Notice of Preliminary Results of Antidumping Duty Administrative Review: Certain Forged Steel Crankshafts From the United Kingdom

DEPARTMENT OF COMMERCE

International Trade Administration

[A-412-602]

Notice of Preliminary Results of Antidumping Duty Administrative

Review: Certain Forged Steel Crankshafts From the United Kingdom

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 4, 1995.

FOR FURTHER INFORMATION CONTACT: Brian C. Smith or John Beck, Office of

Antidumping Investigations, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue NW., Washington, D.C. 20230; telephone: (202) 482-

1766 or (202) 482-3464, respectively. [[Page 22046]]

SUPPLEMENTARY INFORMATION:

Background

On September 7, 1993, the Department of Commerce (the Department)

published in the Federal Register a notice of ``Opportunity to Request

an Administrative Review'' of the Antidumping Duty Order on Certain

Forged Steel Crankshafts from the United Kingdom (52 FR 35467). In

accordance with 19 CFR 353.22(a)(2), in September 1993, United

Engineering and Forging (UEF) requested an administrative review of the

antidumping order covering the period September 1, 1992, through August

31, 1993. We initiated the administrative review on October 18, 1993

(58 FR 53710), and are conducting it in accordance with section 751 of

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

Scope of the Review

The products covered in this review are certain forged steel

crankshafts (CFSCs). The term ``crankshafts,'' as used in this review,

includes forged carbon or alloy steel crankshafts with a shipping

weight between 40 and 750 pounds, whether machined or unmachined. The

products are currently classifiable under items 8483.10.10.10,

8483.10.10.30, 8483.10.30.10, and 8483.10.30.50 of the Harmonized

Tariff Schedule of the United States (HTSUS). Neither cast crankshafts

nor forged crankshafts with shipping weights of less than 40 pounds or

more than 750 pounds are subject to this review. Although the HTSUS

subheadings are provided for convenience and Customs purposes, our

written description of the scope of this proceeding is dispositive.

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.

Such or Similar Merchandise

In determining similar merchandise comparisons, we considered the

following physical characteristics, which appear in order of

importance: (1) Twisted vs. untwisted; (2) number of throws; (3) ship

weight; (4) forging method; (5) engine type; (6) number of bearings;

(7) number of flanges; and, (8) number of counterweights (see the

February 4, 1993, model matching methodology memorandum from Louis

Apple, Acting Division Director to David L. Binder, Acting Director,

Office of Antidumping Investigations; and the April 26, 1995,

memorandum from the case analyst to the file).

United States Price (USP)

We based USP on purchase price, in accordance with section 772(b)

of the Act, because the subject merchandise was sold to an unrelated

purchaser before importation into the United States and because

exporter's sales price methodology was not otherwise indicated. We

based purchase price on the packed, c.i.f. price to the first unrelated

purchaser in the United States.

We made deductions from USP, where appropriate, for ocean and

foreign inland freight, U.S. duties, harbor maintenance and merchandise

processing fees, marine insurance and U.S. brokerage and handling

expenses, in accordance with section 772(d)(2) of the Act. For certain

sales made by UEF's Shardlow facility, ocean freight, foreign inland

freight, U.S. duties, and U.S. brokerage and handling expenses were not

reported. Therefore, in accordance with section 776(c) of the Act, we

have relied upon the best information available (BIA) in these

preliminary results to value these unreported expenses for those sales.

As BIA, we applied the largest reported amount to each of Shardlow's

unreported expenses. Based on verification, we requested UEF to correct

its reported brokerage and handling expenses, and ocean freight

expenses identified in the August 23, 1994, verification reports. In

addition, we made certain corrections to UEF's reported credit

expenses, warranty expenses, U.S. duty expenses, marine insurance

expenses and additional corrections to ocean freight and U.S. brokerage

and handling expenses identified in the verification reports.

For one crankshaft model, we increased USP to account for tooling

and manufacturing costs that were not included in the U.S. sales

invoice, but were billed separately to the U.S. customer. Such costs

are normally considered a component of USP for that merchandise (see

Final Results of Antidumping Duty Administrative Review: Certain Forged

Steel Crankshafts from the United Kingdom (52 FR 5975 (February 14,

1991)).

We also made adjustments to USP, as appropriate, for price and/or

quantity changes subsequent to shipment.

Finally, we made an adjustment for taxes paid on comparison sales

in the United Kingdom, in accordance with our practice, pursuant to the

Court of International Trade (CIT) decision in Federal-Mogul, et al v.

United States, 834 F. Supp. 1993. See Preliminary Determination of

Sales at Less Than Fair Value: Color Negative Photographic Paper and

Chemical Components Thereof from Japan (59 FR 16177, 16179 (April 6,

1994)), for an explanation of this tax methodology.

Foreign Market Value

In order to determine whether there were sufficient sales of CFSCs

in the home market to serve as a viable basis for calculating foreign

market value (FMV), we compared the volume of the respondent's home

market sales to the volume of its third country sales, in accordance

with section 773(a)(1)(B) of the Act. Based on this comparison, we

determined that the home market is viable, and that it is the most

appropriate basis for calculating FMV.

Where home market sales were used for comparisons, we calculated

FMV based on packed, ex-factory or delivered prices to customers in the

United Kingdom. We made deductions, where appropriate, for discounts.

We also made adjustments to FMV, where appropriate, for price and/or

quantity changes subsequent to shipment.

In light of the Court of Appeals for the Federal Circuit's decision

in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland Cement v.

United States, 13 F.3d 398 (Fed. Cir. 1994), the Department no longer

can deduct home market movement charges from FMV pursuant to its

inherent power to fill in gaps in the antidumping statute. Instead, we

adjust for those expenses under the circumstance-of-sale (COS)

provision of 19 CFR 353.56(a). Accordingly, in the present case, we

adjusted for post-sale home market inland freight charges under the COS

provision of 19 CFR 353.56(a).

Because all price-to-price comparisons involved purchase price

sales, we also made COS adjustments, where appropriate, for differences

in credit expenses, warranty expenses, and pre-sale and post-sale

warehousing expenses on U.S. sales, in accordance with 19 CFR

353.56(a). We treated the pre-sale warehousing expense as a direct

selling expense because UEF has an agreement with its U.S. customer

that it will store the subject merchandise in a warehouse before it

transfers title of the merchandise to its customer. In accordance with

section 773(a)(1) of the Act, we then added U.S. packing costs to all

home market prices. We did not deduct home market packing costs because

UEF could not report them separately.

Where appropriate, we made adjustments to FMV to account for

differences in physical characteristics of the merchandise, in

accordance with 19 CFR 353.57. [[Page 22047]]

For two U.S. products, we found no home market products sold in

contemporaneous periods which had an adjustment for differences in

physical characteristics of merchandise that was less than 20 percent

of the cost of manufacture of the U.S. product. For sales of one U.S.

product, we deemed it inappropriate to match a twisted with an

untwisted crankshaft (see Final Determination of Sales at Less Than

Fair Value: Certain Forged Steel Crankshafts from the United Kingdom

(52 FR 32951, 32953 (September 1, 1987)). For the second U.S. product,

there were no contemporaneous sales of comparable home market products.

For these products, we based FMV on CV. We calculated CV based on the

sum of the respondent's submitted cost of materials, fabrication,

general expenses, U.S. packing and profit. In addition, we increased

the respondent's submitted general and administrative expenses (G&A) to

include certain forging division G&A items (see August 18, 1994,

verification report for a further discussion). According to section

773(e)(1)(B) (i) and (ii) of the Act, we included the actual general

expenses which exceeded the statutory minimum (ten percent of the cost

of manufacturing (COM)). We used the statutory minimum profit, which is

eight percent of the sum of COM and general expenses, because the

actual profit amount was less than the statutory minimum.

We made adjustments to CV, in accordance with 19 CFR 353.56, for

differences in circumstances of sale. These adjustments were made for

differences in credit expenses, warranties, and warehousing.

Currency Conversion

We made currency conversions in accordance with 19 CFR 353.60(a).

All currency conversions were made at the rates certified by the

Federal Reserve Bank.

Verification

As provided in section 776(b) of the Act, we verified information

provided by respondent by using standard verification procedures,

including on-site inspection of the manufacturer's facilities,

examination of relevant sales and financial records, and selection of

original source documentation containing relevant information.

Preliminary Results of Review

As a result of our review, we preliminarily determine that the

following margin exists for the period September 1, 1992, through

August 31, 1993:

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

Margin

Manufacturer/exporter Review period (percent)

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

UEF...................................... 9/01/92--8/31/93 0.36

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

Interested parties may request a disclosure within 5 days of

publication of this notice and may request a hearing within 10 days of

the date of publication. Any hearing, if requested, will be held 44

days after the date of publication, or the first workday thereafter.

Interested parties may submit case briefs within 30 days of the date of

publication. Rebuttal briefs, limited to issues raised in the case

briefs, may be filed not later than 37 days after the date of

publication. The Department will publish a notice of the final results

of this administrative review, which will include the results of its

analysis of issues raised in any such case briefs.

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 directly to

the Customs Service.

Furthermore, the following deposit requirement will be effective

for all shipments of CFSCs from the United Kingdom entered, or

withdrawn from warehouse, for consumption on or after the publication

date of the final results of this administrative review, as provided by

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

will be the rate established in the final results of this review,

except if the rate is less than 0.50 percent and, therefore, de

minimis, the cash deposit will be zero; (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 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, as set forth below.

On March 25, 1993, the Court of International Trade (CIT), in

Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993), and

Federal-Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993),

decided that once an ``all others'' rate is established for a company,

it can only be changed through an administrative review. The Department

has determined that in order to implement this decision, it is

appropriate to reinstate the original ``all others'' rate from the LTFV

investigation (or that rate as amended for correction of clerical

errors or as a result of litigation) in proceedings governed by

antidumping duty orders. In proceedings governed by antidumping

findings, unless we are able to ascertain that ``all others'' rate from

the original investigation, the Department has determined that it is

appropriate to adopt the ``new shipper'' rate established in the first

final results of administrative review published by the Department (or

that rate as amended for correction of clerical errors or as a result

of ligitation) as the ``all others'' rate for the purposes of

establishing cash deposits in all current and future administrative

reviews. Because this proceeding is governed by an antidumping duty

order, the ``all others'' rate for the purposes of this review will be

14.67 percent, the ``all others'' rate established in the LTFV

investigation.

These cash deposit requirements, when imposed, shall remain in

effect until publication of the final results of the next

administrative review.

This notice serves as a preliminary 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 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: April 27, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-11056 Filed 5-3-95; 8:45 am]

BILLING CODE 3510-DS-P