Commerce Dept. Confirms TKS Should Face Hefty Antidumping Duties

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By: Jim Rosenberg

The U.S. Commerce Department’s International Trade Administration has confirmed its preliminary finding of two years ago that Japanese makers of large newspaper printing presses should be subject to anti-dumping duties.

As reported in the Federal Register late last week, the department determined that, “had the antidumping duty order not been revoked in the 2002 Sunset Review, revocation of the antidumping duty order on LNPP from Japan would have likely led to continuation or recurrence of dumping.”

A lawyer for TKS and a spokesman for Goss had no comment on the determination.

The decision follows the reopening of an investigation of Tokyo Kikai Seisakusho Ltd. after Goss International Corp. demonstrated in a 2003 lawsuit that TKS sold equipment at less than fair value.

The lawsuit was brought after Goss successfully petitioned the Commerce Department to examine the U.S. sales practices of two German and two Japanese competitors. The department found that those competitors had dumped presses in this country; the U.S. International Trade Commission subsequently found that the dumping had harmed Goss; and antidumping duties were imposed.

The duties eventually expired after the government was satisfied that no further dumping had occurred. But evidence from Goss’ suit showed that TKS had misled the government during its review prior to the duties’ expiry.

Commerce Department reconsideration was sidetracked from Washington to New York when TKS took the matter before the U.S. Court of International Trade. That court disallowed reconsideration, but a federal appeals court said otherwise last June and the review proceeded.

It is now again up to the International Trade Commission to impose antidumping duties, which the Commerce Department calculated at almost 52% against TKS.

Duties are imposed on imports of pertinent goods from another country on behalf of the same U.S. industry. In the case of large newspaper presses, Goss was the U.S. industry, and the Japanese industry also included Mitsubishi Heavy Industries and another company on both of which the department calculated higher duties. Mitsubishi’s sale to the Washington Post sparked Goss’ initial petition in the mid-1990s but the sale later was exempted from penalty upon request by Goss. Mitsubishi sales in this country did not resume until after they were no longer subject to antidumping duties. The other Japanese manufacturer has had no U.S. sales.

Goss had sued the same four overseas competitors originally investigated by the Commerce Department. Three of those press makers settled before going to trial. The law under which Goss brought the suit was later revoked by Congress after the World Trade Organization determined that the nature of its penalty provisions contravened U.S. treaty obligations.

The U.S. District Court verdict, damages of which were trebled by law to almost $32 million, was upheld on appeal. But, after awaiting a determination by the World Trade Organization, Japan enacted its Special Measures Act – so-called clawback legislation that allows it to compensate TKS for the loss in U.S. court by claiming an equal amount from Goss’ Japanese interests.

For that to happen, TKS was required to sue Goss in Japan. In 2006 Goss asked the original trial court in Cedar Rapids, Iowa, to enjoin TKS from suing Goss in Japan. When an injunction was granted, TKS appealed to the U.S. Eighth Circuit, which vacated the injunction a year later. The Supreme Court this year declined to review the case. (See E&P Online, June 28, 2007 for this and a timeline of related administrative and judicial actions.)

With pressure from legislators from New Hampshire — where Goss has offices and a principal manufacturing site in Durham — the matter has been left to the U.S. State Department to iron out with Japan’s government.

On July 31, New Hampshire Senators John Sununu and Judd Gregg introduced S. 3394, a bill that aims to “prevent the undermining of the judgments of courts of the United States by foreign courts.” The language of the bill specifies actions taken with respect to the Antidumping Act of 1916, but does not specify a foreign defendant or U.S. plaintiff. Nevertheless, an August 1 press release from Sen. Sununu’s office said the bill was introduced “to protect Goss” and “effectively nullify retaliatory actions taken by the Japanese government” in reaction to the outcome of the antidumping lawsuit.

The bill would prohibit state or federal enforcement of a foreign judgment arrived at under clawback legislation. It would allow a U.S. plaintiff or its affiliate that was forced to pay damages as a result of a judgment in a clawback case in a foreign court to “file a civil action against the foreign defendant” that was awarded the damages. The U.S. District Court that issued the final judgment in the original trial would hear the case. Damages awarded by the District Court would equal those obtained by the foreign company in its clawback case and related costs and fees.

Sununu called the Special Measures Act a “harmful” trade precedent requiring a forceful response. “My bill will provide new tools to stop any effort to use the claw back statute against Goss in a case where the Japanese government has tried to unfairly and inappropriately protect a Japanese company found guilty of fraudulent practices,” Sununu said in a statement.

S. 3394 was read twice and referred to the Finance Committee. Laena Fallon, press secretary to Sen. Gregg, said no final decision has been made about legislation to be introduced in the next Congress. Fallon added that before re-introducing the bill, which originated with outgoing Sen. Sununu, Sen. Gregg would consult with Goss to be sure that its management still felt such legislation was necessary.

Earlier in the year, U.S. Congresswoman Carol Shea-Porter, representing New Hampshire’s 1st District, introduced H.R. 5667, which would direct U.S. Customs to collect antidumping duties based on an antidumping margin of almost 60% that the Commerce Department assigned for the 1997-1998 administrative review, which was found to have relied on information later called into question by evidence from the 2003 trail of the antidumping lawsuit.

Shea-Porter’s bill was referred to the House Was and Means Committee’s Subcommittee on Trade.

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