Notice of Preliminary Results of Antidumping Duty Administrative Review: Roller Chain, Other Than Bicycle, From Japan

DEPARTMENT OF COMMERCE

[A-588-028]

Notice of Preliminary Results of Antidumping Duty Administrative

Review: Roller Chain, Other Than Bicycle, From Japan

AGENCY: International Trade Administration/Import Administration,

Department of Commerce

EFFECTIVE DATE: August 23, 1995.

SUMMARY: In response to a request from the American Chain Association,

the petitioner in this proceeding, the Department of Commerce has

conducted an administrative review of the antidumping finding on roller

chain, other than bicycle, from Japan. This review, which covers four

manufacturers/exporters of this merchandise to the United States and

the period April 1, 1992 through March 31, 1993, indicates the

existence of dumping margins. Interested parties are invited to comment

on these preliminary results.

FOR FURTHER INFORMATION CONTACT: Donna Berg or Gregory Thompson, Office

of Antidumping Investigation, International Trade Administration, U.S.

Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-

0114 or 482-3003, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statue 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.

The Department is conducting this review in accordance with section

751 of the Tariff Act of 1930, as amended (the Act), and section 353.22

of the Department's regulations (19 CFR 353.22).

Background

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

published in the Federal Register (58 FR 52264) the final results of

its last administrative review of the antidumping finding on roller

chain, other than bicycle, from Japan (38 FR 9226; April 12, 1973). In

April 1993, the petitioner requested that we conduct an administrative

review for the period April 1, 1992 through March 31, 1993, in

accordance with 19 CFR 353.22(a)(1). We published a notice of

initiation of review on May 27, 1993 (58 FR 30769).

On August 9, 1993, the Department issued an antidumping

questionnaire to the following six companies: Daido Kogyo Co., Ltd.

(Daido), Enuma Chain Mfg. Co., Ltd. (Enuma), Hitachi Metals Techno Ltd.

(Hitachi), Izumi Chain Manufacturing Co., Ltd. (Izumi), Pulton Chain

Co., Ltd. (Pulton), and R.K. Excel (Excel). Of those six companies,

Excel and Izumi submitted their responses on September 24, 1993.

Hitachi and Pulton asserted that they had no sales during this period

of review (POR). Although Daido and Enuma were included when the

Department published a notice of initiation for this review, the

administrative reviews of Daido and Enuma are being conducted

separately and their preliminary results will be published in a later

notice.

Scope of the Review

Imports covered by the review are shipments of roller chain, other

than bicycle, from Japan. The term ``roller chain, other than

bicycle,'' as used in this review includes chain, with or without

attachments, whether or not plated or coated, and whether or not

manufactured to American or British standards, which is used for power

transmission and/or conveyance. Such chain consists of a series of

alternately-assembled roller links and pin links in which the pins

articulate inside the bushings and the rollers are free to turn on the

bushings. Pins and bushings are press fit in their respective link

plates. Chain may be single strand, having one row of roller links, or

multiple strand, having more than one row of roller links. The center

plates are located between the strands of roller links. Such chain may

be either single or double pitch and may be used as power transmission

or conveyer chain.

This review also covers leaf chain, which consists of a series of

link plates alternately assembled with pins in such a way that the

joint is free to articulate between adjoining pitches. This review

further covers chain model numbers 25 and 35. Roller chain is currently

[[Page 43770]]

classified under the Harmonized Tariff Schedule of the United States

(HTSUS) subheadings 7315.11.00 through 7619.90.00. HTSUS item numbers

are provided for convenience and Customs purposes. The written

description remains dispositive.

Fair Value Comparisons

We compared the United States price (USP) to the foreign market

value (FMV), as specified in the ``United States Price'' and ``Foreign

Market Value'' sections of this notice. When comparing the U.S. sales

to sales of similar merchandise in the home market, we made adjustments

for differences in physical characteristics, pursuant to 19 CFR 353.57.

United States Price

Pursuant to section 772(b) of the Act, we based USP on purchase

price because all of Excel's and Izumi's U.S. sales to the first

unrelated purchaser took place prior to importation into the United

States, and exporter's sales price methodology was not otherwise

indicated.

We calculated purchase price based on packed FOB or ex-go-down

Japanese port prices to unrelated purchasers in the United States or

Japan. Inasmuch as Excel incorrectly reported U.S. price, net of

commissions, we recalculated gross unit price to include U.S.

commissions. Where applicable, we made deductions for foreign inland

freight and foreign inland insurance. See Roller Chain, Other Than

Bicycle, From Japan: Final Results of Antidumping Duty Administrative

Review 57 FR 56319-20 (November 27, 1992).

In accordance with our standard practice, pursuant to the decision

of the U.S. Court of International Trade (CIT) in Federal-Mogul

Corporation and The Torrington Company v. United States (Federal-

Mogul), 834 F. Supp. 1391 (CIT 1993), our calculations include an

adjustment to U.S. price for the consumption tax levied on comparison

sales in Japan. See Final Antidumping Duty Determination of Sales at

Less Than Fair Value: Stainless Steel Angle From Japan, 60 FR 16609

(March 31, 1995) and Preliminary Antidumping Duty Determination: Color

Negative Photographic Paper and Chemical Components from Japan, 59 FR

16177, 16179 (April 6, 1994), for an explanation of this methodology.

Foreign Market Value

In order to determine whether there were sufficient sales of the

subject merchandise in the home market to serve as a viable basis for

calculating FMV, we compared each respondents' volume of home market

sales of the subject merchandise to the volume of third country sales

in accordance with section 773(a)(1)(B) of the Act. We found that the

home market was viable for both respondents. See 19 CFR 353.48(a).

We calculated FMV for both respondents based on packed, FOB or

delivered prices to unrelated purchasers in Japan. We made deductions,

where appropriate, from FMV for inland freight, insurance, and

discounts. In accordance with section 773(a)(1) of the Act, we

deducted, as appropriate, home market packing costs and added U.S.

packing costs. We made circumstance-of-sale adjustments, where

applicable, for differences in credit expenses, advertising expenses,

warranty expenses and technical service expenses. Pursuant to section

353.56 (b)(1) of the Department's regulations, we offset U.S.

commissions, where appropriate, by deducting home-market indirect

selling expenses from FMV in an amount not exceeding the U.S.

commissions. We recalculated Excel's technical service costs. Only the

travel portion of Excel's technical service costs was treated as a

direct selling expense because these expenses would not have been

incurred absent the sales of the subject merchandise. Following our

past practice, the fixed costs associated with technical services

(salaries, benefits, and automobile depreciation) were treated as

indirect selling expenses.

An adjustment for the consumption tax was made in accordance with

our practice (see ``United States Price'' section of this notice).

We performed an arm's-length test to determine whether Izumi's

sales to its related customers were made at arm's length. Consequently,

we disregarded one of Izumi's reported sales to a related party for

margin calculation purposes because there were no comparable sales to

unrelated parties to use as an arm's length benchmark.

Section 773(a)(4)(c) of the Act provides that a difference-in-

merchandise (DIFMER) allowance may be made when a product on which FMV

is based is not identical to that exported to the United States.

However, when the DIFMER is greater than 20 percent of the U.S.

product's total cost of manufacture (COM), the Department resorts to

constructed value (CV) to establish FMV. See ``Differences in

Merchandise: 20% Rule,'' Import Administration Policy Bulletin: Number

92.2 (July 29, 1992).

In this review, we found that the variable manufacturing cost

differences for certain models of roller chain, other than bicycle, did

not exceed 20 percent of the total average COM of the product exported

to the United States. In such instances, we based FMV on home-market

prices, including a DIFMER allowance. For some models sold by Izumi,

however, these variable-cost differences exceeded 20 percent of the

U.S. product COM. In these instances, we based FMV on CV, as described

in the ``Constructed Value'' section below.

Constructed Value

Pursuant to section 773(a)(2) of the Act, where there were no

contemporaneous home-market sales of such or similar merchandise, we

based FMV on CV. We also relied on CV where there were contemporaneous

home-market sales of such or similar merchandise but the DIFMER

exceeded 20 percent.

In accordance with section 773(e) of the Act, we calculated CV

based on the sum of the cost of materials, fabrication costs, general

expenses, profit, and U.S. packing. Based on Import Administration

Policy Bulletin: Number 94.6 (March 25, 1994), we did not include

consumption taxes in our calculation of CV. We added statutory or

actual amounts for the general expenses and profit components of CV, as

appropriate.

With respect to Izumi's CV submission, we made the following

adjustments:

(1) General and administrative (G&A) expenses: Izumi, in accordance

with its accounting period, reported its G&A expenses for the chain

division in two six-month periods. We recalculated these expenses on a

company-wide basis for the year ending September 30, 1992. Using this

period is consistent with the Department's practice, i.e., it was the

annual period corresponding most closely to the POR. Additionally, we

deducted inland freight from the submitted G&A expenses.

(2) Interest expenses: Izumi computed interest expense for CV based

on amounts incurred by the company's chain division. It is the

Department's normal practice to compute interest at the highest entity

level, in this case, Izumi Chain Manufacturing Co., Ltd. We therefore

revised Izumi's interest expense based on its company-wide financial

statements for the year ended September 30, 1992, the annual period

most closely related to the POR.

Preliminary Results of the Review

As a result of our comparison of United States price to foreign

market value, we preliminarily determine the following dumping margins:

[[Page 43771]]

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

Margin

Manufacturer/exporter (percent)

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

Hitachi..................................................... \1\ 12.68

Izumi....................................................... 0.27

Pulton...................................................... \1\ 0.01

Excel....................................................... 0.10

All Others.................................................. 15.92

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

\1\ No sales during the period. Rate is from the last period in which

there were sales.

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. Upon completion of this administrative review, the Department

will issue appraisement instructions on each exporter directly to the

Customs Service. Furthermore, the following deposit requirements will

be effective for all shipments of roller chain, other than bicycle,

from Japan, 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 Act: (1) the cash

deposit rate will be that 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 in the final determination covering

the most recent period review; (3) if the exporter is not a firm

covered in this review, previous reviews, or the original

investigation, but its manufacturer is such a firm, the cash deposit

rate will be the rate established for the manufacturer in the final

results of the most recently completed review; and (4) for any future

entries from all other manufacturers or exporters who are not covered

in this or prior administrative reviews, and who are unrelated to any

firms listed above, or any previously reviewed firm, the cash deposit

rate will be the ``new shipper'' rate established in the first review

conducted by the Department in which a ``new shipper'' rate was

established, as discussed below.

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

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

Federal-Mogul, 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 these decisions, 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 for the

purposes of establishing cash deposits in all current and future

administrative reviews. Because this proceeding is governed by an

antidumping duty finding, and we are unable to ascertain the ``all

others'' rate from the Treasury LTFV investigation, the ``all others''

rate for the purposes of this review would normally be the ``new

shipper'' rate established in the first notice of final results of

administrative review published by the Department (46 FR 44488,

September 4, 1981). However, a ``new shipper'' rate was not established

in that notice. Therefore, the ``all others'' rate of 15.92 percent is

based on the first review conducted by the Department in which a ``new

shipper'' rate was established in the final results of antidumping

finding administrative review (48 FR 51801, November 14, 1983).

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This notice also serves as a 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.

Public Comment

Interested parties who wish to request a hearing must submit a

written request to the Assistant Secretary for Import Administration,

U.S. Department of Commerce, Room B-099, within ten days of

publication. Requests should contain: (1) the party's name, address and

telephone number; (2) the number of participants; and (3) a list of the

issues to be discussed.

In accordance with 19 CFR 353.38, case briefs or other written

comments in at least ten copies must be submitted to the Assistant

Secretary no later than September 18, 1995, and rebuttal briefs no

later than September 20, 1995. A public hearing, if requested, will be

held on September 22, 1995, at 10:00 am at the U.S. Department of

Commerce, in Room 1410, 14th Street and Constitution Avenue, NW,

Washington, DC. Parties should confirm by telephone the time, date, and

place of the hearing 48 hours prior to the scheduled time. In

accordance with 19 CFR 353.38(b), oral presentations will be limited to

issues raised in the briefs. The Department will publish a notice of

final results of this administrative review, including an analysis of

issues raised in any written comments.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22

of the Department's regulations (19 CFR 353.22).

Dated: August 16, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-20930 Filed 8-22-95; 8:45 am]

BILLING CODE 3510-DS-P