Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3617

obligation. The CIT’s decisions on

August 20, 1993, March 4, 1994, and

May 24, 1994 constitute decisions not in

harmony with the Department’s final

results.

Pursuant to the decision in Timken,

the Department will continue the

suspension of liquidation of the subject

merchandise pending the later of the

expiration of the period for appeal or

the conclusion of any appeal. Further,

absent an appeal, or, if appealed, upon

a ‘‘conclusive’’ court decision affirming

the CIT’s opinion, the Department will

amend the final affirmative results of

the first administrative review of the

antidumping duty order on antifriction

bearings (other than tapered roller

bearings) and parts thereof from

Germany to reflect the amended margins

of the Department’s redeterminations on

remand, which were affirmed by the

CIT.

Dated: January 9, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–1214 Filed 1–17–95; 8:45 am]

BILLING CODE 3510–DS–P

[A–401–601]

Brass Sheet and Strip From Sweden;

Final Results of Antidumping

Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

review.

SUMMARY: On March 23, 1994, the

Department of Commerce (the

Department) published the preliminary

results of its 1991–92 administrative

review of brass sheet and strip from

Sweden. The review covers exports of

this merchandise to the United States by

one manufacturer/exporter, Outokumpu

Copper Rolled Products AB (OAB),

during the period March 1, 1991

through February 29, 1992. The review

indicates the existence of dumping

margins for this period.

We gave interested parties an

opportunity to comment on our

preliminary results. Based on our

analysis of the comments received, we

have adjusted OAB’s margin for these

final results.

EFFECTIVE DATE: January 18, 1995.

FOR FURTHER INFORMATION CONTACT:

Valerie Turoscy, Chip Hayes, or John

Kugelman, Office of Antidumping

Compliance, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW.,

Washington, DC 20230; telephone: (202)

482–5253.

SUPPLEMENTARY INFORMATION:

Background

On March 23, 1994, the Department

published in the Federal Register the

preliminary results of its 1991–92

administrative review of the

antidumping duty order on brass sheet

and strip from Sweden (59 FR 13698).

The Department has now completed this

administrative review in accordance

with section 751 of the Tariff Act of

1930, as amended (the Act).

Scope of the Review

Imports covered by this review are

sales or entries of brass sheet and strip,

other than leaded and tinned brass sheet

and strip, from Sweden. The chemical

composition of the products under

review is currently defined in the

Copper Development Association

(C.D.A.) 200 Series or the Unified

Numbering System (U.N.S.) C20000

series. This review does not cover

products the chemical compositions of

which are defined by other C.D.A. or

U.N.S. series. The merchandise is

currently classified under Harmonized

Tariff Schedule (HTS) item numbers

7409.21.00 and 7409.29.20. The HTS

item numbers are provided for

convenience and Customs purposes.

The written description remains

dispositive.

The review period is March 1, 1991

through February 29, 1992. The review

involves one manufacturer/exporter,

OAB.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results. At the request of

OAB, we held a hearing on May 9, 1994.

We received case and rebuttal briefs

from OAB and from the petitioners,

Hussey Copper, Ltd., The Miller

Company, Olin Corporation-Brass

Group, and Revere Copper Products,

Inc.

Comments are addressed in the

following order:

1. Value Added Tax (VAT) Adjustment

Methodology

2. Unpaid U.S. Sales

3. Model Match Methodology

4. Clerical and/or Programming Errors

VAT Adjustment Methodology

Comment 1: OAB argues that the

Department’s current VAT adjustment

methodology, in which the Department,

in its calculation of United States price

(USP), applies the home market ad

valorem VAT rate to USP, results in a

‘‘multiplier effect’’ which serves to

artificially inflate the respondent’s

antidumping margin. OAB requests that

the Department alter its methodology for

the final results of review in accordance

with footnote 4 of the United States

Court of Appeals for the Federal

Circuit’s (Federal Circuit) decision in

Zenith Electronics Corp. v. United

States, 988 F.2d 1573, 1577 (Fed. Cir.

1993) (Zenith) and the Court of

International Trade’s (CIT) decision in

Hyster Co. v. United States, CIT Slip Op.

94–34, Court No. 93–03–00133 (March

1, 1994) at 11 (Hyster), and eliminate the

‘‘multiplier effect’’ by applying the

actual home market VAT amount rather

than the ad valorem home market VAT

rate to USP. Citing Zenith, OAB claims

that the Federal Circuit, in footnote 4 of

this decision, clearly indicated that the

Department is free to eliminate the

multiplier effect by applying to USP the

actual home market VAT amount.

Furthermore, OAB points out that such

a methodology has also been recognized

in Hyster, in which the CIT, relying on

footnote 4 of Zenith, upheld the

Department’s earlier application of the

actual home market VAT amount to

USP. OAB also contends that while the

CIT in Federal-Mogul Corporation and

the Torrington Company v. United

States, 813 F. Supp. 856 (October 7,

1993) (Federal-Mogul), elected to

disregard the position of the Federal

Circuit in footnote 4 of Zenith, the

Federal-Mogul decision has been

appealed, and, absent any final

statement by the Federal Circuit on this

issue, the Federal-Mogul view of

footnote 4 is entitled to little, if any,

weight (Federal-Mogul Corp. v. United

States, Court No. 94–1097 (Federal

Circuit), and Federal-Mogul Corp. v.

United States, Court No. 94–1104

(Federal Circuit)).

Next, OAB argues that because the

Department’s current VAT methodology

serves to artificially inflate the

respondent’s antidumping margin, it

violates the Department’s obligation

under section 722(d)(1)(c) of the Act to

protect against the creation or inflation

of dumping margins due to taxes

assessed on home market sales but

forgiven on export sales, and the

Department’s obligation to calculate fair

and accurate margins (see Koyo Seiko,

Ltd. v. United States, 14 CIT 680, 746 F.

Supp. 1108, 1110 (1990), and

Oscillating Ceiling Fans from the

People’s Republic of China, 56 FR

55271, 55275). Finally, OAB contends

that because the Department’s VAT

methodology subjects countries with
3618 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

higher VATs, such as Sweden, to

disproportionately and artificially

higher dumping margins than countries

with lower VATs, the methodology is

clearly discriminatory, and, as such,

constitutes a violation of the

Department’s obligation pursuant to

Articles I and VI of the General

Agreement on Tariffs and Trade (GATT)

to collect antidumping duties on a nondiscriminatory basis.

Citing section 722(d)(1)(c) of the Act,

the petitioners state that the plain

language of this section requires that the

amount of taxes to be added to USP is

the amount of taxes that would be

imposed upon the exported

merchandise, not the home market

merchandise. Furthermore, the

petitioners argue that OAB has

misinterpreted both Zenith and Hyster.

The petitioners claim that the Federal

Circuit, in Zenith, despite footnote 4,

clearly recognized that the legislative

intent of the statute was not to eliminate

the multiplier effect. Rather, the

multiplier effect was recognized by the

Federal Circuit to be the direct result of

Congress’ intent that the USP tax

adjustment was to be based on the

amount of taxes forgiven on the

exported merchandise. Petitioners also

contend that not only did the CIT

correctly determine that footnote 4 of

Zenith was contrary to the statute, but

the CIT, in Hyster, did not uphold a tax

methodology based on footnote 4 of

Zenith. Rather, petitioners state that the

CIT only remanded the VAT issue to the

Department, which on remand applied

the same VAT methodology used in the

preliminary results for this

administrative review (see the

Department’s April 11, 1994, Remand

Results in Hyster Co. v. United States,

Court No. 92–03–00133). Petitioners

contend that in another case, Avesta

Sheffield, Inc. v. United States, 18 CIT

llll, Slip Op. 94–53 (March 31,

1994) (Avesta), the CIT speaks more

clearly to the VAT issue. The CIT, as in

Hyster, remanded the VAT issue to the

Department, but in Avesta the CIT

directly instructed the Department to

apply to USP the home market VAT rate

rather than the actual amount of home

market tax. The petitioners comment

that, on remand, the Department

complied with these instructions and

again applied the same methodology as

used in the preliminary results for this

administrative review (see Avesta

Sheffield, Inc. v. United States, 17 CIT

llll, 838 F. Supp. 608, 615 (1993)

and Avesta at 2). Petitioners argue that

the Department’s application of the ad

valorem home market VAT rate is

therefore lawful and in direct accord

with the language and legislative intent

of section 722(d)(1)(c) of the Act. As a

result, the Department should not alter

its VAT adjustment methodology for the

final results of review, but rather should

rely on its current methodology in

accordance with Federal-Mogul, Avesta,

and the body of the Zenith decision.

Department’s Position: We agree with

the petitioners. In addressing the

treatment of taxes under existing U.S.

law, the CIT in Federal-Mogul rejected

the Department’s VAT methodology of

adding the actual home market VAT

amount to USP and held that the

adjustment to USP for imputed tax

should be calculated by applying the

foreign market tax rate to USP (see

Federal-Mogul at 12). In addition, the

CIT explicitly rejected a VATadjustment methodology based on

adding the actual amount of the home

market tax to USP stating that such an

approach ‘‘is clearly at odds with the

body of Zenith and the language of the

statute.’’ The Department has conformed

its current practice to the CIT’s decision

in Federal-Mogul, and the CIT has

upheld this approach in Torrington Co.

v. United States, 854 F. Supp. 446

(1994), Independent Radionic Workers

of America v. United States, Slip Op.

94–144 (CIT 1994), Zenith Electronics

Corp. v. United States, Slip Op. 94–148

(CIT 1994), Samsung Electronics Co.,

Ltd. v. United States, Slip Op. 94–146

(CIT 1994), and Zenith Electronics Corp.

v. United States, Slip Op. 94–146 (CIT

1994).

In accordance with the CIT’s decision

in Federal-Mogul, we have multiplied

the foreign market tax rate by the price

of the U.S. merchandise at the same

point in the chain of commerce that the

foreign market tax was applied to

foreign market sales, and have added

the product to USP. In order to prevent

our methodology from creating dumping

margins where no margins would exist

if no taxes were levied upon foreign

market sales, we have also deducted

from the USP and FMV those portions

of the respective home market tax and

USP tax adjustments attributable to

expenses included in the foreign market

and U.S. bases of tax if we deduct those

expenses later to calculate FMV and

USP.

This margin creation effect is due to

the fact that the bases for calculating

both the amount of tax included on the

price of the foreign market merchandise

and the amount of the USP tax

adjustment include many expenses

which are later deducted when

calculating USP and FMV. After these

deductions are made, the amount of tax

included in FMV and the USP tax

adjustment still reflects the amounts of

these expenses. Thus a margin may be

created that is not dependent upon a

difference between adjusted USP and

FMV, but is the result of differences

between the expenses in the United

States and the home market that were

deducted through expenses. The

Department’s policy to avoid the margin

creation effect is in acccordance with

the Federal Circuit’s statement that the

USP tax adjustment should not create an

antidumping margin if pre-tax FMV

does not exceed USP. (See Zenith at

1,581.) In addition, the CIT has

specifically held that an adjustment

should be made to mitigate the impact

of the expenses that are deducted from

FMV and USP upon the USP tax

adjustment and the amount of tax

included in FMV. (See Daewoo

Electronics Co., Ltd. v. United States,

760 F. Supp. 200, 208 (CIT 1991)

(Daewoo).) However, the mechanics of

our adjustment to the USP tax

adjustment and the foreign market tax

amount as described above is not

identical to those suggested in Daewoo.

In sum, we believe that the

application of the home market VAT

rate to USP and the subsequent

adjustment of expenses addresses the

concerns of the courts regarding the

adjustment of USP for VAT under

section 772(d)(1)(C) of the Act.

Finally, while the GATT requires that

we treat all member countries equally in

trade matters, there is no requirement

under the GATT that the results of our

actions affect each country equally.

Since the adoption of this VAT

adjustment methodology, we have

applied the same methodology in each

case regardless of the country or

respondent involved. Therefore, our

methodology is not discriminatory but

rather is applied equally to all

antidumping duty administrative review

proceedings (see, e.g., Color Television

Receivers from the People’s Republic of

Korea; Final Results of Antidumping

Administrative Review, 59 FR 13701

(March 23, 1994)).

Comment 2: OAB contends that the

Department’s recent change in its VAT

adjustment methodology is premature

and in violation of the Administrative

Procedure Act (APA) (5 U.S.C. 551).

OAB argues that before making such a

fundamental change to an established

practice, the Department must conduct

a rule-making procedure in accordance

with the APA (see Carlisle Tire and

Rubber Co. v. United States, 634 F.

Supp. 419 (CIT 1986) (Carlisle), and

IPSCO, Inc. v. United States, 687 F.

Supp. 614 (CIT 1988) (IPSCO)). OAB

further contends that because the

Department’s new VAT rule is clearly

subject to the requirements of 5 U.S.C.
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3619

533 (b) and (c), and because it does not

constitute an ‘‘interpretive rule’’ or

‘‘general statement of policy,’’ both of

which constitute exceptions to the

APA’s rule-making procedures, the

Department should have published in

the Federal Register an advance notice

of its proposed VAT methodology and

should have given interested parties an

opportunity to comment. OAB argues

that by not doing so, the Department has

violated 5 U.S.C. 533 and should

postpone issuance of final results of this

administrative review pending

completion of the APA rule-making

procedures.

Petitioners state that, contrary to

OAB’s arguments, the Department’s

method for adjusting for VAT

constitutes an interpretive policy

designed to implement and interpret

section 722(d)(1)(c) of the Act.

Petitioners contend that Carlisle and

IPSCO represent two cases in which the

Department, for administrative

purposes, created rules that had no basis

in the statute. As a result, rule-making

procedures were in order. Petitioners

claim that the Department’s VAT

adjustment methodology was developed

specifically to implement section

722(d)(1)(c) of the Act, and, as a result,

is an interpretive rule which serves to

clarify or explain existing law, rather

than create new law, rights, or duties

(see Timken Co. v. United States, 11 CIT

786, 673 F. Supp. 495, 514 (1987)

(Timken), citing Cabia v. Egger, 690

F.2d 234, 238 (D.C. Cir. 1982)). As such,

it constitutes an exception to the APA’s

rule-making procedures. Petitioners

argue that the Department is, therefore,

not in violation of 5 U.S.C. 533 and that

APA rule-making procedures are

unwarranted in this case.

Department’s Position: We agree with

the petitioners. The Department’s VAT

adjustment methodology was developed

in accordance with the CIT’s decision in

Federal-Mogul in which the CIT held

that the addition to USP under section

772(d)(1)(c) of the Act should be the

result of applying the foreign market tax

rate to the price of the U.S.

merchandise. As a result, our VAT

methodology represents a methodology

developed by the Department for the

purpose of implementing section

722(d)(1)(c) of the Act in accordance

with the CIT’s decision in FederalMogul. Unlike the methodologies

contested in Carlisle and IPSCO, our

VAT adjustment methodology does not

create a new rule, right, duty, law, or

standard. Rather, our VAT methodology,

because it interprets the law, is not

subject to the APA (Cf. Timken, 11 CIT

at 514, agreeing with the Department

that its 10–90–10 sales- below-cost

methodology was not subject to the APA

since it interpreted current law rather

than made new law). The Department’s

methodology is the means by which we

interpret, implement, and administer

section 722(d)(1)(c) of the Act, not a

new rule or law.

Comment 3: OAB contends that, if the

Department does not alter its VAT

methodology, it should change the way

in which it determines the amount of

antidumping duties to be assessed on

merchandise subject to this

administrative review. Respondent

argues that when assessing duties on

imports of brass sheet and strip from

Sweden, the Department, rather than

relying on its current assessment

methodology, should apply the ad

valorem margin to the actual entered

value, which is not inflated by the VAT.

OAB points out that not only is there no

case law prohibiting such an assessment

approach, but this approach would also

eliminate the artificial inflation of

respondent’s margins caused by the

Department’s current VAT

methodology. OAB concludes by stating

that the Department would thereby meet

its fundamental obligation to calculate

fair and accurate margins.

Petitioners argue that the assessment

methodology proposed by the

respondent is simply another method by

which the multiplier effect can be

eliminated from the Department’s

margin calculations and by which tax

neutrality can be achieved. As such, this

assessment approach would be in

violation of section 722(d)(1)(c) of the

Act and contrary to both Zenith and

Federal-Mogul for the same basic

reasons as argued in Comment 1.

Petitioners contend that the Department

should, therefore, reject OAB’s

argument and not alter its assessment

methodology.

Department’s Position: We disagree

with the OAB’s contention that if we do

not alter our VAT adjustment

methodology, we should then ensure

that our assessment methodology

eliminates the multiplier effect. As

explained by the Federal Circuit in

Zenith, it was not the intent of Congress

to eliminate the multiplier effect or for

the Department to seek tax neutrality.

Rather, the exporters themselves, by

engaging in dumping, are responsible

for any artificial inflation of their

dumping margins due to the operation

of section 722(d)(1)(c) of the Act.

Therefore, as the Federal Circuit has

held in Zenith, the elimination of the

multiplier effect is not necessary. The

Federal Circuit’s holding in Zenith is

just as applicable to our assessment

methodology as it is to our VAT

adjustment methodology or to any other

methodology used in our analysis that

can potentially be manipulated to

eliminate the multiplier effect.

Therefore, we will not adopt an

assessment policy, or any other

methodology, for the sole purpose of

eliminating any multiplier effect caused

by the application of our VAT

adjustment methodology.

Furthermore, our policy is to base

assessment on the entered value of

sales, and when we do not have the

entered value of sales, we will base

assessment on the total calculated USP.

Because we do not have entered value

of sales information for this review, we

will base the duties to be assessed on

imports of Swedish brass sheet and strip

on the total USP calculated from OAB’s

response.

Unpaid U.S. Sales

Comment 4: Petitioners claim that

during verification the Department

discovered that, due to financial

difficulties, one of OAB’s U.S.

customers has yet to pay OAB for

merchandise it purchased during the

review period and took delivery for, and

that OAB has left its books open for

these unpaid sales. In addition, the

petitioners point out that when the

Department requested that OAB identify

these unpaid U.S. sales, OAB stated that

it would be too difficult to accomplish

during the verification (see the

Department’s Home Market Verification

Report for OAB (March 9, 1994)

(Verification Report)). Petitioners

contend that because the Department

was unable to completely verify these

sales, because at verification these sales

had not yet been paid for, and because

there is no evidence on the record that

OAB has since received payment for

this merchandise, the Department

should not rely on OAB’s reported

invoice prices for these unpaid sales.

Rather, because OAB failed in its

questionnaire responses to report that

there were problems with these sales

and failed to identify these sales at

verification, petitioners urge the

Department to follow its past practice in

similar circumstances. Specifically, the

petitioners argue that, as complete BIA

for these unpaid U.S. sales, the

Department should use the highest

calculated margin for an individual sale

subject to the administrative review, as

it did in Certain Stainless Steel Cooking

Ware from the Republic of Korea; Final

Results of Antidumping Duty

Administrative Review, 56 FR 38114

(1991) (SS Cooking Ware).

Petitioners also contend that if the

Department decides to base USP on

OAB’s reported invoice prices for its

unpaid U.S. sales, then the Department
3620 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

should not rely on OAB’s reported

fictional payment dates and fictional

payment periods and should reject the

credit expense amounts OAB claimed

for its unpaid U.S. sales. Petitioners

argue that the Department should follow

its past practice and recalculate OAB’s

credit expense for these unpaid sales

using as partial BIA the date of the

notice of the final results for this

administrative review as the date of

payment (see Certain Hot-Rolled Carbon

Steel Flat Products, Certain Cold-Rolled

Carbon Steel Flat Products, and Certain

Cut-to-Length Carbon Steel Plate from

Belgium; Final Determinations of Sales

at Less than Fair Value, 58 FR 37083,

37087 (July 9, 1993) (Belgian Steel), and

Certain Stainless Steel Wire Rods from

France; Final Determination of Sales at

Less than Fair Value, 58 FR 68865,

68871 (December 29, 1993) (SS Wire

Rods)).

OAB contends that there is no

justification for the application of either

complete or partial BIA to these unpaid

sales. First, OAB argues that because the

cases cited by petitioners involve

entirely different facts than those in the

case at hand, they are inappropriate

precedents. Not only did SS Cooking

Ware, Belgian Steel, and SS Wire Rod

not involve sales to bankrupt customers,

but in all three cases respondents either

failed to report any data whatsoever

regarding unpaid sales or they failed to

provide an explanation as to why

payment had not been received on those

sales. OAB contends that it has

responded to all information requests

regarding U.S. sales, has reported

invoice prices which were successfully

verified by the Department, and has

provided a clear explanation why its

sales to a certain U.S. customer are still

unpaid. Furthermore, OAB points out

that SS Cooking Ware involved unpaid

sales which constituted an entire

market, whereas the unpaid sales in this

case only represent a limited number of

sales to a single customer, not sales to

an entire market. Furthermore, OAB

argues that the prerequisites for the use

of BIA, as outlined in sections 776 (b)

and (c) of the Act and the Department’s

regulations implementing section 776

(b) and (c), do not exist in this case, as

they did in the others cited by the

petitioners. Therefore, OAB contends

that the Department should not reject

the invoice prices, payment periods, or

credit expenses OAB reported for its

unpaid U.S. sales. Rather, citing various

decisions, OAB urges the Department to

act in accordance with its prior practice

in a variety of cases where a customer

failed to pay a respondent for

merchandise it purchased, accept the

reported invoice prices, and calculate

credit expenses for the unpaid sales

using an average credit period based on

similar sales or some other non-punitive

measure (see, e.g., New Minivans from

Japan; Final Determination of Sales at

Less than Fair Value, 57 FR 21937,

21945 (May 26, 1992)).

The respondent argues that the

Department’s use of the date of the final

results notice as the payment date for

unpaid sales in both the Belgian Steel

and SS Wire Rod original investigations

was not punitive, whereas such a

decision in this review would be

punitive. OAB explains that both of

these cases were original investigations,

which, unlike administrative reviews,

were of a shorter duration and subject

to stricter statutory deadlines. Because

this proceeding is not only an

administrative review, but an

administrative review that has taken

longer than normal to complete, a

decision by the Department to use the

date of the notice of the final results of

review as the payment date for these

sales would create some payment

periods in excess of three years, and as

such would result in an extremely

unwarranted punitive outcome.

Finally, the respondent contends that,

in accordance with the Federal Circuit’s

decision in Olympic Adhesives v.

United States, 899 F.2d 1573 (Fed. Cir.

1990) (Olympic Adhesives), to the extent

that the actual payment dates for these

unpaid sales do not exist, the

Department may not penalize OAB by

using as BIA payment dates which

would grossly distort any reasonable

credit calculation.

Department’s Position: We agree in

part with both the respondent and the

petitioners. Prior to verification OAB

had not indicated in its original

questionnaire response or its subsequent

supplemental responses that it had not

yet received payment for certain of its

U.S. sales to a particular customer. Nor

did OAB indicate that it had reported

estimated payment dates and

corresponding payment periods for

these unpaid sales, which it knew when

it submitted its questionnaire response

were not actual payment dates and

periods. It was only because one of the

sales we selected in the sales trace

portion of our verification happened to

be an unpaid U.S. sale that we

discovered at verification (1) that OAB

had unpaid U.S. sales, (2) that OAB had

reported estimated payment dates for

these sales and that these dates had

already passed without payment, (3)

that OAB had left its books open on

these sales, and (4) that one of OAB’s

U.S. customers had been unable to pay

OAB for merchandise it purchased

during the review period due to

financial difficulties (i.e., bankruptcy).

When we asked the respondent at

verification to identify all of its unpaid

U.S. sales, OAB indicated that only a

few sales to this bankrupt customer

were unpaid, and explained that it

would be too difficult to isolate these

sales in the time allotted for verification.

As a result, because we were only first

aware of the nature of these sales at

verification and because the respondent

was unable to identify these unpaid

sales at verification, we were unable to

verify the extent of these unpaid sales

and unable to verify the accuracy of

OAB’s explanation why the sales were

unpaid. However, by means of our sales

traces, we were able to verify some

limited information concerning sales to

the U.S. customer, such as the invoice

prices OAB reported for them. After

verification we conducted our own

analysis of OAB’s sales to this U.S.

customer and discovered that only one

sale did not have an estimated payment

date and corresponding estimated

payment period. As a result, we

determined that all but one of OAB’s

sales to this customer were unpaid.

Based on these facts, we disagree with

the respondent’s contention that the

prerequisites for the application of BIA

do not exist in this instance and that,

based on Olympic Adhesives, we cannot

use BIA for information that simply

does not exist. Although we recognize

that OAB included these sales in its

original U.S. sales listing, the fact

remains that OAB failed to inform us of

the nature of these sales, and failed to

inform us that the ‘‘estimated’’ payment

dates and payment periods it reported

were not actual payment dates and

periods. This, along with the fact that

OAB was unable to identify these sales

at verification and only first offered at

verification any explanation why these

sales were unpaid, impeded our ability

to accurately and completely verify

these sales. Therefore, because OAB

provided incomplete and inaccurate

information concerning the nature of

these sales, and because at verification

we were able to verify only a limited

amount of information concerning these

sales, we have determined for these

final results, in accordance with section

776(b) and 776(c) of the Act, that the

application of BIA to these sales is

warranted. Furthermore, Olympic

Adhesives is not applicable in this case

because the Department is not applying

BIA because OAB failed to provide nonexistent payment dates. Rather, we are

applying BIA because the payment

information OAB provided in its

questionnaire responses was incomplete
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3621

and inaccurate and because we were

unable to verify the extent of these

unpaid sales.

Although we have determined that

BIA is warranted in this case, we do not

agree with the petitioners’ contention

that we should reject the invoice prices

OAB reported for these sales and apply

as BIA the highest calculated margin for

any sale in the review. At verification

we were able to verify that the invoice

prices OAB reported for these sales

matched those on pro forma invoices,

on ‘‘call-off’’ invoices, and in OAB’s

ledgers. Because we are satisfied that

the prices reported and the prices we

observed are the same prices agreed to

by OAB and its customer, we have no

reason to question the accuracy of these

prices. As a result, for these final results

we have accepted OAB’s reported

invoice prices. In accordance with our

policy, we have determined that partial

BIA, based on a recalculation of the

payment periods and credit expenses

OAB reported for its unpaid U.S. sales,

is more appropriate and more in

accordance with the facts in this case.

Due to the differences in duration and

statutory deadlines between the

investigative and administrative review

processes, we disagree with the

petitioners’ contention that we should

use the date of the notice of the final

results of review as the date of payment.

Rather, because of the extended passage

of time between the actual sales being

reviewed and the conclusion of the

administrative review process, as

compared to the original investigative

process, we have determined that the

use of the last day of our verification as

the payment date for OAB’s unpaid

sales is reasonable. Based on the record

for this review, the last day of

verification is the last day that we can

determine with any certainty that these

sales were still unpaid and that OAB

was still extending credit to this

customer. Therefore, for these final

results we have determined to use for

the payment period for each unpaid

U.S. sale the time elapsed from the date

of shipment reported by OAB to the last

day of verification. Accordingly, we

have also recalculated the credit

expenses OAB reported for these unpaid

U.S. sales, based upon this payment

period.

Model Match Methodology

Comment 5: Petitioners contend that

length is the most important

distinguishing characteristic between

brass sheet and brass strip, and that if

the length of the merchandise sold is in

excess of 10 feet, the merchandise is

brass strip rather than brass sheet, and

should be identified accordingly.

Petitioners argue that because OAB has

not submitted any information regarding

the length of the merchandise it sold,

but instead has relied solely on width to

distinguish between sheet and strip, the

Department cannot be certain that OAB

properly identified the form of its sales

as brass sheet or brass strip. Petitioners

claim that the Department should

require OAB to substantiate its claim

that all of its U.S. sales were of brass

sheet. Petitioners argue that this is

especially important for this

administrative review because (1) the

Department, accepting OAB’s assertion

that all of its U.S. sales were of sheet,

in this review based its model matches

on only two criteria, alloy and gauge,

rather than on the four criteria, alloy,

gauge, width, and form, that it used in

previous administrative reviews of this

order, and (2) based on one of the pro

forma invoices contained in exhibit 2 of

the Department’s verification report, it

appears that OAB has misidentified a

U.S. strip sale as a sheet sale in its U.S.

sales listing. Therefore, petitioners infer

that by not using width and form, the

Department risks comparing sales of

sheet to sales of strip.

The petitioners state that because the

Department has the authority under 19

C.F.R. 353.31(b)(1) to request

information even after the preliminary

results of a review, the Department

should obtain information regarding the

length of all products sold by OAB

during the review period. In this way

the Department would be able to

determine with certainty whether all of

OAB’s U.S. sales were indeed sales of

brass sheet. The petitioners argue that,

based on the information the

Department receives from OAB

regarding product lengths, the

Department should then reexamine its

model matches to ensure that U.S. and

home market sales are properly

matched.

The respondent argues that there is

nothing on the record to substantiate the

petitioners’ claim that length is the most

important distinguishing characteristic

between brass sheet and strip or that

products in excess of 10 feet in length

are by definition strip and not sheet.

OAB contends that it has correctly

identified its sales as strip or sheet

based on the recognized industry

standard of whether the merchandise

was sold as cut-to-length or coiled. OAB

argues that as a result the Department

has properly relied on alloy and gauge

in its model matches, since only these

characteristics are necessary for

comparing sales of sheet. Because all of

OAB’s U.S. sales were of sheet, the

Department correctly used only home

market sheet sales in its analysis. Thus,

all sales were already matched as to

form prior to any further comparisons

by the Department. Furthermore,

because the Department has already

collected all of the data necessary to

develop an appropriate model-match

methodology and because it has applied

an appropriate model-match

methodology in this review, there is no

reason for the Department to reopen the

issue by obtaining information regarding

length of the products sold, or to reexamine its model-match methodology.

Department’s Position: We agree with

OAB. The Department’s understanding

in this review, as it has been in all

previous reviews of this order, is that

form is the distinguishing factor

between brass sheet and brass strip.

While brass sheet is sold flat and cut-tolength and is packed and shipped in

this form, brass strip is sold coiled or

traverse-wound and is packed and

shipped in its coiled form. In past

reviews we did not include the length

of the merchandise as a model-match

criterion or as a defining characteristic

between strip and sheet. In this review

the petitioners have provided

insufficient evidence for us to make a

determination that length is a reliable

criterion upon which to distinguish

sheet from strip, or that length should

be included as a model-match criterion

or should replace the form criterion in

our model-match methodology. As a

result, for this review, as in all past

reviews, we have based the difference

between brass sheet and brass strip on

the form of the merchandise, not its

length.

We disagree with the petitioners’

contention that we excluded the form

and width criteria from our product

comparisons in this review and did not

adhere to our established model-match

methodology. As in all past reviews, we

have again included the form and width

criteria in our analysis. However, for

several reasons, it was not necessary for

us to explicitly include these criteria in

the model-match portion of our

computer program. For example, upon

determining that all of OAB’s U.S. sales

were sheet sales, we excluded from our

analysis all home market strip sales as

a means to ensure proper product

comparisons. As a result, because only

sheet sales remained (meaning that all

home market and U.S. sales were of the

same form), it was not necessary for us

to specifically include the form criterion

in the model-match portion of our

computer program.

We specifically used width as a

criterion in all past reviews because our

analysis addressed sales of both brass

strip and brass sheet. Due to the

additional costs associated with cutting
3622 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

strip to meet a specific width

requirement, width is extremely

relevant when comparing one strip sale

to another strip sale. However, because

there are no additional costs associated

with variations in the width of sheet,

width is irrelevant when one sheet sale

is compared to another sheet sale. As

previously stated, based on our

determination that all of OAB’s U.S.

sales were of sheet, only sheet sales

were subject to our product

comparisons. As a result, although we

considered the width criterion in our

methodology, it became irrelevant to our

analysis and unnecessary for the modelmatch portion of our computer program.

After excluding all home market strip

sales from our analysis we also

excluded all home market sheet sales

which were under 15 inches in width.

In doing so we did not intend to create

width groups (sheet over and under 15

inches in width), or distinguish between

the widths of sheet sales. As OAB

explained in its response, during the

review period, it produced all subject

merchandise in two different mills, one

of which was a more modern, state-ofthe-art mill. Because of the way OAB

casts and rolls its sheet in the more

modern mill, all sheet produced in this

mill is always greater than 15 inches in

width. As a result, due to the modern

mill’s production process,

differentiation according to the width of

the merchandise corresponds to

differentiation of the merchandise

according to form. Because all of OAB’s

U.S. sales (which OAB identified, based

on form, as all sheet sales) and nearly

all of OAB’s home market sheet sales

were produced in the more modern

mill, all of OAB’s U.S. sales and nearly

all of its home market sheet sales also

happen to be over 15 inches in width.

Our preliminary results revealed 1) that

the small quantity of home market sheet

sales which were produced in OAB’s

older mill (under 15 inches in width)

were all of the 1063 alloy, and 2) that

when we compared OAB’s U.S. sheet

sales of alloy 1063 (which were all

produced in the modern mill) to home

market sheet sales for contemporaneous

such or similar matches, every one of

OAB’s U.S. 1063 sheet sales matched to

a contemporaneous such or similar

home market sheet sale which was also

produced in the modern mill. In other

words, although OAB had home market

sheet sales of the 1063 alloy produced

in the older mill, none of these sales

were contemporaneous to OAB’s U.S.

sheet sales of the 1063 alloy. As a result,

we determined that it was unnecessary

to include home market sheet sales

produced in the older mill in our

analysis. Because home market sheet

sales produced in the older mill are

under 15 inches in width, we used

width to identify these sales and

eliminate them from our analysis.

Based on our verification, we disagree

with the petitioners that OAB based its

determination of a sale as sheet or strip

on width. We verified that OAB clearly

relied on the form of the merchandise

(i.e., whether it was flat and cut-tolength or whether it was coiled or

traverse-wound) when identifying its

sales as either sheet or strip in its

response. As noted above, because of

the way OAB casts and rolls its sheet in

the more modern mill, all sheet

produced in this mill is always greater

than 15 inches in width. As a result, due

to the modern mill’s production

process, differentiation according to the

width of the merchandise corresponds

to differentiation of the merchandise

according to form. Because all of OAB’s

U.S. sales (which OAB identified, based

on form, as all sheet sales) and nearly

all of OAB’s home market sheet sales

were produced in the more modern

mill, all of OAB’s U.S. sales and nearly

all of its home market sheet sales also

happen to be over 15 inches in width.

Therefore, OAB did not use width as a

means to define its merchandise, nor

did it use width as a distinguishing

characteristic. Rather, in this review, the

width of nearly all of OAB’s sheet sales

correlates to the form of the

merchandise.

We agree with petitioners that there is

a discrepancy concerning one of OAB’s

U.S. sales. We re-examined the invoice

for this sale contained in exhibit 2 of

our verification report and the invoice

describes the merchandise sold as brass

strip, whereas OAB reported this sale as

a sheet sale in its U.S. sales listing. For

the purposes of this review, we have

determined that this is a sheet sale and

we have treated it accordingly in our

analysis. Our determination that this

sale is a sheet rather than a strip sale is

based on the fact that the merchandise

sold was over 20 inches in width.

Although we have clearly stated that

width is not a defining characteristic,

the fact remains that, for Customs’

purposes, brass sheet is subject

merchandise over 20 inches in width

while brass strip is subject merchandise

under 20 inches. This is evident in the

HTS where a distinction is made

between subject merchandise over 500

mm in width and under 500 mm in

width. As a result, due to the fact that

the width of the merchandise sold, as

reflected on the pro forma invoice for

this sale, was over 20 inches, this

merchandise was entered as sheet.

Therefore, we have determined that

because this sale was entered as a sheet

sale, it should be treated as such in our

analysis. For these final results of

review, we have thus used the same

methodology as in our preliminary

results of review in that our analysis of

OAB’s U.S. sales is based on our

determination that all of these sales

were of brass sheet.

Comment 6: The petitioners argue that

when the Department was unable to

find an identical home market match for

U.S. sales of alloy 1085, it correctly

searched for contemporaneous home

market sales of the most similar alloy

1080, but incorrectly also searched for

contemporaneous home market sales of

the less similar home market alloy 1070.

Petitioners contend that because home

market alloy 1090 is clearly more

similar in copper content to the U.S.

1085 alloy than the home market 1070

alloy, the Department should use home

market sales of alloy 1090 rather than

alloy 1070 for the purpose of

comparison. As a result, petitioners urge

the Department to change its modelmatch methodology to ensure that when

it is unable to find an identical home

market match for a U.S. sale of alloy

1085, the U.S. sale of alloy 1085 should

be matched to a contemporaneous home

market sale of alloy 1080 or alloy 1090.

OAB argues that because its home

market sales of alloy 1090 were of

unique and very expensive merchandise

and, therefore, wholly inappropriate

candidates for price comparisons to U.S.

sales, the Department, when unable to

find an identical home market match to

U.S. sales of alloy 1085, correctly

searched for contemporaneous matches

of home market alloy 1080 and alloy

1070 sales. Respondent further argues

that the petitioners’ contention that the

Department should match U.S. sales of

alloy 1085 to contemporaneous home

market sales of alloy 1090 rather than

alloy 1070 only reflects the petitioners’

preference which is unsupported by any

evidence on the record. Since the

Department has broad discretion in

designing its model-match methodology

and has already developed an

appropriate methodology for this

review, OAB argues that the Department

should not allow the petitioners to

determine what constitutes most similar

merchandise (see NTN Bearing Corp. of

America v. United States, 747 F. Supp.

726, 736 (CIT 1990), Ceramica

Regiomontana S.A. v. United States, 636

F. Supp. 961, 966 (CIT 1986), and

Timken Co. v. United States, 630 F.

Supp. 1338 (CIT 1986)). Rather, the

Department should use the same

methodology in its final results as it did

in its preliminary results and match

U.S. sales of alloy 1085 to
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3623

contemporaneous home market sales of

alloy 1080 or alloy 1070.

Department’s Position: In the model

matches for our preliminary results of

review, because all of the sales we

analyzed were in the same form and

because the width criterion was

irrelevant in this review, for each U.S.

sheet sale, we first searched for a

contemporaneous home market sheet

sale of merchandise identical to each

U.S. product based on an identical alloy

and an identical gauge. If we found no

match of identical merchandise, we

then searched for a contemporaneous

home market sale of merchandise that

was most similar to the U.S. product

based on an identical alloy but a

different gauge. If we were still unable

to find a match, we then searched for a

contemporaneous home market sale

based on a different alloy but an

identical gauge. At this stage in the

model matching we determined that the

two home market alloys that were most

similar to the U.S. 1085 alloy were the

home market 1080 and 1070 alloys. As

a result, for those U.S. sales of the 1085

alloy for which we were unable to find

a contemporaneous home market match

based on an identical alloy and gauge,

or a contemporaneous home market

match based on an identical alloy but a

different gauge, we then searched for a

contemporaneous home market sale of

the 1080 alloy and of the same gauge.

If at this point we were still unable to

match the U.S. 1085 sale to a

contemporaneous home market sale, we

searched for a contemporaneous home

market sale of the 1070 alloy and the

same gauge.

Based on comments from both the

respondent and the petitioners and our

reexamination of the respondent’s

arguments against including home

market 1090 alloy sales in our analysis,

we determined that for these final

results, when we were unable to match

a U.S. 1085 alloy sale to a home market

sheet sale of identical merchandise, to a

home market sheet sale of an identical

alloy but a different gauge, or a home

market sheet sale of the 1080 alloy and

the same gauge, we would search for a

contemporaneous home market sheet

sale of the 1090 rather than the 1070

alloy.

Our decision to alter our model-match

program and to replace home market

1070 sales with home market 1090 alloy

sales is based on the following reasons.

First, due to the fact that all of OAB’s

U.S. sales were of brass sheet over 15

inches in width, we used only home

market sales of sheet over 15 inches in

width for our analysis and based the

computer program portion of the model

match on only the alloy and gauge

criteria. Of these two criteria, we

determined that alloy was the most

important criterion upon which to base

our determination of home market such

or similar merchandise. We also

determined that when selecting the two

home market alloys most similar to the

U.S. 1085 and 1090 alloys, the only two

U.S. alloys for which sufficient such or

similar matches were not available, we

would base our choice on similarity of

alloy compositions. In our preliminary

results we determined that, due to their

similarity in copper content, the home

market 1085 and 1080 alloys were the

two most similar alloys to the U.S. 1090

alloy. Likewise, we determined that the

two home market alloys most similar to

the U.S. 1085 alloy were the 1080 and

1070 alloys. However, because we agree

with petitioners that the home market

1090 alloy is closer in copper content to

the U.S. 1085 alloy than is the home

market 1070 alloy, we have determined

for these final results that the ranking of

home market 1090 alloy sales over home

market 1070 alloy sales is more

appropriate.

Furthermore, we disagree with the

respondent’s argument in its

questionnaire response and its

preliminary results comments that

because OAB’s home market 1090 alloy

sales entailed only a few, small quantity

sales of expensive, unique merchandise

to only a limited number of customers,

these sales are not in the ordinary

course of trade and are inappropriate for

price-to-price comparisons. After

examining OAB’s home market sales of

sheet over 15 inches in width, we

discovered that OAB’s sales of other

alloys at certain gauges were made in

even smaller quantities and constituted

even fewer transactions than OAB’s

1090 alloy home market sales. In

addition, we also discovered that OAB’s

weighted-average home market prices of

other alloys were similar to the

weighted-average home market price for

OAB’s 1090 sales, and one home market

alloy was sold at a weighted-average

price that even exceeded that of the

1090 alloy. As a result, we have

determined that not only is there no

evidence on the record that OAB’s home

market 1090 alloy sales were outside the

ordinary course of trade, but that the

evidence on the record refutes OAB’s

original claims that its home market

sales of the 1090 alloy were smaller in

quantity, less frequent, and more

expensive. Therefore, because we have

determined that OAB’s home market

1090 alloy sales should not be excluded

from such or similar merchandise

comparisons, and because it would be

neither distortive nor unreasonable to

use the 1090 alloy, we have changed our

model matches for U.S. 1085 alloy sales

and have relied on 1080 and 1090 alloy

sales as similar comparisons where

home market 1085 sales are not

available for comparison.

Clerical and Programming Errors

Comment 7: OAB states that because

the Department has determined for this

review that OAB paid commissions in

the U.S. market but not in the home

market, the Department should grant

OAB a commission offset and deduct

from FMV home market indirect selling

expenses up to the amount of the U.S.

commission. OAB contends that while

the Department correctly applied the

offset to certain sales, it did not apply

the offset to an overwhelming number of

sales. As a result, OAB requests that the

Department re-examine its preliminary

calculations and correct this error.

Department’s Position: We agree with

the respondent. Because we

inadvertently omitted certain

programming language in a portion of

our preliminary results computer

program, a majority of the values OAB

reported for its home market indirect

selling expense variable were not

retained in our calculation of FMV. As

a result, when we applied the

commission offset, we used missing

values rather than actual home market

indirect selling expense values. For

these final results we added

programming language which prevents

the creation of missing values and

ensures that the commission offset is

properly applied to all appropriate

sales.

Final Results of Review

As a result of our analysis of the

comments received, we determine that

the following margin exists for OAB for

the period March 1, 1991, through

February 29, 1992:

Manufacturer/exporter Percent

margin

Outokumpu Copper Rolled Products AB (OAB) ............................ 8.60

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

the USP and FMV may vary from the

percentage stated above. The

Department will issue appraisement

instructions directly to the Customs

Service.

Furthermore, the following deposit

requirements will be effective for all

shipments of subject merchandise

entered, or withdrawn from warehouse,

for consumption on or after the
3624 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

publication date of these final results, as

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

Act:

(1) The cash deposit rates for OAB

will be the rate outlined above;

(2) For previously reviewed or

investigated companies not listed above,

the cash deposit rate will continue to be

the company-specific rate published for

the most recent period;

(3) If the exporter is not a firm

covered in this review, a prior review,

or the original less-than-fair-value

(LTFV) investigation, but the

manufacturer is, the cash deposit rate

will be the rate established for the most

recent period for the manufacturer of

the merchandise; and

(4) If neither the exporter nor the

manufacturer is a firm covered in this or

any previous review conducted by the

Department, the cash deposit rate will

be the ‘‘all others’’ rate of 11.96 percent

established in the LTFV investigation.

All U.S imports of subject

merchandise by the respondent will be

subject to the deposit rate found in this

proceeding. The cash deposit rates have

been determined on the basis of the

selling price to the first unrelated

customer in the United States. The

Department will use the total value of

USP calculated from OAB’s response to

determine the appraisement rate.

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 the 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 the return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and terms of an APO is a sanctionable

violation.

This administrative review and this

notice are in accordance with section

751(a)(1) of the Act (19 U.S.C.

1675(a)(1)) and 19 CFR 353.22.

Dated: January 9, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–1215 Filed 1–17–95; 8:45 am]

BILLING CODE 3510–DS–P

[A–588–054]

Tapered Roller Bearings, Four Inches

or Less in Outside Diameter, and

Components Thereof, From Japan;

Affirmation of the Results of

Redetermination Pursuant to Court

Remand

AGENCY: Import Administration/

International Trade Administration,

Department of Commerce.

SUMMARY: On June 8, 1994, the United

States Court of International Trade (CIT)

affirmed the Department of Commerce’s

(the Department’s) redetermination on

remand of the final results of

administrative review of the

antidumping finding on tapered roller

bearings, four inches or less in outside

diameter, and certain components

thereof (TRBs) from Japan (56 FR 26054,

June 6, 1991) (The Timken Company v.

United States (Slip Op. 94–41 (March 7,

1994)) (Timken). The results covered the

period August 1, 1987, through July 31,

1988, and TRBs produced by Koyo

Seiko Co., Ltd., and distributed by its

subsidiary, Koyo Corporation of U.S.A.

(collectively, Koyo), and by NSK Ltd.,

and distributed by its subsidiary, NSK

Corporation (collectively, NSK).

EFFECTIVE DATE: June 18, 1994.

FOR FURTHER INFORMATION CONTACT:

Chip Hayes or John Kugelman, Office of

Antidumping Compliance, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue NW., Washington, DC 20230,

telephone: (202) 482–5253.

SUPPLEMENTARY INFORMATION:

Background

On March 7, 1994, the CIT issued an

order remanding to the Department the

final results of administrative review of

the antidumping finding on TRBs from

Japan (56 FR 26054, June 6, 1991).

In its decision in Timken, the CIT

remanded the final results to the

Department to allow the Department to

determine whether it has statutory

authority to adjust foreign market value

(FMV) for pre-sale inland freight in light

of the decision of the United States

Court of Appeals for the Federal Circuit

(Federal Circuit) in Ad Hoc Comm. of

AZ-NM-TX-FL Producers of Gray

Portland Cement v. United States, No.

93–1239 (Fed. Cir., January 5, 1994) (Ad

Hoc Comm.). In response to that order,

we explained that we adjust FMV for

post-sale movement expenses as

differences in circumstances of sale (19

CFR § 353.56(a)) and we consider presale freight to be appropriate expenses

to include in the exporter’s sales price

(ESP) offset under 19 CFR § 353.56(b)(2),

because they are post-production

expenses borne in preparation to sell the

merchandise. We further clarified that

§ 353.56(b)(2) of the Department’s

regulations allows the Department to

deduct from FMV all expenses, other

than direct selling expenses enumerated

in § 353.56(a), incurred in selling such

or similar merchandise up to the

amount of expenses incurred in selling

the merchandise in the United States.

Consequently, the Department has

determined it will evaluate claims of

pre-sale inland freight expenses for

home market (or third-country) sales

using the ESP offset provision in the

regulations.

Subsequent to the Department’s

explanation of the treatment of pre-sale

freight expenses in Timken, we have

determined that there are circumstances

when pre-sale movement expenses may

be direct expenses. Since direct

expenses are adjusted for under the

circumstance-of-sale provision, the

Department evaluates whether the presale movement expenses are direct

expenses by examining each

respondent’s pre-sale warehousing

expenses, since the pre-sale movement

charges incurred in positioning the

merchandise at the warehouse are, for

analytical purposes, linked to pre-sale

warehousing expenses. If the pre-sale

warehousing expenses constitute

indirect expenses, the expenses

involved in getting the merchandise to

the warehouse also must be indirect.

In its affirmation of June 8, 1994 (Slip

Op. 94–95), the CIT accepted the

Department’s explanation of its

methodology and ordered its

implementation for this review period.

In its decision in Timken Co. v.

United States, 893 F.2d 337 (Fed. Cir.

1990) (Timken I), the Federal Circuit

held that, pursuant to 19 U.S.C.

1516a(e), the Department must publish

a notice of a court decision which is not

‘‘in harmony’’ with a Departmental

determination, and must suspend

liquidation of entries pending a

‘‘conclusive’’ court decision. The CIT’s

decision in Timken constitutes a

decision not in harmony with the

Department’s final results of review.

This notice fulfills the publication

requirements of Timken I.

Accordingly, the Department will

continue the suspension of liquidation

of the subject merchandise.