[Federal Register Volume 59, Number 41 (Wednesday, March 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4775]


[[Page Unknown]]

[Federal Register: March 2, 1994]


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DEPARTMENT OF COMMERCE
[A-588-814]

 

Polyethylene Terephthalate Film, Sheet, and Strip from Japan; 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration/International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to requests from one respondent and one U.S. 
producer the Department of Commerce has conducted an administrative 
review of the antidumping duty order on polyethylene terephthalate 
film, sheet, and strip (PET film) from Japan. The review covers three 
manufacturers/exporters of this merchandise to the United States and 
the period November 30, 1990, through May 31, 1992. We preliminarily 
determine that margins exist for the period.
    Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: March 2, 1994.

FOR FURTHER INFORMATION CONTACT: Arthur N. DuBois, or Thomas F. 
Futtner, Office of Antidumping Compliance, International Trade 
Administration, U.S. Department of Commerce, Washington, DC 20230, 
telephone: (202) 482-6312/3814.

SUPPLEMENTARY INFORMATION:

Background

    On June 8, 1992, the Department of Commerce (the Department) 
published a notice of ``Opportunity to Request an Administrative 
Review'' (57 FR 24244) of the antidumping duty order on PET film (56 FR 
25660, June 5, 1991). On June 30, 1992, one respondent, Toray 
Industries Inc. (Toray), requested an administrative review and one 
U.S. producer, Toray Plastics America (TPA) (see Decision Memorandum 
dated December 28, 1992, regarding Toray's status as a producer in the 
United States), requested an administrative review for two other 
Japanese manufacturers/exporters of PET film. We initiated the review 
on Toray, covering November 30, 1990, through May 31, 1992, on July 22, 
1992 (57 FR 32521) and the reviews on Teijin, Ltd. (Teijin) and Diafoil 
Co. Ltd. (Diafoil), on August 26, 1992 (57 FR 38668). The Department 
has now conducted the review in accordance with section 751 of the 
Tariff Act of 1930, as amended (the Tariff Act).

Scope of the Review

    Imports covered by the review are shipments of all gauges of raw, 
pretreated, or primed PET film, whether extruded or co-extruded. The 
films excluded from the scope of this order are metallized films and 
other finished films that have had at least one of their surfaces 
modified by the application of performance-enhancing resin or inorganic 
layer more than 0.00001 inches (0.054 micrometers) thick. Roller 
transport cleaning film which has at least one of its surfaces modified 
by the application of 0.5 micrometers of SBR latex has also been ruled 
as not within the scope of the order.
    PET film is currently classifiable under Harmonized Tariff Schedule 
(HTS) subheading 3920.62.00.00. The HTS subheading is provided for 
convenience and for Customs purposes. The written description remains 
dispositive.
    The review covers three Japanese manufacturers/exporters of this 
merchandise to the United States, Toray, Teijin, and Diafoil, and the 
period November 30, 1990, through May 31, 1992.

Such or Similar Comparisons

    As stated in the less-than-fair-value (LTFV) investigation, we have 
determined that the subject merchandise constitutes a single class or 
kind of merchandise. Each company had sufficient home market sales of 
PET film to unrelated customers to serve as a basis for calculating 
foreign market value (FMV).

Best Information Available

    Diafoil did not respond to the Department's questionnaire. 
Therefore, we are using best information available for the purposes of 
this review. As best information for Diafoil, we preliminarily 
determine the dumping margin to be 14.00 percent, the highest margin 
calculated in the original investigation.

United States Price

    For Toray, we calculated the United States price based on purchase 
price as all U.S. sales were made to unrelated parties prior to 
importation into the United States, in accordance with section 772(b) 
of the Tariff Act.
    For Toray, we calculated purchase price based on f.o.b. Japanese 
port or delivered U.S. customer prices. We made deductions, where 
appropriate, for price adjustments (rebates). We also made deductions, 
where appropriate, for the costs of foreign inland freight, 
containerization, warehousing, credit expense, foreign brokerage and 
handling, ocean freight, marine insurance, U.S. duty, U.S. brokerage 
and handling, and U.S. inland freight in accordance with section 
772(d)(2) of the Tariff Act.
    For Teijin, we calculated purchase price based on f.o.b. Japanese 
port or delivered U.S. customer prices. We made deductions, where 
appropriate, for price adjustments (rebates). We also made deductions, 
where appropriate, for the costs of foreign inland freight and 
insurance, bank charges, foreign brokerage and handling, ocean freight, 
warehousing, commissions, credit insurance, indirect selling expenses 
(U.S. and non-U.S.), inventory carrying charges, other expense, U.S. 
duty, harbor and U.S. Customs user fees, U.S. brokerage and handling, 
and U.S. inland freight and insurance in accordance with section 
772(d)(2) of the Tariff Act.
    In addition, for both Toray and Teijin, we made adjustments for the 
value added tax applied in the home market. On October 7, 1993, the 
United States Court of International Trade (CIT), in Federal-Mogul 
Corp. and The Torrington Co. v. United States, Slip Op. 93-194 (CIT, 
October 7, 1993), rejected the Department's methodology for calculating 
an addition to U. S. price (USP) under section 772(d)(1)(C) of the 
Tariff Act to account for taxes that the exporting country would have 
assessed on the merchandise had it been sold in the home market. The 
CIT held that the addition to USP under section 772(d)(1)(C) of the 
Tariff Act should be the result of applying the foreign market tax rate 
to the price of the United States merchandise at the same point the 
chain of commerce that the foreign market tax was applied to foreign 
market sales. Federal-Mogul, Slip Op. 93-194 at 12.
    The Department has changed its methodology in accordance with the 
Federal-Mogul decision. The Department will add to USP the result of 
multiplying the foreign market tax rate by the price of the United 
States merchandise at the same point in the chain of commerce that the 
foreign market tax was applied to foreign market sales. The Department 
will also adjust the USP tax adjustment and the amount of tax included 
in FMV. These adjustments will deduct the portions of the foreign 
market tax and the USP tax adjustment that are the result of expenses 
that are included in the foreign market price used to calculate the 
foreign market tax and are included in the United States merchandise 
price used to calculate the USP tax adjustment and that are later 
deducted to calculate FMV and USP. These adjustments to the amount of 
the foreign market tax and the USP tax adjustment are necessary to 
prevent our new methodology for calculating the USP tax adjustment from 
creating antidumping duty margins where no margins would exist if no 
taxes were levied upon foreign market sales.
    This margin creation effect is due to the fact that the bases for 
calculating both the amount of tax included in the price of the foreign 
market merchandise and the amount of the USP tax adjustment include 
many expenses that are later deducted when calculating USP and FMV. 
After these deductions are made, the amount of tax included in FMV and 
the USP tax adjustment still reflects the amounts of these expenses. 
Thus, a margin may be created that is not dependent upon a difference 
between USP and FMV, but is the result of the price of the United 
States merchandise containing more expenses that the price of the 
foreign market merchandise The Department's policy to avoid the margin 
creation effect is in accordance with the United States Court of 
Appeals' holding that the application of the USP tax adjustment under 
section 772(d)(1)(C) of the Tariff Act should not create an antidumping 
duty margin if pre-tax FMV does exceed USP. Zenith Electronics Corp. v. 
United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993). In addition, the 
CIT has specifically held that an adjustment should be made to mitigate 
the impact of expenses that are deducted from FMV and USP upon the USP 
tax adjustment and the amount of tax included in FMV. Daewoo 
Electronics Co., Ltd. v. United States, 7609 F. Supp. 200, 208 (CIT, 
1991). However, the mechanics of the Department's adjustment and the 
foreign market tax amount as described above are not identical to those 
suggested in Daewoo.

Foreign Market Value

    In order to determine whether there were sufficient sales of PET 
film in the home market to serve as a viable basis for calculating 
foreign market value (FMV), we compared the volume of home market sales 
of PET film to the volume of third country sales of PET film, in 
accordance with section 773(a)(1)(B) of Tariff Act. Each respondent had 
a viable home market with respect to sales of PET film made during the 
period of review.
    For Toray, we calculated the FMV based on delivered prices to 
unrelated customers in the home market. We did not use related party 
sales because the prices to related parties were determined not to be 
at arm's length, in accordance with 19 CFR 353.45(a). We made 
deductions, where appropriate, for rebates and inland freight. We 
deducted home market packing cost and added U.S. packing costs.
    Pursuant to section 353.56, we made circumstance-of-sale 
adjustments, where appropriate, for differences in claimed warranty 
expenses, post-sale warehousing expenses, credit expenses, and credit 
interest revenue.
    We made a difference-in-merchandise adjustment, where appropriate, 
based on differences in the variable costs of manufacture.
    For Teijin, we calculated FMV based on delivered prices to 
unrelated and three related customers in the home market. These related 
party sales were determined to be at arm's length, in accordance with 
section 353.45(a) of our regulations. We made deductions, where 
appropriate, for rebates, inland freight, and insurance. We deducted 
home market packing cost and added U.S. packing costs.
    Pursuant to 19 CFR 353.56, we made circumstance-of-sale 
adjustments, where appropriate, for differences in post-sale 
warehousing expenses, and credit expenses.
    For both Toray and Teijin, in order to simplify analysis, we 
decided to test the home markets sales to determine whether we could 
use annual FMVs as a basis of comparison to U.S. sales. To determine 
whether a period of review (POR) weighted-average price was 
representative of the transactions under consideration we performed a 
three-step test.
    We first compared the monthly weighted-average home market price 
for each model with the weighted-average POR price of that model. We 
calculated the proportion of each model's sales whose POR weighted-
average price did not vary more than plus or minus ten percent from the 
monthly weighted-average prices. We did this test for each model. We 
then compared the volume of sales of all models of whose POR weighted-
average price did not vary more than plus or minus ten percent from the 
monthly weighted-average price from the total volume of sales. If the 
POR weighted-average price of at least 90 percent of sales did not vary 
more than plus or minus ten percent from the monthly weighted-average 
price, we consider the POR weighted-average price to be representative 
of the sales under consideration. Finally, we tested whether there was 
any correlation between fluctuations in price and time for each model. 
Where the correlation was less than 0.05 (where a coefficient 
approaching 1.0 indicates a direct relationship between price and 
time), we concluded that there was no significant relationship between 
price and time. Since home market prices of both companies passed all 
of these tests we used annual FMV's as a basis of comparison for both 
companies.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following margins exist for the period November 30, 1990, through May 
31, 1992: 

------------------------------------------------------------------------
                                                                Margin  
              Manufacturer/producer/exporter                  (percent) 
------------------------------------------------------------------------
Toray......................................................         4.76
Diafoil....................................................        14.00
Teijin.....................................................        5.73 
------------------------------------------------------------------------

    Case briefs and/or written comments from interested parties may be 
submitted no later than 30 days after the date of publication of this 
notice. Rebuttal briefs and rebuttals to written comments, limited to 
issues raised in the case briefs and comments, may be filed not later 
than 37 days after the date of publication of this notice.
    Within 10 days of the date of publication of this notice, 
interested parties to this proceeding may request a disclosure and/or a 
hearing. The hearing, if requested, will take place not later than 44 
days after publication of this notice. Persons interested in attending 
the hearing should contact the Department for the date and time of the 
hearing.
    The Department will subsequently publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments or a hearing.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between United States price and foreign market value may 
vary from the percentages stated above. The Department will issue 
appropriate appraisement instructions directly to the Customs Service 
upon completion of this review.
    Furthermore, the following deposit requirements will be effective 
upon publication of our final results of review for all shipments of 
the subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after that publication date of the final results of 
this administrative review, as provided by section 751(a)(1) of the 
Tariff Act:
    (1) The cash deposit rate for the reviewed companies will be those 
rates established in the final results of this review;
    (2) The cash deposit rate for subject merchandise exported by 
manufacturers or exporters not covered in this review but covered in 
previous reviews or in the original LTFV investigation will be based 
upon the most recently published rate in a final result or 
determination for which the manufacturer or exporter received a 
company-specific rate;
    (3) The cash deposit rate for subject merchandise exported by an 
exporter not covered in this review, a prior review, or the original 
investigation, but where the manufacturer of the merchandise has been 
covered by this or a prior final results or determination will be based 
upon the most recently published company-specific rate for that 
manufacturer, and
    (4) The cash deposit rate for merchandise exported by all other 
manufacturers and exporters who are not covered by these or any 
previous administrative review conducted by the Department will be the 
``all others'' rate established in the LTFV investigation.
    On March 25, 1993, the Court of International Trade (CIT), in 
Floral Trade Council v. United States, Slip Op. 93-79, and Federal-
Mogul Corporation v. United States, Slip Op. 93-83, decided that once 
an ``all others'' rates is established for a company, it can only be 
changed through an administrative review. The Department has determined 
that in order to implement these decisions, it is appropriate to 
reinstate the original ``all others'' rate from the LTFV investigation 
(or that rate as amended for correction of clerical errors or as a 
result of litigation) in the proceeding governed by antidumping duty 
orders.
    Because this proceeding is governed by an antidumping duty order, 
the ``all others'' rate for the purposes of this review will be 6.32 
percent, the ``all others'' rate established in the LTFV investigation 
(56 FR 25660, June 5, 1991).
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 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 Tariff Act and 19 CFR 353.22.

    Dated: February 22, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-4775 Filed 3-2-94; 8:45 am]
BILLING CODE 3510-DS-P