Mechanical Transfer Presses from Japan: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

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

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on mechanical transfer presses (MTPs) from Japan in response to a request by Hitachi Zosen Corp. (HZC), and its subsidiary, Hitachi Zosen Fukui Corporation, doing business as H&F Corporation (H&F). This review covers shipments of this merchandise to the United States during the period of February 1, 2001, through January 31, 2002. We have preliminarily determined that U.S. sales have not been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service to liquidate entries without regard to antidumping duties. Interested parties are invited to comment on these preliminary results. See Preliminary Results of Review section of this notice.

EFFECTIVE DATE:

March 7, 2003.

FOR FURTHER INFORMATION CONTACT:

Jacqueline Arrowsmith or Doug Campau, Antidumping/Countervailing Duty Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington DC 20230; telephone (202) 482-5255 or (202) 482-1395, respectively.

Background

The Department published an antidumping duty order on MTPs from Japan on February 16, 1990 (55 FR 5642). On February 19, 2002, the Department received a timely request for an administrative review of the antidumping duty order on MTPs from HZC and its subsidiary, H&F. On February 28, 2002, the Department received a timely request from the petitioner, IHI-Verson Press Technology, LLC, for an administrative review of HZC, H&F, Komatsu Corporation, Ltd. (Komatsu) and Komatsu American Industries, LLC. On March 27, 2002, we published a notice initiating an administrative review of MTPs (67 FR 14696) for HZC, and HZC's subsidiary, H&F, and Komatsu. On May 22, 2002, we published Mechanical Transfer Presses from Japan: Final Results of Antidumping Duty Administrative Review and Revocation, in-Part, in which we revoked the antidumping order with respect to Komatsu. The revocation was effective for subject merchandise entered, or withdrawn from warehouse, for consumption on or after February 1, 2001. See 67 FR 35958.

Due to complicated issues in this case, on October 25, 2002, the Department extended the deadline for the preliminary results of this antidumping duty administrative review until no later than February 28, 2003. See Mechanical Transfer Presses From Japan: Extension of Time Limit for Preliminary Results and Preliminary Rescission, in Part, of Antidumping Administrative Review 67 FR 14696 (November 1, 2002).

Scope of the Antidumping Duty Order

Imports covered by this order include mechanical transfer presses (MTPs) currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) item numbers 8462.99.8035, 8462.21.8085, and 8466.94.5040. The HTSUS subheadings are provided for convenience and Customs purposes only. The written description of the scope of this order is dispositive. The term “mechanical transfer presses” refers to automatic metal-forming machine tools with multiple die stations in which the work piece is moved from station to station by a transfer mechanism designed as an integral part of the press and synchronized with the press action, whether imported as machines or parts suitable for use solely or principally with these machines. These presses may be imported assembled or unassembled.

The Department published in the Federal Register several notices of scope rulings with respect to MTPs from Japan, determining that (1) spare and replacement parts are outside the scope of the order (see Notice of Scope Rulings, 57 FR 19602 (May 7, 1992); (2) a destack sheet feeder designed to be used with a mechanical transfer press is an accessory and, therefore, is not within the scope of the order (see Notice of Scope Rulings, 57 FR 32973 (July 24, 1992); (3) the FMX cold forging press is within the scope of the order (see Notice of Scope Rulings, 59 FR 8910 (February 24, 1994); and (4) certain mechanical transfer press parts exported from Japan are outside the scope of the order (see Notice of Scope Rulings, 62 FR 9176 (February 28, 1997).)

Verification

As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), we verified the sales and cost information provided by H&F using standard verification procedures, on-site inspection of the manufacturer's facilities and the examination of relevant sales, financial, and cost accounting records. Our verification results are outlined in the public and proprietary versions of the verification report, which are on file in the Central Records Unit of the Department.

Affiliation of HZC and H&F

HZC owns significantly more than 50 percent of H&F. Accordingly, we preliminarily find HZC and H&F to be affiliated pursuant to sections 771(33)(E) and (G) of the Act.

Collapsing HZC and H&F

Section 351.401(f) of the Department's regulations outlines the criteria for collapsing (i.e., treating as a single entity) affiliated producers. Pursuant to section 351.401(f), the Department will treat two or more affiliated producers as a single entity where (1) those producers have production facilities for similar or identical products that would not require substantial retooling of either facility in order to restructure manufacturing priorities, and (2) the Department concludes that there is a significant potential for the manipulation of price or production. Pursuant to section 351.401(f)(2), in identifying a significant potential for the manipulation of price or production, the Department may consider the following factors:

(i) The level of common ownership;

(ii) The extent to which managerial employees or board members of one firm sit on the board of directors of an affiliated firm; and,

(iii) Whether operations are intertwined, such as through the sharing of sales information, involvement in production and pricing decisions, the sharing of facilities or employees, or significant transactions between the affiliated producers.

To establish the first prong of the collapsing test, pursuant to section 351.401(f)(1), the producers must have production facilities equipped to manufacture similar or identical products that would not require substantial retooling of either facility to restructure manufacturing priorities. H&F maintains a production facility that produces MTPs in Fukui Prefecture and another facility at Kanazu Town that produces press accessories. HZC owns two subsidiaries that sometimes fabricate significant MTP components: Hitachi Zosen Diesel and Engineering Co., Ltd. (HZD&E) and IMEX Corporation. HZD&E, which is wholly-owned by HZC, is capable of manufacturing complete MTPs, according to the H&F's response.

With regard to common ownership, which is one of the factors to be considered under 19 CFR 351.401(f)(2)(i), HZC owns significantly more than 50 percent of H&F's voting stock.

Finally, with regard to 19 CFR 351.401(f)(2)(iii), there are intertwined operations between companies. According to section A of the July 2, 2001 response for the 2000-2001 administrative review, HZC's and H&F's press businesses were integrated in July 1999. The former HZC engineers moved to a newly created Large Presses Department. See “Memorandum from Jacqueline Arrowsmith to the File: Mechanical Transfer Presses from Japan,” dated February 25, 2003, placing this information on the record of this review. Moreover, HZC sometimes acts as the nominal ‘reseller’ for H&F's MTPs; for these ‘resales,’ HZC does not perform any selling functions; it merely allows H&F to use its name for consideration in order to inspire the customer's confidence.

Based upon our review of the level of common ownership and the intertwined operations, we preliminarily find that collapsing of these two entities under 19 CFR 351.401(f) is appropriate in this case.

Normal Value Comparisons

To determine whether respondents' exports of the subject merchandise to the United States were made at less than NV, we compared export price (EP) to NV, as described in the “Export Price” and “Normal Value” sections of this notice.

Export Price

In accordance with section 772(a) of the Act, EP is the price at which subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside the United States to an unaffiliated purchaser for export to the United States. For purposes of this administrative review, HZC/H&F has classified its sales as EP. Based on the fact that HZC/H&F sold the subject merchandise to unaffiliated trading companies in Japan prior to importation into the United States, we preliminarily determine that HZC/H&F's sales were EP sales. Furthermore, we found no evidence that treating these sales as constructed export price sales is warranted. We calculated EP for HZC/ H&F based on the packed, freight prepaid price to the U.S. customer. We made deductions from the starting price for foreign inland freight, foreign inland insurance, foreign brokerage and handling, international freight, marine insurance, U.S. inland freight, U.S. inland brokerage and handling, and supervision installation expenses, in accordance with section 772(c)(2) of the Act.

Normal Value

While the home market is viable, in accordance with precedent in this proceeding, we have determined that constructed value (CV) should be used to calculate NV. MTPs are made-to-order, and there are significant physical differences among these machines. For example, when discussing two MTPs with similar ton capacities, H&F officials explained that two particular subject presses had fundamentally different designs because of the number of strikes, even when these MTPs have similar capacities. See “Memorandum from Jacqueline Arrowsmith and Doug Campau to the File: Sales and Cost Verification of Hitachi Zosen Corporation & Hitachi Zosen Fukui Corporation in the Antidumping Administrative Review of Mechanical Transfer Presses from Japan,” dated January 31, 2003. See also Mechanical Transfer Presses From Japan; Preliminary Results of Antidumping Duty Administrative Review, and Intent To Revoke, In-Part, 63 FR 10363 (March 7, 2002); Mechanical Transfer Presses From Japan: Final Results of Antidumping Duty Administrative Review and Revocation, in-Part, 67 FR 35958 (May 22, 2002).

Accordingly, we are using CV as the basis for NV for HZC/H&F, in accordance with section 773(a)(4) of the Act. CV consists of direct materials, direct labor, variable overhead, fixed overhead (yielding total cost of manufacturing), plus selling, general and administrative expenses, net interest expense, profit, and U.S. packing expenses. We subtracted home market direct selling expenses (warranties and credit). We added to CV amounts for direct selling expenses (warranties and credit) for merchandise exported to the United States.

Currency Conversion

We made currency conversions pursuant to section 351.415 of the Department's regulations at the rates certified by the Federal Reserve Bank.

Preliminary Results of Review

We preliminarily determine that the following dumping margin exists:

Duty Assessments and Cash Deposit Requirements

The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions directly to the U.S. Customs Service within 15 days of publication of the final results of review. Furthermore, the following deposit rates will be effective with respects to all shipments of MTPs from Japan entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided for by section 751(a)(2)(C) of the Act: (1) For HZC and H&F, the cash deposit rate will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will be the company-specific rate established for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair-value (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 subject merchandise; and (4) for all other producers and/or exporters of this merchandise, the cash deposit rate shall be the all other rate established in the LTFV investigation, which is 14.51 percent. See Notice of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Mechanical Transfer Presses from Japan, 55 FR 5642 (February 16, 1990). These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Public Comment

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Normally, case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) A statement of the issues, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

Also, pursuant to 19 CFR 351.310, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments to be raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. Parties will be notified of the time and location. The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief, not later than 120 days after publication of these preliminary results, unless extended.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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 issued in accordance with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. § 1675(a)(1) and 19 U.S.C 1677f(i)(1)).