[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36032-36035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17464]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[A-580-807]
Polyethylene Terephthalate Film from Korea: Preliminary Results
of Antidumping Duty Administrative Review, Intent to Revoke the Order
in Part, and Termination in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review, Intent to Revoke the Order in Part, and
Termination in Part.
-----------------------------------------------------------------------
SUMMARY: In response to a request from two respondents and three U.S.
producers, 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 three manufacturers/exporters of the subject
merchandise to the United States and the period June 1, 1994 through
May 31, 1995. The review indicates the existence of sales below normal
value for certain manufacturers/exporters during the period of review.
We preliminarily determine the dumping margin for Kolon Industries
(Kolon) to be [zero or de minimis] percent during the period June 1,
1994 through May 31, 1995. Based on three years of sales at not less
than normal value (NV), we intend to revoke the order with respect to
Kolon if the preliminary results of this review are affirmed in our
final results.
If these preliminary results are adopted in our final results of
review, we will instruct the U.S. Customs Service to assess antidumping
duties equal to the difference between the United States Price and NV.
On June 26, 1996, in accordance with 19 CFR 353.25, we issued a
revocation of the order with respect to Cheil Synthetics Inc. (Cheil).
Accordingly, we are terminating this review of Cheil.
Interested parties are invited 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
[[Page 36033]]
and (2) a brief summary of the argument (no longer than five pages,
including footnotes).
EFFECTIVE DATE: July 9, 1996.
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-
4475/0649.
APPLICABLE STATUTE: Unless otherwise indicated, all citations to the
Tariff Act of 1930, as amended (the Act) are references to the
provisions effective January 1, 1995, the effective date of the
amendments made to the Act by the Uruguay Rounds Agreements Act (URAA).
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the current regulations, as amended by
the interim regulations published in the Federal Register on May 11,
1995 (60 FR 25130).
SUPPLEMENTARY INFORMATION:
Background
The Department published an antidumping duty order on PET film from
the Republic of Korea on June 5, 1991 (56 FR 25660). The Department
published a notice of ``Opportunity To Request Administrative Review''
of the antidumping duty order for the 1994/1995 review period on June
6, 1995 (60 FR 29821). On June 26, 1995, Cheil requested that the
Department conduct an administrative review of the antidumping duty
order on PET film from the Republic of Korea. On June 29, 1995, the
petitioners, E.I. DuPont Nemours & Co., Inc., Hoescht Celanese
Corporation, and ICI Americas, Inc. requested reviews of Cheil, Kolon,
SKC Limited (SKC), and STC corporation (STC). SKC and Kolon filed
requests for review on June 29, 1995 and June 30, 1995, respectively.
We initiated the review on July 14, 1995 (60 FR 36260).
The Department extended the time limits for completion of the
preliminary and final results of review. See Antidumping Duty
Administrative Reviews: Time Limits, 61 FR 8911 (March 6, 1996).
On June xx, 1996, the Department revoked the order in part with
respect to Cheil. Accordingly, we are terminating this review with
respect to Cheil.
Intent to Revoke
In its submission of June 30, 1995, Kolon requested, pursuant to 19
CFR 353.25(b), revocation of the order with respect to its sales of PET
film. Kolon certified in its June 30, 1995 submission that (1) it sold
the subject merchandise at not less than NV during the relevant review
period, and (2) that in the future it will not see the subject
merchandise at less than NV. Kolon indicated in its June 30, 1995
submission that it did not believe that the agreement required under 19
CFR 353.25(a)(2)(iii) was applicable to its request because there had
not been any finding that its sales were sold at less than NV.
On February 12, 1996, the Department issued an amended final
results of the first review of the antidumping duty order on PET film
from Korea (61 FR 5375). In this amended final, we determined that
Kolon made sales at less than NV during the relevant period. Therefore,
we permitted Kolon to perfect its timely request for revocation. On
June 25, 1996, Kolon amended its request to include, in accordance with
19 CFR 353.25(a)(2)(iii), an agreement to immediate reinstatement in
the order if any producer or reseller is subject to the order and the
Department concludes that Kolon sold below NV under section 353.22(f)
subsequent to revocation. Based on the final results of the two
preceding reviews and the preliminary results of this review, Kolon has
demonstrated three consecutive years of sales at not less than NV.
If the final results of this review demonstrate that Kolon sold the
merchandise at not less than NV, and if the Department determines that
it is not likely that Kolon will sell the subject merchandise at less
than NV in the future, we intend to revoke the order with respect to
merchandise produced and exported by Kolon.
Scope of the Review
Imports covered by this 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. 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 U.S. Customs purposes. The written description
remains dispositive as to the scope of the product coverage.
The review covers the period June 1, 1994 through May 31, 1995. The
Department is conducting this review in accordance with section 751 of
the Act, as amended.
Verification
As provided in section 782(i) of the Act, we verified information
provided by Kolon using standard verification procedures, including
onsite 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 version of the Kolon verification report.
United States Price (USP)
In calculating USP, the Department treated respondents' sales as
export price (EP) sales, as defined in section 772(a) of the Act, when
the merchandise was sold to unaffiliated U.S. purchasers prior to the
date of importation. The Department treated respondents' sales as
constructed export price (CEP) sales, as defined in section 772(b) of
the Act, when the merchandise was sold to unrelated U.S. purchasers
after importation.
EP was based on the ex-factory, f.o.b. Korean port, f.o.b.
customer's specific delivery point, c.i.f. U.S. port, or delivered,
packed prices to unrelated purchasers in the United States. We made
adjustments, where applicable, for Korean and U.S. brokerage charges,
terminal handling charges, truck loading charges, containerization
charges, Korean and U.S. inland freight, ocean freight, wharfage
expenses, U.S. duties, and rebated in accordance with section 772(c) of
the Act.
CEP was based on ex-warehouse, f.o.b. customer's specific delivery
point, or delivered, packed prices to unrelated purchasers in the
United States. We made adjustments, where applicable, for Korean and
U.S. brokerage charges, terminal handling charges, containerization
charges, Korean and U.S. inland freight, ocean freight, rebates,
wharfage expenses, and U.S. duties, in accordance with section 772(c)
of the Act. In accordance with section 772(d)(1) of the Act, we made
deductions for selling expenses associated with economic activities in
the United States, including warranties, credit, commissions, postage
expenses, bank charges and indirect selling expenses. Pursuant to
section 772(d)(3) of the Act, the price was further reduced by an
amount for profit to arrive at the CEP.
[[Page 36034]]
For SKC, we made an offset to interest expense for interest
revenue, and for post-sale cost and quantity adjustments that were not
reflected in the gross price. With respect to subject merchandise to
which value was added in the United States by SKC prior to sale to
unrelated customers, we deducted any increased value in accordance with
section 772(d)(2) of the Act.
Normal Value
In order to determine whether there were sufficient sales of PET
film in the home market (HM) to serve as a viable basis for calculating
NV, we compared the volume of home market sales of PET film to the
volume of PET film sold in the United States, in accordance with
section 773(a)(1)(B) of the Act. Each respondent's aggregate volume of
HM sales of the foreign like product was greater than five percent of
its respective aggregate volume of U.S. sales of the subject
merchandise. Therefore, we have based NV on HM sales.
Based on the fact that the Department had disregarded sales in the
first administrative review because they were made below the cost of
production (COP), the Department initiated a sales-below-cost of
production (COP) investigation for each of the respondents in
accordance with section 773(b) of the Act. (The first administrative
review was the most recently completed review at the time that we
issued our antidumping questionnaire.)
We performed a model-specific COP test in which we examined whether
each HM sale was priced below the merchandise's COP. We calculated the
COP of the merchandise using Kolon's, SKC's, and STC's cost of
materials and fabrication for the foreign like product, plus amounts
for home market general expenses and packing costs in accordance with
section 773(b)(3) of the Act.
In accordance with section 773(b)(1) of the Act, in determining
whether to disregard home market sales made at prices below COP, we
examined whether such sales were made within an extended period of time
in substantial quantities, and whether such sales were made at prices
which would permit recovery of all costs within a reasonable period of
time.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given model were at prices less
than COP, we did not disregard any below-cost sales of that model
because these below-cost sales were not made in substantial quantities.
We found that, for certain models of PET film, 20 percent or more of
the home market sales were sold at below-cost prices. Where 20 percent
or more of a respondent's home market sales of a given model were at
prices less than the COP, we disregarded the below-cost sales because
such sales were found to be made (1) in substantial quantities within
the POR (i.e., within an extended period of time) and (2) at prices
which would not permit recovery of all costs within a reasonable period
of time, in accordance with section 773(b)(2)(D) of the Act (i.e., the
sales were made at prices below the weighted-average per unit COP for
the POR). We used the remaining above-cost sales as the basis of
determining NV if such sales existed, in accordance with section
773(b)(1). For those models of the subject merchandise for which there
were no above-cost sales available for matching purposes, we compared
U.S. price to constructed value (CV).
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of the respondent's cost of materials, fabrication,
and general expenses. In accordance with section 773(e)(2)(A) of the
Act, we based selling, general, and administrative (SG&A) expenses and
profit on the amounts incurred and realized by the respondents in
connection with the production and sale of the foreign like product in
the ordinary course of trade for consumption in the foreign country.
For selling expenses we used the weighted-average HM selling expenses.
Pursuant to section 773(e)(3) of the Act, we included U.S. packing.
In accordance with section 773(a)(6), we adjusted NV, where
appropriate, by deducting home market packing expenses and adding U.S.
Packing expenses. We also adjusted NV to reflect deductions for HM
inland freight, loading charges, and credit expenses. For comparisons
to EP, we made an addition to NV for differences in warranty and credit
expenses as circumstance-of-sale adjustments pursuant to section
773(a)(6)(C) of the Act.
Level of Trade and CEP Offset
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the URAA,
reprinted in H.R. Doc. No. 316, 103d Cong., 2d Session 829-831 (1994),
to the extent practicable, the Department will calculate NV based on
sales at the same level of trade as the U.S. sale. When the Department
is unable to find sale(s) in the comparison market at the same level of
trade as the U.S. sale(s), the Department may compare sales in the U.S.
and foreign markets at a different level of trade.
In accordance with section 773(a)(7)(A) of the Act, if we compare a
U.S. sale at one level of trade to NV sales at a different level of
trade, the Department will adjust the NV to account for differences in
level of trade if two conditions are met. First there must be
differences between the actual selling functions performed by the
seller at the level of trade of the U.S. sale and at the level of trade
of the comparison market sale used to determine NV. Second, the
differences must affect price comparability as evidenced by a pattern
of consistent price differences between sales at the different levels
of trade in the market in which NV is determined. When CEP is
applicable, section 773(a)(7)(B) of the Act establishes the procedures
for making a CEP ``offset'' when two conditions exist: (1) NV is
established at a level of trade which constitutes a more advanced stage
of distribution than the level of trade of the CEP; and (2) the data
available do not provide an appropriate basis for a level-of-trade
adjustment.
In order to implement these principles, each of the respondents
provided information with respect to its selling activities associated
with each channel of distribution. All of the respondents identified
two channels of distribution in the home market: (1) wholesalers/
distributors and (2) end-users. For both channels, all of the
respondents perform similar selling functions such as market research
and after sales warranty services. Because channels of distribution do
not qualify as separate levels of trade when the selling functions
performed for each customer class are sufficiently similar, we
determined that there exists one level of trade for each of the
respondents' home market sales.
Each of the respondents made CEP and EP sales to the United States
market and claimed either a level of trade adjustment for its CEP
sales, or a CEP offset. The level of trade of the U.S. sale is
determined by the adjusted price of the CEP sale. Based on each of the
respondents' questionnaire responses to our requests for supplemental
information, we determined a difference between the actual selling
functions performed by respondents at the level of trade of the CEP
sale and the level of trade of the HM sale. The adjusted CEP sales do
not reflect the selling functions performed for end-users or
distributors in the Korean market.
Kolon provides inventory maintenance, after-sales and warranty
services, and advertising on behalf of its customer for HM sales. Kolon
does not provide these services on its CEP sales. SKC provides market
research,
[[Page 36035]]
engineering services, inventory maintenance, and delivery services on
its HM sales. SKC does not provide these services on its CEP sales. STC
provides inventory maintenance, after sales-services and warranty
assistance, entertainment of customers, and marketing research on its
HM sales. STC does not provide these services on its CEP sales.
Therefore, the selling functions performed by each of the respondents
for CEP sales are sufficiently different than for HM sales so as to
establish different levels of trade.
Because we compared these CEP sales to HM sales at a different
level of trade, we examined whether a level-of-trade adjustment may be
appropriate. In this case each of the respondents only sold at one
level of trade in the home market; therefore, there is no basis upon
which any of the respondents has demonstrated a consistent pattern of
price differences between levels of trade. Further, we do not have the
information which would allow us to examine pricing patterns of
respondents' sales of other similar products, and there is no other
respondent's or other information on the record to analyze whether the
adjustment is appropriate.
Because the data available do not provide an appropriate basis for
making a level-of-trade adjustment but the level of trade in Korea for
each respondent is at a more advanced stage than the level of trade of
the CEP sales, a CEP offset is appropriate in accordance with section
773(a)(7)(B) of the Act. Each respondent claimed a CEP offset, which we
applied to NV. We based the CEP offset amount on the amount of home
market indirect selling expenses, and limited the deduction for HM
indirect selling expenses to the amount of indirect selling expenses
incurred on sales in the United States, in accordance with section
772(d)(1)(D) of the Act. The level-of-trade methodology used in this
review is based on the facts particular to this review. The Department
will continue to examine its policy for making level-of-trade
comparisons and adjustments for the final results of this review.
Fair Value Comparisons
To determine whether sales of PET film in the United States were
made at less than fair value, we compared USP to the NV, as described
in the ``United States Price'' and ``Normal Value'' sections of this
notice. In accordance with section 777(A) of the Act, we calculated
monthly weighted-average prices for NV and compared these to individual
U.S. transactions.
Preliminary Results of Review
We preliminarily determine that the following margins exist for the
period June 1, 1994 through May 31, 1995:
------------------------------------------------------------------------
Manufacturer/exporter Margin
------------------------------------------------------------------------
Kolon........................................................ 0.14
SKC.......................................................... 1.91
STC.......................................................... 4.98
------------------------------------------------------------------------
Parties to this proceeding may request disclosure within five days
of publication of this notice and any interested party may request a
hearing within 10 days of publication. Any hearing, if requested, will
be held 44 days after the date of publication, or the first working day
thereafter. Interested parties may submit case briefs and/or written
comments no later than 30 days after the date of publication. Rebuttal
briefs and rebuttals to written comments, limited to issues raised in
such briefs or comments, may be filed no later than 37 days after the
date of publication. The Department will publish the final results of
this administrative review, which will include the results of its
analysis of issues raised in any such written comments or at a hearing.
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between USP and NV may vary from the percentages stated above. The
Department will issue appraisement instructions directly to Customs.
The final results of this review shall be the basis for the assessment
of antidumping duties on entries of merchandise covered by the
determination and for future deposits of estimated duties.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of these administrative reviews
for all shipments of PET film from the Republic of 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 reviewed
firms will be the rate established in the final results of
administrative review; (2) for merchandise exported by manufacturers or
exporters not covered in these reviews but covered in the original
less-than-fair value (LTFV) investigation or a previous review, the
cash deposit will continue to be the most recent rate published in the
final determination or final results for which the manufacturer or
exporter received a company-specific rate; (3) if the exporter is not a
firm covered in these reviews, or the original investigation, but the
manufacturer is, the cash deposit rate will be that established for the
manufacturer of the merchandise in the final results of these reviews,
or the LTFV investigation; and (4) if neither the exporter nor the
manufacturer is a firm covered in these or any previous reviews, the
cash deposit rate will be 4.82%, the ``all others'' rate established in
the LTFV investigation.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26(b) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during these review periods. 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 Act (19 U.S.C. 1675(a)(1).
Dated: July 1, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-17464 Filed 7-8-96; 8:45 am]
BILLING CODE 3510-DS-M