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

DEPARTMENT OF COMMERCE

[A-588-810]

Mechanical Transfer Presses From Japan; Final Results of

Antidumping Duty Administrative Review

AGENCY: International Trade Administration/Import Administration

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review.

-----------------------------------------------------------------------

SUMMARY: On November 18, 1993, the Department of Commerce published the

preliminary results of the administrative review of the antidumping

duty order on mechanical transfer presses from Japan. The review covers

four manufacturers/exporters of subject merchandise to the United

States and the period February 1, 1992, through January 31, 1993. We

gave interested parties an opportunity to comment on the preliminary

results. We received comments from the petitioner and two respondents.

Based on our analysis, we have changed the final results from those

presented in the preliminary results of review.

EFFECTIVE DATE: March 2, 1994.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Maureen Flannery,

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-

4733.

SUPPLEMENTARY INFORMATION:

Background

On November 18, 1993, the Department of Commerce (the Department)

published in the Federal Register (58 FR 60843) the preliminary results

of the third administrative review of the antidumping duty order on

mechanical transfer presses (MTPs) from Japan (55 FR 5642, February 16,

1990). The Department has now completed the review in accordance with

section 751 of the Tariff Act of 1930, as amended (the Tariff Act).

Scope of the Review

Imports covered by the review include MTPs currently classifiable

under Harmonized Tariff Schedule (HTS) item numbers 8462.99.0035 and

8466.94.5040. The HTS numbers are provided for convenience and for U.S.

Customs purposes. The written description remains dispositive.

The term ``mechanical transfer presses'' refers to automatic metal-

forming machine tools with multiple die stations in which the workpiece

is moved from station to station by a transfer mechanism designed as an

integral part of the press and synchronized with the press action,

whether imported as machines or parts suitable for use solely or

principally with these machines. These presses may be imported

assembled or unassembled.

This review covers four manufacturer/exporters of MTPs from Japan

entered into the United States during the period February 1, 1992,

through January 31, 1993. This review does not cover spare and

replacement parts and accessories, which were determined to be outside

the scope of the order. See ``Final Scope Ruling on Spare and

Replacement Parts,'' U.S. Department of Commerce, March 20, 1992. On

November 23, 1993, the Department determined that Aida's FMX series

cold forging press is within the scope of the order. See ``Final Scope

Ruling--Antidumping Duty Order on Mechanical Transfer Presses from

Japan: Aida Engineering, Ltd.,'' U.S. Department of Commerce, November

23, 1993. We have included the FMX press in our analysis for these

final results.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results of review, as provided by 19 CFR 353.38. We

received comments from the petitioner, Verson Division of Allied

Products Corp., and two respondents, Aida Engineering, Ltd. (Aida), and

Komatsu Ltd. (Komatsu).

Comment 1: The petitioner argues that the Department should have

used an exchange rate based on either the date of shipment or the date

of entry, instead of employing the exchange rate in effect on the date

of sale to the United States, because of the extended time between the

sale and shipment of MTPs, and the appreciation of the yen against the

dollar during the review period.

Aida and Komatsu state that the Department correctly employed the

exchange rate in effect on the date of the U.S. sale, according to the

Department's regulations, 19 CFR 353.60, 353.46, 353.49 and 353.50.

Department's Position: We agree with respondents that we have

properly employed the exchange rate that was in effect on the date the

merchandise was sold to the United States. According to our regulations

and long-standing practice, when the U.S. price is based on purchase

price and the foreign market value (FMV) is based on constructed value

(CV), the conversion of currency is directly tied to the date the

merchandise is sold for exportation to the United States. See 19 CFR

353.60 and 19 CFR 353.50(b)(1).

Comment 2: Aida states that it is reserving the right to challenge

the Department's inclusion of the FMX press within the scope of the

order and within the final results of this review.

The petitioner claims that the Department should include home

market and U.S. sales of Aida's FMX press and its optional transfer

unit in its analysis for these final results, because the Department

has determined that the FMX press is within the scope of the order.

Department's Position: We agree with petitioner. We did not include

the FMX press in our preliminary results of review, but stated we would

do so in our final results if an affirmative scope determination were

made by that time. On November 23, 1993, the Department determined that

Aida's FMX cold forging press is within the scope of the antidumping

duty order on MTPs. See ``Final Scope Ruling--Antidumping Duty Order on

Mechanical Transfer Presses from Japan: Aida Engineering, Ltd.,'' U.S.

Department of Commerce, November 23, 1993. We verified the sales and CV

data Aida submitted with respect to the FMX press sold in the United

States during the review period, and have included this sale in our

final analysis.

Comment 3: Aida states that, subsequent to verification, it

analyzed the year-end warranty cost adjustments discovered at

verification, and concluded that only a portion thereof should be

allocated to warranty cost. In its case brief, Aida presents a

recalculation of the warranty expense factor, and asks that the

Department use this revised factor to calculate warranty costs for the

final results.

Department's Position: At verification, the Department discovered

that Aida's records indicated an amount for additional warranty costs

that Aida had not reported. At that time, Aida claimed that these costs

were related to non-subject merchandise, but was unable to

satisfactorily document this position. See sales verification report

dated October 19, 1993, page 13.

According to 19 CFR 353.31(a)(1)(ii), the time limit for submitting

factual information in an administrative review is not later than the

earlier of the date of publication of the notice of preliminary results

of review or 180 days after the date of publication of the notice of

initiation of the review. As Aida submitted its explanation of the

additional unreported warranty expenses and recalculation of the

warranty expense factor after the date of publication of the

preliminary results, this information was untimely submitted.

Therefore, we did not consider this information for these final

results. As in the preliminary results of review, we used warranty

costs as adjusted for the additional costs discovered at verification.

Comment 4: Aida states that the Department erred in adding related-

party commissions on U.S. sales to FMV, and offsetting the commissions

by deducting home market indirect selling expenses up to the amount of

the commissions. Aida believes that the Department should have treated

the commissions as internal transfers, which do not require any

adjustment to FMV or offsetting adjustment for indirect home market

selling expenses.

Department's Position: Aida reported commissions to a related party

that varied directly with the sale price of an MTP. We verified the

commissions paid, and have no reason to believe that these directly

related selling expenses were not, in fact, in the nature of

commissions. The fact that these commissions were paid to a related

party does not change their nature as commissions. Therefore, in

accordance with 19 CFR 353.56(a), we are adjusting FMV for the

differences in home market and U.S. commissions. Because there were

commissions on both U.S. and home market sales, 19 CFR 353.56(b), which

calls for an offset when there are commissions in one market but not

the other, does not apply.

Comment 5: The petitioner asserts that the Department did not

evaluate or adjust Aida's transfer prices from a certain related party

supplier for such things as direct materials, labor, and/or overhead,

as applicable, to reach a fully-loaded cost of production. The

petitioner further states that the only adjustment made to the related

party inputs was an adjustment made by the Department to include the

general and administrative expense of the related supplier.

Aida contends that it made an adjustment for the difference between

the transfer price of components purchased from its related party

supplier and the related party supplier's cost of manufacturing the

components. Aida acknowledges that it inadvertently failed to take into

account its related party's processing cost variance and general and

administrative expense, but notes that the Department made an

adjustment for these, based on verification findings, in its

preliminary results.

Department's Position: We agree with Aida. The Department was able

to verify Aida's adjustment to restate related party inputs to fully-

loaded costs. Aida's adjustment included direct materials, labor, and

overhead. Based on the Department's findings at verification, an

adjustment was made to not only general and administrative expenses,

but also to the related party's processing variance. (See cost

verification report dated October 22, 1993, page 9.)

Comment 6: Petitioner contends that the Department failed to

verify, but should establish, whether transfer prices of inputs

acquired by Aida from other related parties were at or above cost.

Aida states that the only material purchased for the subject

presses from a related company, other than those from the related party

discussed in Comment 5, above, consisted of control panels purchased

from a partially-owned subsidiary. Aida further states that the

reasonableness of the transfer prices used to determine the cost of

these components was reviewed and confirmed at verification. With

respect to subcontracted work, Aida states that, with the exception of

the related party the Department verified, all subcontractors are

unrelated.

Department's Position: We agree with Aida. At verification, the

Department analyzed all transactions with related parties. Based on our

analysis, we found these transactions to have been made at or above

cost. (See cost verification report dated October 22, 1993, page 9.)

Comment 7: Komatsu argues that the adjustment that the Department

made, in its preliminary results, to costs of subcontracted work

performed by a particular related-party supplier, was based on a

misunderstanding regarding the method used to calculate costs for that

work. In fact, Komatsu claims, in calculating the actual cost of the

related-party inputs, it inadvertently overstated the costs by a

specific profit percentage. Komatsu contends that, given the above, the

costs of the related-party inputs should be reduced rather than

increased.

Department's Position: We disagree with Komatsu. Komatsu did not

clearly demonstrate at verification its alleged overstatement of the

actual costs of the related-party inputs by a profit margin. Given that

the information reviewed at verification indicates an understatement,

rather than an overstatement, of costs, an upward adjustment to the

value of these related-party inputs for a portion of the period loss

incurred by the related party is warranted. (See cost verification

report dated October 25, 1993, pages 7 and 8.)

Comment 8: The petitioner asserts that the Department should

increase Komatsu's submitted costs to account for losses incurred by

certain other related suppliers during the review period. The

petitioner notes that the Department failed to verify the costs of

inputs from these suppliers.

Komatsu argues that the amount of Komatsu's purchases from those

suppliers was clearly insignificant, as would have been any adjustment

the Department might have made.

Department's Position: We agree with Komatsu. At verification, the

Department tested those related party transactions that made

significant contributions to the subject merchandise. See cost

verification report dated October 25, 1993, page 7. Adjustments to

costs for transactions with other related party suppliers, even if

warranted, would not have significantly affected the margin analysis.

Comment 9: Komatsu argues that the Department should allow an

offset to the general and administrative expenses for the gains on

sales of plant assets recorded at its head office, which relate to the

company's general and administrative activities. Komatsu adds that

these gains should be offset against the company-wide general and

administrative expenses, in addition to the offset the Department

allowed for the gain on sales of plant assets at the Komatsu plant.

Petitioner argues that these gains do not appear to relate to the

production operations for subject merchandise, and therefore should be

excluded from the general and administrative expenses calculation.

Department's Position: We agree with the petitioner. During

verification, the respondent provided an exhibit that specifically

identified the gains that related to the Komatsu plant manufacturing

the subject merchandise. (See cost verification exhibit number 29.) No

documentation or other support was provided to establish a basis on

which to allow an offset for the gains on sales of the other plant

assets.

Comment 10: Aida states that the Department double counted an

adjustment it made to the cost variance and general and administrative

expenses in applying these adjustments to the CV format for one of the

U.S. sales.

Department's Position: We agree with Aida and have corrected the

adjustment to the cost variance and general and administrative

expenses.

Comment 11: Aida states, in its case brief, that the Department

made certain clerical errors in its calculations, with respect to

inland freight, packing, credit and warranty.

Department's Position: We agree, and have adjusted our calculations

accordingly.

Final Results of Review

As a result of our review, the Department has determined that the

following margins exist for the period February 1, 1992, through

January 31, 1993:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

Aida Engineering, Ltd........................................ 3.50

Komatsu Ltd.................................................. 0.00

Ishikawajima-Harima Heavy Ind................................ \1\0.00

Hitachi-Zosen Corporation.................................... \1\0.00

------------------------------------------------------------------------

\1\No shipments during the period. Rate is from the last final results

of review for this company.

Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. The Department will instruct

the Customs Service to assess antidumping duties on all appropriate

entries. Individual differences between U.S. price 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

upon publication of this notice of final results of review for all

shipments of MTPs from Japan entered, or withdrawn from warehouse, for

consumption on or after the publication date, as provided for by

section 751(a)(1) of the Tariff Act: (1) The cash deposit rates for the

reviewed companies will be those established in the final results of

this administrative review; (2) for previously reviewed or investigated

companies not listed above, the cash deposit rate will continue to be

the company-specific rate published for the most recent period; (3) if

the exporter is not a firm covered in this review or the 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) the cash deposit rate for all

other manufacturers or exporters will be the ``all others'' rate

established in the final notice of the LTFV investigation of this case,

in accordance with the Court of International Trade's decisions in

Floral Trade Council v. United States, Slip Op. 93-79, and Federal

Mogul Corporation and the Torrington Company v. United States, Slip Op.

93-83. The all others rate is 14.51 percent. These deposit

requirements, when imposed, shall remain in effect until publication of

the final results of the next administrative review.

This notice serves as a final reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and subsequent assessment

of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the return or destruction 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 the terms of APO is a sanctionable violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR

353.22.

Dated: February 22, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-4736 Filed 3-1-94; 8:45 am]

BILLING CODE 3510-DS-P