[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]


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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.

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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