Certain Internal-Combustion, Industrial Forklift Trucks From Japan; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-703]

Certain Internal-Combustion, Industrial Forklift Trucks From

Japan; Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Review.

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SUMMARY: In response to requests from interested parties, the

Department of Commerce (the Department) is conducting an administrative

review of the antidumping duty order on certain internal-combustion,

industrial forklift trucks from Japan. The review covers three

manufacturers/exporters of the subject merchandise to the United States

during the period June 1, 1993 through May 31, 1994.

We have preliminarily determined that sales have been made below

foreign market value (FMV). If these preliminary results are adopted in

our final results of the administrative review, we will instruct U.S.

Customs to assess antidumping duties equal to the difference between

the United States price (USP) and FMV.

We invite interested parties to comment on these preliminary

results. Parties who submit comments in these proceedings are requested

to submit with each argument (1) a statement of the issue and (2) a

brief summary of the argument.

EFFECTIVE DATE: August 6, 1996.

FOR FURTHER INFORMATION CONTACT: Davina Hashmi or Thomas Barlow of

Import Administration, International Trade Administration, U.S.

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

4733.

SUPPLEMENTARY INFORMATION: Unless otherwise indicated, all citations to

the statute and to the Department's regulations are references to the

provisions as they existed on December 31, 1994.

Background

On June 7, 1988, the Department published in the Federal Register

(53 FR 20882) the antidumping duty order on certain internal-

combustion, industrial forklifts from Japan. On June 7, 1994, the

Department published a notice of ``Opportunity to Request an

Administrative Review'' (59 FR 29411). Petitioners requested that we

conduct a review of three respondents, Nissan Motor Company (Nissan),

Toyota Motor Corporation (TMC), and Toyo Umpanki Company, Ltd (TCM). On

July 15, 1994, we initiated an administrative review of this order for

the period June 1, 1993, through May 31, 1994 (59 FR 36160). The

Department is now conducting this administrative review in accordance

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

Scope of Review

The products covered by this review are certain internal-

combustion, industrial forklift trucks, with lifting capacity of 2,000

to 15,000 pounds. The products covered by this review are further

described as follows: Assembled, not assembled, and less than complete,

finished and not finished, operator-riding forklift trucks powered by

gasoline, propane, or diesel fuel internal-combustion engines of off-

the-highway types used in factories, warehouses, or transportation

terminals for short-distance transport, towing or handling of articles.

Less than complete forklift trucks are defined as imports which include

a frame, by itself or a frame assembled with one or more component

parts. Component parts of the subject forklift trucks which are not

assembled with a frame are not covered by this order. This merchandise

is currently classifiable under the Harmonized System (HTS) item

numbers 8427.20.00, 8427.90.00, and 8431.20.00. The HTS item numbers

are provided for convenience and Customs purposes. The written

description remains dispositive.

Such or Similar Comparisons

In this administrative review, respondents made no sales of

identical merchandise in the home and U.S. market. Therefore, for all

respondent companies, pursuant to section 771(16) of the Act, we

established categories of ``such or similar'' merchandise on the basis

of load (lifting) capacity of the forklift. Within these categories, we

based our product comparisons on six primary characteristics, to which

we assigned ``points'' indicating their relative importance. These

characteristics and their point totals are as follows: tire type, 6

points; upright style, 5 points; engine type, 4 points; transmission

type, 3 points; maximum forklift height, 2 points; engine size, 1

point. If no matches were found at the 21-point level at the exact or

same load capacity, then matches of forklift trucks were found with

tire type taking preference. For a more detailed description of the

product matching criteria, see Section VII of the Department's

Questionnaire, June 16, 1995, Product Comparisons

[[Page 40814]]

(Concordance) And Adjustments For Differences In Merchandise.

United States Price (USP)

For those sales made directly to unrelated parties prior to

importation into the United States, we based the United States price on

purchase price, in accordance with section 772(b) of the Act.

Where the sale to the first unrelated purchaser took place after

importation into the United States, we based United States price on

exporter's sales price (ESP), in accordance with section 772(c) of the

Act. The calculation of United States price for each respondent is

detailed below.

Nissan: The information submitted by Nissan in this review, as well

as our consultations with the Customs Service, indicates that Nissan

made no sales of subject merchandise during the period of review.

TMC: We calculated purchase price and ESP based on packed and

delivered, f.o.b., and c&f prices to unrelated customers in the United

States. Pursuant to section 772(d)(2) of the Act, we made deductions

from purchase price and ESP, where appropriate, for foreign inland

freight, export brokerage, U.S. brokerage and handling, ocean freight,

marine insurance, and U.S. inland freight. We also made deductions for

discounts. For sales made to unrelated customers which were financed

through Toyota's credit corporation, we added interest revenue earned

to USP. For ESP sales, we made further deductions from USP under

section 772(e) (1) and (2) of the Act for credit expenses, commissions,

warranties, direct advertising, and indirect selling expenses (which

include inventory carrying costs, advertising, product liability

expenses, and selling expenses). For ESP transactions involving further

manufacturing (e.g., swapping forks and masts, and installation of

certain accessories by a U.S. related entity of TMC) prior to sale in

the United States, we deducted all value added in the United States,

pursuant to section 772(e)(3) of the Act. Also, based on a decision by

the Court of Appeals for the Federal Circuit (Federal Mogul v. United

States, CAFC No. 94-1097), the Department returned to the methodology

of adding the absolute amount of consumption taxes collected in the

home market to both U.S. price and home market price. Pursuant to this

court decision and in accordance with section 772(d)(1)(C) of the Act,

we calculated this amount by multiplying the tax rate in the home

market by home market price net of discounts and rebates.

We did not incorporate operating leases into our calculations of

U.S. Price. In accordance with 19 CFR 353.2(t), we accounted for

capital leases in our preliminary margin calculations.

TCM: The information submitted by TCM in this review, as well as

our consultations with the Customs Service, indicates that TCM made no

sales of subject merchandise during the period of review.

Foreign Market Value

In accordance with section 773(a) of the Act, we calculated foreign

market value (FMV) on the basis of home market sales and, where

appropriate, constructed value. The calculation of FMV for Toyota is

detailed below.

Petitioners alleged that Toyota sold forklift trucks in Japan at

prices below the cost of producing the merchandise. Based on our

analysis of the sales-below-cost-of-production (COP) allegation filed

by petitioners, and in accordance with section 773(b) of the Act, we

determined that there were reasonable grounds to believe or suspect

that such sales were being made. We therefore initiated a COP

investigation.

In accordance with 19 CFR 353.51(c), we calculated the COP based on

the sum of the costs of materials and fabrication employed in producing

such or similar merchandise plus selling, general and administrative

expenses, and all costs and expenses incidental to placing such or

similar merchandise in condition, packed, and ready for shipment. In

our COP analysis, we used the home market sales and COP information

provided by TMC in its questionnaire and supplemental questionnaire

responses.

We performed a model-specific COP test in which we examined whether

each home market sale was priced below the merchandise's COP. For each

model, we compared the COP to the reported home market unit price, net

of price adjustments and movement expenses. In accordance with section

772 (b) of the Act, we also examined whether the home market sales of

each model were made at prices below their COP in substantial

quantities over an extended period of time. Toyota did not submit

evidence that such sales were made at prices which would permit

recovery of all costs within a reasonable period of time in the normal

course of trade. Therefore, we assumed that prices would not recover

the costs in the normal course of trade.

For each model where less than 10 percent, by quantity, of the home

market sales during the period of review (POR) were made at prices

below the COP, we included all sales of that model in the computation

of FMV. For each model where 10 percent or more, but not more than 90

percent, of the home market sales during the POR were priced below the

merchandise's COP, we excluded from the calculation of FMV those home

market sales which were priced below the merchandise's COP, provided

that these below-cost sales were made over an extended period of time.

For each model where more than 90 percent of the home market sales

during the POR were priced below the COP and over an extended period of

time, we disregarded all sales of the model from our calculation of FMV

and used the constructed value (CV) of those models as described below.

See Antifriction Bearings (Other Than Tapered Roller Bearings) and

Parts Thereof From France, et al.; Preliminary Results of Antidumping

Duty Administrative Reviews, Partial Termination of Administrative

Reviews, and Notice of Intent To Revoke Orders (in Part) 59 FR 9463

(February 28, 1994).

In order to determine whether below-cost sales had been made over

an extended period of time, we compared the number of months in which

each product was sold below cost to the number of months during the POR

in which each model was sold. If a product was sold in fewer than three

months during the review period, we did not exclude the below-cost

sales unless there were below-cost sales in each month of sale. If a

product was sold in three or more months, we did not exclude the below-

cost sales unless there were below-cost sales in at least three months

during the POR.

For those models that had sufficient above-cost sales, we

calculated FMV based on delivered prices and f.o.b. prices to unrelated

and related customers in the home market. Where appropriate, and in

accordance with section 773(a)(4)(B) of the Act, we made deductions

from the home market price for inland freight, inland insurance, and

rebates. Since no packing costs were claimed on the home market sales,

we added U.S. packing to the home market price.

In accordance with section 773(a)(4)(B) of the Act and 19 CFR

353.56, for comparisons involving ESP and purchase price sales

transactions, we made deductions from the home market price, where

appropriate, for credit expenses, warranties, and advertising. We made

an adjustment to FMV for indirect selling expenses (which included

incentive program expenses, inventory carrying costs, product liability

expenses, and other indirect expenses) in the home market to offset

indirect selling expenses on ESP sales in the United States. We

[[Page 40815]]

limited the indirect expense deduction on home market sales by the

amount of the indirect selling expenses incurred in the United States

in accordance with 19 CFR 353.56(b)(2). Pursuant to section

773(a)(4)(C) of the Act and 19 CFR 353.57, we made further adjustments

to the home market price to account for differences in the physical

characteristics of the merchandise.

We used CV as FMV for those U.S. sales for which there were no

contemporaneous sales of the comparison home market model or

insufficient sales at or above the COP. We calculated CV, in accordance

with section 773 (e) of the Act, as the sum of the cost of manufacture

(COM) of the product sold in the United States, home market selling,

general and administrative (SG&A) expenses, home market profit and U.S.

packing. Pursuant to 19 CFR 353.51, the COM of the product sold in the

United States is the sum of direct material, direct labor, and variable

and fixed factory overhead expenses. For home market SG&A expenses, and

in accordance with section 773(e)(1)(B)(i) of the Act, we used the

larger of the actual SG&A expenses reported by Toyota or 10 percent of

the COM, the statutory minimum for general expenses. For home market

profit, and in accordance with section 773(e)(1)(B)(ii) of the Act, we

used the larger of the actual profit reported by the respondents or the

statutory minimum of eight percent of the sum of COM and general

expenses. We deducted home market direct selling expenses and added

U.S. direct selling expenses to CV.

Preliminary Results of Review

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

market value, we preliminarily determine that the following margins

exist for the period June 1, 1993 through May 31, 1994:

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Margin

Manufacturer (percent)

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

Toyota Motor Corporation................................... 43.41

Nissan..................................................... \1\7.36

Toyo Umpanki, Ltd.......................................... \1\4.48

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\1\ No shipments or sales subject to this review. Rate is from the last

relevant segment of the proceeding in which the firm had shipments/

sales.

Parties to this proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of the date of publication of this

notice. A hearing, if requested, will be held 44 days from the date of

publication of the preliminary results at the main Commerce Department

building.

Issues raised in hearings will be limited to those raised in the

respective case briefs and rebuttal briefs. Case briefs from interested

parties and rebuttal briefs, limited to the issues raised in the

respective case briefs, may be submitted not later than 30 days and 37

days, respectively, from the date of publication of these preliminary

results. Parties who submit case briefs or rebuttal briefs in this

proceeding are requested to submit with each argument (1) a statement

of the issue and (2) a brief summary of the argument.

The Department will subsequently publish the final results of this

administrative review, including the results of its analysis of issues

raised in any such written briefs or hearing.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Because the

inability to link sales with specific entries prevents calculation of

duties on an entry-by-entry basis, we have calculated an importer-

specific ad valorem duty assessment rate for the merchandise based on

the ratio of the total amount of antidumping duties calculated for the

examined sales made during the POR to the total customs value of the

sales used to calculate those duties. This rate will be assessed

uniformly on all entries of that particular importer made during the

POR. (This is equivalent to dividing the total amount of antidumping

duties, which are calculated by taking the difference between foreign

market value and United States price, by the total United States price

value of the sales compared, and adjusting the result by the average

difference between United States price and customs value for all

merchandise examined during the POR.) The Department will issue

appropriate appraisement instructions directly to the Customs Service

upon completion of this review.

Furthermore, the following deposit requirements will be effective

upon publication of the final results of this administrative review for

all shipments of certain internal-combustion, industrial forklift

trucks from Japan entered, or withdrawn from warehouse, for consumption

on or after the publication date, as provided by section 751(a)(1) of

the Tariff Act: (1) the cash deposit rate for TMC will be the rate

established in the final results of this administrative review, unless

these final results are preceded by the final results in the 1994/1995

administrative review; (2) for previously reviewed 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 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) the cash deposit rate for any future entries

from all other manufacturers or exporters who are not covered in this

review, or a prior administrative review, and who are unrelated to the

reviewed firm or any previously reviewed firm will be 39.45 percent ,

the ``all others'' rate established in the amended final notice of the

investigation by the Department (53 FR 20882, June 7, 1988).

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 this 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(c)(5).

Dated: July 29, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-20000 Filed 8-5-96; 8:45 am]

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