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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Notices6169SUMMARY: In response to a request by thepetitioners, the Department ofCommerce (the Department) isconducting an administrative review ofthe antidumping duty order on colorpicture tubes (CPTs) from Japan. Theperiod of review (POR) is January 1,1995 through December 31, 1995. Thereview indicates the existence ofdumping margins during this period.We have preliminarily determinedthat subject merchandise has been soldat less than normal value (NV) duringthe POR. If these preliminary results areadopted in our final results ofadministrative review, we will instructthe U.S. Customs Service to assessantidumping duties on entries duringthe POR. Interested parties are invited tocomment on these preliminary results.EFFECTIVE DATE: February 11, 1997.FOR FURTHER INFORMATION CONTACT:Charles Riggle or Kris Campbell, ImportAdministration, International TradeAdministration, U.S. Department ofCommerce, 14th Street and ConstitutionAvenue, N.W., Washington D.C. 20230;telephone (202) 482–4733.Applicable StatuteUnless otherwise indicated, allcitations to the Tariff Act of 1930, asamended, (the Act) are references to theprovisions effective January 1, 1995, theeffective date of the amendments madeto the Act by the Uruguay RoundAgreements Act (URAA). In addition, allcitations to the Department’s regulationsare to the current regulations, asamended by the interim regulationspublished in the Federal Register onMay 11, 1995 (60 FR 25130).BackgroundOn January 26, 1996, the Departmentpublished in the Federal Register (61FR 2488) a notice of ‘‘Opportunity ToRequest an Administrative Review’’ ofthe antidumping duty order on CPTsfrom Japan (52 FR 44171 (November 18,1987)). In accordance with 19 C.F.R.353.22(a), the petitioners, theInternational Association of Machinistsand Aerospace Workers, InternationalUnion of Electronic, Electrical, Salaried,Machine & Furniture Workers, AFL–CIO, Industrial Union Department AFL–CIO, requested that we conduct anadministrative review of sales of CPTsfrom Japan by Mitsubishi ElectricCorporation (MELCO). We published anotice of initiation of this antidumpingduty administrative review on February20, 1996 (61 FR 6347), covering theperiod January 1, 1995 throughDecember 31, 1995.Because it was not practicable tocomplete this review within the normaltime frame, on October 25, 1996, wepublished in the Federal Register ournotice of extension of the time limit forthese preliminary results to January 30,1997 (61 FR 55271). The deadline forthe final results will continue to be 120days after publication of thesepreliminary results.Scope of ReviewImports covered by this review areshipments of CPTs from Japan. CPTs aredefined as cathode ray tubes suitable foruse in the manufacture of colortelevisions or other color entertainmentdisplay devices intended for televisionviewing. This merchandise isclassifiable under the Harmonized TariffSchedule (HTS) item numbers8540.11.00.10, 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 areprovided for convenience and customspurposes, our written description of thescope of this proceeding is dispositive.VerificationIn accordance with section 782(i) ofthe Act, we verified informationprovided by MELCO by using standardverification procedures, includingonsite inspection of the manufacturer’sfacilities, the examination of relevantsales and financial records, andselection of original documentationcontaining relevant information. Weconducted the verification at thecompany’s headquarters in Kyoto,Japan, from September 17 throughSeptember 20, 1996. Our verificationresults are outlined in the publicversion of the verification report. SeeMemorandum from Case Analyst to File,dated December 27, 1996.Product ComparisonsWe calculated NV on a monthlyweighted-average basis. Where possible,we compared U.S. sales to sales ofidentical merchandise in Japan. For U.S.sales in which identical merchandisewas not sold during the relevantcontemporaneous period, we comparedU.S. sales to the most similar foreignlike product on the basis ofcharacteristics listed in MELCO’s April1, 1996 response to section A of ourquestionnaire.Constructed Export PriceWe calculated a constructed exportprice (CEP) for MELCO’s U.S.transactions, in accordance with section772(b) of the Act, because sales to thefirst unrelated purchaser took place afterimportation into the United States.We calculated CEP based on thepacked, ex-warehouse price from theU.S. subsidiary to unrelated customers.We made deductions from CEP for U.S.packing in the United States,international freight, foreign inlandfreight, marine insurance, U.S. customsduties, U.S. inland freight insurance andU.S. inland freight. In accordance withsection 772(d)(1) of the Act, wededucted from CEP the following sellingexpenses that related to economicactivity in the United States:commissions, direct selling expenses,including advertising, warranties, creditexpenses, discounts, rebates, andindirect selling expenses, includinginventory carrying costs, and furthermanufacturing. We also made anadjustment for CEP profit in accordancewith section 772 (d)(3) of the Act.Normal ValueIn order to determine whether therewas a sufficient volume of sales in thehome market to serve as a viable basisfor calculating NV, we comparedrespondent’s volume of home marketsales of the foreign like product to thevolume of U.S. sales of the subjectmerchandise, in accordance withsection 773(a)(1)(C) of the Act. Sincerespondent’s aggregate volume of homemarket sales of the foreign like productwas greater than five percent of itsaggregate volume of U.S. sales for thesubject merchandise, we determinedthat the home market was viable.Therefore, we have based NV on homemarket sales. We based NV on thepacked, delivered price to unrelatedpurchasers in the home market.Where applicable, we madeadjustments to home market prices fordiscounts, rebates, technical serviceexpenses, pre-sale warehouse expenses,and royalties. To adjust for differencesin circumstances of sale between thehome market and the United States, wededucted post-sale inland freight andcredit expense from NV in accordancewith section 773(a)(6)(C) of the Act. Inaccordance with 19 C.F.R. 353.56(b), wemade an adjustment to NV for indirectselling expenses in the home market tooffset the sum of commissions in theUnited States.In order to adjust for differences inpacking between the two markets, wededucted home market packing costsfrom NV and added U.S. packing costs.We compared U.S. sales of CPTs toNV based on constructed value (CV)when MELCO did not havecontemporaneous home market sales ofCPTs with which we could compare theU.S. sale. We calculated CV inaccordance with section 773(e) of theTariff Act. We included the cost ofmaterials, labor, general expenses, profitand packing. Where appropriate, we
6170 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Noticesmade adjustments to CV, in accordancewith 19 C.F.R. 353.56, for differences incircumstances of sale.The home market and CV databasesthat MELCO submitted did not containmatches for certain U.S. sales. SeeMemorandum from Analyst to File:Preliminary Results for MELCO, January30, 1997. Therefore, in accordance withsection 776 of the Act, we applied a ratebased on the facts available to thesesales. Given the nature and extent of thedeficiency, we have selected theweighted-average rate that we calculatedfor all other sales in this review (1.92percent) as facts available. See section776(a) of the Act.Level of Trade and CEP OffsetAs set forth in section 773(a)(7) of theAct and in the Statement ofAdministrative Action (H.R. Doc. 316,Vol. 1, 103d Cong., 2d Sess. (1994))(SAA) at 829–831, to the extentpracticable, we will calculate NV basedon sales at the same level of trade as theU.S. sale. In this review, we were unableto find comparison sales at the samelevel of trade as the U.S. sales.Accordingly, we compared the sales inthe United States to sales at a differentlevel of trade in the comparison market.In accordance with section773(a)(7)(A) of the Act, if we compare aU.S. sale with a home market sale madeat a different level of trade, we willadjust the NV to account for thisdifference if two conditions are met.First, there must be differences betweenthe actual selling functions performedby the seller at the level of trade of theU.S. sale and at the level of trade of thecomparison market sale used todetermine NV. Second, the differencesmust affect price comparability asevidenced by a pattern of consistentprice differences between sales at thedifferent levels of trade in the market inwhich NV is determined. For CEP sales,section 773(a)(7)(B) of the Actestablishes the procedures for making aCEP ‘‘offset’’ when two conditions exist:(1) NV is established at a level of tradewhich constitutes a more advancedstage of distribution than the level oftrade of the CEP; and (2) the dataavailable do not provide an appropriatebasis for a level-of-trade adjustment.We based the level of trade of CEPsales on the price in the United Statesafter making the CEP deductions undersection 772(d) but before making thedeductions under section 772(c). Wherehome market sales served as the basisfor NV, we determined the NV level oftrade based on starting prices in thehome market. Where NV was based onCV, we determined the NV level of tradebased on the level of trade of the salesfrom which we derived SG&A and profitfor CV.In order to determine whether sales inthe comparison market are at a differentlevel of trade than the CEP, weexamined whether the comparison saleswere at different stages in the marketingprocess than the CEP. We made thisdetermination on the basis of a reviewof the distribution system in thecomparison market, including sellingfunctions, class of customer, and thelevel of selling expenses for each typeof sale. Different stages of marketingnecessarily involve differences inselling functions, but differences inselling functions, even substantial ones,are not alone sufficient to establish adifference in the level of trade.Similarly, while customer categoriessuch as ‘‘distributor’’ and ‘‘wholesaler’’may be useful in identifying differentlevels of trade, they are insufficient inthemselves to establish that there is adifference in the level of trade. SeeCertain Corrosion-Resistant CarbonSteel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada:Preliminary Results of AntidumpingDuty Administrative Review, 61 FR51896 (October 4, 1996).MELCO requested that we make alevel-of-trade adjustment, or a CEPoffset if we could not quantify a levelof-tradeadjustment, because sales in thehome market involved a more advancedlevel of trade than the level of trade ofthe CEP. Our analysis of the reportedselling expenses, selling functions, andcustomer classes of U.S. and homemarket sales demonstrates that the homemarket sales are distributed through amore advanced marketing stage thanthat involved at the level of trade of theCEP.Because we compared CEP sales tohome market sales at a different level oftrade, we examined whether a level-oftradeadjustment was appropriate. Inthis case, we were unable to quantifyprice differences involving comparisonsof sales made at different levels of tradebecause the same level of trade as thatof the CEP did not exist in the homemarket. Therefore, we could notdetermine whether there was a patternof consistent price differences betweenthe levels of trade based on respondent’shome market sales of merchandiseunder review.Because we were unable to quantify alevel-of-trade adjustment based on apattern of consistent price differences,we granted a CEP offset where thecomparison sales were at a moreadvanced level of trade than the sales tothe United States, in accordance withsection 773(a)(7)(B) of the Act.To calculate the CEP offset, inaccordance with section 772(d)(1)(D) ofthe Act, we considered the home marketindirect selling expenses and deductedthis amount from NV on home marketsales which we compared to U.S. CEPsales. We limited the home marketindirect selling expense deduction bythe amount of the indirect sellingexpenses incurred in the United States.Currency ConversionWe made currency conversions inaccordance with section 773A of theAct. Currency conversions were made atthe rates certified by the Federal ReserveBank. Section 773A(a) directs theDepartment to use a daily exchange rateto convert foreign currencies into U.S.dollars unless the daily rate involves a‘‘fluctuation.’’ It is our practice to findthat a fluctuation exists when the dailyexchange rate differs from a benchmarkrate by 2.25 percent. See PreliminaryResults of Antidumping DutyAdministrative Review: Certain WeldedCarbon Steel Pipe and Tube fromTurkey, 61 FR 35188, 35192 (July 5,1996). The benchmark rate is defined asthe rolling average of the rates for thepast 40 business days. Because wefound no fluctuation in this case, webelieve it is appropriate to use a dailyexchange rate for currency conversionpurposes.Preliminary Results of the ReviewAs a result of our comparison of theCEP to NV, we preliminarily determinethat the following dumping marginexists for the period January 1, 1995through December 31, 1995:Manufacturer/exporterMargin(percent)MELCO ..................................... 1.92Parties to the proceeding may requestdisclosure within five days of the dateof publication of this notice. Anyinterested party may request a hearingwithin 10 days of publication. Anyhearing, if requested, will be heldapproximately 44 days after thepublication of this notice. Interestedparties may submit written comments(case briefs) within 30 days of the dateof publication of this notice. Rebuttalcomments (rebuttal briefs), which mustbe limited to issues raised in the casebriefs, may be filed not later than 37days after the date of publication. TheDepartment will publish a notice offinal results of this administrativereview, including the results of itsanalysis of issues raised in any suchwritten comments, within 120 days ofpublication of these preliminary results.
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