in both of the categories being

compared. Therefore, we disagree with

Koyo that our analysis was inherently

flawed.

However, while we have concluded

that our computer analysis was accurate

and reliable, we have discovered that,

when we interpreted the results of this

analysis in our preliminary results, we

misidentified Koyo’s four categories.

This led to us draw incorrect

conclusions concerning the manner in

which Koyo’s categories were to be

combined for LOT purposes. Therefore,

for these final results we have properly

identified Koyo’s categories and have

reexamined the results of our LOT

analysis. Based on our reexamination of

our model-specific comparisons we

have concluded that our original

determination that categories 1 and 4

were distinct from each other and

reflected separate OEM and AM LOTs

was correct. Furthermore, we have

concluded that there is a clear pattern

of pricing differences between

categories 1 and 2 and categories 1 and

3 such that we cannot consider sales in

categories 2 and 3 to be at the same LOT

as category 1. In addition, our

reexamination of our comparisons

between categories 2 and 4 and

categories 3 and 4 reveal that there is no

distinct pattern of pricing differences

between categories 2 and 4 and

categories 3 and 4 such that we could

consider sales in categories 2 and 3 as

at a separate LOT than category 4.

Therefore, we agree with Koyo that we

improperly collapsed its home market

sales categories in our preliminary

results of review. As a result, for these
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20595

final results we have collapsed

categories 2, 3, and 4 into one distinct

AM LOT and treated category 1 as the

OEM LOT.

2. Comments Concerning Adjustments

to United States Price (USP)

Comment 11: Timken argues that it is

not clear why NTN did not report its

U.S. credit expenses on a transactionspecific basis and, based on its own

analysis, claims that NTN has underreported these credit expenses.

NTN argues that not only has it

consistently reported its U.S. credit

expenses on a customer-specific basis,

but the Department has consistently

accepted NTN’s methodology in all past

reviews. NTN states that Timken has

provided no evidence indicating that

NTN’s customer-specific methodology is

unreasonable, and is only attempting to

persuade the Department to adopt a

position which would yield the results

that Timken wants.

Department’s Position: We disagree

with Timken. While we prefer to have

credit calculated on a transactionspecific basis, when there is a massive

number of transactions in a review, we

generally will not require the

respondent to calculate and report

individual credit costs for each

transaction. Rather, when there is a

voluminous number of transactions

involved, we permit a respondent to

report credit calculations based on the

average credit days outstanding on a

customer-specific basis. This has been

upheld by the CIT (see, e.g., The

Torrington Company v United States,

818 F. Supp 1563 (CIT 1993)), and is in

accordance with our established

practice (see, e.g., Antifriction Bearings

(Other than Tapered Roller Bearings)

and Parts Thereof From the Federal

Republic of Germany; Final Results of

Antidumping Administrative Review, 56

FR 31692 (1991)).

Given the massive number of

transactions NTN has reported in this

review, we have allowed NTN to report

its U.S. credit expenses on a customerspecific basis. Furthermore, not only

have we allowed NTN to report its

credit expenses on a customer-specific

basis in all previous TRBs reviews, but

NTN has explained in past reviews that

it derived its customer-specific credit

ratio based on information directly from

its accounts receivables ledgers

concerning the average number of days

payment was outstanding for each of its

customers. As such, NTN’s reported

credit amounts are based on a

customer’s actual payment information

as maintained in NTN’s books and

records (see, e.g., TRBs 92–93 at 57637)).

We have verified this method in

previous reviews, and, because there is

no evidence that NTN has changed its

methodology for this review, we are

satisfied that NTN has again reported

U.S. credit expenses which are derived

directly from actual customer payment

information. Therefore, we have not

altered our treatment of NTN’s U.S.

credit expenses for these final results.

Comment 12: Timken argues that,

because it appears on the record that

NTN USA is some form of holding

company which provides support to its

wholly-owned subsidiaries, some

portion of NTN USA’s expenses should

be allocated to sales of subject

merchandise. Therefore, Timken

contends, the Department should

increase the pool of U.S. indirect selling

expenses by a portion of NTN USA’s

general and administrative expenses.

NTN argues that, because these G&A

expenses are not provided for, as

Timken suggests, NTN USA’s expenses

should not be allocated to sales of

subject merchandise.

Department’s Position: We disagree

with Timken. The record indicates that

those expenses incurred by NTN USA

on behalf of the various NTN U.S.

subsidiaries are already included in

NTN’s reported U.S. indirect selling

expenses. Therefore, there is no basis to

recalculate NTN’s reported U.S. indirect

selling expenses to account for those

expenses incurred by NTN USA.

Comment 13: Timken asserts that,

because there is no evidence on the

record justifying the various

adjustments NTN made to the pool of

U.S. indirect selling expenses it

reported to be deducted from USP, the

Department should not allow these

adjustments, and should include the

adjustment amounts in the total amount

of U.S. indirect selling expenses

deducted from USP.

NTN states that, because its reporting

of its U.S. indirect selling expenses has

remained consistent throughout all

TRBs administrative reviews to date and

because the Department has consistently

accepted this reporting methodology,

the Department should disregard

Timken’s contentions and again allow

NTN to make the adjustments at issue

to its reported U.S. indirect selling

expenses.

Department’s Position: We agree with

NTN. We have examined certain of

these adjustment’s in previous

verifications of NTN without

discrepancy (see TRBs 90–92 at 64726)

and, absent evidence from Timken

supporting its contention that these

adjustments are unreasonable, we have

no reason to reject them for these final

results.

Comment 14: Timken contends that

NTN’s adjustment to its U.S. indirect

selling expenses for a certain interest

expense amount should not be allowed

because there is no explanation on the

record of what this amount represents,

what it is attributable to, or why it

should be removed from the pool of U.S.

indirect selling expenses to be deducted

from USP.

NTN states that both the Department

and Timken are well aware that the

interest expense in question reflects

those interests expenses NTN incurred

in regard to antidumping duty cash

deposits. NTN contends that, just as

antidumping duties are not a basis for

adjustment to USP, the costs related to

them should also not be the basis for an

adjustment to USP.

Department’s Position: We agree with

Timken that we should deny an

adjustment to NTN’s U.S. indirect

selling expenses for expenses which

NTN claims are related to financing of

cash deposits.

The statute does not contain a precise

definition of what constitutes a selling

expense. Instead, Congress gave the

administering authority discretion in

this area. It is a matter of policy whether

we consider there to be any financing

expenses associated with cash deposits.

We recognize that we have, to a limited

extent, removed such expenses from

indirect selling expenses for such

financing expenses in past reviews of

this finding, this order, and other

orders. However, we have reconsidered

our position on this matter and have

now concluded that this practice is

inappropriate. Further, we note that the

Court’s affirmance of our prior policy

does not preclude us from following this

new, reasonable policy.

We have long maintained, and

continue to maintain, that antidumping

duties, and cash deposits of

antidumping duties, are not expenses

that we should deduct from U.S. price.

To do so would involve a circular logic

that could result in an unending spiral

of deductions for an amount that is

intended to represent the actual offset

for the dumping (see, e.g., Antifriction

Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof from

France, et al.; Final Results of

Antidumping Duty Administrative

Reviews, 57 FR 28360 (June 24, 1992)

(AFBs II)). We have also declined to

deduct legal fees associated with

participation in an antidumping case,

reasoning that such expenses are

incurred solely as a result of the

existence of the antidumping duty order

(see AFBs II). Underlying our logic in

both these instances is an attempt to

distinguish between business expenses
20596 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

that arise from economic activities in

the United States and business expenses

that are direct, inevitable consequences

of an antidumping duty order.

Financial expenses allegedly

associated with cash deposits are not a

direct, inevitable consequence of an

antidumping duty order. Money is

fungible. If an importer acquires a loan

to cover one operating cost, that may

simply mean that it will not be

necessary to borrow money to cover a

different operating cost. Companies may

choose to meet obligations for cash

deposits in a variety of ways that rely

on existing capital resources or that

require raising new resources through

debt or equity. For example, companies

may choose to pay deposits by using

cash on hand, obtaining loans,

increasing sales revenues, or raising

capital through the sale of equity shares.

In fact, companies face these choices

every day regarding all their expenses

and financial obligations. There is

nothing inevitable about a company

having to finance cash deposits and

there is no way for the Department to

trace the motivation or use of such

funds even if it were.

In a different context, we have made

similar observations. For example, we

stated that ‘‘debt is fungible and

corporations can shift debt and its

related expenses toward or away from

subsidiaries in order to manage profit’’

(see Ferrosilicon from Brazil, 61 FR at

59412 (regarding whether the

Department should allocate debt to

specific divisions of a corporation)).

So, while under the statute we may

allow a limited exemption from

deductions from U.S. price for cash

deposits themselves and legal fees

associated with participation in

dumping cases, we do not see a sound

basis for extending this exemption to

financing expenses allegedly associated

with financing cash deposits. By the

same token, for the reasons stated above,

we would not allow an offset for

financing the payment of legal fees

associated with participation in a

dumping case.

We see no merit to the argument that,

since we do not deduct cash deposits

from U.S. price, we should also not

deduct financing expenses that are

arbitrarily associated with cash

deposits. To draw an analogy as to why

this logic is flawed, we also do not

deduct corporate taxes from U.S. price;

however, we would not consider a

reduction in selling expenses to reflect

financing alleged to be associated with

payment of such taxes.

Finally, we also determine that we

should not use an imputed amount that

would theoretically be associated with

financing of cash deposits. There is no

real opportunity cost associated with

cash deposits when the paying of such

deposits is a precondition for doing

business in the United States. Like

taxes, rent, and salaries, cash deposits

are simply a financial obligation of

doing business. Companies cannot

choose not to pay cash deposits if they

want to import nor can they dictate the

terms, conditions, or timing of such

payments. By contrast, we impute credit

and inventory carrying costs when

companies do not show an actual

expense in their records because

companies have it within their

discretion to provide different payment

terms to different customers and to hold

different inventory balances for different

markets. We impute costs in these

circumstances as a means of comparing

different conditions of sale in different

markets. Thus, our policy on imputed

expenses is consistent; under this

policy, the imputation of financing costs

to actual expenses is inappropriate.

Comment 15: In its response NTN

reported that it paid commissions to

NBCA for certain purchase price sales.

In addition, NTN indicated that NBCA

incurred other expenses associated with

the services it provided with regard to

these purchase price sales. In our

preliminary results we determined that

it was necessary to determine the arm’slength nature of these related-party

commissions by comparing the relatedparty commission rate to those

commission rates NTN reported it paid

to unrelated U.S. commissionaires.

However, because the record did not

explicitly indicate the related-party

commission rate, we attempted to

calculate this commission rate based on

data NTN provided in exhibit B–8 of its

response. In exhibit B–8 NTN

demonstrates its calculation of NBCA’s

total U.S. indirect selling expenses for

all merchandise (both scope and nonscope), as well as its allocation of these

total expense amounts to scope and

non-scope merchandise. In addition, it

is important to note that the purpose of

this exhibit was for NTN to calculate the

indirect selling expense NBCA incurred

for its reported U.S. exporter’s sales

price (ESP) sales. Because the expenses

NBCA incurred in relation to those

services it provided for certain purchase

price sales were not expenses NBCA

incurred in association with its ESP

sales, NTN removed these expenses

from its reported total NBCA expenses

in exhibit B–8 by making a downward

adjustment to specific total expense

accounts. These downward adjustments

were clearly identified in exhibit B–8 as

related to those expenses incurred by

NBCA for certain purchase price sales.

Based on these reported downward

adjustments we calculated a total

commission amount and divided this by

the total sales value of NTN’s TRB

purchase price sales, which we derived

directly from NTN’s U.S. computer sales

file. We considered the resulting ratio

the related-party commission rate and,

upon comparing it to the commission

rates NTN reported it had paid to

unrelated U.S. parties, we determined

the related-party commission not to be

at arm’s length. Therefore, we treated it

as an indirect selling expense and

adjusted for it accordingly in margin

calculations for purchase price sales.

NTN argues that, while it agrees with

the Department’s disregarding the

related-party commission, the

Department’s additional arm’s-length

analysis was unnecessary because, in

accordance with the Department’s

practice, related-party commissions are

treated as intra-company transfers of

funds and, as such, are not proper

adjustments to price. NTN further

claims that, while the Department

should not have conducted an arm’slength analysis, it is nevertheless

important for the Department to

recognize that it made two errors when

calculating the related-party

commission rate. First, NTN asserts, the

Department relied on a numerator

which reflected all expenses incurred by

NBCA for the services it provided for

certain purchase price sales, rather than

on a numerator which reflected only the

related-party commission NBCA was

paid. Second, NTN argues, even if the

Department had used the correct

numerator, the calculation would still

be incorrect because the Department

used a denominator which reflected

only scope merchandise. NTN asserts

that exhibit B–8 clearly indicates that

the downward adjustments for purchase

price sales reflected all merchandise,

not only TRBs. As a result, because the

numerator for the calculation would

reflect both scope and non-scope

merchandise, the Department should

have used a denominator which

reflected NTN’s purchase price sales of

all merchandise, rather than only the

purchase price sales of TRBs. In order

to further demonstrate its point, NTN

reported its actual related-party

commission rate and referred to the

difference between this rate and the one

calculated by the Department.

Timken argues that NTN seeks to alter

the Department’s judgment regarding

these related-party commissions by

supplementing the record with new

factual information. Timken asserts that

NTN has reported for the first time its

actual related-party commission rate
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20597

and has indicated for the first time that

the downward adjustments it made in

exhibit B–8 for those expenses NBCA

incurred for services it provided for

certain purchase price sales reflect both

scope and non-scope merchandise.

Therefore, Timken asserts, the

Department should reject this untimely

information and disregard NTN’s

arguments.

Department’s Position: Based on

Timken’s assertion that NTN’s brief

contained new information, we

reviewed the information and

preliminarily concluded that it most

likely constituted new factual

information. Therefore, at the August

21, 1996 hearing, we explained our

position to the parties and requested

that NTN and Timken refrain from

discussing the information in question.

Based on the objections raised by NTN

at the hearing and the fact that we had

yet to make a final decision regarding

the nature of the information in

question (i.e., we had not yet officially

rejected or returned the information to

NTN), we reopened the record on the

issue and provided both NTN and

Timken additional time to comment on

the issue of whether the information in

question constituted new information

which should be rejected and not

considered by the Department. The

additional comments submitted by NTN

and Timken, our final determination

concerning the issue of new

information, and our position on the

related-party commission issue are

discussed in Comment 16 below.

Comment 16: NTN argues that the

Department’s decision to disallow

discussion of the related-party

commission issue at the hearing was not

only unwarranted, but, because it

prevented NTN from sufficiently

making its case, it served to render the

administrative review process useless.

NTN also asserts that, because the

Department failed to communicate

coherently which information in NTN’s

case brief it had rejected, NTN was only

able to surmise which information was

in question. NTN further asserts that,

regardless of what the specific

information is, it is its contention that

none of the information contained in its

pre-hearing case brief can be considered

new factual information. For example,

NTN claims, even a brief review of

exhibit B–8 reveals that the numerator

used by the Department in its

calculation reflected all expenses

incurred by NBCA for services it

provided for certain purchase price

sales, rather than only the commission

amount. NTN contends that this is

demonstrated by the fact that the

Department’s numerator corresponds to

the sum of all the expenses (i.e., the

total amount of downward adjustments

for these purchase price-related NBCA

expenses) as identified on worksheet 4

of exhibit B–8. As a result, NTN

concludes, there is no way the

numerator used by the Department

could be considered as reflective of only

a commission amount.

NTN further argues that the

Department has verified that the

downward adjustments made in exhibit

B–8 reflect expenses incurred for all

merchandise, both scope and non-scope.

Therefore, NTN claims, because the

adjustments clearly reflect all

merchandise, rather than only TRBs, it

is patently absurd for the Department to

now claim that it did not realize this.

As for the related-party commission

rate NTN reported in its case brief, NTN

contends that it was never instructed by

the Department to report this rate in this

review or any other previous TRBs

review. In fact, NTN claims, it only

submitted this rate in its brief in an

effort to point out the inaccuracy of the

Department’s calculation. NTN asserts

that, to refuse to accept this corrected

figure, which the Department was

attempting to calculate itself, is arbitrary

and capricious.

In addition, NTN argues, one of the

primary purposes of the pre-hearing

briefing process is to allow respondents

to address methodologies and correct

clerical errors. NTN asserts that not only

was the information in question clearly

not new information, but it is apparent

that NTN submitted the information in

order to correct the Department’s

clerical errors. Citing NTN Bearing

Corp. v. United States, Slip Op. 94–1186

(Fed. Cir. 1995) and Koyo Seiko v.

United States, 14 CIT 680 (CIT 1990),

NTN asserts that, because the

Department has an obligation to correct

errors which are timely identified by a

respondent and because fair and

accurate determinations are

fundamental to the proper

administration of the antidumping laws,

the Department cannot simply reject the

information in question. Rather, NTN

urges the Department to either

reconvene the hearing to allow

comments on the related-party

commission issue or allow NTN to

submit the comments it was prevented

from making at the August 28, 1996

hearing.

Timken argues that the Department

could draw only one conclusion from

the information NTN provided in

exhibit B–8 concerning the expenses

NBCA incurred when providing services

for certain purchase price sales.

Therefore, Timken asserts, because the

additional information NTN provided in

its case brief provides a different

interpretation of exhibit B–8, the

Department should reject the new

information and not change how it

treated NTN’s related-party

commissions.

Department’s Position: We both agree

and disagree in part with NTN. First, it

is important to clarify that, while we

indicated to NTN and Timken at the

hearing that we considered certain

information in NTN’s case brief to

constitute new factual information, we

did not consider this to be our final

decision on the issue. For example, we

did not, in accordance with 19 CFR

353.31(3), officially reject and return the

information in question to NTN at any

time prior to the hearing. Rather, we

decided that the hearing was the

appropriate forum for explaining our

initial determination and to determine

whether the issue required additional

examination and/or comment. Due to

the controversy surrounding the issue at

the hearing, we decided that, in order to

make a reasonable and equitable

decision, we would allow additional

comment and discussion. Therefore, we

reopened the record on this issue and

provided both NTN and Timken time to

submit additional argument and rebuttal

concerning the nature of the information

in question. Given that we never

officially rejected and returned the

information in question and that we

reopened the record to allow further

examination, we disagree with NTN that

we arbitrarily made a final decision on

this issue without providing NTN

proper notice.

We also disagree with NTN that our

decision to disallow discussion of the

new information at the hearing

undermined the administrative review

process and prevented NTN from

adequately presenting its position.

While we acknowledge that we did not

allow NTN and Timken to specifically

discuss this new information at the

hearing, this only prevented NTN from

discussing the more detailed points of

its position. It did not, in any manner,

prevent NTN from voicing its assertion

that the calculation was inaccurate,

from objecting to the Department’s

treatment of the related-party

commission, or from asserting that the

additional analysis we performed

concerning the commission was

unwarranted. Furthermore, while NTN

may not have been able to address the

detailed points of its position at the

hearing, it nevertheless fully briefed

these specific points in its pre-hearing

briefs. Given that parties to a hearing, in

accordance with 19 CFR 353.38, may

only discuss at the hearing that which

has already been presented in their
20598 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

written briefs, both the Department and

Timken were fully aware of NTN’s

specific arguments upon receipt of its

brief and no party would have been

permitted to provide any additional,

new arguments at the hearing. In

addition, since most of the information

at issue was identified as proprietary by

NTN, no party (NTN, Timken or the

Department) would have been able to

discuss the information at the hearing

regardless of our decision to disallow its

discussion. Furthermore, by reopening

the record, we clearly provided NTN

with the opportunity to make any

additional arguments to support its

position. Thus, we do not agree that

NTN had no opportunity to present its

case.

We also disagree with NTN that we

never clarified which information in its

case brief we considered to be new

information. Because Timken’s case

brief clearly identified that information

which it alleged to be new information,

NTN was on notice of the fact that the

issue of whether the information in

question is new might be addressed in

the course of the hearing. In addition,

immediately following the hearing

Department officials discussed with

NTN the new information issue to

ensure that NTN understood the

parameters of the additional comments

we requested at the hearing. Thus, at

this time NTN had every opportunity to

request clarification where necessary.

Furthermore, our reopening of the

record regarding this issue provided

NTN with an additional opportunity

and additional time to request

clarification or explanation.

Therefore, we disagree with NTN’s

assertions that we mistreated NTN and

failed to extend NTN the opportunity to

fully state its position and/or to

participate in the administrative review

proceeding. However, we do agree with

NTN that the additional analysis we

conducted in our preliminary results, in

which we found it necessary to

calculate a related-party commission

rate, was unnecessary. We also agree

with NTN that certain information we

initially deemed as new factual

information was not actually new

information.

It has been the Department’s practice

to treat NTN’s related-party

‘‘commissions’’ for certain purchase

price sales as intra-company transfer of

funds which are not an allowable

adjustment to price (see, e.g., AFBs 93–

94 at 66489). Thus, it has been our

practice not to include these

‘‘commissions’’, the transfer payment

between NTN and NBCA, in our

analysis. Rather, we have consistently

taken into account the actual expenses

which NBCA incurred with respect to

these purchase price sales and, based on

our determination that these expenses

are those that we typically consider to

be indirect expenses incurred by sales

organizations, we have treated these

expenses as indirect selling expenses

and made the appropriate adjustment

for these expenses in our purchase price

margin calculations for commission

offset purposes (see id.).

In light of our past treatment of NTN’s

related-party commission, and the fact

that the record in this review contains

no evidence which would support a

change in this treatment, we have

determined for these final results that it

was unnecessary for us to calculate

NTN’s related-party commission rate.

Rather, we have determined that, in

accordance with our previous policy

regarding NTN’s related-party

commission, the appropriate adjustment

is not to consider NTN’s intra-company

transfers as commissions or direct

selling expenses, but rather to consider

as indirect selling expenses those

expenses which NBCA incurred for

those services it provided for certain

purchase price sales. Because NTN’s

claimed U.S. related-party

‘‘commissions’’ are not a proper basis

for a COS adjustment, the actual

calculation of NTN’s related-party

commission rate is irrelevant to our

treatment of the related-party

commission and those expenses NBCA

incurred for those services it provided

for certain purchase price sales. Given

the fact that all the information Timken

alleged to be new in NTN’s brief

addressed the inaccuracies in our

attempt to calculate NTN’s related-party

commission rate, the new information

issue is moot with regard to our

commission rate calculation.

However, because Timken did allege

that NTN’s brief contained new

information concerning the nature of the

expenses NBCA incurred in relation to

certain purchase price sales, and

because it is these expense amounts that

we consider in our margin calculations,

we have determined that the new

information issue is relevant with regard

to our adjustment for these expenses.

Therefore, for these final results we

have examined the record in order to

determine whether the fact that both

scope and non-scope merchandise are

reflected in NTN’s exhibit B–8

downward adjustments for these

purchase price-related expenses is new

information and whether there are any

inaccuracies in NTN’s exhibit B–8

which would cast doubt on the

reliability of these reported purchase

price-related expense amounts.

As indicated earlier, NTN reported

and allocated indirect selling expenses

incurred by NBCA for ESP sales.

Because NBCA does not maintain

separate records for the merchandise it

sells, the initial, unadjusted expenses

NTN reported in this exhibit reflect both

scope and non-scope merchandise sold

by NBCA. Prior to allocating these

expenses to scope and non-scope

merchandise NTN made a series of

downward adjustments to the total

expense amounts, including the

downward adjustments for those

expenses NBCA incurred with regard to

purchase price sales. Based on our

examination of exhibit B–8 for these

final results, it is clear from the exhibit

that the total unadjusted expenses

reported by NTN reflect both scope and

non-scope merchandise and that all

downward adjustments NTN made to

these total U.S. indirect selling expenses

reflect both scope and non-scope

merchandise. Therefore, we agree with

NTN that the purchase price-related

adjustments NTN claimed in exhibit B–

8 clearly reflect both scope and nonscope merchandise, and that this fact is

not new information. Furthermore, we

have determined that NTN’s removal of

these expenses was warranted, given

that the purpose of exhibit B–8 was to

calculate ESP-related indirect selling

expenses. We also find NTN’s

methodology for calculating and

allocating these ESP-related indirect

selling expenses to scope and non-scope

merchandise was reasonable and nondistortive. NTN adjusted total expense

amounts which reflected all

merchandise by adjustments which also

reflected all merchandise. Because it

was only after the adjustments were

made that NTN allocated the total

expenses to scope merchandise, the fact

that the adjustments reflected both

scope and non-scope merchandise did

not distort the allocation of these

expenses to scope merchandise.

Therefore, based on the fact that the

information NTN provided concerning

NBCA’s purchase price-related expenses

was not new information, and the fact

that there is no reason to doubt the

nature of these expenses as reported by

NTN, for these final results we have

considered these expenses as indirect

selling expenses in our purchase price

margin calculations (for commission

offset purposes), rather than making a

COS adjustment for NTN’s related-party

‘‘commissions’’.

Comment 17: Timken argues that the

Department should recalculate Koyo’s

reported U.S. selling, general and

administrative expenses (SG&A) to

include those expenses incurred by

American Koyo Manufacturing
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20599

Corporation (AKBMC), Koyo’s U.S.

manufacturing affiliate.

Koyo contends that AKBMC’s G&A

expenses are already included as an

element of its reported furtherprocessing expenses. Thus, Koyo argues,

to include these G&A expenses in the

pool of U.S. indirect selling expenses

would obviously result in an

impermissible double counting of

AKBMC’s G&A expenses.

Department’s Position: We agree with

Koyo. In our verification of Koyo’s

1992–93 U.S. sales and furthermanufacturing information we not only

verified the accuracy of Koyo’s reported

U.S. SG&A expenses (see the

Department’s U.S. furthermanufacturing verification report for

Koyo dated September 8, 1995).

Therefore, if we were to include

AKBMC’s G&A expenses in Koyo’s U.S.

indirect selling expenses, we would, in

essence, be deducting these expenses

from U.S. price twice. Therefore, we

have not changed our treatment of

AKBMC’s G&A expenses for these final

results.

Comment 18: Timken contends that

Koyo’s reported Japanese pre-sale

freight expenses are misallocated

because Koyo used an improper

denominator in its allocation

methodology. Timken argues that,

because Koyo incurs these expenses for

both domestic and export sales, but does

not record the expenses separately for

export and domestic sales, the expenses

should be allocated equally to bearings

sold domestically and abroad. However,

Timken asserts, Koyo’s allocation

methodology instead results in greater

pro rata amounts being allocated to

domestic sales in comparison to export

sales. Timken contends that this is due

to the fact that Koyo’s allocation

denominator is the sum of a home

market total sales value which reflects

the total sales value to unrelated parties

and a U.S. sales value which reflects the

total transfer prices between related

parties. Timken argues that, because

these two total sales values represent

different stages in the stream of

commerce, the expenses are overallocated to home market sales and

under-allocated to U.S. sales. Timken

suggests that one method to ensure an

even allocation of the expenses would

be to allocate them on the basis of the

ratios of the home market and export

sales to the total costs of sales. Timken

concludes that, even if the Department

does not choose this method, it still has

an obligation to correct the allocation of

these expenses such that they are evenly

allocated to Koyo’s domestic and export

sales.

Koyo first argues that not only is its

Japanese pre-sale freight allocation

methodology well-established, but it has

been repeatedly verified and accepted

by the Department in numerous reviews

of both the TRBs and AFBs cases. Next,

Koyo argues that it allocated these

expenses in the manner in which they

were incurred. Koyo states that because

the expenses, by definition, cannot be

distinguished between the two markets,

it calculated a single allocation ratio by

dividing the total expense amount,

which was incurred entirely by Koyo

Japan, by Koyo Japan’s total sales value

for both the export and domestic

markets, as taken directly from Koyo’s

financial reports. Third, Koyo asserts

that Timken is incorrect in assuming

that the denominator includes U.S. and

home market total sales values at

different stages. Koyo points out that the

total home market sales value does not

reflect only the total sales value to

unrelated parties but also accounts for

the total sales values to several related

home market customers as well.

Likewise, Koyo states, the entire export

sales value is based not only on sales to

its related affiliate in the United States,

but includes all export sales, including

sales to unrelated parties in thirdcountry markets. As a result, Koyo

concludes, the home market, U.S., and

third-country sales values which

constitute the denominator reflect a mix

of sales to related and unrelated parties

such that Koyo’s allocation results in a

fair ‘‘apples-to-apples’’ comparison.

Department’s Position: We agree with

Koyo. In general, when a respondent

relies on an allocation to calculate its

per-unit adjustment amounts, we

require that allocation to reflect the

manner in which the expenses were

actually incurred (see, e.g., TRBs 92–93

at 57635 and Certain Fresh Cut Flowers

From Columbia; Final Results of

Antidumping Duty Administrative

Reviews, 61 FR 42848 (August 19,

1996)). In addition, we examine the

respondent’s allocation methodology to

determine if there is internal

consistency between the numerator and

denominator and in the methodology as

a whole. For example, if an expense is

allocated on the basis of total sales

value, as are the expenses at issue here,

the expense amount (the numerator) and

the total sales value (the denominator)

should reflect the same pool of sales

such that the total expense amount

reported by the respondent is divided

into the total value of the sales for

which the expense was actually

incurred. Likewise, the allocation ratio

should be applied to the same sales

price reflected in the denominator. For

example, we would not accept the

application of an allocation ratio to

gross sales price if the denominator was

calculated by totaling the value of all

sales on the basis of a net price.

In the instant case, Koyo Seiko, the

Japanese parent, incurred the pre-sale

freight expenses at issue for all

merchandise, whether destined for sale

to the U.S., third-country, or home

market. Because Koyo does not maintain

its records such that it is able to

calculate the total expense amount

incurred for each market, it was unable

to separately calculate the specific presale freight expenses attributable to each

market. Therefore, Koyo used as its

allocation numerator the total expense

amount incurred by Koyo Seiko for all

merchandise, as derived from Koyo

Seiko’s sales records. The sales for

which these expenses were incurred

were Koyo Seiko’s sales to all its various

customers, which encompassed a mix of

related and unrelated entities in both

the export and home markets. Thus,

Koyo calculated its pre-sale freight

allocation denominator by totaling the

value for all of Koyo Seiko’s sales to all

its customers, as derived from Koyo

Seiko’s records.

Because Koyo Seiko’s customers

encompassed a mix of related and

unrelated parties in both the home and

export markets, Koyo’s denominator

includes sales values which reflect both

transfer and resale prices. Because Koyo

Seiko’s customer in the United States is

KCU, its wholly-owned U.S. affiliate,

the U.S. sales transactions relevant to

Koyo’s allocation are those between

Koyo Seiko and KCU. Thus, Koyo

correctly included within its

denominator the total value of its sales

to KCU, which were made at transfer

prices. Similarly, in the home and thirdcountry markets Koyo Seiko sold to both

related and unrelated customers.

Therefore, Koyo properly included

within its allocation denominator the

total value of Koyo Seiko’s sales to its

home and third-country market

customers, some of which were at resale

prices, while others were at transfer

prices. Koyo’s methodology, therefore,

not only relies on a numerator and

denominator which reflect the same

pool of sales, but its denominator is

calculated on the basis of the value of

those sales for which the reported total

expense amount was actually incurred.

When calculating the per-unit

expense adjustment amount for each

U.S. and home market transaction, Koyo

applied its allocation ratio (which was

the same for all sales) to the appropriate

unit price. For U.S. sales it applied the

ratio to the transfer prices Koyo reported

between Koyo Seiko and KCU, which
20600 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

were the U.S. prices upon which the

expense was incurred and the U.S. sales

values reflected in Koyo’s allocation

denominator. For home market sales,

Koyo applied the ratio to either a resale

price (for unrelated customers) or

transfer price (for related customers)

because these were the home market

prices upon which the expense was

incurred and the home market sales

values reflected in the allocation

denominator.

Therefore, because Koyo’s allocation

properly reflects the manner in which,

and the sales upon which, Koyo actually

incurred this expense, we do not agree

with the petitioner that Koyo’s

allocation is unreasonable and have

made no changes to this methodology

for these final results.

Comment 19: In its response Koyo

reported inventory carrying costs (ICC)

it incurred in the United States as well

as the ICC it incurred in Japan for both

further-manufactured and non-furthermanufactured TRBs it sold in the United

States. In those instances where the

average number of days a TRB spent in

inventory in the United States was

shorter than the number of days in

which KCU, Koyo’s U.S. sales

subsidiary, was required to pay Koyo,

we set the U.S. ICCs equal to zero,

added the number of days of KCU’s

payment terms to the number of days

Koyo reported for inventory in Japan,

and calculated a revised ICC for U.S.

sales using this revised number of days

in inventory and the home market

borrowing rate. This is in accordance

with our practice to use the interest rate

applicable to the foreign parent’s

borrowings in calculating U.S. ICCs

when there is evidence on the record

that the foreign parent assumed the

financial burden of this imputed

expense through delayed payment by

the U.S. subsidiary (see, e.g., FederalMogul Final Remand Results at

Comment 1 and The Timken Company

v. United States, 865 F. Supp. 881 (CIT

1994)). We then applied our

recalculated factor for Japanese ICC to

the transfer price between Koyo and

KCU and our recalculated U.S. ICC

factor to the landed cost of the TRB to

derive per-unit ICCs for Koyo’s U.S.

sales.

Timken argues that, because there are

inventory carrying costs associated with

that portion of merchandise which has

been further manufactured, any

calculation of the inventory carrying

costs for further-manufactured

merchandise should not rely on the

transfer price between Koyo and KCU,

because it fails to deduct from USP

those inventory carrying costs

attributable to further-manufacturing. In

addition, Timken contends that, with

respect to the Department’s

recalculation methodology, it

incorrectly used the home market

borrowing rate, rather than Koyo’s U.S.

borrowing rate.

Koyo argues that the Department

should not adjust USP for the imputed

carrying costs associated with its

further-manufacturing costs because,

during the period that forgings are held

at AKBMC’s Orangeburg facility, they

are considered raw materials used in the

production of TRBs. Because the

Department bases inventory carrying

costs on the value of finished goods

only, Timken’s argument should be

dismissed. In addition, Koyo adds that

the imputed costs of AKBMC’s raw

material inventory are already included

in its further-manufacturing costs

through the inclusion of financing costs.

As a result, Koyo argues that to make an

additional adjustment, as Timken

suggests, would constitute the doublecounting of these inventory carrying

costs.

However, Koyo states that if Timken

is only suggesting that the Department

apply the inventory carrying cost factor

for U.S. sales to the cost of

manufacturing TRBs, rather than the

transfer price, Koyo agrees. Koyo asserts

that the Department should apply its

recalculated inventory carrying cost

factor to the total cost of manufacturing

for both finished and furthermanufactured TRBs sold in the United

States because it would allow the

Department to apply the same general

formula to both the U.S. sales of

finished TRBs and U.S. furthermanufactured TRBs.

Finally, Koyo argues that the

Department properly used the home

market borrowing rate in its

recalculation because, for those

situations in which the number of days

in inventory in the United States is less

that the terms of payment between Koyo

and KCU, the applicable rate is the

home market rate. However, Koyo adds,

while it agrees with the Department’s

recalculation methodology, the

Department erroneously applied the

home market rate to the full period

covered by the terms of payment

between Koyo and KCU, rather than

only to the actual number of days that

the merchandise spent in inventory in

the United States.

Department’s Position: We disagree

with Timken and agree in part with

Koyo. As indicated above, we applied

our recalculation methodology to both

Koyo’s further-manufactured and nonfurther-manufactured U.S. sales.

However, for these final results we have

determined that it is inappropriate to

recalculate the ICCs Koyo reported for

its further-manufactured sales because

Koyo’s methodology accurately reflects

the ICCs it incurred for these sales.

In our preliminary results we

determined that it was necessary to

recalculate Koyo’s reported ICCs for

U.S. sales in order to account for those

instances where the foreign parent

assumed the financial burden of the

imputed expenses through the delayed

payment by the U.S. subsidiary. As the

record indicates, with respect to Koyo’s

non-further-manufactured U.S. sales,

where KCU purchases finished TRBs

from Koyo and resells the finished

bearings to unrelated U.S. customers,

there were instances where the total

time in inventory (in both the United

States and Japan) of the finished TRBs

was shorter than the number of days in

which KCU was required to pay Koyo.

Accordingly, because Koyo incurred the

financial burden of the imputed expense

in these instances, we recalculated

Koyo’s reported ICCs for its U.S. sales in

accordance with our practice in such

instances to use the interest rate

applicable to the foreign parent’s

borrowings. We therefore disagree with

Timken that we should not have applied

the home market interest rate in our

recalculation.

As was the case with its non-furthermanufactured U.S. sales, Koyo reported

ICCs for both the time in inventory in

Japan and in the United States for the

further-manufactured sales. However,

the Japanese ICC Koyo reported for its

further-manufactured U.S. sales

reflected the time in inventory in Japan

for forgings, while the reported U.S. ICC

reflected the time in inventory in the

United States for the finished TRBs.

This is consistent with the fact that (1)

Koyo treated forgings as finished

merchandise in Japan, (2) once the

forgings were purchased by AKBMC,

Koyo’s U.S. manufacturing subsidiary,

the forgings became part of AKBMC’s

raw material inventory, and (3) it wasn’t

until the forgings were further processed

into finished TRBs that ICCs were

incurred in the United States for

finished goods. Because the forgings

became raw material inventory upon

purchase by AKBMC, the ICCs for the

forgings at this point were not U.S.

selling expenses, but rather reflected

and were captured in AKBMC’s

production costs. Because it is our

policy to make an ICC adjustment to

USP for only finished goods in

inventory because unfinished goods

represent production expenses rather

than U.S. selling expenses (see, e.g.,

Dynamic Random Access Memory

Semiconductors of One Megabit or

Above From the Republic of Korea;
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20601

Final Results of Antidumping Duty

Administrative Review, 61 FR 20216

(May 6, 1996)), it would be

inappropriate to apply our recalculation

methodology to Koyo’s furthermanufactured sales because this

methodology would not only treat the

ICCs incurred during the time the

forgings are unfinished goods as U.S.

selling expenses, but it would result in

the double-counting of these expense as

well. Therefore, we have not applied

our recalculation methodology to Koyo’s

further-manufactured sales for these

final results and have relied on Koyo’s

originally reported ICC expense

calculations.

With respect to Timken’s argument

that any calculation of Koyo’s ICC for

further-manufactured sales should not

rely on the transfer price between Koyo

and KCU because it excludes the ICCs

incurred during the time of furthermanufacture, we disagree. As noted

above, we only calculate ICCs for

finished goods. Because the forgings are

clearly not finished merchandise during

the further-manufacturing process, these

expenses were properly captured in

AKBMC’s production costs. In addition,

we note that as a general rule we prefer

ICCs to be calculated using cost-based

information because it represents the

imputed cost to the firm for storing

merchandise in inventory. However, as

explained in our Federal-Mogul Final

Remand Results, transfer prices

represent the actual cost to a U.S.

subsidiary of acquiring the subject

merchandise and, as such, reflect the

actual cost of the merchandise as it

entered the subsidiary’s inventory (see

Federal-Mogul Final Remand Results at

Comment 1). Because the reporting and

subsequent verification of the U.S. ICCs

typically requires that the U.S.

subsidiary establish the average cost of

merchandise held in inventory as well

as the total cost of merchandise sold

during the time period at issue

(generally one year), subsidiaries often

base such costs on transfer prices,

which are maintained in the normal

course of business, and provide an

accurate basis upon which to calculate

the cost to the subsidiary of holding

inventory prior to the sale to an

unrelated customer. Based on these

reasons, as well as the fact that there is

no evidence on the record to impugn the

reliability of Koyo’s reported transfer

prices, we have determined that the use

of the transfer price as the basis for

Koyo’s calculation of the ICC expenses

incurred in Japan for its U.S. furthermanufactured sales and as the basis for

our calculation of the ICC expense

incurred by Koyo for non-furthermanufactured U.S. sales is appropriate

and accurate.

Finally, we agree with Koyo that,

when recalculating Koyo’s ICCs for its

U.S. non-further-manufactured sales

where the time in inventory in the

United States was less than the terms of

payment between Koyo Seiko and KCU,

we incorrectly included within our

calculation of the revised number of

days in inventory the full number of

days of KCU’s payment terms to Koyo

Seiko, despite the fact that the actual

number of days the merchandise spent

in inventory in the United States was

less than the payment terms. As a result,

we agree that our recalculation

overstates Koyo’s ICCs for these U.S.

TRBs sales. Therefore, for these final

results we have corrected this error by

calculating the number of days in

inventory for Koyo’s non-furthermanufactured U.S. merchandise by

adding to the number of days the U.S.

merchandise spent in inventory in the

home market the actual number of days

in inventory in the United States, rather

than the number of days reflected by the

full payment terms between KCU and

Koyo Seiko.

Comment 20: Timken argues that,

because TRBs manufactured by

American NTN Bearing Corporation

(ANBC), NTN’s U.S. manufacturing

subsidiary, are maintained in ANBC’s

inventory until sold to NBCA, the time

in inventory at ANBC should be added

to NBCA’s time in inventory in NTN’s

U.S. inventory carrying cost calculation

for further-manufactured merchandise.

NTN contends that Timken’s

argument is misplaced because NBCA

incurs all inventory expenses relative to

further-manufactured merchandise from

the point ANBC completes the

manufacture of the finished

merchandise.

Department’s Position: We agree with

NTN. Because NBCA incurs all the

inventory expenses relative to furthermanufactured merchandise from the

point that ANBC completes the

production of the finished merchandise,

the ICCs Timken refers to are already

included in NBCA’s reported ICCs for

U.S. sales. Therefore, we have made no

changes to NTN’s reported ICCs for

these final results.

Comment 21: Timken argues that the

Department improperly treated NSK’s

reported U.S. technical service expenses

as indirect selling expenses. Timken

contends that not only did NSK report

technical service expenses which the

Department considers to be directly

related to sales, but NSK failed to

segregate its technical service expenses

into direct and indirect portions.

Timken asserts that, because it is the

Department’s practice to treat all of a

respondent’s U.S. technical service

expenses as direct selling expenses

when a respondent fails to segregate the

expenses into direct and indirect

portions, the Department should make

an adverse inference and treat all of

NSK’s reported U.S. technical service

expenses as direct selling expenses.

NSK argues that the record

demonstrates that its reported U.S.

technical service expenses reflect

indirect expenses such as salaries and

fringe benefits, and that any expenses

which could be potentially identified as

direct selling expenses would have a de

minimis impact on the expense

calculation. Furthermore, NSK asserts,

the Department has verified and

accepted its reported technical service

expenses in past reviews of both the

TRBs and AFBs cases (TRBs 90–92 at

64726) and should do so again in these

instant reviews.

Department’s Position: We agree with

Timken. Our questionnaire specifically

requests respondents to separate the

fixed and variable portions of technical

service expenses because we treat fixed

technical servicing costs as indirect

expenses and variable technical

servicing costs as direct expenses. Our

review of NSK’s response indicates that,

although NSK incurred both fixed and

variable technical service expenses, it

did not separate these expenses into

direct and indirect portions. While we

recognize that, in order to achieve this

segregation it would be necessary for

NSK to trace certain expenses, such as

travel and travel-related expenses, to

individual customer calls, the difficulty

that may be associated with such an

exercise does not relieve NSK of its

responsibility to provide the

Department with actual expense

information. Therefore, for these final

results we have applied BIA and treated

all of NSK’s U.S. technical service

expenses as direct selling expenses (see,

e.g., AFBs 93–94 at 66486).

Comment 22: Timken contends that

Koyo has identified an imported

component for a certain TRB, that was

further manufactured and sold in the

United States during the 1992–93 POR,

as an AFB part rather than as a TRB

part. Timken contends that the

Department must ensure that Koyo is

properly identifying its imported TRBs

components as TRB parts and is paying

the appropriate antidumping duty cash

deposit rates on these components.

Furthermore, Timken asserts, given

Koyo’s failure to identify this TRB part

as a TRB part in its response, the

Department should apply a first-tier BIA

rate to all of Koyo’s reported U.S. sales
20602 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

of the model which contains this

misidentified component.

Koyo argues that, when calculating its

reported further-processing expenses for

a particular TRB model, it did

improperly identify that component as

non-scope merchandise. However, Koyo

contends, Timken’s contention that the

Department should resort to first-tier

BIA to calculate the margin for all sales

of the model which contained this

component is extreme and unwarranted.

Koyo claims that the only impact of its

error was to slightly inflate its reported

material costs. Koyo contends that the

Department, therefore, should simply

neutralize the impact of the error by

making the appropriate offsetting

adjustment to the material costs Koyo

reported for the TRB model which

contains this component prior to

deducting the model’s furtherprocessing costs from USP.

Department’s Position: We agree with

Koyo. Not only is this the first time

Koyo has submitted its furtherprocessing costs for TRBs further

manufactured from forgings and sold in

the United States, but there is no

evidence on the record to suggest that

Koyo intentionally identified the

component in question as an AFBs part

or that Koyo is paying AFBs

antidumping duty cash deposit rates on

entries of merchandise subject to the

TRBs antidumping duty order or

finding. Rather, the record indicates that

Koyo made an error when compiling its

further-processing costs for the purpose

of responding to our questionnaire.

Because information on the record

allows us to correct this error, and

because the correction of the error does

not entail a substantial revision to

Koyo’s response, we have made the

appropriate corrections for these final

results. See the proprietary version of

the Department’s final results analysis

memorandum for Koyo for a detailed

description of our corrections.

3. Discounts, Rebates, and Post-Sale

Price Adjustments (PSPAs)

Comment 23: Timken argues that,

while the Department properly

determined that NTN’s discounts,

Koyo’s billing adjustments (BILLADJI),

and NSK’s return rebates should not be

treated as direct selling expenses

because they were neither reported on a

transaction-specific basis nor granted at

a fixed and constant percentage of the

sales upon which they were allocated,

the Department incorrectly treated these

expenses as indirect selling expenses.

Timken contends that in Torrington

Company v. United States, 82 F.3d 1039

(Fed. Cir. 1996) (Torrington), the Court

of Appeals for the Federal Circuit

(CAFC) emphasized that indirect selling

expenses are those types of expenses

that are not related to particular sales,

but are incurred on all sales, and

concluded that expenses that are, by

their nature, directly related to

particular sales cannot be treated and

deducted from FMV as indirect selling

expenses. Timken asserts that, although

NTN’s discount, Koyo’s BILLADJI, and

NSK’s return-rebate reporting

methodologies prevent the Department

from treating these expenses as direct

selling expenses, the record

demonstrates that they are nevertheless

related to particular sales and are,

therefore, direct by their nature. Timken

concludes that the Department, in

accordance with Torrington, cannot

treat these expenses as indirect selling

expenses; rather, it must deny each

adjustment in its entirety.

NTN argues that, because its home

market discounts are not related to

particular sales and do not vary with the

quantity of a particular item sold,

Torrington does not apply to these

discounts and the Department properly

adjusted for the expenses as indirect

selling expenses.

Koyo argues that Timken has

mischaracterized the CAFC’s ruling in

Torrington by contending that the CAFC

held that direct expenses may not be

allocated to all sales. Koyo argues that

the Torrington decision was in fact

much more limited, deciding only that,

because PSPAs were incurred as direct

expenses, the Department could not

treat them as indirect expenses under

the ESP offset provision. Koyo asserts

that in Torrington the CAFC merely

reaffirmed its earlier determination in

Smith Corona Group v. United Sates,

713 F.2d 1568 (Fed. Cir. 1983) (Smith

Corona), which permits the Department

to accept allocated expenses as direct

selling expenses, provided that the

allocation does not distort the margins.

In fact, Koyo contends, contrary to

Timken’s assertion, there is nothing

within the Torrington decision which

undermines the authority of the

Department to treat expenses allocated

over scope merchandise as direct

expenses. Koyo explains that, because

its BILLADJI adjustment was allocated

across sales of only scope merchandise,

the Department must reject Timken’s

arguments and adjust FMV for these

billing adjustments as direct, rather than

indirect, selling expenses.

NSK contends that the evidence on

the record clearly demonstrates that its

reported return rebates warrant

deduction from FMV as direct selling

expenses. NSK contends that, in

accordance with Torrington, these

return rebates are direct in nature.

Furthermore, NSK states that the

evidence on the record also clearly

demonstrates that NSK reported these

expenses as specifically as its records

permitted and calculated the

adjustments to avoid inaccuracies or

distortions to FMV. NSK concludes that,

because the Department allows nondistortive allocations where transactionspecific reporting is not feasible and

because its reporting methodology

reflects its actual experience, the

Department’s decision to treat these

expenses as indirect selling expenses in

its preliminary results was incorrect.

Department’s Position: We agree in

part with Timken. As a general matter,

pursuant to the law in effect prior to

January 1, 1995, the Department only

accepts claims for discounts, rebates, or

other PSPAs as direct adjustments to

price if actual amounts are reported for

each transaction (see, e.g., AFBs 93–94

at 66498). One way in which a

respondent may report actual

adjustment amounts is if the PSPA is

reported on a transaction-specific basis.

Because allocated price adjustments can

have the effect of distorting individual

prices by diluting the PSPAs received

on some sales, inflating them on other

sales, and attributing them to still other

sales that did not actually receive any

adjustment at all, such allocations do

not result in the actual amount of the

adjustment being reported for each

individual sale. Rather, allocations have

the effect of partially averaging prices.

Just as we do not allow respondents to

report average prices, we do not allow

respondents to average direct additions

to or subtractions from price. However,

if the PSPA is allocated, we consider the

actual amount of the adjustment to be

reported and will treat the PSPA as a

direct selling expense if the respondent

demonstrates that the PSPA was granted

as a fixed and constant percentage of the

sales price of all transactions for which

it was reported and to which it was

allocated. We do so because such an

allocation does not distort the amount of

the adjustment the respondent granted

because the same percentage adjustment

applies to all sales. This policy is

consistent with the policy we

established and followed in numerous

reviews of both the TRBs and AFBs

orders (see, e.g., TRBs 92–93 at 57640

and AFBs 93–94 at 66498).

In the past, if a respondent allocated

a PSPA such that it was limited to scope

merchandise, but did not result in the

actual amount of the adjustment being

reported for each sale (i.e., it was

reported on a customer- or productspecific basis) we treated the PSPA as

an indirect expense and adjusted FMV

accordingly. However, in light of
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20603

Torrington, in which the CAFC

determined that we cannot treat a PSPA

as an indirect selling expense when it is,

by its nature, a direct selling expense,

we no longer treat improperly allocated

home market price adjustments as

indirect selling expenses, but instead

disallow negative (downward)

adjustments in their entirety. However,

we will continue to treat positive

(upward) home market price

adjustments (e.g., positive billing

adjustments that increase the final sales

price) as direct selling expenses in our

analysis. The treatment of positive

billing adjustments as direct selling

expenses is appropriate because

disallowing such adjustments would

provide an incentive to a respondent to

report positive billing adjustments on an

allocated basis in order to minimize

their effect on the margin calculations.

That is, if we were to disregard positive

billing adjustments which would be

upward adjustments to FMV,

respondents would have no incentive to

report these adjustments on a

transaction-specific basis (see AFBs 93–

94 at 66498).

We note that this policy is in direct

accordance with Torrington and Smith

Corona which hold that we must

disallow home market price adjustments

that are allocated in a manner that does

not allow us to separate expenses

incurred on sales of scope merchandise

from those incurred on sales of nonscope merchandise. Our policy

incorporates this decision in that we do

not allow allocated price adjustments

except for those granted at a fixed and

constant percentage of the sales price on

all transactions for which the

adjustment was reported. If a

respondent grants and reports a PSPA as

a fixed percentage of the sales to which

it pertains, the fact that this pool of sales

may include non-scope merchandise

does not distort the amount of the

expense the respondent granted and

reported on sales of subject merchandise

because the same adjustment percentage

applied to both scope and non-scope

merchandise (see id.).

Therefore, contrary to Koyo’s

assertion that we have based our policy

on an overly narrow interpretation of

the CIT and CAFC rulings requiring us

to reject allocated PSPAs in all cases,

our policy allows for the acceptance of

allocated PSPA amounts as direct

selling expenses when a respondent

demonstrates that no distortion has

occurred as a result of its allocation. The

only manner in which an allocated

PSPA would not result in distortion is

if it was granted and reported as a fixed

and constant percentage of the sales to

which it has been allocated.

For these final results we have

applied this policy to NTN’s home

market discounts, Koyo’s home market

BILLADJI adjustment, and NSK’s return

rebates and have made the following

determinations:

First, concerning NTN’s discounts,

NTN did not report these discounts on

a transaction-specific basis, but, rather,

reported the adjustments on a productor customer-specific basis. Furthermore,

NTN did not grant and report these

discounts as a fixed and constant

percentage of sales. Therefore, because

NTN’s discounts are clearly direct in

nature (i.e., they are directly related to

particular sales rather than related to all

sales), but were not allocated

appropriately, we have disallowed this

adjustment to FMV for these final

results (see AFBs 93–94 at 66501).

Concerning Koyo’s BILLADJI

adjustment, while Koyo reported this

adjustment based on a scope-specific

allocation, Koyo did not report it on a

transaction-specific basis and we found

no evidence that Koyo granted the

adjustment as a fixed and constant

percentage of the sales for which it was

reported. As a result, because this

allocation does not result in the actual

amount of the adjustment being

reported for each transaction, we have,

in accordance with our established

practice, denied all negative BILLADJI

adjustments in their entirety. However,

because Koyo also reported positive

BILLADJI adjustments, in accordance

with our policy stated above, we have

treated these as direct selling expense

adjustments to FMV.

With respect to NSK’s return rebates,

we have determined for these final

results that NSK’s return rebates are

promotional expenses, rather than price

adjustments, because NSK grants these

rebates to promote sales made by

distributors. Because NSK demonstrated

in its response that it incurred and

reported these expenses on a modelspecific basis and tied these expenses to

subject merchandise, we consider the

expenses to be direct selling expenses

and have adjusted FMV accordingly.

Comment 24: Timken argues that the

Department improperly treated NSK’s

lump-sum PSPAs as indirect selling

expenses. Timken contends that the CIT

has clearly stated that the Department

may not allow an adjustment to FMV for

any rebates allocated on the basis of

sales of non-scope merchandise

(Torrington Co. v. United States, 818 F.

Supp. 1563 (CIT 1993)). Timken

contends that the record demonstrates

that NSK did not report its lump-sum

PSPAs on the basis of sales of in-scope

merchandise only, and, as a result, the

Department must deny this adjustment

to FMV in its entirety.

Citing Torrington, NSK contends that

the CAFC has clearly determined that

this type of PSPA constitutes a direct

selling expense. Furthermore, NSK

contends, it has submitted evidence

demonstrating that the monthly

purchasing patterns of customers

receiving these adjustments are

relatively stable for purchases of scope

and non-scope merchandise. NSK

asserts that, because these customers

consistently buy about the same

percentage of scope and non-scope

products from month to month, without

any variance, the PSPA granted is fairly

apportioned to scope sales and does not

distort FMV. Thus, NSK contends, its

method for reporting lump-sum PSPAs

accurately calculates the per-unit

adjustment for sales of scope

merchandise and the Department must

treat these expenses as direct selling

expenses.

Department’s Position: We agree with

Timken. We have denied this

adjustment for these final results

because it is a direct price adjustment

and NSK failed to tie the PSPA to the

particular sales affected by the

adjustment. NSK explained in its

response that it granted these lump-sum

PSPAs as a fixed percentage of a certain

group of sales. However, rather than

tying the adjustment to the particular

transactions for which the adjustment

was incurred, NSK allocated the lumpsum PSPAs by dividing the total amount

of the lump-sum PSPAs it paid to a

customer during the POR by the total

sales value of all merchandise (scope

and non-scope) sold to the customer

during the POR. As a result, NSK

allocated the PSPAs across a broader

base of sales than those for which it was

granted. Accordingly, we have denied

this adjustment in its entirety for these

final results.

Comment 25: Timken contends that

the record demonstrates that NSK’s

home market early payment discounts

are, by their nature, directly related to

sales. However, Timken asserts, NSK

did not report these discounts on a

transaction-specific basis and its

allocation of these discounts included

non-scope merchandise. Timken argues

that, in an effort to eliminate the flaws

in NSK’s reporting methodology, the

Department attempted to recalculate

NSK’s early payment discounts.

However, Timken contends, not only is

it unclear how the Department’s

recalculation methodology accurately

established the payment period for each

customer receiving such a discount, but,

because the recalculation is neither

transaction-specific nor limited to scope
20604 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

merchandise, it also fails to result in the

derivation of the actual discount earned

on individual transactions of scope

merchandise. Therefore, Timken

concludes, the Department should

abandon its attempts to recalculate

NSK’s discounts and should deny the

adjustment in its entirety for these final

results.

NSK argues that, while non-scope

merchandise was included in both its

original allocation and the Department’s

recalculation, the record clearly

demonstrates that it granted these

discounts as a fixed and constant

percentage of the sales to which they

were allocated. As a result, NSK claims,

there is no need for the Department to

remove non-scope merchandise from its

recalculation. Furthermore, NSK argues,

the Department’s recalculation

accurately assigned the applicable

payment period to each customer

receiving such a discount. In addition,

NSK asserts, because the record

demonstrates that customers’ payment

patterns were stable throughout the

POR, the Department’s recalculation

resulted in accurate per-transaction

discount amounts for scope

merchandise. As a result, NSK

concludes, the Department should not

abandon its recalculation methodology

and should continue to adjust FMV for

these discounts as direct selling

expenses.

Department’s Position: We agree with

NSK. The record demonstrates that NSK

granted a discount to those customers

who remitted payment earlier than the

terms of payment for that particular

customer called for. The record also

reveals that NSK granted different rates

depending upon how early the payment

was received. In other words, NSK had

in place a rebate schedule which offered

a different discount rate on the basis of

the payment category, such that when

NSK received a payment, for example,

zero to thirty days early NSK granted

one discount rate, while when NSK

received a payment thirty to sixty days

early, it granted a different discount

rate. The record also indicates that NSK

offered the same discounts equally to

sales of both scope and non-scope

merchandise; thus, regardless of the

merchandise, whenever payment was

received early, NSK granted the

applicable discount rate on the basis of

the payment category. In addition, the

record demonstrates that NSK

periodically changed the discount rates

for each payment category throughout

the POR such that, even if a customer

consistently paid the same number of

days early every month in the POR, it

received different discount rates during

the POR. Finally, the record

demonstrates that each customer had a

stable payment pattern. In other words,

each customer remitted payment within

the same number days early each month

such that it consistently received the

discount rate in effect for the same

payment category.

NSK calculated its reported discount

amounts by dividing the total discounts

paid to a customer during the POR by

the total sales value of merchandise sold

to that customer during the POR. As a

result, even though each customer’s

payment category remained stable over

time, the discount rate NSK reported for

a customer reflected an average POR

percentage rather than the actual rate

granted to the customer at the time the

actual transaction was made. In other

words, NSK averaged a customer’s

discount rate and applied that rate to

each transaction rather than the actual

rate granted. In our preliminary results,

based on our review of the information

NSK submitted in regard to these

discounts, we determined that

information on the record enabled us to

remove this distortion. Therefore, we

recalculated NSK discounts as follows:

First, because a customer’s payment

category was stable over time, it was

mathematically possible to determine

the payment category for a customer for

a given transaction by dividing the

discount amount reported for the

transaction by the unit price. By

comparing this ratio to the individual

POR averages NSK reported for each

customer, we were able to ascertain the

payment category for that customer. For

example, if a customer consistently

remitted payment 0–30 days early and

the discount rate for this category was

1.5 percent for the first half of the POR

and 2.0 percent for the second half of

the POR, the average POR rate NSK

would have reported for the transaction

would be 1.75 percent. If we divided the

discount amount reported for a

transaction by the unit price of that

transaction and arrived at 1.75 percent,

we would know that that transaction fell

in the zero to thirty day payment

category. However, because the discount

rate NSK applied to the unit price

reported for a transaction reflected the

average POR rate for the customer (1.75

percent) and not the actual discount rate

granted during the period in which the

transaction took place (either 1.5

percent or 2.0 percent), NSK’s allocation

failed to result in actual transactionspecific discounts. Therefore, after

determining the payment category for

each transaction, we applied a revised

discount rate to that transaction

depending upon the date of the

transaction and applicable payment

category discount rate. In this way, we

applied to each transaction the discount

rate which actually applied to the sale.

We disagree with Timken that this

recalculation suffers from the same

flaws as NSK’s original methodology.

Because NSK granted the same discount

rate on sales of all merchandise (i.e.,

granted the discount as a fixed and

constant percentage of all applicable

sales prices), the inclusion of non-scope

merchandise in our allocation is nondistortive. Furthermore, our

methodology clearly results in the

application of transaction-specific

discounts because we apply the

discount rate granted to a customer

within a given time period to sales to

that customer within the corresponding

time period. Therefore, we have not

altered our recalculation of NSK early

payment discounts for these final results

and have continued to treat these

discounts, as recalculated, as direct

selling expenses.

Comment 26: NSK argues that the

record demonstrates that it granted and

reported its distributor incentives as a

fixed and constant percentage of all

applicable sales. Furthermore, NSK

asserts that in a recent remand

determination the Department

determined that, because NSK’s

distributor incentives were granted and

reported as a fixed percentage of all

sales, both scope and non-scope, NSK’s

allocation was reasonable and nondistortive, and the Department

subsequently treated the adjustment as

a direct selling expense (Final Results of

Redetermination Pursuant to Remand,

Torrington Co. v. United States, Court

No. 92–07–00483 (CIT 1995), aff’d Slip

Op. 96–85 (CIT 1996)). NSK concludes,

because there is no difference in the

methodology it used in this review and

the one at issue in the remand, the

Department should treat these

distributor incentives as direct selling

expenses in these reviews as well.

Timken contends that there is no

evidence on the record demonstrating

that the sales upon which NSK

calculated its incentive rebates included

only sales of subject merchandise.

Therefore, Timken concludes, because

the Department cannot allow the

inclusion of non-scope merchandise

when calculating adjustments to FMV,

the Department should continue to deny

this adjustment for these final results.

Department’s Position: We disagree

with NSK. Based on our reexamination

of the record, we have determined that,

while NSK granted its distributor

incentives as a fixed and constant

percentage of its distributors’ gross

sales, NSK did not allocate these

expenses on the basis of this same group

of sales. Rather, NSK allocated the
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20605

expenses on the basis of its sales to its

distributors. Therefore, while NSK may

have incurred the expenses as a fixed

and constant percentage of its

distributors’ sales, NSK provided no

evidence indicating that the adjustment

was granted as a fixed and constant

percentage of its sales to its distributors

(the sales upon which NSK actually

allocated the expense for the purpose of

its response). Therefore, we have denied

this adjustment in its entirety for these

final results.

Comment 27: Fuji argues that the

Department incorrectly disallowed its

claimed adjustment for home market

rebates. First, Fuji explains that it

allocated its rebates to scope

merchandise using both scope and nonscope merchandise because the rebates

were incurred on the basis of both scope

and non-merchandise. As a result, Fuji

asserts, its records do not provide a

separate breakout for TRB rebates alone,

and it is unable to provide TRB-specific

rebate amounts. However, Fuji adds,

under its rebate program the same rebate

amounts are paid on scope and nonscope merchandise regardless of

whether the merchandise is scope- or

non-scope. Therefore, Fuji asserts, its

allocation methodology accurately

allocates the rebates to TRBs and the

Department should adjust FMV for these

expenses as direct selling expenses.

Fuji further contends that, even if the

Department does not agree that these

rebates warrant a direct adjustment to

FMV, the Department must nevertheless

adjust for these rebates as indirect

selling expenses. Fuji asserts that the

Department routinely includes the

amount of a disallowed rebate within

home market indirect selling expenses

even in situations where the rebate

amount includes both scope and nonscope merchandise.

Timken argues that the Department

properly denied Fuji an adjustment for

its home market rebates because the

record demonstrates that Fuji provided

rebates for selected periods of time and,

as a result, the POR encompasses

several rebate periods. Timken asserts

that, while it may be the case that in a

given period Fuji granted the same

rebate for both scope and non-scope

merchandise, the existence of multiple

rebate periods indicates that, if the

recipient of the rebate sold only nonscope merchandise within a period and

earned a large rebate, but in the next

period sold both scope and non-scope

merchandise, the rebate for the nonscope merchandise would be allocated

to all sales even though it was only

earned for non-scope merchandise. As a

result, Timken concludes, the

Department must deny this adjustment

as it did in its preliminary results.

Department’s Position: We agree in

part with Timken. The record indicates

that Fuji offered two different types of

rebate programs to its dealers. Fuji

calculated the rebate amounts it

reported for each transaction by

dividing the total amount of rebate paid

to each dealer during the POR by the

total sales to the dealer during the POR.

As a result, Fuji reported its rebates on

a customer-specific rather than a

transaction-specific basis. Therefore, in

order for us to accept Fuji’s allocation,

Fuji must demonstrate that it granted its

rebates to each customer at a fixed and

constant percentage of its sales of all

products, both scope and non-scope. We

examined the record to determine if, as

Fuji claims, its rebates were granted and

reported as a fixed and constant

percentage of all sales such that the

inclusion of non-scope merchandise in

its denominator would not produce

distortions. Fuji noted several times that

its rebates were granted at a fixed and

constant percentage. However, we are

unable to find any evidence on the

record supporting this contention.

Furthermore, it is unclear from Fuji’s

response whether there are multiple

rebate periods in a POR, and, if so,

whether the rebate percentage granted to

a customer was the same for each

period. Given that Fuji calculated an

overall POR rebate percentage for each

dealer, if we are unable to determine if

multiple rebate periods existed within

the POR, we are unable to determine

whether the POR rebate percentage Fuji

reported for each transaction truly

reflects the rebate percentage applicable

to each transaction. Therefore, because

the information Fuji submitted is

insufficient for the purpose of

determining whether the rebate

percentage reported for each dealer

reflected the actual rebate percentage

applicable to a given transaction to that

dealer, we have not treated these rebates

as direct selling expenses.

Finally, because the record

demonstrates that Fuji’s rebates are

direct by their nature, in accordance

with Torrington we cannot treat these

rebates as indirect selling expenses.

Therefore, for these final results we

have continued to deny Fuji’s rebate

adjustments in their entirety.

4. COP and CV

Comment 28: Timken argues that, in

accordance with Certain Hot-Rolled,

Cold-Rolled, Corrosion-Resistant and

Cut-to-Length Steel Flat Products from

Korea (58 FR 37176) and Certain

Stainless Steel Wire Rods from France

(58 FR 68865), the Department should

exclude from its profit calculation for

CV those sales to related parties which

were not at arm’s length.

NTN argues that nothing in the statute

suggests that the Department must

examine whether sales were made at

arm’s length for the purposes of

calculating CV. NTN argues that the

Department did not exclude such sales

in its calculation of CV profit for NTN

in the 1992–93 TRBs review and

nothing on the record in this review

supports any such change.

Koyo argues that, because neither the

statute nor case law requires the pool of

sales for determining FMV based on

price-to-price comparisons to be the

same as the pool of sales used to

calculate profit for CV, the Department

has the authority to base CV profit on

all home market sales. Furthermore,

Koyo asserts, because section

773(e)(1)(A) of the Act specifies that

profit is to be ‘‘equal to that usually

reflected in sales of merchandise of the

same general class or kind as the

merchandise under consideration,’’ the

statute clearly requires CV profit to be

calculated on the basis of all sales of the

general class or kind of merchandise

under consideration. Moreover, citing to

Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts

Thereof From France, et. al.; Final

Results of Antidumping Duty

Administrative Reviews, 60 FR 10900,

10922 (February 28, 1995) (AFBs 92–93),

Koyo contends that the Department does

not support the exclusion of all relatedparty sales that fail the arm’s-length test

from the CV profit calculation. Thus,

Koyo concludes, the fact that sales may

fail the arm’s-length test does not

warrant the automatic exclusion of the

sales from the CV profit calculation.

Department’s Position: We agree with

Timken in part. As explained in

numerous reviews of the AFBs orders

(see, e.g., AFBs 93–94 at 66493), section

773(e)(2) of the Act provides that a

transaction between related parties may

be ‘‘disregarded if, in the case of an

element of value required to be

considered, the amount representing

that element does not fairly reflect the

amount usually reflected in sales in the

market under consideration.’’ Our

arm’s-length test determines whether

prices to related parties are equal to, or

higher than, sales prices to unrelated

parties in the same market. Therefore,

this test is not dispositive of whether an

element of profit on related-party sales

is somehow not reflective of the amount

usually earned on sales of the

merchandise under consideration.

Related-party sales that fail the arm’slength test do give rise to the possibility,

however, that certain elements of value,
20606 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

such as profit, may not fairly reflect an

amount usually earned on sales of the

merchandise. For these final results we

considered whether the amount for

profit on sales to related parties which

failed the arm’s-length test was

reflective of an amount of profit usually

experienced on sales of TRBs. To do so,

we compared profit on sales to related

parties that failed the arm’s-length test

to profit on sales to unrelated parties. If

the profit on sales to related parties

varied significantly from the profit on

sales to unrelated parties, we

disregarded the related-party sales when

calculating profit for CV. Specifically,

we first calculated the profit on sales to

unrelated parties. If the profit on these

sales was less than the statutory

minimum of eight percent, we used the

eight-percent minimum in the

calculation of CV. If the profit on these

sales was equal to, or greater than, the

eight-percent minimum, we calculated

profit on the sales to related parties that

failed the arm’s-length test and

compared it to the profit on sales to

unrelated parties as described above. If

the profits on such sales to related

parties varied significantly from the

profits on sales to unrelated parties, we

excluded those related-party sales when

calculating profit for CV .

We note that this is identical to the

steps we took in AFBs 92–93 at 10922

and AFBs 93–94 at 66493. However,

these TRBs reviews mark the first time

since our adoption of this policy that we

needed to conduct this analysis in the

TRB cases. We did not apply this policy

in TRBs 92–93 because we found that

none of the respondents’ related-party

sales failed the arm’s-length test. As a

result, the issue was moot for those

reviews. Therefore, we do not agree

with NTN that, because we have not

applied this policy in past TRBs

reviews, we have no basis to do so in

these instant reviews. Rather, because

we found non-arm’s-length related-party

sales for those firms for which we based

FMV on CV (NTN, NSK, and Koyo), we

have applied our policy as explained

above and made changes, where

appropriate, in our respective companyspecific analyses.

Comment 29: NSK claims that the

Department violated the antidumping

law by never establishing the grounds

for collecting cost data from relatedparty suppliers. NSK contends that,

pursuant to section 773(e)(3) of the Act,

the Department has the right to

disregard sales prices NSK paid to

related-party suppliers in favor of the

supplier’s COP only if (1) the

Department has reasonable grounds to

believe or suspect that an amount

represented as the value of such input

is less than the COP of the input, and

(2) the information being requested is

for a ‘‘major’’ input. NSK argues that,

because the language in section

773(e)(3) of the Act is identical to that

in section 773(b) of the Act (the

provision which grants the Department

the authority to conduct cost

investigations), the same threshold

standard is applicable. In other words,

NSK argues that, because the petitioner

never alleged that NSK purchased an

input from a related supplier at less

than COP, and because the Department

never alleged or substantiated that

transfer prices from related suppliers

were less than COP, let alone whether

the input was a ‘‘major’’ input,

reasonable grounds for the collection of

this data did not exist.

NSK further contends that the

Department has no other statutory

authority for requesting related-supplier

COP data and that there is no evidence

on the record to support the

Department’s disregard of NSK’s

related-supplier transfer prices.

Therefore, NSK concludes, the

Department should not use this

illegally-obtained related-supplier

information and should strike it from

the record of these reviews.

Timken argues that the Department’s

preliminary results decision regarding

NSK’s related-supplier transfer prices

was justified and in accordance with the

law. Timken contends that the standard

for analyzing below-cost sales pursuant

to section 773(b) of the Act does not

require any allegation by domestic

parties. Likewise, accepting NSK’s

position that the identical language of

sections 773(e)(3) and 773(b) constitutes

the application of the same standard,

Timken maintains that there is therefore

no requirement that the domestic party

has the burden of submitting evidence

of below-cost related-party supplier

transfer prices. In fact, Timken

maintains, the respondent should bear

the responsibility of providing such

evidence because related-party input

transfers are already ‘‘suspect’’ and

domestic producers simply do not have

access to the respondent’s books and

records, or access to what inputs were

purchased from related suppliers.

Timken adds that, given the nature of

TRB production, it is also nearly

impossible to submit data regarding the

production costs at every stage of

production that might be a transfer

point. Furthermore, the petitioner states

that to require allegations from the

domestic party as a prerequisite for the

Department to investigate would

effectively curtail the inherent authority

of the Department to conduct below-cost

sales and related-party transfer price

investigations. Timken also maintains

that the Department’s collection of

NSK’s related-supplier transfer prices

was justified because NSK has engaged

in below-cost selling. Timken argues

that, given that NSK does sell at belowcost prices, it is reasonable to infer that

its losses are passed back to related

suppliers which are forced to transfer

inputs at a loss. In addition, Timken

asserts that there is ample evidence on

the record for these reviews supporting

the Department’s decision to disregard

NSK’s related-party transfer prices.

Finally, Timken argues, because

NSK’s arguments were rejected by the

CIT in NSK Ltd. v. United States, 910 F.

Supp. 663 (CIT 1995) (NSK), the

Department should adhere to its

preliminary determination and adjust

NSK’s reported COP and CV to reflect

the actual COP of related-party inputs.

However, Timken notes, while the

Department indicated in its preliminary

results that it did adjust NSK’s COP and

CV to reflect the actual COP of relatedparty inputs, it is not apparent from the

Department’s preliminary results

computer program that it did so.

Timken, therefore, requests that the

Department ensure that NSK’s COP and

CV are properly adjusted for these final

results.

Department’s Position: We disagree

with NSK. As we explained in detail in

TRBs 92–93 at 57643, two separate

sections of the Act direct the

Department to disregard transfer prices

for certain transactions: section

773(e)(2) which directs us to disregard

transfer prices if the transfer prices for

‘‘any element of value’’ do not reflect

their normal market value, and section

773(e)(3) which directs the Department

to disregard transactions if the transfer

prices for ‘‘major inputs’’ are below the

COP.

For CV purposes, pursuant to section

773(e)(2) of the Act, in general we

determine whether the transfer prices

for any element of value were below the

normal market value of that element.

Pursuant to the statute, we do not use

transfer prices between related

companies to value any element of

value if such prices do not fairly reflect

the amount usually reflected in sales of

the merchandise under consideration in

the market under consideration. This is

sometimes referred to as the

requirement for an ‘‘arm’s-length’’ price.

To determine whether the transfer

prices reflect arm’s-length prices, we

normally compare the transfer price to

(1) the prices related suppliers charge to

unrelated parties, or (2) the prices

charged by unrelated suppliers to the

respondent. If we disregard a

transaction because the respondent
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20607

cannot demonstrate that the transaction

was made at arm’s length, and there are

no other transactions available for

consideration, then we must rely on the

‘‘best evidence available’’ to determine

the value of the element. In other words,

if there are no arm’s-length prices for

components to compare to transfer

prices, ‘‘Commerce generally use[s] the

cost of the components as representative

of the value reflected in the market

under consideration’’ (see Final

Determinations of Sales at Less Than

Fair Value: Antifriction Bearings (Other

Than Tapered Roller Bearings) and

Parts Thereof From the Federal Republic

of Germany et al., 54 FR 18992 (1989)

(AFBs LTFV)). In that situation we must

determine whether to use the reported

cost data as the ‘‘best evidence

available.’’ Otherwise, we cannot fulfill

our statutory obligation of valuing

elements of value for CV purposes.

NSK erroneously argues that, before

we can request cost data for inputs, we

must have a specific and objective basis

for suspecting that the transfer price

paid to a particular related supplier for

a major input is below the related

supplier’s COP. NSK’s argument is

based on the erroneous assumption that

we must rely upon section 773(e)(3) of

the Act to request information regarding

the cost of components parts. As

demonstrated above, section 773(e)(3) of

the Act simply provides an alternative

basis for requesting cost information.

However, there also exists a basis for

examining whether the transfer prices of

major inputs were below cost under

section 773(e)(3). We agree with the

petitioner’s argument that, when a

domestic party files a COP allegation, it

does not necessarily have the

information necessary to allege that a

particular input or element of value

from a related party is priced below

COP. Therefore, the petitioner cannot

necessarily make COP allegations

regarding specific related-party inputs.

As a result, we consider our initiation

of a cost investigation concerning home

market sales a specific and objective

reason to believe or suspect that the

transfer price from a related party for

any element of value may be below the

related suppliers’ COP.

In accordance with our standard

practice (see, e.g., Final Determination

of Sales at Less Than Fair Value:

Certain Carbon Steel Butt-Weld Pipe

Fittings From France, 60 FR 10538

(February 27, 1995)), we asked NSK to

provide cost data for inputs produced

by related parties. NSK complied with

our request for information and

supplied the transfer prices and cost of

production of inputs from its related

parties. The record for these reviews

demonstrates that in its response NSK

also submitted a comparison of the

weighted-average transfer prices for

those inputs NSK purchased from both

related and unrelated suppliers. By this

comparison NSK intended to show the

arm’s-length nature of its transfer prices

where inputs were purchased from both

related and unrelated suppliers. This

comparison, however, was not useful in

determining whether related-supplier

transfer prices were at arm’s length

because it listed only a limited number

of instances where NSK purchased an

identical or similar input from both a

related and unrelated supplier. Because

we could not rely on NSK’s relatedparty transfer price comparison, we

examined in detail the submitted COP

and transfer prices for all of NSK’s

related suppliers. We found that,

contrary to NSK’s claim, transfer prices

from related suppliers were often below

the suppliers’ COP for that input.

Because NSK was unable to demonstrate

that elements of value included in its

submitted CV calculations were

reflective of their normal market value,

the submitted related-party cost

information was required by law.

Hence, we did not strike NSK’s reported

related-party cost information from the

record. On the contrary, for these final

results we relied on NSK’s submitted

related-party cost information if the

COP for the input exceeded the transfer

price NSK reported for the input.

Furthermore, as indicated by Timken,

in NSK the CIT upheld our authority to

request cost data from a company’s

related suppliers. The CIT determined

that ‘‘1677b(e)(2) does not limit

Commerce’s authority to request COP

data pursuant to 1677b(e)(2) * * * .

[T]he purpose of 1677b(e)(3) is to permit

Commerce to use the best evidence

available when it has reasonable

grounds to suspect below cost sales

occurred. There is no support in the

legislative history of 1677b(e)(3) for the

claim that Commerce may not request

COP data for other purposes’ (see NSK

at 669).

Finally, concerning Timken’s

assertion that it is unclear whether our

preliminary results computer program

for NSK adjusts NSK’s reported COP

and CV to take into account relatedparty transfer prices for inputs which

were below the COP of the input, we

note that our preliminary results

computer program for NSK clearly

makes this adjustment. We adjusted

NSK’s reported COP values in lines 79

and 80 and NSK’s reported CV values in

lines 570 through 591.

Comment 30: NTN argues that, when

the Department recalculated NTN’s COP

and CV values to reflect those relatedparty inputs for which NTN’s transfer

prices were less than the COP of the

input, the Department applied an

inappropriate allocation ratio. NTN

asserts that, in an attempt to calculate

the ratio for the total excess of COP over

transfer price for related-party inputs,

the Department used a denominator

based on the sum of transfer prices for

those related-party inputs where

transfer price was below COP rather

than the sum of all related-party input

transfer prices.

Timken asserts that, while the ratio

NTN describes in its comments could be

used in the Department’s recalculation,

the record contains neither the quantity

data for those inputs transferred below

COP nor the identification of which

TRBs included related-party inputs. As

a result, Timken claims, the Department

is unable to determine the actual sum of

the difference between COP and transfer

price for all parts purchased by NTN

and has, instead, used a reasonable

proxy for this absent information.

Department’s Position: We agree with

NTN. As explained in our preliminary

results analysis memorandum for NTN

dated April 12, 1996, NTN submitted

COP and CV values which reflected the

value of related-party inputs based on

transfer price. Based on a schedule

submitted by NTN’s related supplier, we

determined that a significant number of

inputs were sold to NTN at transfer

prices below COP. Therefore, we

calculated a percentage adjustment that,

when applied to NTN’s reported COP

and CV values, would increase COP by

an amount reflective of the difference

between COP and transfer price where

transfer price was less than COP. The

first step of our calculation of this

percentage adjustment involved the

derivation of the total difference

between COP and transfer price for all

related-party inputs where transfer price

was below COP, and the expression of

this difference as a percentage of

transfer price. It is the denominator we

used to calculate the amount of COP

that exceeded transfer price that NTN

objects to based on the assertion that it

reflects only a portion of, rather than the

total sum of, transfer prices. Based on

our reexamination of our calculation for

these final results we have determined

that the denominator in question is

inconsistent with the methodology of

our overall COP/CV adjustment

calculation and have made the

appropriate changes to our calculation

for these final results. Please see the

proprietary version of our final results

analysis memorandum for NTN for a

detailed explanation of these changes.

Comment 31: Timken states that in

the Department’s preliminary results for
20608 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

Koyo the Department calculated

modified home market indirect and

direct selling expenses for use in those

comparisons where the Department

based FMV on CV. Timken argues that,

because Koyo’s originally-reported CV

values included expense amounts

different from the revised expense

amounts the Department deducted from

CV to calculate FMV, the Department

should have deducted the originallyreported expense amounts from CV and

added its revised expenses amounts to

the CV calculation prior to deducting

the revised expenses from CV when

calculating FMV.

Department’s Position: We agree with

Timken. As explained in our

preliminary results analysis memoranda

for Koyo, for those comparisons in

which we based FMV on CV we

deducted home market direct and

indirect selling expense from CV.

Because Koyo reported in its response

the overall direct selling expense ratio

and the overall indirect selling expense

ratio it used to calculate its reported

COP and CV, we recalculated these

ratios to include Koyo’s reported home

market pre-sale and post-sale inland

freight expense and used these

recalculated ratios to calculate the

amount of direct and indirect expenses

to be deducted from CV. We

recalculated Koyo’s overall ratios

because, in accordance with the law in

effect prior to January 1, 1995, where we

adjust for home market movement

expenses under the circumstance-of-sale

provision of 19 CFR 352.56 and the ESP

offset provision of 19 CFR 353.56 (b)(2),

we treated Koyo’s reported home market

pre-sale freight expenses as indirect

selling expenses and Koyo’s reported

home market post-sale freight expenses

as direct selling expenses. Because

Koyo’s overall direct selling expense

ratio did not reflect home market postsale freight and Koyo’s overall indirect

selling expense ratio did not include

home market pre-sale freight, in order to

ensure the proper application of our

home market freight expense policy

when FMV was based on CV, we

determined that it was necessary to

recalculate Koyo’s reported indirect and

direct selling expense ratios to reflect

these expenses. However, Koyo’s

originally reported CV values relied on

the ratios Koyo originally reported in its

response. As a result, we when we

deducted our calculated indirect and

direct selling expenses from CV, we

adjusted for expenses which were not

originally included in CV. This had the

effect of artificially lowering CV for our

margin calculations. Therefore, for these

final results, prior to deducting our

calculated home market indirect and

direct selling expenses from CV, we first

recalculated Koyo’s reported CV to

reflect its home market pre-sale and

post-sale freight expenses.

Comment 32: NTN argues that, when

calculating the overall weighted-average

ratios for NTN’s home market direct and

indirect selling expenses, which the

Department used to derive the amount

of direct and indirect selling expenses to

be deducted from CV in those

comparisons in which FMV was based

on CV, the Department made two errors.

First, NTN claims that the ratios the

Department calculated in the beginning

of its margin calculation computer

program, as contained on the first page

of the preliminary results computer

program printout, are not the same as

the ratios the Department used in a

subsequent portion of the computer

program. Second, NTN claims that the

Department calculated a single overall

weighted-average indirect selling

expense ratio which reflected all home

market sales, rather than taking into

account exhibit D–11 of NTN’s response

where NTN calculated three separate

ratios reflecting the differences in

indirect selling expenses NTN incurred

for sales to each of its three home

market levels of trade (LOT).

Department’s Position: We agree with

NTN that, when transferring the results

of our calculation of the overall

weighted-average ratios for certain of

NTN’s home market direct and indirect

selling expenses (as they appeared on

page 1 of our preliminary results margin

calculation computer program printouts

for NTN) to a subsequent portion of our

preliminary results computer program,

we incorrectly transcribed these ratios.

Therefore, for these final results we

have corrected this inadvertent error.

However, we do not agree with NTN

that the single overall weighted-average

ratio we calculated for its home market

indirect selling expenses should not

have been a single ratio, but, rather,

three separate ratios reflecting the

difference in indirect selling expenses

NTN incurred as a result of the

differences in its three home market

LOTs. The LOT-specific indirect selling

expenses ratios NTN refers to in exhibit

D–11 of its response were derived

directly from exhibit C–5 of its

response, where NTN allocated the

indirect selling expenses it incurred in

the home market during the POR

according to its LOTs. While we agree

that NTN had three distinct LOTs in the

home market, we do not agree that it

incurred its home market indirect

selling expenses differently according to

LOT due to the difference in its LOTs

such that LOT-specific allocations are

warranted.

The CIT addressed the issue of LOTspecific expense allocations in the

Timken Company v. United States, 930

F. Supp 621 (CIT 1996) (Timken). This

decision not only has general relevance,

but it is especially significant for the

instant reviews because the CIT ruled

on the issue of LOT-specific expense

allocations specifically with regard to

NTN and the 1990–91 and 1991–92

TRBs reviews. Recognizing that there

may be a difference between a

respondent’s methodology for response

purposes which allocates expenses to a

LOT and how a respondent actually

incurs the expenses due to differences

when selling to each LOT, the CIT

clearly stated that, in order for the

Department to accept NTN’s LOTspecific expense allocations, NTN’s

expenses must ‘‘demonstrably vary

according to level of trade’’ (see Timken

at 628). In other words, the fact that a

respondent allocates according to LOT

in an antidumping questionnaire

response does not indicate whether a

respondent actually incurred the

expenses differently due to differences

in LOTs. Rather, in order to determine

if a respondent’s expenses demonstrably

varied according to LOT, additional

narrative and quantitative evidence

must exist which demonstrates that the

respondent either performed different

activities/functions or performed

activities/functions to a different degree

when selling to each LOT such that the

amount of expenses incurred for the sale

of the identical merchandise to different

LOTs would vary. Based on our review

of the record for this review, we have

determined that NTN did not provide

any evidence demonstrating that it

actually incurred its reported home

market indirect selling expenses

differently due to differences in LOT.

Rather, NTN’s sole support for its LOTspecific allocations is the allocations

themselves. As a result, the record does

not support our using three separate

LOT-specific indirect selling expense

ratios to derive the home market

indirect selling expense amounts in

those comparisons where FMV is based

on CV.

Furthermore, while we recognize that,

for these final results, the issue of LOTspecific allocations appears to be

limited to NTN’s comments concerning

our calculation of indirect selling

expense ratios for comparisons in which

FMV is based on CV, the CIT’s

determination in Timken that a

respondent must demonstrate that the

expenses demonstrably vary according

to LOT in order to allocate those

expenses according to LOT has
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20609

implications for other aspects of our

analysis of NTN as well.

For example, using the LOT-specific

allocations it calculated for its home

market indirect selling expenses in

exhibit C–5, NTN calculated LOTspecific per-unit indirect selling

expense amounts by multiplying its

exhibit C–5 LOT-specific allocation

ratios by its reported unit prices. As a

result, NTN reported for each of its

home market transactions indirect

selling expense adjustments which

varied according to the LOT at which

the transaction occurred. Based on our

determination for these final results that

the record does not contain evidence

demonstrating that NTN actually

incurred these indirect selling expenses

differently due to the differences in

LOTs, we cannot accept NTN’s reported

LOT-specific per-unit indirect selling

expense adjustments. Therefore, we

have recalculated NTN’s home market

indirect selling expense allocations such

that we derived a single allocation ratio

applicable to all sales regardless of LOT.

We then applied this ratio to NTN’s

reported home market unit prices and

calculated per-unit adjustment amounts

which also did not vary according to

LOT.

NTN’s exhibit C–5 allocations,

however were not limited to only

indirect selling expenses. NTN also

calculated LOT-specific allocations and

per-unit adjustments for its home

market pre-sale and post-sale freight

expenses. We have examined the record

and have found no evidence

demonstrating that NTN actually

incurred these freight expenses

differently due to differences in LOTs.

Therefore, as was the case with NTN’s

indirect selling expenses, for these final

results we recalculated a single

allocation ratio for each of these freight

expenses and applied this single ratio to

NTN’s reported unit prices so that

NTN’s allocation ratios and expense

adjustments did not vary according to

LOT.

The CIT’s requirement that LOT

allocations must be supported by

evidence that a respondent’s expenses

demonstrably varied according to LOTs

applies to U.S. expenses as well. As a

result, because NTN allocated several of

its reported U.S. expenses according to

LOT in exhibit B–8 of its response, and

calculated LOT-specific U.S. expense

allocation ratios and LOT-specific U.S.

per-unit expense amounts, we examined

the record to determine if there was any

evidence which demonstrated that NTN

actually incurred these expenses

differently due to differences in LOTs.

Based on our review we have

determined that there is no evidence

that NTN incurred its U.S. direct

technical service expenses, freight

expenses, indirect advertising expenses,

or other indirect selling expenses

differently due to the differences in its

U.S. LOTs. Therefore, because there is

no evidence that these U.S. expenses

demonstrably varied according to NTN’s

U.S. LOTs, we have not allowed NTN’s

LOT-specific allocations, allocation

ratios, and per-unit amounts for these

U.S. expenses. Rather, for these final

results we have calculated a single

allocation ratio for each expense which

reflects all U.S. sales and have

recalculated NTN’s reported U.S. perunit amounts for these expenses without

regard to LOTs.

In addition to the above, we have

made one more change to our

preliminary results for NTN based on

our determination that NTN’s home

market expenses did not demonstrably

vary according to LOT. In this review

NTN requested and we preliminarily

granted a LOT adjustment based on the

differences in certain home market

indirect selling expenses between

NTN’s LOTs whenever we compared

U.S. merchandise to such or similar

home market merchandise at a home

market LOT different than the LOT of

the U.S. sale. In accordance with our

regulations and policy concerning LOT

adjustments pursuant to the law in

effect prior to January 1, 1995, NTN

bears the burden of demonstrating that

it was entitled to an adjustment for

differences in LOTs (see 19 CFR 353.54)

and is required to provide evidence that

its claimed adjustment was in fact

attributable to differences in LOTs (see,

e.g., NAR S.p.A. v. United States, 707 F.

Supp. 553 (CIT 1989), and Silver Reed

et. al. v. United States, 669 F.Supp 291

(CIT 1988)). In our preliminary results,

which were published prior to the CIT’s

determination in Timken, we

considered NTN’s LOT-specific

allocations of its home market expenses

in exhibit C–5 to indicate that NTN

actually incurred these expenses

differently due to a difference in LOT.

As a result, we considered the LOT

differences NTN reported in exhibit C–

5 for certain home market indirect

selling expenses to constitute

quantitative evidence that NTN incurred

these indirect selling expenses

differently due to the difference in LOTs

and subsequently based our calculation

of NTN’s LOT adjustment on the

indirect selling expense differentials in

exhibit C–5. However, in light of (1)

Timken, (2) our determination that NTN

failed to provide evidence that its home

market expenses demonstrably varied

according to LOTs, and (3) our denial of

nearly all of NTN’s LOT-specific home

market and U.S. allocations in these

final results, we can not rely on NTN’s

LOT-specific allocations of certain of its

home market indirect selling expenses

alone as evidence that NTN actually

incurred these expenses differently due

to LOT differences. In addition, we can

not consider NTN’s exhibit C–5 home

market indirect selling expense

differentials as a reliable basis for a LOT

adjustment. Therefore, for these final

results we have eliminated from our

margin calculation for NTN the LOT

adjustment we allowed in our

preliminary results.

Comment 33: Timken states that

NSK’s response indicates that it did not

include inventory write-offs and writedowns for damaged or obsolete

merchandise in its reported COP.

Timken asserts that, because the

Department considers inventory writeoffs/write-downs as part of COP, the

Department should revise NSK’s

reported COP to include these costs.

NSK contends that its inventory

write-off/write-down methodology has

been the same for decades and is in

accordance with the Japanese Generally

Accepted Accounting Principles

(GAAP). Furthermore, NSK argues, its

inventory write-offs and write-downs

have no relation to the cost of producing

the subject merchandise. Finally, NSK

asserts, even if the Department should

agree with Timken, it still should not

include these costs in COP because the

effect of any such inclusion would be de

minimis.

Department’s Position: We agree with

Timken. We regard NSK’s inventory

write-offs and write-downs as part of the

fully-absorbed cost of goods sold which

should be included in the calculation of

COP (see, e.g., AFBs 94–95 at 2117).

Therefore, for these final results we

have included both NSK’s inventory

write-offs and write-downs in its

reported COP.

Comment 34: Timken argues that

NSK’s response indicates that NSK did

not include idled asset depreciation as

an element of its production costs.

Timken asserts that, because the

Department has an established practice

of adjusting a respondent’s cost data to

reflect depreciation on idled assets, if,

as under the Japanese GAAP, the

respondent does not report this

depreciation as an element of its

production costs, the Department

should revise NSK’s reported COP and

CV by including an amount for NSK’s

idled asset depreciation. In addition,

Timken contends, because NSK did not

report the amount of its idled asset

depreciation, the Department should

use as BIA the highest idled asset
20610 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

depreciation reported by any other

respondent in the review.

NSK argues that, because it has

already accounted for its idled asset

depreciation in its reported cost of

manufacturing (COM), it is unnecessary

for the Department to make any

adjustment to its reported COP and CV.

Department’s Position: We agree with

NSK. It is evident from NSK’s response

that it included an amount for idle-asset

depreciation in its COM. Therefore, for

these final results it is unnecessary for

us to modify NSK’s reported COP and

CV to reflect this depreciation.

Comment 35: Timken asserts that,

because (1) it is the Department’s

practice to allow offsetting interest

income only if it is related to COP and

(2) NSK has failed to demonstrate that

its reported interest income is related to

normal production, the Department

should revise NSK’s reported financing

expenses by disallowing NSK’s claimed

interest income offset.

NSK contends that its interest income

offset is appropriate because its shortterm interest is generated by short-term

investment of its working capital.

Therefore, NSK argues, in accordance

with the Department’s policy to accept

interest income offsets when the offset

is attributed to short-term investments

of working capital, the Department

should adhere to its preliminary results

determination and continue to accept

NSK’s claimed offset.

Department’s Position: We agree with

NSK. We have determined in past AFB

reviews that NSK’s business records do

not separately report the short-and longterm nature of the interest income

earned by the company and its

subsidiaries and that its alternative

calculation of its income offset

reasonably reflects short-term interest

income related to production activities

and the investment of working capital

(see AFBs 93–94 at 66495 and AFBs 94–

95 at 2118). Because there is nothing on

the record in these TRBs reviews to

suggest that NSK has altered its

reporting methodology or that its

claimed interest income offset is no

longer attributed to short-term

investments of working capital, we have

not altered NSK’s reported financing

expenses for these final results.

Comment 36: Timken argues that,

because NSK failed to include in its

reported COP and CV an amount

reflecting NSK’s losses and gains on the

disposal of fixed assets, the Department

should revise NSK’s reported COP and

CV to include these amounts.

NSK argues that, because gains and

losses as a result of the disposal of fixed

assets are not related to its production,

the Department correctly concluded in

its preliminary results that these

extraordinary losses and gains should

not be included in COP.

Department’s Position: We regard

gains and losses as a result of the

disposal of fixed assets as a normal cost

of production (see, e.g., AFBs 94–95 at

2118). Based on our review of NSK’s

response, we have found no evidence to

suggest that NSK’s gains and losses were

unrelated to the general production

activity of NSK overall. Therefore, we

have included this amount as a general

expense and recalculated NSK’s

reported COP and CV accordingly.

5. Clerical and Computer Programming

Errors

Comment 37: Timken asserts that, as

NTN’s preliminary margin calculation

computer printouts demonstrate, the

Department apparently erred when

uploading NTN’s U.S. database such

that the values for several U.S. variables

were misaligned. As a result, Timken

contends, the U.S. database the

Department relied upon to calculate

NTN’s 1993–94 margin contains

variables for which the wrong values

have been reported.

Department’s Position: We agree with

Timken and have corrected these errors

for these final results.

Comment 38: Timken argues that,

while the Department properly

determined that certain of Koyo’s sales

to related home market customers were

not at arm’s length, when transcribing

the results of its arm’s-length test to its

margin calculation computer program

for Koyo in order to exclude non-arm’slength sales from its analysis, the

Department failed to include the codes

for all customers who had sales which

were not at arm’s length.

While Koyo agrees with Timken that

the Department incorrectly transcribed

the results of its arm’s-length test to its

margin calculation program, it argues

that Timken’s proposed method for

correcting this error only addresses half

of the problem. Koyo asserts that

Timken only identifies the error as the

Department’s failure to exclude those

sales to certain customers which did not

pass the arm’s-length test. However,

Koyo argues, the Department also

excluded certain customer codes in its

margin calculation program which

should have been included on the basis

that the sales to these customers were

found by the Department to be at arm’s

length. Koyo contends that the

Department’s errors are apparently due

to the Department’s transcribing the

results of the arm’s-length test for the

A–588–054 review to the A–588–604

portion of the margin calculation

program. In addition, Koyo asserts, the

Department also made certain keypunch

errors when transferring customer codes

from the arm’s-length test to the margin

calculation computer program and it

should correct these errors as well.

Department’s Position: We agree with

Koyo. For both the 1992–93 and 1993–

94 reviews of both TRBs cases we

conducted an arm’s-length test for Koyo

to determine those home market related

customers to which Koyo’s sales were

not at arm’s length. In our analysis we

determined these customers for each

TRBs case in each review period.

Because we used computer programs

separate from our margin calculation

computer programs for Koyo, it was

necessary to transcribe the results of the

arm’s-length tests for each case in each

review period to the corresponding

portions of our margin calculation

programs. However, when doing so, we

inadvertently transcribed the arm’slength test results for the 1992–93 A–

588–054 review to the 1992–93 A–588–

604 portion of our margin calculation

computer program. We made the same

error for the 1993–94 reviews as well.

This resulted in the inaccuracies both

Koyo and Timken describe in their

comments above. For these final results

we have corrected this error by

transcribing the results of our arm’slength test for each case in each review

period to the appropriate sections of our

margin calculation computer programs.

In addition, we agree with Koyo that we

also made other keypunch errors when

entering certain customer codes in our

margin calculation programs, and we

have corrected these errors for these

final results as well.

Comment 39: Koyo argues that, in

accordance with the Department’s

practice of correcting inadvertent errors

in a respondent’s response, provided

that these errors are obvious from the

administrative record and the

Department is able to verify the correct

information, the Department should

correct two errors which occurred

within Koyo’s reported computer

databases.

First, Koyo explains, in its 1992–93

and 1993–94 computer tape files for

U.S. further-manufactured sales, it

erroneously reported a fixed adjustment

amount for its ocean freight and marine

insurance. Koyo contends that, as a

result, it reported the identical ocean

freight and marine insurance amount for

every transaction contained in this file.

Koyo contends that, in its narrative

responses, it clearly explained that its

intention was to calculate these

adjustment amounts by applying its

calculated ocean freight allocation ratio

to the net weight it reported for each

individual transaction and its marine
Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices 20611

2No shipments or sales subject to this review.

The firm has no rate from any prior segment of this

proceeding.

insurance allocation ratio to the CIF

value it reported for each individual

transaction. Koyo argues that this

methodology would clearly result in a

different amount being reported for each

transaction. Therefore, Koyo asserts, it is

obvious that it made an error in these

two adjustments when compiling its

U.S. further-manufacturing databases.

Furthermore, citing the Department’s

1992–93 home market sales verification

report dated November 22, 1995, Koyo

contends that the Department clearly

verified that Koyo’s intention was

always to calculate these two

adjustments using its reported

allocation ratios.

Koyo argues that it also inadvertently

misreported the nomenclature for one

A–588–054 TRB cone which was sold as

part of a set in the home market during

the 1993–94 POR. Koyo asserts that,

after examining the nomenclature of the

nine TRBs sets most similar to the TRB

set containing this cone, it is apparent

that a keypunch error resulted in the

incorrect product code being entered

into the computer databases for this

cone.

Department’s Position: Pursuant to

the CAFC’s decision in NTN Bearing

Corp. v. United States, 74 F.3d 1204

(Fed. Cir. 1995), we will correct alleged

clerical errors made by a respondent if

the following conditions are met: (1)

The error in question must be

demonstrated to be a clerical error, not

a methodological error, an error in

judgment, or a substantive error; (2) the

Department must be satisfied that the

corrective documentation provided in

support of the clerical error allegation is

reliable; (3) the respondent must have

availed itself of the earliest reasonable

opportunity to correct the error; (4) the

clerical error allegation, and any

corrective documentation, must be

submitted to the Department no later

than the due date of the respondent’s

administrative case brief; (5) the clerical

error must not entail a substantial

revision of the response; and (6) the

respondent’s corrective documentation

must not contradict information

previously determined to be accurate at

verification (see Certain Fresh Cut

Flowers From Columbia; Final Results

of Antidumping Duty Administrative

Reviews, 61 FR 42833 (August 19,

1996)).

Concerning Koyo’s claim that it erred

when reporting its ocean freight and

marine insurance adjustments in its U.S.

further-manufacturing computer tape

sales file, we have determined that, not

only is the error obvious from the record

in existence prior to Koyo’s submission

of its pre-hearing case brief, but Koyo’s

allegation clearly meets each of the six

conditions outlined above. Therefore,

we have corrected this error for these

final results.

In regard to Koyo’s nomenclature

error, we have examined the argument

and documentation submitted by Koyo

in its case brief, and have again found

that each of the six conditions described

above were met. Therefore, we have also

corrected this error for these final

results.

Comment 40: Timken argues that,

when calculating the amount of home

market value-added tax (VAT) to be

used when calculating NSK’s VAT

adjustment, the Department used

computer programming language which

resulted in the calculation of inaccurate

home market VAT values.

Department’s Position: We agree with

Timken and have corrected this error for

these final results.

Final Results of Review

Based on our review of the arguments

presented above, for these final results

we have made changes in our margin

calculations for NTN, Koyo, and NSK.

All of our Prelim Results determinations

concerning the application of BIA, no

shipments, and the termination of

reviews remain unchanged for these

final results (see Prelim Results at

25201–25202).

As a result of our comparison of USP

to FMV, we have determined that the

following margins exist for Koyo for the

period October 1, 1992, through

September 30, 1993:

For the A–588–054 Review

Manufacturer/Exporter and Margin:

Koyo Seiko—38.07%

For the A–588–604 Review

Koyo Seiko—40.12%

In addition, we have determined that

the following margins exist for the

period October 1, 1993, through

September 30, 1994 for the following

firms:

For the A–588–054 Review

Manufacturer/Reseller/Exporter and

Margin:

Koyo Seiko—35.27%

Nachi—47.63%

NSK—11.25%

Fuji—6.04%

Kawasaki—47.63%

Yamaha—47.63%

MC International—2.36%

Maekawa—47.63%

Toyosha—47.63%

Nigata Converter—47.63%

Suzuki—47.63%

For the A–588–604 Review

NTN—20.80%

Koyo Seiko—41.04%

Nachi-Fujikoshi Corp.—40.37%

NSK—12.78%

Fuji—ll2

Kawasaki—40.37%

Yamaha—40.37%

MC International—ll2

Maekawa—40.37%

Toyosha—40.37%

Nigata Converter—40.37%

Suzuki—40.37%

Showa Seiko—ll2

Daido—40.37%

Ichiyanagi Tekko—40.37%

Kawada Tekkosho—40.37%

Asakawa Screw Co.—40.37%

Isshi Nut—40.37%

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

USP and FMV may vary from the

percentages stated above. The

Department will issue appraisement

instructions on each exporter 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, as

provided for by section 751(a)(1) of the

Tariff Act:

(1) The cash deposit rates for

Kawasaki, Nigata, Suzuki, and Yamaha

for the A–588–054 case and Kawasaki,

Yamaha, Nigata, and Suzuki for the A–

588–604 case are those rates we

determined for these firms for our

administrative reviews of the October 1,

1994, through September 30, 1995

period for both the TRBs finding and

order (see 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 Termination in Part, 62 FR

11825, 11843 (March 13, 1997) (TRBs

1994–95). The cash deposit rates for

Koyo, NSK, Fuji, and MC International

in the A–588–054 case and for NTN,

NSK, and Koyo in the A–588–604 case

are the rates we determined for these

firms for our recently published

administrative reviews of the October 1,

1995, through September 30, 1996

period for both the TRBs finding and

order (TRBs 1995–96). The cash deposit

rates for all other firms listed above will

be the rates outlined above;

(2) For previously reviewed or

investigated companies not listed above
20612 Federal Register / Vol. 63, No. 80 / Monday, April 27, 1998 / Notices

and not listed in TRBs 1994–95 or TRBs

1995–96, 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 these reviews, a prior review,

or the original less-than-fair-value

(LTFV) investigations, but the

manufacturer is, the cash deposit rate

will be the rate established for the most

recent period for the manufacturer of

the merchandise;

(4) If neither the exporter nor the

manufacturer is a firm covered in these

or any previous reviews conducted by

the Department, the cash deposit rate for

the A–588–054 finding will be 18.07

percent and 36.52 percent for the A–

588–604 order (see Preliminary Results

of Antidumping Duty Administrative

Reviews; 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, 58 FR 51058 (September

30, 1993)).

The cash deposit rate has been

determined on the basis of the selling

price to the first unrelated customer in

the United States. For appraisement

purposes, where information is

available, the Department will use the

entered value of the merchandise to

determine the assessment rate. In the

case of Fuji, the Department will

calculate an assessment rate in the A–

588–054 case which reflects the total

value of that merchandise which we

deemed to meet the criteria of the

‘‘Roller Chain’’ principle.

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 a 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). 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.

These administrative reviews 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: April 15, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–10570 Filed 4–24–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

University of California, San Diego;

Notice of Decision on Application for

Duty-Free Entry of Scientific

Instrument

This decision is made pursuant to

Section 6(c) of the Educational,

Scientific, and Cultural Materials

Importation Act of 1966 (Pub. L. 89–

651, 80 Stat. 897; 15 CFR part 301).

Related records can be viewed between

8:30 A.M. and 5:00 P.M. in Room 4211,

U.S. Department of Commerce, 14th and

Constitution Avenue, N.W.,

Washington, D.C.

Docket Number: 98–008. Applicant:

University of California, San Diego, La

Jolla, CA 92093–0359. Instrument:

Imaging Plate X-ray Detector for Protein

Crystallography. Manufacturer: MAR

Research, Germany. Intended Use: See

notice at 63 FR 11870, March 11, 1998.

Comments: None received. Decision:

Approved. No instrument of equivalent

scientific value to the foreign

instrument, for such purposes as it is

intended to be used, is being

manufactured in the United States.

Reasons: The foreign instrument

provides:

(1) High efficiency detection of

molybdenum Kα x-rays at resolution to

0.12nm and (2) exposure time of just 90s

allowing use of a single imaging plate

under computer control and data

readout. The Stanford Synchrotron

Radiation Laboratory advised April 15,

1998 (1) these capabilities are pertinent

to the applicant’s intended purpose and

(2) it knows of no domestic instrument

or apparatus of equivalent scientific

value to the foreign instrument for the

applicant’s intended use.

We know of no other instrument or

apparatus of equivalent scientific value

to the foreign instrument which is being

manufactured in the United States.

Frank W. Creel,

Director, Statutory Import Programs Staff.

[FR Doc. 98–10996 Filed 4–24–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

Application for Duty-Free Entry of

Scientific Instrument

Pursuant to Section 6(c) of the

Educational, Scientific and Cultural

Materials Importation Act of 1966 (Pub.

L. 89–651; 80 Stat. 897; 15 CFR part

301), we invite comments on the

question of whether an instrument of

equivalent scientific value, for the

purposes for which the instrument

shown below is intended to be used, is

being manufactured in the United

States.

Comments must comply with 15 CFR

301.5(a)(3) and (4) of the regulations and

be filed within 20 days with the

Statutory Import Programs Staff, U.S.

Department of Commerce, Washington,

D.C. 20230. Application may be

examined between 8:30 A.M. and 5:00

P.M. in Room 4211, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C.

Docket Number: 98–021. Applicant:

University of California, Berkeley,

Berkeley, CA 94720. Instrument:

Electron Neutralizer. Manufacturer:

Gammadata-Scienta, Sweden. Intended

Use: The instrument is intended to be

used for the study of the phenomena of

superconductivity in high critical

temperature materials during angleresolved experiments. The objective of

these investigations is to study the

electron structure and physical

properties of superconducting materials.

In addition, the instrument will be used

to train graduate students in their thesis

research. Application accepted by

Commissioner of Customs: April 7,

1998.

Frank W. Creel,

Director, Statutory Import Programs Staff.

[FR Doc. 98–11147 Filed 4–24–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

[C–508–605]

Industrial Phosphoric Acid from Israel;

Amended Final Results of

Countervailing Duty Administrative

Review.

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce

ACTION: Notice of amended final results

of countervailing duty administrative

review.

SUMMARY: On March 20, 1998, the

Department of Commerce published in