Color Picture Tubes From Japan; Preliminary Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-609]

Color Picture Tubes From Japan; Preliminary Results of

Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review of color picture tubes from Japan.

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

[[Page 6169]]

SUMMARY: In response to a request by the petitioners, the Department of

Commerce (the Department) is conducting an administrative review of the

antidumping duty order on color picture tubes (CPTs) from Japan. The

period of review (POR) is January 1, 1995 through December 31, 1995.

The review indicates the existence of dumping margins during this

period.

We have preliminarily determined that subject merchandise has been

sold at less than normal value (NV) during the POR. 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 on entries during the POR. Interested parties are invited to

comment on these preliminary results.

EFFECTIVE DATE: February 11, 1997.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington D.C. 20230; telephone (202) 482-4733.

Applicable Statute

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 Round Agreements Act (URAA). In addition, 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).

Background

On January 26, 1996, the Department published in the Federal

Register (61 FR 2488) a notice of ``Opportunity To Request an

Administrative Review'' of the antidumping duty order on CPTs from

Japan (52 FR 44171 (November 18, 1987)). In accordance with 19 C.F.R.

353.22(a), the petitioners, the International Association of Machinists

and Aerospace Workers, International Union of Electronic, Electrical,

Salaried, Machine & Furniture Workers, AFL-CIO, Industrial Union

Department AFL-CIO, requested that we conduct an administrative review

of sales of CPTs from Japan by Mitsubishi Electric Corporation (MELCO).

We published a notice of initiation of this antidumping duty

administrative review on February 20, 1996 (61 FR 6347), covering the

period January 1, 1995 through December 31, 1995.

Because it was not practicable to complete this review within the

normal time frame, on October 25, 1996, we published in the Federal

Register our notice of extension of the time limit for these

preliminary results to January 30, 1997 (61 FR 55271). The deadline for

the final results will continue to be 120 days after publication of

these preliminary results.

Scope of Review

Imports covered by this review are shipments of CPTs from Japan.

CPTs are defined as cathode ray tubes suitable for use in the

manufacture of color televisions or other color entertainment display

devices intended for television viewing. This merchandise is

classifiable under the Harmonized Tariff Schedule (HTS) item numbers

8540.11.00.10, 8540.11.00.20, 8540.11.00.30, 8540.11.00.40,

8540.11.00.50 and 8540.11.00.60. Although the HTS item numbers are

provided for convenience and customs purposes, our written description

of the scope of this proceeding is dispositive.

Verification

In accordance with section 782(i) of the Act, we verified

information provided by MELCO by using standard verification

procedures, including onsite inspection of the manufacturer's

facilities, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. We conducted the verification at the company's

headquarters in Kyoto, Japan, from September 17 through September 20,

1996. Our verification results are outlined in the public version of

the verification report. See Memorandum from Case Analyst to File,

dated December 27, 1996.

Product Comparisons

We calculated NV on a monthly weighted-average basis. Where

possible, we compared U.S. sales to sales of identical merchandise in

Japan. For U.S. sales in which identical merchandise was not sold

during the relevant contemporaneous period, we compared U.S. sales to

the most similar foreign like product on the basis of characteristics

listed in MELCO's April 1, 1996 response to section A of our

questionnaire.

Constructed Export Price

We calculated a constructed export price (CEP) for MELCO's U.S.

transactions, in accordance with section 772(b) of the Act, because

sales to the first unrelated purchaser took place after importation

into the United States.

We calculated CEP based on the packed, ex-warehouse price from the

U.S. subsidiary to unrelated customers. We made deductions from CEP for

U.S. packing in the United States, international freight, foreign

inland freight, marine insurance, U.S. customs duties, U.S. inland

freight insurance and U.S. inland freight. In accordance with section

772(d)(1) of the Act, we deducted from CEP the following selling

expenses that related to economic activity in the United States:

commissions, direct selling expenses, including advertising,

warranties, credit expenses, discounts, rebates, and indirect selling

expenses, including inventory carrying costs, and further

manufacturing. We also made an adjustment for CEP profit in accordance

with section 772 (d)(3) of the Act.

Normal Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared respondent's volume of home market sales of the foreign

like product to the volume of U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(C) of the Act. Since respondent's

aggregate volume of home market sales of the foreign like product was

greater than five percent of its aggregate volume of U.S. sales for the

subject merchandise, we determined that the home market was viable.

Therefore, we have based NV on home market sales. We based NV on the

packed, delivered price to unrelated purchasers in the home market.

Where applicable, we made adjustments to home market prices for

discounts, rebates, technical service expenses, pre-sale warehouse

expenses, and royalties. To adjust for differences in circumstances of

sale between the home market and the United States, we deducted post-

sale inland freight and credit expense from NV in accordance with

section 773(a)(6)(C) of the Act. In accordance with 19 C.F.R.

353.56(b), we made an adjustment to NV for indirect selling expenses in

the home market to offset the sum of commissions in the United States.

In order to adjust for differences in packing between the two

markets, we deducted home market packing costs from NV and added U.S.

packing costs.

We compared U.S. sales of CPTs to NV based on constructed value

(CV) when MELCO did not have contemporaneous home market sales of CPTs

with which we could compare the U.S. sale. We calculated CV in

accordance with section 773(e) of the Tariff Act. We included the cost

of materials, labor, general expenses, profit and packing. Where

appropriate, we

[[Page 6170]]

made adjustments to CV, in accordance with 19 C.F.R. 353.56, for

differences in circumstances of sale.

The home market and CV databases that MELCO submitted did not

contain matches for certain U.S. sales. See Memorandum from Analyst to

File: Preliminary Results for MELCO, January 30, 1997. Therefore, in

accordance with section 776 of the Act, we applied a rate based on the

facts available to these sales. Given the nature and extent of the

deficiency, we have selected the weighted-average rate that we

calculated for all other sales in this review (1.92 percent) as facts

available. See section 776(a) of the Act.

Level of Trade and CEP Offset

As set forth in section 773(a)(7) of the Act and in the Statement

of Administrative Action (H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess.

(1994)) (SAA) at 829-831, to the extent practicable, we will calculate

NV based on sales at the same level of trade as the U.S. sale. In this

review, we were unable to find comparison sales at the same level of

trade as the U.S. sales. Accordingly, we compared the sales in the

United States to sales at a different level of trade in the comparison

market.

In accordance with section 773(a)(7)(A) of the Act, if we compare a

U.S. sale with a home market sale made at a different level of trade,

we will adjust the NV to account for this difference if two conditions

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

functions performed by the seller at the level of trade of the U.S.

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

determine NV. Second, the differences 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. For CEP sales, section 773(a)(7)(B) of the Act establishes

the procedures for making a CEP ``offset'' 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.

We based the level of trade of CEP sales on the price in the United

States after making the CEP deductions under section 772(d) but before

making the deductions under section 772(c). Where home market sales

served as the basis for NV, we determined the NV level of trade based

on starting prices in the home market. Where NV was based on CV, we

determined the NV level of trade based on the level of trade of the

sales from which we derived SG&A and profit for CV.

In order to determine whether sales in the comparison market are at

a different level of trade than the CEP, we examined whether the

comparison sales were at different stages in the marketing process than

the CEP. We made this determination on the basis of a review of the

distribution system in the comparison market, including selling

functions, class of customer, and the level of selling expenses for

each type of sale. Different stages 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, while customer categories

such as ``distributor'' and ``wholesaler'' may be useful in identifying

different levels of trade, they are insufficient in themselves to

establish that there is a difference in the level of trade. See Certain

Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-

Length Carbon Steel Plate from Canada: Preliminary Results of

Antidumping Duty Administrative Review, 61 FR 51896 (October 4, 1996).

MELCO requested that we make a level-of-trade adjustment, or a CEP

offset if we could not quantify a level-of-trade adjustment, because

sales in the home market involved a more advanced level of trade than

the level of trade of the CEP. Our analysis of the reported selling

expenses, selling functions, and customer classes of U.S. and home

market sales demonstrates that the home market sales are distributed

through a more advanced marketing stage than that involved at the level

of trade of the CEP.

Because we compared CEP sales to home market sales at a different

level of trade, we examined whether a level-of-trade adjustment was

appropriate. In this case, we were unable to quantify price differences

involving comparisons of sales made at different levels of trade

because the same level of trade as that of the CEP did not exist in the

home market. Therefore, we could not determine whether there was a

pattern of consistent price differences between the levels of trade

based on respondent's home market sales of merchandise under review.

Because we were unable to quantify a level-of-trade adjustment

based on a pattern of consistent price differences, we granted a CEP

offset where the comparison sales were at a more advanced level of

trade than the sales to the United States, in accordance with section

773(a)(7)(B) of the Act.

To calculate the CEP offset, in accordance with section

772(d)(1)(D) of the Act, we considered the home market indirect selling

expenses and deducted this amount from NV on home market sales which we

compared to U.S. CEP sales. We limited the home market indirect selling

expense deduction by the amount of the indirect selling expenses

incurred in the United States.

Currency Conversion

We made currency conversions in accordance with section 773A of the

Act. Currency conversions were made at the rates certified by the

Federal Reserve Bank. Section 773A(a) directs the Department to use a

daily exchange rate to convert foreign currencies into U.S. dollars

unless the daily rate involves a ``fluctuation.'' It is our practice to

find that a fluctuation exists when the daily exchange rate differs

from a benchmark rate by 2.25 percent. See Preliminary Results of

Antidumping Duty Administrative Review: Certain Welded Carbon Steel

Pipe and Tube from Turkey, 61 FR 35188, 35192 (July 5, 1996). The

benchmark rate is defined as the rolling average of the rates for the

past 40 business days. Because we found no fluctuation in this case, we

believe it is appropriate to use a daily exchange rate for currency

conversion purposes.

Preliminary Results of the Review

As a result of our comparison of the CEP to NV, we preliminarily

determine that the following dumping margin exists for the period

January 1, 1995 through December 31, 1995:

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

Margin

Manufacturer/exporter (percent)

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

MELCO...................................................... 1.92

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

Parties to the proceeding may request disclosure within five days

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

request a hearing within 10 days of publication. Any hearing, if

requested, will be held approximately 44 days after the publication of

this notice. Interested parties may submit written comments (case

briefs) within 30 days of the date of publication of this notice.

Rebuttal comments (rebuttal briefs), which must be limited to issues

raised in the case briefs, may be filed not later than 37 days after

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

results of this administrative review, including the results of its

analysis of issues raised in any such written comments, within 120 days

of publication of these preliminary results.

[[Page 6171]]

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 NV and

CEP, by the total CEP value of the sales compared, and adjusting the

result by the average difference between CEP and customs value for all

merchandise examined during the POR.) The Department will issue

appraisement instructions directly to the Customs Service.

Furthermore, the following cash deposit requirements will be

effective upon publication of the final results of this administrative

review for all shipments of the subject merchandise entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751(a)(1) of the Act: (1) For MELCO

the cash deposit rate will be the rate established in the final results

of this review; (2) if the exporter is not a firm covered in this

review, a previous review, or the original less-than-fair value

investigation (LTFV), but the manufacturer is, the cash deposit rate

will be that which was established for the most recent period for the

manufacturer of the merchandise; (3) for non-Japanese exporters of

subject merchandise from Japan, the cash deposit rate will be the rate

applicable to the Japanese supplier of that exporter; (4) if neither

the exporter nor the manufacturer is a firm covered in this or any

previous reviews, the cash deposit rate will be 27.93 percent, the

``all others'' rate established in the LTFV investigation, as explained

below. These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

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

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

Mogul Corporation 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. We have 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. Therefore, we are reinstating the ``All

Others'' rate made effective by the final determination of sales at

LTFV (see Color Pictures Tubes, 52 FR 44171, November 18, 1987).

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 C.F.R. 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

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

353.22.

Dated: January 30, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-3361 Filed 2-10-97; 8:45 am]

BILLING CODE 3510-DS-P