[Federal Register Volume 61, Number 25 (Tuesday, February 6, 1996)]
[Notices]
[Pages 4408-4415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2369]



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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-008]


Color Television Receivers from the Republic of Korea; Final 
Results of Antidumping Duty Administrative Reviews

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Reviews.

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SUMMARY: On February 16, 1995, the Department of Commerce (the 
Department) published the preliminary results of its administrative 
reviews of the antidumping duty order on color television receivers 
(CTVs) from the Republic of Korea covering exports of this merchandise 
to the United States by certain manufacturers. Based on our preliminary 
review of these exports during the period April 1, 1988 through March 
31, 1989 and April 1, 1989 through March 31, 1990, we found margins for 
all reviewed companies with the exception of respondent Samsung 
Electronics Co., Ltd. (Samsung), which has a de minimis margin in both 
of our reviews. We invited interested parties to comment on the 
preliminary results. We received comments from the Independent Radionic 
Workers of America; the International Union of Electronic, Electrical, 
Technical, Salaried, and Machine Workers, AFL-CIO; the International 
Brotherhood of Electrical Workers of America; and the Industrial Union 
Department, AFL-CIO (petitioners). We also received comments from 
Samsung and rebuttals to Samsung's comments from Zenith Electric 
Corporation (Zenith), a domestic interested party. We have now 
completed our final results of review and determine that the results 
with respect to Samsung remain de miminis; those with respect to the 
other manufacturers have not changed from those presented in our 
preliminary results.

EFFECTIVE DATE: February 6, 1996.

FOR FURTHER INFORMATION CONTACT: Anne D'Alauro or Richard Herring, 
Office of Countervailing Compliance, International Trade 
Administration, U.S. Department of Commerce, Washington, D.C. 20230; 
telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On February 16, 1995 (60 FR 9005), the Department published in the 
Federal Register the preliminary results of its administrative reviews 
of the antidumping duty order on CTVs from the Republic of Korea (49 FR 
18336; April 30, 1984) covering exports of this merchandise to the 
United States by Samsung, Cosmos Electronics Company Ltd. (Cosmos), 
Tongkook General Electronics Co., Ltd (Tongkook), and Samwon 
Electronics, Inc. (Samwon). For administrative convenience, we combined 
the results of two reviews covering the periods April 1, 1988 through 
March 31, 1989, and April 1, 1989 through March 31, 1990. We have now 
completed these administrative reviews in accordance with section 751 
of the Tariff Act of 1930, as amended (1988)(the Act).

Scope of the Review

    Imports covered by these reviews include CTVs, complete and 
incomplete, from the Republic of Korea. The order covers all CTVs 
regardless of tariff classification. During the period of review, the 
subject merchandise was classified under item numbers 684.9246, 
684.9248, 684.9250, 684.9252, 684.9253, 

[[Page 4409]]
684.9255, 684.9256, 684.9258, 684.9262, 684.9263, 684.9270, 684.9275, 
684.9655, 684.9656, 684.9658, 684.9660, 684.9663, 684.9864, 684.9866, 
687.3512, 687.3513, 687.3514, 687.3516, 687.3518, and 687.3520 of the 
Tariff Schedules of the United States Annotated (TSUSA). This 
merchandise is currently classifiable under item numbers 8528.10.0800, 
8528.10.11.00, 8528.10.13.00, 8528.10.17, 8528.10.19, 8528.10.24, 
8528.10.28, 8528.10.34, 8528.10.38, 8528.10.44, 8528.10.48, 8528.10.54, 
8528.10.58, 8528.10.61, 8528.10.63, 8528.10.67, 8528.10.69, 8528.10.71, 
8528.10.73, 8528.10.77, 8528.10.79, 8529.90.03, 8529.90.06, and 
8540.11.10 of the Harmonized Tariff Schedule (HTS). Although the HTS 
and TSUSA item numbers are provided for convenience and Customs 
purposes, our written description of the scope remains dispositive.

Applicable Statute and Regulations

    The Department is conducting this administrative review in 
accordance with section 751(a) of 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.

Analysis of Comments Received

    We invited interested parties to comment on our preliminary results 
of the reviews. We received comments from the petitioners, and Samsung, 
and rebuttal comments from Zenith.

Petitioners' Comments With Respect to Both Reviews

    Comment 1: Petitioners argue that the Department should deny the 
Installment Sales Incentive (ISI) rebate claimed by Samsung as a direct 
selling expense deduction on its home market sales. Petitioner argues 
that since Samsung failed to report interest received from installment 
sales, the Department should either request such information or 
calculate an amount from information currently available in Samsung's 
submitted questionnaire responses.
    Samsung points out that in order to maximize its sales, it did not 
charge interest to consumers, either directly or indirectly, on 
installment sales made by its dealers. Samsung states that it merely 
provided a collection service which Samsung's numerous small 
distributors were unable to provide on a cost effective basis.
    Department's Position: The Department verified the response 
submitted by Samsung in the 1988-89 (sixth) administrative review and 
examined the operation of the ISI rebate program. We verified that 
customers paid Samsung directly in installments and that no interest 
was earned on these transactions. Therefore, we have allowed the ISI 
rebate as a direct selling expense.
    Comment 2: Petitioners fault the calculation of U.S. indirect 
selling expenses reported by Samsung Electronics America (SEA) because 
it included certain unacceptable advertising expenses. As a result of 
Samsung's inadequate explanation of why it should include such 
expenses, petitioners advocate that the Department revise the 
calculation of U.S. indirect selling expenses incurred by SEA by 
excluding these contested expenses.
    Samsung counters that, in the sixth review, the expense in question 
resulted from an initial bookkeeping error and its subsequent 
correction. Since the overall advertising expense total remains 
unchanged, the total advertising expense used for allocation remains 
unaffected.
    In the seventh review, the expense in question was also a 
correction of an overstatement found to have been made in the sixth 
review.
    Department's Position: We agree with the respondent that the 
disputed expense in review six does not affect the total allocated 
amount for advertising included in SEA's indirect selling expense 
calculation. Similarly, the Department accepts the correction made 
within the context of the seventh review. Therefore, no changes have 
been made in these final results with respect to Samsung's reported 
advertising expenses.
    Comment 3: Petitioners argue that the Department should recalculate 
the interest rate that it used to calculate Samsung's U.S. credit 
expenses because it included an asset item from its daily loan balance 
termed ``LIBOR & Cash.'' Petitioners question the inclusion of an asset 
in the daily loan balance as well as why it should incur interest on an 
asset. Because these amounts increase the denominator in the interest 
calculation, the interest rate used to calculate U.S. credit expenses 
is understated. In addition, the petitioners request the use of 360 
days in both calculations used to derive the ``rate of credit 
expense.''
    Samsung states that petitioners have misinterpreted the line item 
``LIBOR & Cash'', which, in fact, refers to Samsung's LIBOR loans and 
cash loans. Thus, Samsung did not calculate interest on an asset item. 
Furthermore, using 360 days in both calculations to derive the rate of 
credit expense yields the same rate as was originally reported and used 
by the Department.
    Department's Position: We agree with the respondent and have made 
no changes to Samsung's reported credit expense rate.
    Comment 4: Petitioners argue that Samsung has not reported the 
amount for its imputed cost of carrying inventory on its Exporter Sales 
Prices (ESP) transactions. Because Samsung should not benefit from its 
failure to report relevant expenses, petitioners advocate that the 
Department calculate an amount to account for the inventory carrying 
expense, and deduct the amount from the price of its ESP sales.
    Samsung notes that in its supplemental questionnaire response, 
Samsung reported inventory carrying costs incurred with respect to its 
ESP sales. The overall indirect selling expense ratio was increased 
accordingly to that which was used by the Department in its preliminary 
results calculations for these reviews.
    Department's Position: We agree with Samsung that inventory 
carrying costs were reported and included in the amount deducted for 
indirect selling expenses for all ESP sales transactions in both the 
sixth and seventh reviews (see submissions of Samsung dated March 20, 
1991 at 6-7 and August 9, 1991 at 1-3, respectively).
    Comment 5: Petitioners state that the Department should calculate 
an amount for credit expenses based on the estimated credit period for 
Samsung's purchase price sales which were sold ``at sight.'' 
Petitioners argue that, since the time between the date that CTVs were 
shipped from Samsung's factory and the date that Samsung was credited 
by its bank for payment can easily run as long as 10 to 14 days, 
Samsung should be required to report this time period and its 
corresponding credit expense.
    Samsung argues that the period from the date the CTVs leave the 
factory until the date the CTVs are loaded onto a ship is an inventory 
carrying cost rather than a credit expense. Since inventory carrying 
costs are indirect selling expenses, and indirect selling expenses are 
not considered in these purchase price transactions, there is no need 
for the Department to impute an expense for this portion of the period. 
Moreover, as clearly set forth in Certain Iron Construction Castings 
from Brazil (51 FR 9477, 9479; March 19, 1986), it is not the 
Department's policy to calculate a credit expense when the terms of 
sale are letter of credit ``at sight.'' Therefore, the Department 
should also not impute any credit expense for the period from the date 
when Samsung receives the 

[[Page 4410]]
carrier's bill of lading until the date when the bank credits the 
payment.
    Department's Position: It is Department policy that the credit 
period begins with shipment of the merchandise to the customer from the 
foreign producer's warehouse, whether located on the production site or 
at an off-site warehouse location, and ends at the time the producer 
receives payment. We agree with Samsung that it is not the Department's 
policy to calculate a credit expense for ``at sight'' sales, since 
generally for these sales, payment by the bank is effected immediately 
upon presentation of the sales documentation. We reviewed the sales 
verification documents collected in the sixth review to determine the 
actual time between the date of shipment and the date of payment. These 
documents indicate that there is generally only a one day lag between 
the two events. Therefore, no credit expense is applicable.
    Comment 6: Petitioners state that the Department did not follow its 
normal practice which is to adjust constructed value (CV) for home 
market selling expenses based on the weighted-average direct and 
indirect selling expenses for all home market sales. Instead the 
Department relied on ratios reported by Samsung for direct and indirect 
selling expenses which the petitioner alleges that Samsung failed to 
adequately explain and which differ from that reported in the home 
market sales tape. Accordingly, petitioners argue the Department should 
calculate the selling expense adjustments from the reported home market 
sales tape.
    Samsung responds that the methodology for deriving the expense 
ratios reported for making adjustments to CV were individually 
explained in its response. In response to petitioners' additional point 
that the ratios do not correspond to the information contained in the 
home market sales tape, such a comparison is fundamentally flawed. The 
home market sales expenses reported in the sales tape are actual and 
sales-specific whereas the reported CV expense ratio is based on the 
average expense amount relative to the cost of home market sales. 
Samsung argues that there is simply no way that this information can be 
directly or meaningfully compared. Lastly, Samsung states that the 
underlying methodology was fully reviewed and verified by the 
Department.
    Department's Position: We reviewed, and verified in the sixth 
administrative review, the methodology used by Samsung for reporting 
its home market selling expenses for CV. These expense amounts properly 
reflect Samsung's selling experience for all home market sales of CTVs. 
As Samsung explained, these ratios were calculated using the cost of 
sales. Since petitioner compares these average amounts to the sales-
specific amounts calculated using sales revenue, it is not surprising 
that the two results differ. In fact, unless sales are made below the 
cost of manufacture, an allocation based on the cost of sales would 
always yield a higher percentage than would an allocation of the same 
amount based on the value of sales. The Department finds no 
inaccuracies in Samsung's calculation of the weighted-average direct 
and indirect selling expenses for all home market sales of CTVs 
reported for purposes of CV.
    Comment 7: Petitioners contend that to the extent that SEA is the 
importer of record for the CTV entries concerned and consequently is 
obligated for payment of antidumping duties on those entries, 
absorption or reimbursement will have occurred contrary to the statute 
and regulations at 19 CFR section 353.26. Therefore, the antidumping 
duties should be assessed and collected a second time. According to 
petitioners, the subsidiary relationship between Samsung and SEA 
shields the first unrelated buyer in the United States from the 
remedial mechanism of the antidumping duties and thereby wrongly erodes 
the purpose of the law.
    Petitioners, therefore, ask that the Department reconsider its past 
reluctance to find absorption or reimbursement when antidumping duties 
are to be paid by an importing party that is related to the foreign 
producer. Although one court decision, Outokumpu Copper Rolled Products 
AB v. United States, 829 F. Supp. 1371, 1382-84 (CIT 1993), has 
supported the Department's position, the petitioners argue that the 
grounds relied upon by the court are not persuasive. First, the court 
saw the foreign producer and its related party in the United States as 
having separate corporate identities with no inappropriate financial 
intermingling, in spite of the fact that these companies were 
considered a single company in the classification of their United 
States sales and the computation of dumping margins on those sales. 
Petitioners ask why a subsidiary of a foreign producer that has been 
found to be dumping should be permitted to pay antidumping duties as 
the importer of record and characterized as a separate importer rather 
than the foreign respondent's controlled subsidiary serving to shield 
unrelated customers in the United States from antidumping duties. 
Second, petitioners claim that the court concluded that no absorption 
or reimbursement had taken place because the cash deposits of estimated 
duties should not be ``recast'' into duties actually paid. However, 
whenever the related party is the importer of record, that related 
party is ultimately responsible for the payment of any antidumping 
duties due. Petitioners conclude that, to the extent that the 
Department calculates margins of dumping on Samsung's CTVs in these 
reviews, those duties to be paid by SEA should be paid a second time.
    Samsung argues that petitioners' attempts at distinguishing the 
Outokumpu decision, which is governing precedent and should be applied 
here, fails because their analysis is neither grounded in the statute 
or the regulations. The Outokumpu decision held that mere allegations 
that the foreign producer and the U.S. importer are related and that 
the importer paid the duties are not sufficient to satisfy 19 CFR 
section 353.26(a). In order for the reimbursement provision to apply, 
there must be ``evidence on the record that an agreement to reimburse 
those duties exists,'' that the foreign producer reimbursed the 
importer, or that the importer paid duties on behalf of the foreign 
producer. Samsung asserts that since no such evidence has been 
provided, the Department should dismiss this argument.
    Department's Position: The imposition of antidumping duties is 
intended to provide relief to U.S. industries injured by unfair trade 
practices of foreign competitors. In effect, antidumping duties raise 
prices of subject merchandise to importers, thereby providing a level 
playing field upon which injured U.S. industries can compete. The 
remedial effect of the law is defeated, however, where exporters 
themselves pay antidumping duties, or reimburse importers for such 
duties. To ensure that the remedial effect of the law is not 
undermined, the Department has authority to reduce the U.S. price (used 
to determine dumping) by the amount of any duty paid, or reimbursed, by 
the producer or reseller, thereby increasing the amount of the duty 
ultimately collected. See 19 CFR 353.26.
    The Department's regulation on reimbursement applies to both 
purchase price and ESP transactions, notwithstanding our statement to 
the contrary in Final Results of Antidumping Duty Administrative 
Reviews and Revocation in Part of Antidumping Duty Order, 58 FR 39729 
(July 26, 1993) (review of the orders on antifriction bearings (AFBs) 
from various countries). Contrary to our longstanding interpretation, 
in that AFBs review we stated that section 353.26 did not apply to ESP 
transactions 

[[Page 4411]]
because the exporter and related importer are treated as a single 
entity for margin calculation purposes. We concluded that because the 
related companies are considered to be a single entity, we could not 
treat the two companies as separate entities for purposes of duty 
payment.
    We have reconsidered our statement in AFBs and find it to be 
inconsistent with both the plain language of the regulations and the 
regulatory history. See, e.g., 19 CFR 353.41 (defining U.S. price as 
the purchase price or the ESP). We also note that the statement of 
administrative action of the URAA confirms that the Department has 
``full authority under its current regulations (19 CFR 353.26) to 
increase the duty when an importer directly pays the duties due, or 
reimburses the importer, whether independent or affiliated, for the 
importer's payment of duties.'' (Emphasis added.) SAA at 216.
    The fact that margins are calculated based on prices to the first 
unrelated party in the United States does not warrant an assumption 
that there cannot be reimbursement of antidumping duties when the 
exporter and importer are related. How antidumping duties are 
calculated and who, under the law, is responsible for paying those 
duties are separate and distinct issues. The contrary reasoning in AFBs 
is inconsistent with the underlying policy of the reimbursement 
regulation. Accordingly, we are reaffirming our original view that 
reimbursement, within the meaning of the regulation, takes place 
between related parties if the evidence demonstrates that the exporter 
directly pays antidumping duties for the related importer or reimburses 
the importer for such duties. Brass Sheet and Strip from the 
Netherlands, 57 FR 9534, 9537 (March 19, 1992); Brass Sheet and Strip 
from the Sweden, 57 FR 2706, 2708 (January 23, 1992); Brass Sheet and 
Strip from Korea, 54 FR 33257, 33258 (August 14, 1989).
    This position has been upheld by the Court of International Trade 
in Outokumpu. This does not imply that foreign exporters automatically 
will be assumed to have reimbursed related U.S. importers for 
antidumping duties by virtue of the relationship between them. While we 
recognize that all transactions between related parties must be 
scrutinized with care, the relationships between such parties are too 
complex to justify such an assumption. However, where the exporter 
directly pays antidumping duties or reimburses the related party 
importer specifically for such duties, we must conclude that 
reimbursement has occurred.
    In this case, there is no evidence of inappropriate financial 
intermingling or of an agreement to reimburse antidumping duties 
between the two related parties. Therefore, the Department has no 
reason to require payment of twice the amount of any dumping duties 
owed.

Petitioners' Comments With Respect Only to the 88-89 (Sixth) Review

    Comment 8: Petitioners argue that during verification it was noted 
that Samsung did not claim expenses incurred in certain departments, 
although expenses incurred in identical- or similarly-named departments 
were included in the calculation of Samsung's home market indirect 
selling expenses. Therefore, the Department should recalculate U.S. 
indirect selling expenses to include the expenses of the noted excluded 
departments.
    Samsung states that petitioners have misinterpreted the 
verification report's findings. After a thorough examination of the 
functions of the identical- or similarly-named departments at Samsung, 
the verifiers concluded that the functions performed by these 
departments were not the same as those performed by the departments 
which were included in Samsung's home market indirect selling expenses. 
Thus, the Department correctly accepted the exclusion of the costs 
incurred by these departments from Samsung's indirect selling expenses.
    Department's Position: Samsung's statement that the Department 
accepted the exclusion of the costs incurred by these departments from 
Samsung's indirect selling expenses is only partially correct. During 
verification, we reviewed Samsung's claimed indirect selling expenses 
incurred with respect to home market sales and with respect to U.S. 
sales. During this examination, we noted that Samsung did not claim 
expenses incurred in certain departments in its calculation of U.S. 
indirect selling expenses, while expenses incurred in identical- or 
similarly-named departments were included in its calculation of home 
market indirect selling expenses. We then collected and reviewed the 
job descriptions for these various departments to determine whether the 
tasks performed in the respective home market and export departments 
were similar.
    Based on the examination of the job descriptions, we had Samsung 
provide us with the expenses for certain additional export departments 
which were not included in its claimed U.S. indirect selling expenses.
    For the other export departments which were examined, we determined 
during verification that the functions of those export departments were 
not similar to the corresponding home market sales departments, and 
were not expenses related to export sales. Therefore, expenses for 
those departments were not requested. The descriptions of these 
departments and the additional expenses which were collected during the 
verification are detailed in Exhibit 39 of the Sales Verification 
Report for Samsung.
    In these final results for the sixth administrative review, we have 
concluded that the functions of certain export departments are similar 
to the functions performed in certain domestic sales departments which 
were included by Samsung in its claimed home market indirect selling 
expenses. Therefore, we have added the expenses incurred by those 
export departments to Samsung's U.S. indirect selling expenses.
    Comment 9: Petitioners allege that Samsung has not demonstrated 
that the transfer prices of raw materials it obtained from its related 
party suppliers reflect the actual market value for these materials, 
are above cost, or otherwise are arm's length transactions. The 
Department should request that Samsung provide information regarding 
its related supplier's fully absorbed manufacturing costs, in order to 
ensure that any transfer prices used in its CV analysis are at arm's 
length.
    Samsung notes that the Department's verification report confirms 
that material costs were reported at their fully-absorbed cost. The 
transfer price was reported only for one related supplier as a matter 
of convenience since materials purchased from that supplier were so 
negligible as to comprise approximately one percent of total material 
purchases.
    Department's Position: At verification the Department found that, 
with the exception of the noted one percent of material purchases from 
one particular related supplier, all of Samsung's material costs 
reported for purposes of CV were fully-absorbed costs and not transfer 
prices (see Report on Verification of Constructed Value and Adjustments 
for Differences in Merchandise at 11). Therefore, the material costs on 
purchases from related parties were appropriately reported by Samsung 
and accepted by the Department.

Petitioners' Comments With Respect to the 89-90 (Seventh) Review

    Comment 10: Petitioners state that the Department should apply best 
information available (BIA), i.e., the 

[[Page 4412]]
highest calculated margin for any individual sales from this review, 
for the one purchase price sale for which no contemporaneous foreign 
market value (FMV) information was supplied by Samsung.
    Samsung counters that information on all models requested by the 
Department was cooperatively supplied and there is no basis whatsoever 
for use of punitive BIA. In the alternative, the Department can either 
make a comparison outside the contemporaneous period or make a 
comparison with an alternative home market model for which information 
is also available.
    Department's Position: The Department has determined that, for the 
one sale for which it preliminarily failed to calculate FMV and 
assigned Samsung's weighted-average margin, there is sufficient 
information on the record to calculate CV. Accordingly, in these final 
results, the Department has used CV as the basis for FMV in comparison 
to the one sale.

Samsung's Comments

    Comment 11: Samsung objects to the Department's value-added tax 
adjustment methodology used in its preliminary results of review. 
Samsung argues that the Department should instead adopt a ``tax 
neutral'' methodology.
    Petitioners and Zenith counter that the methodology used in these 
preliminary results is the Department's current administrative practice 
and has been approved by the Court of International Trade (CIT). 
Indeed, in litigation involving the eighth review of this order, the 
Department's remand results involved application of the new tax 
methodology (remand results filed August 31, 1994 in CIT Ct. No 93-11-
00719); those results were sustained by the court on December 28, 1994 
(Slip Op. 94-199) and, without an appeal by any party, are now final. 
Petitioners and Zenith contend that Samsung has raised no basis for 
reconsideration of the tax methodology.
    Department's Position: In light of the Federal Circuit's decision 
in Federal Mogul v. United States, CAFC No. 94-1097, made since the 
submission of comments in this case, the Department has changed its 
treatment of home market consumption taxes. Where merchandise exported 
to the United States is exempt from the consumption tax, the Department 
will add to the U.S. price the absolute amount of such taxes charged on 
the comparison sales in the home market. This is the same methodology 
that the Department adopted following the decision of the Federal 
Circuit in Zenith v. United States, 988 F. 2d 1573, 1582 (1993), and 
which was suggested by that court in footnote 4 of its decision. The 
CIT overturned this methodology in Federal Mogul v. United States, 834 
F. Supp. 1391 (1993), and the Department acquiesced in the CIT's 
decision. The Department then followed the CIT's preferred methodology, 
which was to calculate the tax to be added to U.S. price by multiplying 
the adjusted U.S. price by the foreign market tax rate; the Department 
made adjustments to this amount so that the tax adjustment would not 
alter a ``zero'' pre-tax dumping assessment.
    The foreign exporters in the Federal Mogul case, however, appealed 
that decision to the Federal Circuit, which reversed the CIT and held 
that the statute did not preclude Commerce from using the ``Zenith 
footnote 4'' methodology to calculate tax-neutral dumping assessments 
(i.e., assessments that are unaffected by the existence or amount of 
home market consumption taxes). Moreover, the Federal Circuit 
recognized that certain international agreements of the United States, 
in particular the General Agreement on Tariffs and Trade (GATT) and the 
Tokyo Round Antidumping Code, required the calculation of tax-neutral 
dumping assessments. The Federal Circuit remanded the case to the CIT 
with instructions to direct Commerce to determine which tax methodology 
it will employ.
    The Department has determined that the ``Zenith footnote 4'' 
methodology should be used. First, as the Department has explained in 
numerous administrative determinations and court filings over the past 
decade, and as the Federal Circuit has now recognized, Article VI of 
the GATT and Article 2 of the Tokyo Round Antidumping Code required 
that dumping assessments be tax-neutral. This requirement continues 
under the new Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade. Second, the Uruguay Round Agreements 
Act (URAA) explicitly amended the antidumping law to remove consumption 
taxes from the home market price and to eliminate the addition of taxes 
to U.S. price, so that no consumption tax is included in the price in 
either market. The Statement of Administrative Action (p. 159) 
explicitly states that this change was intended to result in tax 
neutrality.
    While the ``Zenith footnote 4'' methodology is slightly different 
from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA 
law required that the tax be added to United States price rather than 
subtracted from home market price, it does result in tax-neutral duty 
assessments. In sum, the Department has elected to treat consumption 
taxes in a manner consistent with its longstanding policy of tax-
neutrality and with the GATT.
    Comment 12: Samsung argues that the Department should classify 
Samsung's home market bad debt as a direct selling expense. The bad 
debt expenses claimed by Samsung were owed by CTV purchasers that had 
declared bankruptcy. Since the bad debt expense was incurred as a 
direct result of CTV sales, there can be no dispute that the expense 
was directly linked to sales of the subject merchandise. Furthermore, 
the Department's treatment in these reviews is inconsistent with the 
CIT's decision in Daewoo Electronics Co. v. United States, 712 F. Supp. 
931, 938 (1989), aff'd in part and rev'd in part on other grounds, 6 
F.3d 1511 (Fed. Cir. 1993), cert. denied, 114 S. Ct. 2672 (1994) as 
well as the Department's decision on remand in the second and the 
fourth reviews of this order to treat bad debt expenses as direct 
selling expenses.
    Petitioner points out that the referenced court decision did not 
completely foreclose the Department from treating bad debt expenses as 
indirect expenses. Rather, a respondent must bear the burden of 
demonstrating that these expenses should be considered direct expenses. 
Accordingly, the Department should continue to treat Samsung's bad debt 
expenses as indirect selling expenses.
    Zenith argues that the Department has stated that only those bad 
debt expenses that have been identified, through an analysis of each 
individual bad debt account, as directly related to the subject 
merchandise would qualify as a direct selling expense (See Fourth 
Review Remand Results dated 1/30/95 at 16). Specifically, where an 
account reflecting receivables from CTV sales is written off as bad, 
current CTV sales may be adjusted for the expense of the uncollectible 
CTV receivables, notwithstanding that the receivables may have been 
booked during a prior period. However, Zenith argues, Samsung has 
failed to meet the standard for establishing that a direct relationship 
exists between its sales of CTVs and the bad debt it incurred during 
the period.
    Department's Position: The Department verified the bad debt 
expenses incurred by Samsung in the context of the sixth review and 
found these expenses to be incurred with respect to sales to specific 
distributors which had gone bankrupt and to whom Samsung had sold CTVs. 
Furthermore, we also reviewed and accepted the 

[[Page 4413]]
allocation used to derive the CTV-specific expense amount. Therefore, 
we have treated the bad debt expenses reported with respect to CTVs as 
direct selling expenses in these final results of both reviews.
    Comment 13: Samsung argues that the Department should reverse its 
preliminary decision to deny Samsung's revocation request based on the 
conclusion that it was untimely. Although the statute authorizes 
revocation, it says nothing about the procedures which the agency may 
use to accomplish revocation, including whether a revocation request 
must be filed at all and certainly not that such a request must be 
filed on a specified date as a precondition to its consideration. In 
implementing the statute, the Department issued a regulation that 
provides that ``during the third and subsequent annual anniversary 
months of the publication of an order or suspension of investigation 
(the calendar month in which the anniversary of the date of publication 
of the order or suspension occurs), a producer or reseller may request 
in writing that the Secretary revoke an order * * *.'' (19 C.F.R. 
353.25(b)). The respondent states that the use of the permissive term 
``may'' can only mean that the Department has discretion to accept a 
revocation request in a month other than the anniversary month of the 
order. Because, in addition, the regulation does not say that the 
request must be based on three immediately preceding review periods, 
Samsung argues that a timely request could be filed in the anniversary 
month of any year so long as the results of any previous reviews reveal 
at least three consecutive years of no dumping.
    The respondent further argues that the Department's preliminary 
decision to refuse to consider Samsung's revocation request because it 
was untimely filed is an abuse of the agency's discretion for four 
reasons. First, it was not possible for Samsung to file its revocation 
request in April 1989 (the anniversary month and year for requesting 
the sixth administrative review) because the Department had not yet 
issued its preliminary determination in the two immediately preceding 
reviews of the fourth and fifth periods. Given the substantially above 
de minimis margins determined in the first through third administrative 
reviews, which were the only reviews completed as of April 1989, 
Samsung argues that it was not possible at that time for it to form a 
``reasonable belief'' that no dumping occurred in the three consecutive 
review periods as required by the regulations. Litigation was also then 
pending on issues arising from the final determinations in the first 
through third administrative reviews, and the outcome of those issues 
threatened to have a significant negative impact on the margin in all 
of the subsequent administrative reviews. Second, Samsung claims that 
it was not in a position to form that ``reasonable belief'' in part 
because the Department itself had breached its own regulatory 
obligation to complete the fourth and fifth administrative reviews 
within the required 12-month period. Had that not been the case, 
Samsung would have known that the fourth and fifth review margins 
established its eligibility for requesting revocation. Third, Samsung 
asserts that it submitted its request to the agency within a reasonable 
time after the date on which it first could reasonably assume that its 
margins in the fourth through sixth reviews would be de minimis. The 
fourth review final results were issued in June 1990, and the fifth 
review final results were not issued until March 1991. However, the 
precedent setting issues in the first, second, and third reviews still 
remained pending on appeal. Until the resolution of the tax pass 
through issue in the first administrative review with the issuance by 
the Court of Appeals for the Federal Circuit (CAFC) of its decision in 
Daewoo Electronics Co., Ltd., et al. v. United States, 6 F.3d 1511 
(Fed. Cir. 1993), Samsung argues that it remained impossible for it to 
conclude that the de minimis results in the fourth and fifth reviews 
would remain unaffected by the outcome of this litigation. Fourth, 
Samsung claims that neither the Department nor the interested parties 
have been prejudiced by Samsung's 1993 request for revocation.
    Before 1984, the statute required the Department to review every 
antidumping order at least once during each 12-month period. In 1984 
when the Act was amended to conduct reviews only upon request by 
interested parties, the underlying purpose of the change was to reduce 
the administrative burden on the Department. Samsung states that the 
Department's position that Samsung should have filed its revocation 
request in April 1989 to preserve its right to revocation in the sixth 
review effectively contravenes the purpose of the 1984 amendment. If 
the Department holds to that position, every respondent in every case 
will have to file a revocation request as a matter of routine in every 
anniversary month of an order, beginning with the third anniversary 
month, to preserve its right to revocation. This in turn means that the 
Department becomes obligated to conduct a ``revocation review'' and a 
``revocation verification'' in each review for which a revocation 
request is submitted. Samsung argues that the goal of reducing the 
administrative burden of conducting yearly reviews on outstanding 
dumping orders has been undermined by such a requirement. Furthermore, 
so long as the issue of whether a final determination will yield a de 
minimis margin in any review upon which revocation depends remains 
unresolved due either to Departmental delays in completing that review 
or to a pending judicial appeal, Samsung asserts that the Department 
legally cannot revoke the underlying antidumping order. Samsung argues 
that the Department's policy of requiring a revocation request to be 
filed in the anniversary month of the review period which would 
potentially complete its revocation eligibility, regardless of ongoing 
litigation affecting those reviews that could significantly alter the 
results, serves no purpose, imposes unnecessary burdens on the agency, 
and may, in fact, void the basis of its revocation decision.
    Samsung also states that the Department abused its discretion by 
failing to revoke the order with respect to Samsung on its own 
initiative. Given the fact that, with the inclusion of these two review 
results, Samsung has not been dumping for six years (third through 
eighth review periods) and significant amounts of time and money have 
been spent in proving that fact, the Department's failure to initiate 
revocation proceedings on its own initiative is an abuse of agency 
discretion.
    Samsung claims that because Article 9(1) of the GATT code provides 
that ``[a]n anti-dumping order shall remain in force only as long as, 
and to the extent necessary to counteract dumping which is causing 
injury,'' the Department's failure to revoke the order violates the 
GATT Antidumping Code. Agreement on the Implementation of Article VI of 
the General Agreement on Tariffs and Trade (Geneva, 1979). In addition, 
Samsung argues that the failure of the Department to self initiate a 
revocation proceeding also violates Article 9(2) which requires 
investigating authorities to review the need for the continued 
imposition of the duty on their own initiative.
    Lastly, Samsung argues that the present case is distinguishable 
from the CAFC decision in Exportaciones Bochica/Floral v. United States 
802 F. Supp. 447 (1992) aff'd without opinion, 996 F2d 317 (Fed. Cir. 
1993) (Bochica/Floral). Samsung argues that in that case the 
Department's reason for rejecting an 

[[Page 4414]]
untimely filed revocation request was its interest in minimizing the 
agency's administrative burdens and the need for prompt completion of 
reviews. Samsung states that this rationale simply does not apply to 
the factual situation in their case. This is because Samsung's right to 
revocation based on de minimis results in the fourth through sixth 
reviews depends on the application of methodologies which were not 
finalized until court litigation involving the first CTV review was 
resolved by the CAFC. Thus, Samsung concludes that the Department's 
interests in minimizing administrative burdens and promptly completing 
its reviews, which were upheld in Bochica/Floral, have no relevance 
here.
    Petitioners respond to Samsung's arguments by indicating that the 
regulations plainly provide that a respondent is required to request 
revocation during the anniversary month of the order. They claim that 
Samsung's argument that a revocation request for a particular period 
can be filed during the anniversary month of any year is a 
misinterpretation of the regulations. Petitioners state it is clear 
that a request for a review for the immediately prior period must be 
made in the immediately following anniversary month. Similarly, the 
request for revocation applies to the same time period. This regulatory 
requirement has been upheld by the CIT in Bochica/Floral where the 
court specifically noted that ``ITA interprets [19 C.F.R. 353.26(b)] to 
require that any revocation request be filed on the anniversary month 
of the order if it is to be considered in the review requested that 
month.'' Considering that the Department has been granted the authority 
to establish implementing regulations, which it is also required to 
follow, petitioners argue that failure of the Department to require a 
timely revocation request of Samsung would result in great unfairness 
to other interested parties and would be contrary to the plain language 
of the regulations and the supporting CIT decision.
    Petitioners disagree with Samsung's claim that its untimeliness 
causes no prejudice to the Department or domestic interested parties. 
Petitioners submit that the timing requirement is so important because 
the request serves as notification of other requirements and other 
deadlines necessary to the revocation process. Samsung's revocation 
request filed in November of 1993, over four years late for review six 
does not allow the Department to base its revocation determination on 
recent information. If the Department is aware that revocation is at 
issue and if it is unable to complete the revocation review promptly, 
then in subsequent reviews it will know at the outset of the review 
that it must verify the data. Petitioners assert that, if the request 
for revocation is submitted late in the process, the Department will be 
unable to conduct its revocation proceedings properly. The Department 
must also determine that the respondent is not likely to sell at less 
than FMV in the future. Accordingly, to satisfy the requirements 
necessary for revocation, Samsung should have timely provided 
information to demonstrate that there was no likelihood that it would 
sell its merchandise from Korea at less than FMV.
    Petitioners state that having failed to overcome the procedural and 
substantive barriers to revocation resulting from its untimely request, 
Samsung tried to excuse itself from its failure by arguing that it was 
prevented from doing so because it could not form a reasonable belief 
that there would be no dumping found in the fourth and fifth reviews. 
Petitioners contend that, based on the Department's established 
practice during April of 1989, there was a real possibility that the 
margin results in the fourth and fifth reviews would be de minimis, 
even in the absence of preliminary results. As of November 3, 1993, 
when Samsung made its request for revocation, litigation on a range of 
issues was also still continuing in a variety of administrative 
reviews. Thus, petitioners contend, neither the timing of the 
publication of the preliminary results nor the pending litigation can 
excuse Samsung from failing to make a timely revocation request in 
April 1989. Furthermore, petitioners point out, even if the Department 
had completed the reviews within a twelve month period, the reviews 
would have been subject to the same litigation that they were subject 
to in November 1993. Samsung would have been in no better or worse 
position in April 1989 than it was when it eventually filed its 
request.
    Zenith submitted rebuttal comments addressing this issue which 
support those arguments provided by the petitioners and discussed 
above.
    Department's Position: The Department agrees with the petitioner 
and Zenith and remains unpersuaded by Samsung's arguments regarding its 
failure to timely file its revocation requests. The Department 
interprets section 353.25(b) of its regulations to require a producer 
or reseller to submit its revocation request during the opportunity 
month for the administrative review which the respondent reasonably 
believes would establish its eligibility for revocation. This 
interpretation has been upheld by the CIT in Bochica/Floral.
    Regardless of Samsung's numerous and varied reasons for its failure 
to comply, the fact remains that Samsung should have filed its 
revocation request for the sixth administrative review in April 1989, 
the opportunity month for the sixth review period. Only by making such 
a filing could Samsung have preserved its right to revocation in the 
sixth review.
    The Department is also not persuaded by Samsung's argument that the 
unknown results of ongoing litigation is an acceptable explanation for 
tardiness. The Department has consistently indicated that it is not its 
policy to await the results of pending court actions in making 
revocation decisions. See, Certain Fresh Cut Flowers from Colombia; 
Final Results of Antidumping Duty Administrative Review, and Notice of 
Revocation of Order (in Part) (59 FR 15159; March 31, 1994).
    Moreover, Samsung's specific argument that uncertainty concerning 
the outcome of litigation on prior review periods precluded 
certification that it had not sold CTVs at less than FMV for three 
years, is based on an erroneous reading of section 353.25(b)(1) of the 
regulations. The certification that a party has not sold merchandise at 
less than FMV, required under 353.25(b)(1), pertains only to the 
administrative review period being requested for review (and 
revocation)--i.e., in Samsung's case, for review six. Since the 
certification concerning the administrative review establishing a 
respondent's eligibility for revocation is always made in advance of 
conducting the review, it reflects the respondent's best information 
and belief concerning it's pricing behavior during the period. Although 
the Department had not issued preliminary results of review for periods 
four and five by the time the revocation request was required for 
period six in April of 1989, no presumption existed that Samsung had 
been dumping in those earlier periods. Therefore, consistent with its 
position in prior reviews, Samsung could have provided a certification 
with respect to the third consecutive review period for which there was 
as yet no confirmation that it made sales as less than FMV. Even though 
Samsung could not know at the time whether it would ultimately qualify 
for revocation, it had a sufficient basis to make the request and could 
have timely done so.
    The requirement that the revocation request be submitted at the 
time the applicable review is requested is entirely reasonable and is 
supported by practical considerations. All parties 

[[Page 4415]]
involved in the proceeding are notified and are able to collect 
information and contribute comments on the merits of the revocation. In 
addition, the Department can properly plan to examine and verify all 
necessary U.S. sales and FMV information including the likelihood that 
the respondent will sell the merchandise at less than FMV in the future 
(See section 353.25(a)(2)(ii)). It is precisely with respect to this 
last point that the Department has not had the opportunity to gather 
evidence or solicit comments. The Department received Samsung's 
revocation request after having completed its verification of 
information submitted in the sixth review. If the Department had 
received a timely revocation request from Samsung, it could have 
planned to gather, analyze, and verify all information necessary for 
adequately evaluating Samsung's request and making that decision. This, 
however, is not the situation in this case. For these reasons, the 
Department is not revoking the order with respect to Samsung in these 
administrative reviews.

Final Results of the Review

    As a result of our review, we determine that the weighted-average 
dumping margins for the periods are:

------------------------------------------------------------------------
                                                    Margin      Margin  
                                                  percentage  percentage
                                                 -----------------------
              Manufacturer/exporter                04/01/88-   04/01/89-
                                                   03/31/89    03/31/90 
                                                                        
------------------------------------------------------------------------
Cosmos..........................................        2.24        2.24
Samsung.........................................        0.00        0.03
Samwon..........................................       16.57       16.57
Tongkook........................................       16.57       16.57
------------------------------------------------------------------------

    The Department shall instruct the U.S. Customs Service to assess 
antidumping duties on all appropriate entries. The Department will 
issue appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of these final results of administrative review for 
all shipments of the subject merchandise from Korea entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided by section 751(a)(1) of the Tariff Act: (1) The cash 
deposit rate for all companies will continue to be the company-specific 
rate published in the final determination covering the most recent 
period; (2) for merchandise exported by manufacturers or exporters not 
covered in this review but covered in previous reviews or the original 
LTFV investigation, the cash deposit rate will continue to be the 
company-specific rate published in the final determination covering the 
most recent period; (3) if the exporter is not a firm covered in this 
review, previous reviews, or the original 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; (4) the 
cash deposit rate for all other manufacturers or exporters will be 
13.90 percent, the ``all other'' rate established in the original LTFV 
investigation by the Department (49 FR 7620, March 1, 1984), in 
accordance with the decisions of the CIT in Floral Trade Council v. 
United States, 822 F. Supp. 766 (CIT 1993), and Federal-Mogul 
Corporation v. United States 822 F. Supp. 782 (CIT 1993).
    This notice serves as a final 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 notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibilities 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to 
comply is a violation of the APO.
    These administrative reviews and notice are in accordance with 
section 751(a)(1) of the Tariff Act, as amended (19 U.S.C. 1675(a)(1)) 
and 19 CFR 353.22.

    Dated: January 29, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-2369 Filed 2-5-96; 8:45 am]
BILLING CODE 3510-DS-P