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

DEPARTMENT OF COMMERCE

[A-588-028]

Notice of Final Results of Antidumping Duty Administrative

Review: Roller Chain, Other Than Bicycle, From Japan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

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

the petitioner in this proceeding, the Department of Commerce (the

Department) has conducted an administrative review of the antidumping

finding on roller chain, other than bicycle, from Japan. The review

covers four manufacturers/exporters of this merchandise to the United

States during the period of April 1, 1992, through March 31, 1993.

We gave interested parties the opportunity to comment on our

preliminary results. Based on our analysis of the comments received, we

have revised the results from those presented in our preliminary

results.

EFFECTIVE DATE: December 6, 1995.

FOR FURTHER INFORMATION CONTACT: Greg Thompson or Donna Berg, Office of

Antidumping Investigations, Import

[[Page 62388]]

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.

20230; telephone: (202) 482-3003 or (202) 482-0114, respectively.

SUPPLEMENTARY INFORMATION:

Background

On August 23, 1995, the Department published in the Federal

Register the preliminary results of its 1992-1993 administrative review

of the antidumping duty order on Roller Chain, Other Than Bicycle, from

Japan (60 FR 43769). The four manufacturers/exporters reviewed are

Izumi Chain Manufacturing Co., Ltd. (Izumi), R.K. Excel (Excel),

Hitachi Metals Techno Ltd. (Hitachi), and Pulton Chain Co. Ltd.

(Pulton). Pulton submitted comments on August 30, 1995. On September

18, 1995, the petitioner submitted its case brief. Excel submitted

rebuttal comments on September 25, 1995. The Department has now

conducted this review in accordance with section 751 of the Tariff Act

of 1930, as amended (the Tariff Act).

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.

Scope of the Review

Imports covered by this 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

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.

United States Price

We calculated USP according to the methodology described in our

preliminary results, except for the adjustment of value-added taxes

(VAT), as described below.

In light of the Federal Circuit's decision in Federal Mogul v.

United States, CAFC No. 94-1097, the Department has changed its

treatment of home market consumption taxes. Where merchandise exported

to the United States is exempt from the consumption tax, the Department

will add to the U.S. price the absolute amount of such taxes charged on

the comparison sales in the home market. This is the same methodology

that the Department adopted following the decision of the Federal

Circuit in Zenith v. United States, 988 F. 2d 1573, 1582 (1993), and

which was suggested by that court in footnote 4 of its decision. The

Court of International Trade (CIT) overturned this methodology in

Federal Mogul v. United States, 834 F. Supp. 1391 (1993), and the

Department acquiesced in the CIT's decision. The Department then

followed the CIT's preferred methodology, which was to calculate the

tax to be added to U.S. price by multiplying the adjusted U.S. price by

the foreign market tax rate; the Department made adjustments to this

amount so that the tax adjustment would not alter a ``zero'' pre-tax

dumping assessment.

The foreign exporters in the Federal Mogul case, however, appealed

that decision to the Federal Circuit, which reversed the CIT and held

that the statute did not preclude Commerce from using the ``Zenith

footnote 4'' methodology to calculate tax-neutral dumping assessments

(i.e., assessments that are unaffected by the existence or amount of

home market consumption taxes). Moreover, the Federal Circuit

recognized that certain international agreements of the United States,

in particular the General Agreement on Tariffs and Trade (GATT) and the

Tokyo Round Antidumping Code, required the calculation of tax-neutral

dumping assessments. The Federal Circuit remanded the case to the CIT

with instructions to direct Commerce to determine which tax methodology

it will employ.

The Department has determined that the ``Zenith footnote 4''

methodology should be used. First, as the Department has explained in

numerous administrative determinations and court filings over the past

decade, and as the Federal Circuit has now recognized, Article VI of

the GATT and Article 2 of the Tokyo Round Antidumping Code required

that dumping assessments be tax-neutral. This requirement continues

under the new Agreement on Implementation of Article VI of the General

Agreement on Tariffs and Trade. Second, the Uruguay Round Agreements

Act (URAA) explicitly amended the antidumping law to remove consumption

taxes from the home market price and to eliminate the addition of taxes

to U.S. price, so that no consumption tax is included in the price in

either market. The Statement of Administrative Action (p. 159)

explicitly states that this change was intended to result in tax

neutrality.

While the ``Zenith footnote 4'' methodology is slightly different

from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA

law required that the tax be added to United States price rather than

subtracted from home market price, it does result in tax-neutral duty

assessments. In sum, the Department has elected to treat consumption

taxes in a manner consistent with its longstanding policy of tax-

neutrality and with the GATT.

Foreign Market Value

With the exception noted above for VAT, we calculated FMV according

to the methodology described in our preliminary results.

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.

Interested Party Comments

Comment 1: Consumption Tax Adjustment

The petitioner argues that the Department erred with respect to its

consumption tax (VAT) calculations for Excel's home market sales.

Specifically, the petitioner claims that the Department incorrectly

excluded U.S. commissions from its calculation of the hypothetical VAT

amount applicable to U.S. selling expenses. Insofar as the

[[Page 62389]]

VAT on expenses is deducted from FMV, the petitioner argues that the

alleged error has the effect of lowering FMV and thereby improperly

decreasing Excel's margin.

Excel contends that it would be incorrect to include commissions in

the calculation of U.S. expenses because commissions were not included

in the calculation of the VAT amount that was added to U.S. price. If

the Department were to include commissions in the equation for U.S.

expenses, Excel argues that the Department should also include

commissions in the calculation of the VAT amount that is added to U.S.

price.

DOC Position

In accordance with the CAFC decision (see the ``United States

Price'' section of this notice), the Department has changed its VAT

calculation methodology. Therefore, the comments made by the petitioner

and Excel are moot.

Comment 2: Pulton's Dumping Margin

Pulton states that the Department's preliminary results correctly

indicated that Pulton reported no U.S. sales during this review period.

However, Pulton contends that the Department incorrectly cited the

dumping margin from the most recent review when Pulton had U.S. sales.

Instead of the rate of 0.01 percent published by the Department, Pulton

contends the rate should be 0.00 percent (see 58 FR 52264, 52267

(October 7, 1993)).

DOC Position

We agree with Pulton and have corrected this inadvertent error for

these final results.

Final Results of Review

As a result of our analysis of the comments received, we determine

that the following weighted-average margins exist for the April 1, 1992

through March 31, 1993 period:

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

Margin

Manufacturer/exporter (percent)

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

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

Izumi........................................................ 0.52

Pulton....................................................... \1\0.00

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. The Department will issue appraisement instructions 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 these final results of administrative review, as

provided by section 751(a)(1) of the Tariff Act: (1) The cash deposit

rates for Pulton and Excel will be zero because the margins for these

firms are zero or de minimus. The cash deposit rates for Izumi and

Hitachi will be 0.52 and 12.68 percent, respectively; (2) for

merchandise exported by manufacturers or exporters not covered in this

review but covered in previous reviews or the original less-than-fair-

value (LTFV) investigation, the cash deposit rate will continue to be

the rate published in the most recent final results or determination

for which the manufacturer or exporter received a company-specific

rate; (3) if the exporter is not a firm covered in this review, earlier

review, or the LTFV investigation, but the manufacturer is, the cash

deposit rate will be that established for the manufacturer of the

merchandise in the final results of this review, earlier reviews, or

the LTFV investigation, whichever is the most recent; (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 ``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 CIT in Floral Trade Council v. United States,

822 F. Supp. 766 (CIT 1993), and Federal-Mogul Corporation and the

Torrington Company 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 these decisions, it is

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

the Treasury LTFV 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 litigation) 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 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 comes from Roller Chain, Other Than Bicycle, from

Japan, Final Results of Administrative Review of Antidumping Finding,

48 FR 51801 (November 14, 1983), the first review conducted by the

Department in which a ``new shipper'' rate was established.

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 final reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

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

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as the only reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d). Timely written notification of

return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and terms of the 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: November 29, 1995

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-29728 Filed 12-5-95; 8:45 am]

BILLING CODE 3510-DS-P