Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews

DEPARTMENT OF COMMERCE

[A-588-054, A-588-604]

Tapered Roller Bearings and Parts Thereof, Finished and

Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or

Less in Outside Diameter, and Components Thereof, From Japan;

Preliminary Results of Antidumping Duty Administrative Reviews and

Partial Termination of Administrative Reviews

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Reviews and Partial Termination of Administrative

Reviews.

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SUMMARY: In response to requests by the petitioner and two respondents,

the Department of Commerce (the Department) is conducting

administrative reviews of the antidumping duty order on tapered roller

bearings (TRBs) and parts thereof, finished and unfinished, from Japan

(A-588-604), and of the antidumping finding on TRBs, four inches or

less in outside diameter, and components thereof, from Japan (A-588-

054). The review of the A-588-054 finding covers one manufacturer/

exporter and seven resellers/exporters of the subject merchandise to

the United States during the period October 1, 1994, through September

30, 1995. The review of the A-588-604 order covers two manufacturers/

exporters, seven resellers/exporters, four firms identified by the

petitioner in this case as forging producers, and the period October 1,

1994, through September 30, 1995.

We preliminarily determine that sales of TRBs have been made below

the normal value (NV). If these preliminary results are adopted in our

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

Customs Service to assess antidumping duties equal to the difference

between United States price and the NV. Interested parties are invited

to comment on these preliminary results. Parties who submit argument in

these proceedings are requested to submit with the argument (1) a

statement of the issues and (2) a brief summary of the argument.

EFFECTIVE DATE: November 6, 1996.

FOR FURTHER INFORMATION CONTACT: Valerie Turoscy, Robert James, or John

Kugelman, AD/CVD Enforcement, Group III, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, D.C. 20230,

telephone: (202) 482-0145, 5222, or 0649, respectively.

APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all

citations to the Tariff Act of 1930, as amended (the Act) are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Act by the Uruguay Rounds Agreements

Act. In addition, unless otherwise indicated, all citations to the

Department's regulations are to the current regulations, as amended by

the interim regulations published in the Federal Register on May 11,

1995 (60 FR 25130).

SUPPLEMENTARY INFORMATION:

Background

On August 18, 1976, the Treasury Department published in the

Federal Register (41 FR 34974) the antidumping finding on TRBs from

Japan, and on October 6, 1987, the Department published the antidumping

duty order on TRBs from Japan (52 FR 37352). On October 5, 1995, the

Department published the notice of ``Opportunity to Request

Administrative Review'' for both TRB cases covering the period October

1, 1994 through September 30, 1995 (60 FR 52149).

In accordance with 19 CFR 353.22(a)(1) (1995), the petitioner, the

Timken Company (Timken), requested that we conduct a review of Honda

Motor Company, Ltd. (Honda), Fuji Heavy Industries (Fuji), Kawasaki

Heavy Industries (Kawasaki), Yamaha Motor Co., Ltd. (Yamaha), Nigata

Convertor Co., Ltd. (Nigata), Suzuki Motor Co., Ltd. (Suzuki), and

Toyosha Co., Ltd. (Toyosha), in both the A-588-054 and A-588-604 cases.

In addition, Timken requested that we conduct a review of Nittetsu

Bolten (Nittetsu), Showa Seiko Co., Ltd. (Showa), Ichiyanagi Tekko

(Ichiyanagi), and Sumikin Seiatsu (Sumikin) in the A-588-604 TRB case.

Koyo Seiko Co., Ltd. (Koyo) requested that we conduct a review of its

sales in both TRB cases, and NTN Corporation (NTN) requested that we

conduct a review of its sales in the A-588-604 case. On November 11,

1995, we published in the Federal Register a notice of initiation of

these antidumping duty administrative reviews covering the period

October 1, 1994 through September 30, 1995 (60 FR 57573).

Because it was not practicable to complete these reviews within the

normal time frame, on May 6, 1996, we published in the Federal Register

our notice of the extension of the time limits for both the A-588-054

and A-588-604 1994-95 reviews (61 FR 8253). As a result of this

extension and the 28-day total federal government shutdown, we extended

the deadline for these preliminary results to October 30, 1996, and for

the final results to February 28, 1997.

Scope of the Reviews

Imports covered by the A-588-054 finding are sales or entries of

TRBs, four inches or less in outside diameter when assembled, including

inner race or cone assemblies and outer races or cups, sold either as a

unit or separately. This merchandise is classified under Harmonized

Tariff Schedule (HTS) item numbers 8482.20.00 and 8482.99.30.

Imports covered by the A-588-604 order include TRBs and parts

thereof, finished and unfinished, which are flange, take-up cartridge,

and hanger units incorporating TRBs, and roller housings (except pillow

blocks) incorporating tapered rollers, with or without spindles,

whether or not for automotive use. Products subject to the A-588-054

finding are not included within the scope of this order, except those

manufactured by NTN. This merchandise is currently classifiable under

HTS item numbers 8482.99.30, 8483.20.40, 8482.20.20, 8483.20.80,

8482.91.00, 8483.30.80, 8483.90.20, 8483.90.30, and 8483.90.60. In

addition, on February 2, 1995, we published in the Federal Register our

final scope decision concerning Koyo's rough forgings (60 FR 6519), in

which we determined that Koyo's rough forgings were within the scope of

the A-588-604 order. The HTS item numbers listed above for both the A-

588-054 finding and the A-588-604 order are provided for convenience

and Customs purposes. The written description remain dispositive.

The period for each 1994-95 review is October 1, 1994, through

September 30, 1995. The review of the A-588-054 case covers TRB sales

by one manufacturer/exporter (Koyo), and seven reseller/exporters

(Honda, Fuji, Kawasaki, Yamaha, Nigata, Suzuki, and Toyosha). The

review of the A-588-054 case covers TRBs sales by two manufacturers/

exporters (Koyo and NTN), seven reseller/exporters (Honda, Fuji,

Kawasaki, Yamaha, Nigata, Suzuki, and Toyosha), and four firms

identified as forging producers (Nittetsu, Showa, Ichiyanagi, and

Sumikin). As described in the ``Termination in Part '' section of

[[Page 57392]]

this notice, we are terminating our review of five of the 13 firms in

the A-588-604 case and two firms in the A-588-054 case.

Termination in Part

In accordance with section 353.22(a)(5) (1995) of the Department's

regulations, on January 16, 1996, Koyo withdrew its request for review

in the A-588-604 case and on January 25, 1996, NTN also withdrew its

request for review in the A-588-604 case. In addition, on March 7,

1996, Timken withdrew its request for review for Ichiyanagi in the A-

588-604 case and for Toyosha in both the A-588-604 and A-588-054 cases.

Because we received timely requests for the withdrawal of review from

Koyo, NTN, and Timken, and because no other party to the proceedings

requested a review for Koyo, NTN, and Ichiyanagi in the A-588-604 case

and Toyosha in both the A-588-604 and A-588-054 cases, in accordance

with 19 CFR 353.22(a)(5), we are terminating the A-588-604 review with

respect to Koyo, NTN, Ichiyanagi, and both the A-588-054 and A-588-604

reviews for Toyosha.

In addition, we are terminating the A-588-604 review for one of the

four firms Timken identified as a potential forging producer. Sumikin

reported that not only did it not export subject merchandise to the

United States during the POR, but it did not manufacture any TRBs or

forgings for TRBs during the POR. Because this firm did not produce or

export the subject merchandise, we are terminating the A-588-604 review

for Sumikin. Our termination of the A-588-604 review for this firm does

not constitute a revocation of the firm from the order. If this firm

ever becomes a manufacturer/exporter of TRBs or forgings used in the

production of TRBs, its sales to the United States will be subject to

the order.

We are also terminating the A-588-054 review for Honda based on the

fact that we recently revoked Honda from the A-588-054 finding in our

1992-93 TRB final results notice. See Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From Japan and TRBs, Four Inches or

Less in Outside Diameter, and Components Thereof, From Japan; Final

Results of Antidumping Duty Administrative Reviews and Revocation in

Part of an Antidumping Finding, issued October 29, 1996.

No Shipments

Two resellers, Fuji and Honda, made no shipments of A-588-604

merchandise during the review period. In addition, neither Fuji nor

Honda was a party to the A-588-604 less-than-fair-value (LTFV)

investigation or any prior administrative reviews of the A-588-604

case. Because Fuji's and Honda's shipments have never been reviewed

individually, we have not assigned a rate to either firm for the A-588-

604 case. If Fuji or Honda begins shipping merchandise subject to the

A-588-604 order at some future date, the entries will be subject to

cash deposit rates attributable to the manufacturer(s) of the subject

merchandise.

Two of the four firms Timken identified as forging producers also

made no shipments of A-588-604 merchandise. Showa reported that, while

it made forgings used in the production of TRBs, it did not export TRBs

or forgings to the United States during the review period. Nittetsu

also reported that it did not export TRBs or forgings used in the

production of TRBs during the review period. Because both producers (1)

had no shipments of merchandise subject to the A-588-604 order during

the review period, (2) were not party to the LTFV investigation, and

(3) were never party to any prior administrative reviews of the A-588-

604 case, we have not assigned individual rates to Showa and Nittetsu

for the A-588-604 case. If Showa or Nittetsu were to begin shipping

merchandise subject to the A-588-604 order at some future date, the

entries will be subject to the A-588-604 LTFV ``all others'' cash

deposit rate of 36.52 percent.

Use of Facts Available

We preliminarily determine, in accordance with section 776(a) of

the Act, that the use of facts available is appropriate for Yamaha,

Kawasaki, Nigata, and Suzuki in both the A-588-054 and A-588-604 cases

because these firms either did not respond in any way to our

antidumping questionnaire, or submitted letters stating that they

decline to respond to our antidumping questionnaire. We preliminarily

find that these firms have withheld ``information that has been

requested by the administering authority.'' Furthermore, we

preliminarily determine that, pursuant to section 776(b) of the Act, it

is appropriate to make an inference adverse to the interests of these

companies because they failed to cooperate by not responding to our

questionnaire. As a result, for the weighted-average dumping margins

for these firms, we have used the highest rate from any prior segment

of the respective A-588-054 and A-588-604 proceedings as adverse facts

available, which is secondary information within the meaning of section

776(c) of the Act.

Section 776(c) of the Act provides that the Department shall, to

the extent practicable, corroborate secondary information used as facts

available from independent sources reasonably at its disposal. The

Statement of Administrative Action (SAA) provides that ``corroborate

means simply that the Department will satisfy itself that the secondary

information to be used has probative value (see H.R. Doc. 316, Vol. 1,

103d Cong., 2d sess. 870 (1994)).

To corroborate secondary information, the Department will, to the

extent practicable, examine the reliability and relevance of the

information used. However, unlike other types of information, such as

input costs or selling expenses, there are no independent sources for

calculated dumping margins. The only source for margins is

administrative determinations. Thus, in an administrative review, if

the Department chooses as total adverse facts available a calculated

dumping margin from a prior segment of the proceeding, it is not

necessary to question the reliability of the margin for that time

period. With respect to the relevance aspect of corroboration, however,

the Department will consider information reasonably at its disposal as

to whether there are circumstances that would render a margin

irrelevant. Where circumstances indicate that the selected margin is

not appropriate as adverse facts available, the Department will

disregard the margin and determine an appropriate margin (see Fresh Cut

Flowers from Mexico; Preliminary Results of Antidumping Duty

Administrative Review, 60 FR 49567 (February 22, 1996), where we

disregarded the highest margin in the case as adverse best information

available because the margin was based on another company's

uncharacteristic business expense resulting in an extremely high

margin).

For these preliminary results, we have examined the history of the

A-588-054 and A-588-604 cases and have determined that 47.63 percent,

the rate we calculated for Koyo in the 1987-88 A-588-054 review, is the

highest calculated rate for any firm in any prior segment of the A-588-

054 finding, and that 40.37 percent, the rate we calculated for NSK

Corporation in the 1988-89 A-588-604 review, is the highest calculated

rate for any firm in any prior segment of the A-588-604 order. In

addition, we have examined the circumstances surrounding the

calculation of these two rates and have determined that there is no

reliable evidence on the administrative records

[[Page 57393]]

for the reviews in which these rates were calculated which indicates

that these margins are irrelevant or inappropriate. As a result, for

these preliminary results we have used 47.63 percent in the A-588-054

case and 40.37 percent in the A-588-604 case as total adverse facts

available for Yamaha, Kawasaki, Nigata, and Suzuki.

Constructed Export Price

Because all of Koyo's sales and certain of Fuji's sales of subject

merchandise were first sold to unrelated purchasers after import into

the United States, in calculating U.S. price we used constructed export

price (CEP) for all of Koyo's sales and certain of Fuji's sales, as

defined in section 772(b) of the Act.

We based CEP on the packed, delivered price to unrelated purchasers

in the United States. We made deductions, where appropriate, for

discounts, billing adjustments, freight allowances, and rebates.

Pursuant to section 772(c)(2)(A) of the Act, we reduced this price for

movement expenses (Japanese pre-sale inland freight, Japanese post-sale

inland freight, international air and/or ocean freight, marine

insurance, Japanese brokerage and handling, U.S. inland freight from

the port to the warehouse, U.S. inland freight from the warehouse to

the customer, U.S. duty, and U.S. brokerage and handling). We also

reduced the price, where applicable, by an amount for the following

expenses incurred in the selling of the merchandise in the United

States pursuant to section 772(d)(1): commissions to unrelated parties,

U.S. credit, payments to third parties, U.S. repacking expenses, and

indirect selling expenses (which included, where applicable, inventory

carrying costs, indirect warehouse expenses, indirect advertising

expenses, indirect technical services expenses, pre-sale warehousing

expenses, other U.S.-incurred indirect selling expenses, and indirect

selling expenses incurred by the Japanese parent related to commercial

activity in the United States). Finally, pursuant to section 772(d)(3),

we further reduced USP by an amount for profit to arrive at CEP.

Because certain of Fuji's sales of subject merchandise were made to

unrelated purchasers in the United States prior to importation into the

United States, in accordance with section 772(a) of the Act, we used

export price (EP) for these sales. We calculated EP as the packed,

delivered price to unrelated purchasers in the United States. In

accordance with section 772(c)(2)(A) of the Act, we reduced this price

by Japanese pre-sale inland freight, Japanese post-sale inland freight,

international air and/or ocean freight, marine insurance, Japanese

brokerage and handling, U.S. brokerage and handling, U.S. duty, and

U.S. inland freight.

Where appropriate, in accordance with section 772(d)(2) of the Act,

the Department also deducts from USP the cost of any further

manufacture or assembly in the United States, except where the special

rule provided in section 772(e) of the Act is applied. With respect to

Koyo, there was no further manufacturing of A-588-054 TRBs by Koyo in

the United States during the review period and, as a result, an

adjustment for value added in the United States was unnecessary. With

respect to Fuji, its two U.S. affiliates, Subaru of America (SOA) and

Subaru-Isuzu Automotive (SIA), both import TRBs into the United States

which were first purchased by Fuji from Japanese producers in Japan.

While SOA imported TRBs during the review period for the sole purpose

of reselling the bearings as replacement parts for Subaru automobiles

in the United States, SIA imported TRBs for the sole purpose of using

them in its production of Subaru automobiles in the United States, the

final product sold by SIA to the first unaffiliated customer in the

United States. As a result, we requested information from Fuji and SIA

concerning this further manufacture and have determined that the

special rule for merchandise with value added after importation under

section 772(e) of the Act applies to Fuji.

Section 772(e) of the Act provides that, where the subject

merchandise is imported by an affiliated person and the value added in

the United States by the affiliated person is likely to exceed

substantially the value of the subject merchandise, we shall determine

the CEP for such merchandise using the price of identical or other

subject merchandise if there is a sufficient quantity of sales to

provide a reasonable basis for comparison and we determine that the use

of such sales is appropriate. If there is not a sufficient quantity of

such sales or if we determine that using the price of identical or

other subject merchandise is not appropriate, we may use any other

reasonable basis to determine CEP.

To determine whether the value added in the United States by SIA is

likely to exceed substantially the value of the subject merchandise, we

estimated the value added based on the differences between the averages

of the prices charged to the first unaffiliated U.S. customer for the

final merchandise sold (the automobiles) and the averages of the prices

paid for the subject merchandise (the imported TRBs) by the affiliated

person. Based on this analysis and information on the record, we

determined that the value of the TRBs further processed by SIA in the

United States was a minuscule amount of the price charged by SIA to the

first unaffiliated customer for the automobiles it sold in the United

States. Therefore, we determined that the value added is likely to

exceed substantially the value of the subject merchandise. Accordingly,

it was unnecessary for us to make an adjustment for value added in the

United States. In addition, we have determined that those sales of TRBs

made by SOA as replacement parts in the United States, which constitute

sales of merchandise identical and/or most similar to those TRBs

imported by SIA for use in the manufacture of Subaru automobiles, were

made in sufficient quantities to provide a reasonable basis for

comparison. Therefore, for purposes of determining dumping margins for

the TRBs entered by SIA and used in the production of automobiles, we

have used the weighted-average dumping margins we calculated on sales

of identical or other subject merchandise sold by SOA as replacement

TRBs to unaffiliated persons in the United States.

No other adjustments to USP were claimed or allowed.

Normal Value

A. Viability

Based on (1) Our comparison of the aggregate quantity of home

market and U.S. sales, (2) the absence of any information that a

particular market situation in the exporting country does not permit a

proper comparison, and (3) the fact that each company's quantity of

sales in the home market was greater than five percent of its sales to

the U.S. market, we determined that the quantity of the foreign like

product for Fuji and Koyo sold in the exporting country was sufficient

to permit a proper comparison with the sales of subject merchandise to

the United States pursuant to section 773(a) of the Act. Therefore, in

accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the

prices at which the foreign like products were first sold for

consumption in the exporting country.

B. Arm's-Length Sales

We excluded from our analysis those sales Koyo and Fuji made to

affiliated customers in the home market which were not at arm's length.

We determined the arm's-length nature of Koyo's and

[[Page 57394]]

Fuji's home market sales to affiliated parties by means of our 99.5

percent arm's-length test in which we calculated, for each model, the

percentage difference between the weighted-average prices to the

affiliated customer and all unaffiliated customers and then calculated,

for each affiliated customer, the overall weighted-average percentage

difference in prices for all models purchased by the customer. If the

overall weighted-average price ratio for the affiliated customer was

equal to or greater than 99.5 percent, we determined that all sales to

this affiliated customer were at arm's length. Conversely, if the ratio

for a customer was less than 99.5 percent, we determined that all sales

to the affiliated customer were not at arm's length because, on

average, the customer paid less than unaffiliated customers for the

same merchandise. Therefore, we excluded all sales to the customer from

our analysis. Where we were unable to calculate an affiliated customer

ratio because identical merchandise was not sold to both affiliated and

unaffiliated customers, we were unable to determine if these sales were

at arm's length and, therefore, excluded them from our analysis (see

Stainless Steel Wire Rods from France: Preliminary Results of

Antidumping Duty Administrative Review (61 FR 8915 (March 6, 1996)).

C. Cost of Production Analysis

Because we disregarded sales below the cost of production (COP) in

our last completed A-588-054 review for Koyo, we have reasonable

grounds to believe or suspect that sales of the foreign like product

under consideration for the determination of NV in this review may have

been made at prices below the COP, as provided by section

773(b)(2)(A)(ii) of the Act (see Final Results of Antidumping Duty

Administrative Reviews; Tapered Roller Bearings and Parts Thereof,

Finished and Unfinished, From Japan and Tapered Roller Bearings, Four

Inches or Less in Outside Diameter, and Components Thereof, from Japan,

58 FR 64720 (December 9, 1993)). Therefore, pursuant to section

773(b)(1) of the Act, we initiated a COP investigation of sales by

Koyo.

In accordance with section 773(b)(3) of the Act, we calculated COP

based on the sum of the costs of materials and fabrication employed in

producing the foreign like product, plus selling, general, and

administrative expenses (SG&A) and the cost of all expenses incidental

to placing the foreign like product in condition packed ready for

shipment. We relied on the home market sales and COP information

provided by Koyo in its questionnaire responses.

After calculating COP, we tested whether home market sales of TRBs

were made at prices below COP within an extended period of time in

substantial quantities and whether such prices permit the recovery of

all costs within a reasonable period of time. We compared model-

specific COPs to the reported home market prices less any applicable

movement charges, discounts, or rebates.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20

percent of a respondent's home market sales for a model are at prices

less than the COP, we do not disregard any below-cost sales of that

model because we determine that the below-cost sales were not made

within an extended period of time in ``substantial quantities.'' Where

20 percent or more of a respondent's home market sales of a given model

are at prices less than COP, we disregard the below-cost sales because

they are (1) Made within an extended period of time in substantial

quantities in accordance with sections 773(b)(2) (B) and (C) of the

Act, and (2) based on comparisons of prices to weighted-average COPs

for the POR, were at prices which would not permit the recovery of all

costs within a reasonable period of time in accordance with section

773(b)(2)(D) of the Act.

The results of our cost test for Koyo indicated that for certain

home market models less than 20 percent of the sales of the model were

at prices below COP. We therefore retained all sales of the model in

our analysis and used them as the basis for determining NV. Our cost

test for Koyo also indicated that within an extended period of time

(one year, in accordance with section 773(b)(2)(B) of the Act), for

certain home market models more than 20 percent of the home market

sales were sold at prices below COP. In accordance with section

773(b)(1) of the Act, we therefore excluded these below-cost sales from

our analysis and used the remaining above-cost sales as the basis for

determining NV.

D. Product Comparisons

For both Fuji and Koyo we compared U.S. sales with contemporaneous

sales of the foreign like product in the home market. We considered

bearings identical on the basis of nomenclature and determined most

similar TRBs using our sum-of-the-deviations model-match methodology

which compares TRBs according to the following five physical criteria:

inside diameter, outside diameter, width, load rating, and Y2 factor.

For Koyo we used a 20 percent difference-in-merchandise (difmer) cost

deviation cap as the maximum difference in cost allowable for similar

merchandise, which we calculated as the absolute value of the

difference between the U.S. and home market variable costs of

manufacturing divided by the U.S. total cost of manufacturing. Because

Fuji, a reseller, was unable to provide the variable and total costs of

manufacturing for the TRBs it purchased from Japanese producers, it

instead provided its acquisition cost for each TRB model it purchased

from Japanese producers. As a result, consistent with our practice in

past TRB reviews for Fuji, we used these acquisition costs as the basis

for our 20-percent difmer cap (see, e.g., Tapered Roller Bearings and

Part Thereof, Finished and Unfinished, From Japan and Tapered Roller

Bearings, Four Inches or Less in Outside Diameter, and Components

Thereof, from Japan: Preliminary Results of Administrative Reviews and

Termination in Part, 61 FR 25200 (May 20, 1996)).

E. Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA

at 829-831, to the extent practicable, the Department will calculate NV

based on sales at the same level of trade as the U.S. sales. When we

are unable to find sales of the foreign like product in the comparison

market at the same level of trade as the U.S. sale, we may compare U.S.

sales to sales at a different level of trade in the comparison market.

In accordance with section 773(a)(7)(A) of the Act, if sales at

allegedly different levels of trade are compared, we will adjust the NV

to account for the difference in levels of trade if two conditions are

met. First, there must be differences between the actual selling

activities performed by the exporter at the level of trade of the U.S.

sale and the level of trade of the comparison market sales used to

determine NV. Second, the differences between levels of trade must

affect price comparability as evidenced by a pattern of consistent

price differences between sales at the different levels of trade in the

market in which NV is determined.

Section 773(a)(7)(B) of the Act establishes that a CEP ``offset''

may be made when two conditions exist: (1) NV is established at a level

of trade which constitutes a more advanced stage of distribution than

the level of trade of the CEP, and (2) the data available do not

provide an appropriate basis for a level-of-trade adjustment.

In order to determine that there is a difference in level of trade,

the Department must find that two sales

[[Page 57395]]

have been made at different phases of marketing, or the equivalent.

Different phases of marketing necessarily involve differences in

selling functions, but differences in selling functions (even

substantial ones) are not alone sufficient to establish a difference in

the level of trade. Similarly, seller and customer descriptions (such

as ``distributor'' and ``wholesaler'') are useful in identifying

different levels of trade, but are insufficient to establish that there

is a difference in the level of trade.

In implementing these principles in these reviews, we asked Fuji

and Koyo to provide detailed information concerning their selling

activities/functions for each claimed phase of marketing and to

establish any claimed levels of trade based on these activities. In

order to determine whether separate levels of trade actually existed

within or between the U.S. and home markets, we reviewed the selling

activities associated with each phase of marketing claimed by Fuji and

Koyo. Pursuant to section 773(a)(1)(B)(i) of the Act and the SAA at

827, in identifying levels of trade for EP and home market sales we

considered the selling functions reflected in the starting price before

any adjustments. For CEP sales we considered only the selling

activities reflected in the price after the deduction of expenses and

profit under section 772(d) of the Act. Whenever sales were made by or

through an affiliate company or agent, we considered all selling

activities of both affiliated parties, except for those selling

activities related to expenses deducted under section 772(d) of the Act

in CEP situations.

In reviewing the selling functions reported by Fuji and Koyo, we

considered all types of selling activities performed. In analyzing

whether separate levels of trade existed in these reviews, we found

that no single selling function in the bearings industry was sufficient

to indicate a separate level of trade (see Notice of Proposed

Rulemaking and Request for Public Comments, 61 FR 7307, 7348 (February

27, 1996)). In addition, in determining whether separate levels of

trade existed in or between the U.S. and home markets, we analyzed the

selling activities associated with the phases of marketing the

respondents reported and expected the functions and activities of the

seller to be similar if a respondent claimed levels of trade to be the

same. Conversely, if the party claimed that levels of trade were

different for different groups of sales, we expected the functions and

activities of the seller to be dissimilar.

Koyo reported two different phases of marketing, original equipment

manufacturers (OEM) and after-market (AM), in both its U.S. and home

markets. Based on our analysis of the information of the record

concerning the selling activities associated with each of Koyo's

claimed home market phases of marketing, we found significant

differences in the advertising, inventory maintenance, and sales and

marketing support activities performed and, to a lesser degree,

differences in other selling activities as well. As a result, we

determined that Koyo's claimed phases of marketing constituted two

separate home market levels of trade.

While Fuji sold to both related and unrelated dealers in Japan, it

reported that there were no significant differences in the selling

activities it performed when selling to each group and claimed only one

phase of marketing in the home market. Based on our examination of the

information supplied by Fuji, we agree that only one phase of marketing

exists and have therefore determined that there is only one level of

trade for Fuji in the home market.

With respect to Koyo's U.S. sales, which were all CEP sales, Koyo

reported two different phases of marketing based on the starting price

of the CEP sales made by its affiliated reseller to unaffiliated U.S.

customers. Likewise, Fuji reported three phases of marketing for its

U.S. CEP sales based on the starting price for the CEP sales made by

its affiliated reseller to unaffiliated customers in the United States.

While we recognize that Koyo's and Fuji's affiliated resellers

performed different selling activities in association with the reported

phases of marketing such that different U.S. levels of trade exist

based on the price to the unaffiliated U.S. customer (i.e., the CEP

starting price), in CEP situations we do not determine the U.S. level

of trade on the basis of the CEP starting price. Rather, as described

above, in CEP situations we determine the U.S. level of trade on the

basis of the CEP starting price minus the expenses and profit deducted

pursuant to section 772(d) of the Act (i.e., the level of trade of the

CEP sale). Therefore, in order to determine the U.S. level of trade for

Koyo's and Fuji's CEP sales, we examined those selling expenses Koyo

and Fuji performed in association with the phase of marketing from the

foreign parent to the affiliated reseller and, regardless of the level

of trade of the CEP starting price, found no significant differences in

the functions either Koyo or Fuji performed when selling to its

respective U.S. affiliate. As a result, we determined that there was

only one U.S. level of trade for both Koyo's and Fuji's CEP sales.

In regard to its EP sales, Fuji identified two categories of U.S.

EP sales: those to certain independent distributors in the United

States where the merchandise is directly shipped from Japan and the

paperwork is processed by, and certain selling functions are performed

by, Fuji's related affiliate SOA, and those direct sales to an

independent dealer/distributor in Hawaii. In determining whether

separate levels of trade existed between these two phases, we examined

the selling functions as reflected in the starting price to the

unaffiliated U.S. customer and found that Fuji provided very limited

selling functions to the Hawaiian dealer/distributor as compared to the

independent distributors. As a result, we have determined that Fuji's

EP sales constitute two separate U.S. EP levels of trade.

When we compared the level of trade of Koyo's CEP sales to Koyo's

home market levels of trade we found that the record indicated that the

level of trade of the CEP sales involved little or no technical

services, engineering services, advertising, after-sales services, or

strategic planning and, as a result, was different from either of the

home market levels and also at a less advanced stage of distribution

than sales at either of the home market levels. Likewise, when we

compared the level of trade of Fuji's CEP sales to its home market

level of trade, the record again indicated that the CEP sales involved

little or no technical services, engineering services, after-sale

services, or advertising and were at a less advanced stage of

distribution than the sales at the home market level of trade. Upon

comparing Fuji's sales at its two U.S. EP levels of trade to its sales

at its home market level we found that the selling functions at its

home market level of trade included strategic/economic planning

services, training and personnel services, and technical services which

were not characteristic of the U.S. EP levels of trade. Consequently,

because we were unable to find the same levels of trade in the home

market as in the United States for both respondents, we were unable to

match Fuji's and Koyo's U.S. CEP sales and Fuji's EP sales at the same

level of trade in the home market.

When we are unable to find sales of the foreign like product in the

home market at the same level of trade as that of the CEP or EP sales,

we examine whether a level-of-trade adjustment is appropriate. Because

the same level of trade as Koyo's and Fuji's CEP level and Fuji's EP

levels did not exist in their home markets, we lacked the data

necessary to determine whether there

[[Page 57396]]

was a consistent pattern of price differences between levels of trade

based on Koyo's and Fuji's home market sales of merchandise under

review, in accordance with section 773(a)(7)(A) of the Act. However,

the SAA states that ``if information on the same product and company is

not available, the adjustment may also be based on sales of other

products by the same company. In the absence of any sales, including

those in recent time periods, to different levels of trade by the

exporter or producer under investigation, Commerce may further consider

the selling experience of other producers in the home market for the

same product or other products'' (see SAA at 830). Accordingly, we

examined these alternative methods for calculating the level-of-trade-

adjustment for Koyo and Fuji, but we lacked the information that would

allow us to apply them. Because the data available do not provide an

appropriate basis for making a level-of-trade adjustment for Koyo or

Fuji, but Koyo's and Fuji's respective home market levels of trade are

at a more advanced stage of distribution than the level of trade of

their respective CEP sales, a CEP offset adjustment, in accordance with

section 773(a)(7)(B) of the Act, is appropriate. Both respondents

claimed a CEP offset adjustment and we applied the offset to NV in our

CEP comparisons for Koyo and Fuji.

F. Home Market Price

While we found below-cost home market sales for Koyo, Koyo's

remaining home market sales at or above cost were sufficient to serve

as the basis for NV.

We based home market prices on the packed, ex-factory or delivered

prices to affiliated purchasers (where an arm's-length relationship was

demonstrated) and unaffiliated purchasers in the home market. We made

adjustments for differences in packing and for movement expenses in

accordance with sections 773(a)(6) (A) and (B) of the Act. In addition,

we made adjustments for differences in cost attributable to differences

in physical characteristics of the merchandise pursuant to section

773(a)(6)(C)(II) of the Act, and for differences in circumstances of

sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and

19 CFR 353.56. For comparison to EP we made COS adjustments by

deducting home market direct selling expenses and adding U.S. direct

selling expenses. For comparisons to CEP, we made COS adjustments to NV

by deducting home market direct selling expenses and, where applicable,

adding U.S. direct selling expenses, except those deducted from the

starting price in calculating CEP pursuant to section 772(d) of the

Act. We also made adjustments, where applicable, for home market

indirect selling expenses to offset U.S. commissions in EP and CEP

calculations.

While both Koyo and Fuji claimed certain post-sale price

adjustments to their reported home market prices, we have not allowed

these adjustments, as explained in detail in the proprietary versions

of our 1994-95 preliminary results analysis memoranda for Koyo and

Fuji.

No other adjustments were claimed or allowed.

Fair Value Comparisons

To determine whether sales of TRBs by the respondents in the United

States were made at less than fair value, we compared the CEP and EP to

NV, as described in the ``United States Price'' and ``Normal Value''

sections of this notice. In accordance with section 777A(d)(2) of the

Act, we calculated monthly weighted-average prices for NV and compared

these monthly averages to individual U.S. sales transactions. For Koyo,

which had two phases of marketing in the home market, we first

calculated monthly weighted-average NVs for the phase of marketing in

the home market which was most comparable to that in which the U.S.

transaction was made (as defined by the price to the first unrelated

U.S. customer). Then, to the extent possible, we compared CEP to this

NV. Alternatively, where there were no home market sales in the phase

of marketing most comparable to the U.S. sale, we weight-averaged home

market sales for the other home market phase of distribution and

compared CEP to this NV (see, e.g., Stainless Steel Wire Rods from

France: Preliminary Results of Antidumping Duty Administrative Review,

61 FR 8015 (March 6, 1996) and Fresh Kiwifruit from New Zealand:

Preliminary Results of Antidumping Duty Administrative Review, 61 FR

15922 (April 10, 1996)). In regard to Fuji, which sold in only one home

market channel of distribution, we compared CEP and EP to the monthly

weighted-average NVs we calculated for this single channel of

distribution.

Preliminary Results of Review

As a result of our reviews, we preliminarily determine the

following weighted-average dumping margins exist for the period October

1, 1994, through September 30, 1995:

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

Margin

Manufacturer/exporter/reseller (percent)

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

For the A-588-054 Case:

Koyo Seiko............................................... 31.25

Fuji..................................................... 11.35

Kawasaki................................................. 47.63

Yamaha................................................... 47.63

Nigata................................................... 47.63

Suzuki................................................... 47.63

For the A-588-604 Case:

Fuji..................................................... (\1\)

Honda.................................................... (\1\)

Kawasaki................................................. 40.37

Yamaha................................................... 40.37

Nigata................................................... 40.37

Suzuki................................................... 40.37

Nittetsu................................................. (\1\)

Showa Seiko.............................................. (\1\)

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

\1\ No shipments or sales subject to this review. The firm has no rate

from any prior segment of this proceeding.

Parties to these proceedings may request disclosure within five

days of the date of publication of this notice and may request a

hearing within ten days of publication. Any hearing, if requested, will

be held 44 days after the date of publication, or the first business

day thereafter. Case briefs and/or written comments from interested

parties may be submitted no later than 30 days after the date of

publication. Rebuttal briefs and rebuttals to written comments, limited

to issues raised in the case briefs and comments, may be filed no later

than 37 days after the date of publication of this notice. Parties who

submit argument in these proceedings are requested to submit with the

argument (1) a statement of the issues and (2) a brief summary of the

argument. The Department will issue final results of these

administrative reviews, including the results of our analysis of the

issues in any such written comments or at a hearing, within 180 days of

issuance of these preliminary results.

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between USP and NV may vary from the percentages stated

above. The Department will issue appraisement instructions directly to

Customs.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of these administrative reviews

for all shipments of TRBs from Japan entered, or withdrawn from

warehouse, for consumption on or after the publication date of the

final results of these administrative reviews, as provided by section

751(a)(1) of the Act:

(1) The cash deposit rates for the reviewed companies will be those

rates

[[Page 57397]]

established in the final results of these reviews;

(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 these reviews, a prior

review, or the LTFV investigations, 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 these or any previous reviews conducted by the Department, the cash

deposit rate for the A-588-054 case will be 18.07 percent, and 36.52

percent for the A-588-604 case (see Preliminary Results of Antidumping

Duty Administrative Reviews; Tapered Roller Bearings, Finished and

Unfinished, and Parts Thereof, from Japan and Tapered Roller Bearings,

Four Inches or less in Outside Diameter, and Components Thereof, From

Japan, 58 FR 51058, 51061 (September 30, 1993)).

All U.S. sales by each respondent will be subject to one deposit

rate according to the proceeding.

The cash deposit rate has been determined on the basis of the

selling price to the first unrelated customer in the United States. For

appraisement purposes, where information is available, the Department

will use the entered value of the subject merchandise to determine the

appraisement rate.

This notice serves as a preliminary reminder to importers of their

responsibility 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. These administrative reviews and this notice are in accordance

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

353.22.

Dated: October 30, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-28559 Filed 11-5-96; 8:45 am]

BILLING CODE 3510-DS-P