[Federal Register Volume 60, Number 189 (Friday, September 29, 1995)]
[Notices]
[Pages 50547-50550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24302]



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

DEPARTMENT OF COMMERCE
[A-580-807]


Polyethylene Terephthalate Film, Sheet, and Strip From the 
Republic of Korea; Preliminary Results of Antidumping Duty 
Administrative Review and Notice of Intent To Revoke Order in Part

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review, and Notice of Intent to Revoke in Part.

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

SUMMARY: In response to requests from three respondents, three U.S. 
producers, and one interested party, the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on polyethylene terephthalate film, sheet, and strip (PET 
film) from the Republic of Korea. The review covers four manufacturers/
exporters of the subject merchandise to the United States during the 
periods June 1, 1992 through May 31, 1993 and June 1, 1993 through May 
31, 1994. The reviews indicate the existence of dumping margins for 
certain firms during the relevant periods.
    We are announcing our intent to revoke the order for Cheil 
Synthetics, Inc. (Cheil). We preliminarily determined that Cheil has 
not sold the subject merchandise at less than foreign market value 
(FMV) in these reviews and for at least three consecutive 
administrative review periods. Cheil has also submitted a certification 
that it will not sell at less than FMV in the future.
    We have preliminarily determined that sales have been made below 
foreign market value (FMV). If these preliminary results are adopted in 
our final results of administrative review, we will instruct the U.S. 
Customs Service (U.S. Customs) to assess antidumping duties equal to 
the difference between the United States price (USP) and the FMV.
    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: September 29, 1995.

FOR FURTHER INFORMATION CONTACT:
Michael J. Heaney or John Kugelman, Office of Antidumping Compliance, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, telephone: (202) 482-4475 or 482-0649, 
respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On June 5, 1991, the Department of Commerce published in the 
Federal Register (56 FR 25660) the antidumping duty order on PET film 
from the Republic of Korea. On June 7, 1993 and June 7, 1994, the 
Department published (58 FR 31941 and 59 FR 29411) the respective 
notices of ``Opportunity to Request an Administrative Review'' of this 
antidumping duty order for the periods June 1, 1992 through May 31, 
1993 (second review) and June 1, 1993 through May 31, 1994 (third 
review). We received timely requests for review from Kolon Industries, 
Inc. (Kolon), SKC Limited (SKC), and STC Corporation (STC) for the 
second review. The petitioners, E.I. DuPont Nemours & Co., Inc., 
Hoechst Celanese Corporation, and ICI Americas, Inc., requested reviews 
of Cheil, Kolon, SKC, and STC for the second review. We received timely 
requests for review from Cheil, Kolon, SKC, and STC for the third 
review. The petitioners also requested reviews for Cheil, Kolon, SKC, 
and STC for the third review. Toray, a domestic interested party, also 
requested reviews of Cheil, Kolon, SKC, and STC for the third review. 
On July 21, 1993 and July 15, 1994, the Department published (58 FR 
39007 and 59 FR 36160) the respective notices of initiation for the 
second and third reviews.

[[Page 50548]]

    The Department is now conducting these reviews in accordance with 
section 751 of the Tariff Act of 1930, as amended (the Act). Unless 
otherwise indicated, all citations to the statute and to the 
Department's regulations are in reference to the provisions as they 
existed on December 31, 1994.
    We have preliminarily determined to revoke the antidumping duty 
order for Cheil. Cheil submitted a request in accordance with 19 CFR 
353.25(b) to revoke the order with respect to its sales of PET film in 
the United States; that request constituted a request for review. 
Cheil's request was accompanied by a certification that it had not sold 
PET film to the United States at less than FMV for at least a three-
year period, including the subject review periods, and would not do so 
in the future. Since we preliminarily determine that Cheil has not sold 
the subject merchandise at less than FMV for at least the required 
three-year period, we intend to revoke the order with respect to Cheil.

Scope of the Review

    Imports covered by the review are shipments of all gauges of raw, 
pretreated, or primed polyethylene terephthalate film, sheet, and 
strip, whether extruded or coextruded. The films excluded from this 
review are metallized films and other finished films that have had at 
least one of their surfaces modified by the application of a 
performance-enhancing resinous or inorganic layer of more than 0.00001 
inches (0.254 micrometers) thick. The Department has determined that 
roller transport cleaning film which has at least one of its surfaces 
modified by the application of 0.5 micrometers of SBR latex is 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 U.S. Customs purposes. 
The written description remains dispositive as to the scope of the 
product coverage.

Verification

    As provided in section 776(b) of the Act, we verified information 
provided by Cheil and SKC for the second review by using standard 
verification procedures including inspection of the manufacturer's 
facilities, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. Our verification results are outlined in the public 
versions of the verification reports.

United States Price (USP)

    In calculating USP, the Department treated respondents' sales as 
purchase price (PP) sales, as defined in section 772(b) of the Act, 
when the merchandise was sold to unrelated U.S. purchasers prior to 
importation. The Department treated respondents' sales as exporter's 
sale price (ESP) sales, as defined in section 772(c) of the Act, when 
the merchandise was sold to unrelated U.S. purchasers after 
importation.
    PP was based on ex-factory, f.o.b. Korean port, f.o.b. customer's 
specific delivery point, c.i.f. U.S. port, or packed, delivered prices 
to unrelated purchasers in the United States. We made adjustments, 
where applicable, for Korean and U.S. brokerage and handling, terminal 
handling charges, Korean and U.S. inland freight, ocean freight, marine 
insurance, containerization expenses and taxes, sample movement 
charges, return movement charges, discounts, wharfage expense, 
consolidated freight charges, and U.S. duties in accordance with 
section 772(d)(2) of the Act.
    ESP was based on ex-warehouse, f.o.b. customer's specific delivery 
point, or packed, delivered prices to unrelated purchasers in the 
United States. We made adjustments, where applicable, for Korean and 
U.S. brokerage and handling, Korean and U.S. inland freight, ocean 
freight, marine insurance, consolidated freight charges, miscellaneous 
handling charges, containerization expenses and taxes, wharfage 
expenses, warranty expenses, rebates, discounts, U.S. duties, U.S. 
commissions, U.S. credit expenses, and indirect selling expenses (which 
include inventory carrying costs and pre-sale warehousing expenses), in 
accordance with section 772(d)(2) of the Act.
    We increased both PP and ESP by the amount of import duties which 
were rebated or which were not collected by reason of the exportation 
of PET film, pursuant to section 772(d)(1)(B) of the Act.
    We adjusted USP for taxes in accordance with our practice as 
outlined in Silicomanganese from Venezuela, Preliminary Determination 
of Sales at Less Than Fair Value, 59 FR 31204, June 17, 1994.
    With respect to subject merchandise to which value was added in the 
United States by SKC and STC prior to sale to unrelated U.S. customers, 
we deducted any increased value in accordance with section 772(e)(3) of 
the Act. The value added consists of the costs associated with the 
production and sale of the further-processed merchandise, other than 
the costs associated with the imported PET film, an a proportional 
amount of profit or loss related to the value added. Profit or loss was 
calculated by deducting from the sales price of the further-processed 
merchandise all production and selling costs incurred by SKC and STC in 
the value-added process. The profit or loss was then allocated 
proportionally to all components of cost.
    No other adjustments were claimed or allowed.

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) of the Act and 19 CFR 353.48 (a). All 
four respondents had viable home markets with respect to sales of PET 
film made during the PORs.
    Due to the existence of sales below the cost of production (COP) in 
the original investigation for Cheil and SKC, which was the last 
completed proceeding at the time we initiated the COP investigations, 
the Department had reasonable grounds to believe or suspect that sales 
below the COP may have occurred during these reviews. See Oil Country 
Tubular Goods from Canada Preliminary Results of Antidumping Duty 
Administrative Review, 59 FR 18798, 18799 (April 20, 1994). 
Accordingly, the Department initiated a COP investigation for Cheil and 
SKC for the second and third administrative reviews in accordance with 
section 773 (b) of the Act.
    Furthermore, based on an allegation by petitioners, the Department 
also determined that reasonable grounds existed to believe or suspect 
that sales below cost had been made by Kolon and STC in the third 
administrative review. See Carbon Steel Butt-Weld Pipe Fittings from 
Taiwan; Preliminary Results of Administrative Review, 59 FR 66001 
(December 22, 1994). Thus, the Department initiated a COP investigation 
for Kolon and STC for the third administrative review in accordance 
with section 773(b) of the Act. However, because the petitioners filed 
an untimely allegation of sales below cost for Kolon and STC for the 
second review, we did not initiate a sales below cost investigation for 
these companies for that period.
    We performed a model-specific COP test, in which we examined 
whether each home market sale was priced below the merchandise's COP. 
We calculated the COP of the merchandise 

[[Page 50549]]
using Cheil's, SKC's, Kolon's, and STC's cost of materials and 
fabrication, and general expenses, in accordance with 19 CFR 353.51(c). 
Respondent's materials and fabrication expenses consisted of materials, 
labor, and overhead costs incurred for film manufacturing. General 
expenses consisted of general and administrative expenses as well as 
net interest expenses. For each model, we compared this sum to the 
reported home market unit price, net of price adjustments and movement 
expenses.
    We relied upon data submitted by the respondents (See August 17, 
1995 memo from the Director of the Office of Accounting to the AS/IA 
regarding cost methodology) except in the following instances where 
costs were not appropriately quantified or valued.
    For SKC, we adjusted the cost of manufacturing for A-grade and B-
grade film types to correct for yield differences between grades. We 
corrected general and administrative expenses to exclude dividend 
income and include the amortization of new stock issuance costs. We 
recalculated interest expense using amounts reported in SKC's financial 
statements, rather than the amount reported in the combined financial 
statements of the Sunkyong Group. Finally, we increased SKC's material 
costs for dimethyl terephthalate and terephthallic acid purchased from 
a related part to reflect the related party's cost of producing those 
materials.
    For Cheil, we recalculated general and administrative expenses 
based on the total activity of the company reported in Cheil's 1992 or 
1993 income statements, rather than on a departmental basis. We 
disallowed certain income as an offset to interest expense, since Cheil 
could not substantiate that the income was short-term in nature. For 
the second review, we increased Cheil's material cost for ethylene 
glycol purchased from a related party to reflect the related party's 
production costs.
    In accordance with section 773(b) of the Act, we also examined 
whether the home market sales of each model were made at prices below 
its COP in substantial quantities over an extended period of time, and 
whether such sales were made at prices which would permit recovery of 
all costs within a reasonable period of time in the normal course of 
trade.
    For each model where less than ten percent, by quantity, of the 
home market sales during the POR were made at prices below the COP, we 
included all sales of that model in the computation of FMV. For each 
model where ten percent or more, but less than ninety percent, of the 
home market sales during the POR were priced below the merchandise's 
COP, we excluded from the calculation of FMV those home market sales 
which were priced below the merchandise's COP, provided that the below-
cost sales were made over an extended period of time. For each model 
where ninety percent or more of the home market sales during the POR 
were priced below the COP, we disregarded all sales of that model from 
our analysis. See Preliminary Results and Partial Termination of 
Antidumping Duty Administrative Reviews; Tapered Roller Bearings, Four 
inches or Less in Outside Diameter, and Certain Components Thereof, 
from Japan, 58 FR 69336, 69338 (December 30, 1993).
    In order to determine whether below-cost sales had been made over 
an extended period of time, we compared the number of months in which 
below-cost sales occurred for each product to the number of months 
during the POR in which each model was sold. If a product was sold in 
fewer than three months during the POR, we did not exclude the below-
cost sales unless there were below-cost sales in each month of sale. If 
a product was sold in three or more months, we did not exclude the 
below-cost sales unless there were below-cost sales in at least three 
months during the POR.
    See Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Carbon Steel Butt Weld Pipe Fittings from Thailand, 60 FR 
10552, 10554 (February 27, 1995).
    In addition, the Department also determined that no evidence was 
presented to indicate that below-cost COP prices would permit recovery 
of all costs within a reasonable period of time in the normal course of 
trade. Therefore, in accordance with section 773(b) we disregarded 
these below-cost sales from our FMV calculations.
    In accordance with section 773(b) of the Act, where home market 
sales (as identified in the model match) were excluded from our 
analysis because they were priced below the COP, or where the remaining 
sales were determined to be inadequate as a basis for determining 
foreign market value, we used the constructed value of the merchandise 
sold in the United States as the basis for FMV. We calculated the 
constructed value, in accordance with section 773(e) of the Tariff Act, 
as the sum of the cost of materials and fabrication expenses of the 
product sold in the United States, home market general expenses, and 
home market profit. In accordance with section 773(b)(i) of the Act, 
for home market general expenses, we used the larger of the actual 
general expenses reported by the respondents or ten percent of the cost 
of materials and fabrication expenses, the statutory minimum for 
general expenses. For home market profit, we used the larger of the 
actual profit reported by the respondents or the statutory minimum of 
eight percent of the sum of the cost of materials, fabrication and 
general expenses in accordance with section 773(b)(i) of the Act.
    For those models which we determined were not sold below the COP 
and were of a sufficient quantity to calculate FMV, we calculated FMV 
based on delivered prices to unrelated customers in the home market. In 
calculating FMV, we made adjustments, where appropriate, for rebates, 
Korean inland freight and insurance, Korean brokerage and loading 
charges, and home market credit expenses in accordance with section 
773(a)(1) of the Act. We deducted home market packing costs from the 
home market price and added U.S. packing costs to the FMV. We also 
made, where applicable, difference-in-merchandise adjustments.
    For comparison to PP sales, pursuant to 19 CFR 353.56, we made 
circumstance-of-sale adjustments to FMV, where appropriate, for post-
sale warehousing expenses, Korean and U.S. bank charges, U.S. credit 
expenses, and U.S. warranty expenses. We made further adjustments, 
where appropriate, for U.S. commissions in accordance with 19 CFR 
353.56(a)(2). Where commissions were paid on U.S. sales and not paid on 
home market sales, we allowed an offset to FMV amounting to the lesser 
of the weighted-average home market indirect selling expenses or the 
U.S. commissions in accordance with 19 CFR 353.56(b) of the 
Department's regulations.
    For comparison to ESP sales, we allowed an ESP offset to FMV, 
amounting to the lesser of the weighted-average total of home market 
indirect selling expenses or the total U.S. indirect selling expenses, 
in accordance with 19 CFR 353.56(b)(2).
    No other adjustments were claimed or allowed.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following margins exist for the periods indicated:

                                                                                                                                                        

[[Page 50550]]
------------------------------------------------------------------------
                                                                 Percent
          Manufacturer/exporter                   Period          margin
------------------------------------------------------------------------
Cheil...................................      06/01/92-05/31/93     0.01
Cheil...................................      06/01/93-05/31/94     0.01
Kolon...................................      06/01/92-05/31/93     0.12
Kolon...................................      06/01/93-05/31/94     0.12
SKC.....................................      06/01/92-05/31/93    12.34
SKC.....................................      06/01/93-05/31/94    16.20
STC.....................................      06/01/92-05/31/93     0.08
STC.....................................      06/01/93-05/31/94     0.94
------------------------------------------------------------------------


    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between United States price and FMV may vary from the 
percentages stated above. Upon completion of the review the Department 
will issue appraisement instructions on each exporter directly to the 
U.S. Customs Service.
    Interested parties may request disclosure within five days of the 
date of publication of this notice, and may request a hearing within 
ten days of the date of publication. Any hearing, if requested, will be 
held as early as convenient for the parties but not later than 44 days 
after the date of publication or the first work day thereafter. Case 
briefs or other written comments from interested parties may be 
submitted not later than 30 days after the date of publication of this 
notice. Rebuttal briefs and rebuttal comments, limited to issues in the 
case briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments or at a hearing.
    Furthermore, the following deposit requirements will be effective 
for all shipments of polyethylene terephthalate film, sheet, and strip, 
from Korea, entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of these administrative 
reviews, as provided by section 751(a)(1) of the Act.
    (1) The cash deposit rate for the reviewed companies will be those 
rates established in the final results of the review of the third 
period. If the rates for Cheil and Kolon remain de minimis, (i.e., less 
than 0.5 percent) there will be no cash deposits required on shipments 
from these firms of subject merchandise;
    (2) For previously reviewed or investigated companies not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period;
    (3) If the exporter is not a firm covered in this review, a prior 
review, or in the original 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 merchandise; and
    (4) If neither the exporter nor the manufacturer is a firm covered 
in this or any previous review conducted by the Department, the cash 
deposit rates will be 4.88 percent, the ``all-others'' rate established 
in the LTFV investigation (56 FR 16305).
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    This notice 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 (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: September 21, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-24302 Filed 9-28-95; 8:45 am]
BILLING CODE 3510-DS-M