[Federal Register Volume 62, Number 45 (Friday, March 7, 1997)]
[Notices]
[Pages 10527-10530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5710]
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DEPARTMENT OF COMMERCE
[A-580-807]
Polyethylene Terephthalate Film, Sheet, and Strip From the
Republic of Korea: Preliminary Results of Antidumping Duty
Administrative Review and Termination in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce and Termination in Part.
ACTION: Notice of preliminary results of antidumping duty
administrative review, 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 two manufacturers/exporters of the subject
merchandise to the United States and the period June 1, 1995 through
May 31, 1996. The review indicates the existence
[[Page 10528]]
of sales below normal value during the period of review.
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 November 14, 1996, in accordance with 19 CFR 353.25, we issued a
revocation of the order with respect to Kolon Industries (Kolon).
Accordingly, we are terminating this review of Kolon.
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 and (2) a
brief summary of the argument (no longer than five pages, including
footnotes).
EFFECTIVE DATE: March 7, 1997.
FOR FURTHER INFORMATION CONTACT:
Michael J. Heaney or Linda Ludwig, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4475/3833.
APPLICABLE STATUTE: Unless otherwise indicted, 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 Round 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 1995/1996 review period on June
6, 1996 (61 FR 28840). On June 29, 1996, the petitioners, E.I. DuPont
Nemours & Co., Inc., Hoescht Celanese Corporation, and ICI Americas,
Inc. requested reviews of Kolon, SKC Limited (SKC), and STC Corporation
(STC). SKC and Kolon filed requests for review on June 27, 1996 and
June 28, 1996, respectively. We initiated the review on August 8, 1996
(61 FR 41373).
On November 14, 1996, the Department revoked the order in part with
respect to Kolon. Accordingly, we are terminating this review with
respect to 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, 1995 through May 31, 1996. The
Department is conducting this review in accordance with section 751 of
the Act, as amended.
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 f.o.b. 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 rebates in
accordance with section 772(c) of the Act.
CEP was based on 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, 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.
For SKC, we made an offset to interest of 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)(C) 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
third 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 third 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 SKC's, and STC's cost of materials and
fabrication for the foreign like product, plus amounts for home market
selling, general and administrative (SG&A) 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
[[Page 10529]]
permit recovery of all costs within a reasonable period of time. We
compared model-specific prices less any applicable movement charges.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given model where 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,
within an extended period of time. 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
found that, for certain models of PET film, 20 percent or more of the
home market sales were sold at below-cost prices. We therefore excluded
these sales from our analysis and 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 SG&A expenses. In accordance with section 773(e)(2)(A) of the Act,
we based 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 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 or 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 determine whether sales in the comparison market are at
a different level of trade than the CEP, we examined whether the
comparison sales were at different stages in the marketing process than
the CEP. We made this determination on the basis of a review of the
distribution system in the comparison market, including selling
functions, class of customer, and the level of selling expenses for
each type of sale. Different stages of marketing necessarily involve
differences in selling functions, but differences in selling functions,
even substantial ones, are not alone sufficient to establish a
difference in level of trade. Similarly, while customer categories such
as ``distributor'' and ``wholesaler'' may be useful in identifying
different levels of trade, they are insufficient in themselves to
establish that there is a difference in level of trade. See Certain
Corrosion Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate from Canada: Preliminary Results of
Antidumping Duty Administrative Review, 61 FR 51896 (October 4, 1996).
In order to implement these principles, each of the respondents
provided information with respect to its selling activities associated
with each stage of marketing. Both of the respondents identified two
stages of marketing in the home market: (1) wholesalers/distributors
and (2) end-users. For both stages, SKC and STC perform similar selling
functions such as market research and after sales warranty services.
Because customer description do not necessarily 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 respondent's home market sales. Because
STC and SKC performed similar marketing functions on EP and home market
sales, we determined that EP and HM sales were at the same the level of
trade for both respondents.
SKC 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.
For both EP and CEP the relevant transaction for determining the level
of trade is the sale from the exporter to the importer, whether
unaffiliated or affiliated. Based on SKC's questionnaire responses and
response to our request for supplemental information, we determined a
difference between the actual selling functions performed by SKC for
the CEP sales and those performed for HM sales. SKC provides
engineering services, and inventory maintenance services on its HM
sales. SKC does not provide these services on its CEP sales. SKC also
provides a greater degree of computer, legal, accounting, audit and/or
business systems development services on its home market sales than it
does on its CEP sales. Therefore, the selling functions performed by
SKC for CEP sales are sufficiently different than for HM sales so as to
establish different levels of trade. In addition, these differences in
selling functions indicated that the home market sales occur at a more
advanced stage of distribution than the CEP sales.
Because we compared SKC's 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 SKC only sold at one level of trade in the
home market; therefore, there is no basis upon which to discern whether
there is a pattern of consistent price differences between levels of
[[Page 10530]]
trade. Further, we do not have the information which would allow us to
examine pricing patterns of SKC's sales of other 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
SKC 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. SKC claimed a CEP offset, which we applied to
NV. To calculate the CEP offset, we took the amount of home market
indirect selling expenses, and deducted this amount from NV, on home
market comparison sales. We limited HM indirect selling expenses to the
amount of indirect selling expenses incurred on sales in the United
States.
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, 1995 through May 31, 1996:
------------------------------------------------------------------------
Manufacturer/exporter Margin
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SKC.................................................. 1.57
STC.................................................. 0.37
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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,
within 120 days after the publication of this notice.
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Because the inability to
link sales with specific entries prevents calculation of duties on an
entry-by-entry basis, we have calculated an importer specific ad
valorem duty assessment rate for the merchandise based on the ratio of
the total amount of antidumping duties calculated for the examined
sales made during the POR to the total customs value of the sales used
to calculate these duties. This rate will be assessed uniformly on all
entries of that particular importer made during the POR. (This is
equivalent to dividing the total amount of antidumping duties, which
are calculated by taking the difference between NV and U.S. Price, by
the total U.S. value of the sales compared, and adjusting the result by
the average difference between U.S. price and customs value for all
merchandise examined during the POR.) 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, except if the rate was less than 0.50 percent,
and therefore, de minimis within the meaning of 19 CFR 353.6, in which
case the cash deposit rate will be zero; (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: March 3, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-5710 Filed 3-6-97; 8:45 am]
BILLING CODE 3510-DS-M