[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Notices]
[Pages 59514-59519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29552]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-833]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Emulsion Styrene-
Butadiene Rubber From the Republic of Korea
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 4, 1998.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or James Nunno, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230; telephone: (202) 482-2613 or (202) 482-0783, respectively.
The 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 Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department of Commerce's (the
Department's) regulations are references to 19 CFR part 351 (April 1,
1998).
Preliminary Determination
We preliminarily determine that emulsion styrene-butadiene rubber
(ESBR) from the Republic of Korea is being, or is likely to be, sold in
the United States at less than fair value (LTFV), as provided in
section 733 of the Act. The estimated margins of sales at LTFV are
shown in the ``Suspension of Liquidation'' section of this notice,
below.
Case History
Since the initiation of this investigation (see Notice of
Initiation of Antidumping Investigations: Emulsion Styrene-Butadiene
Rubber from Brazil, the Republic of Korea, and Mexico (63 FR 20575,
April 27, 1998), ``Notice of Initiation''), the following events have
occurred:
On May 8, 1998, the Department obtained a request from Hyundai
Petrochemical Co., Ltd. (``Hyundai'') to be excluded from participation
as a mandatory respondent in this investigation. On May 12, 1998, the
petitioner submitted a letter to the Department opposing Hyundai's
exclusion from this proceeding. On May 13, 1998, the Department
notified Hyundai that it was selected as a mandatory respondent. In
August 1998, Hyundai submitted a letter stating that it is unable to
participate in this investigation, and is not responding to our
questionnaires.
On May 18, 1998, the United States International Trade Commission
(ITC) issued an affirmative preliminary injury determination in this
case (see ITC Investigation Nos. 731-TA-794-796).
On May 21, 1998, the Department of Commerce (the Department) issued
the antidumping duty questionnaire to Kumho and Hyundai, the only two
producers, and/or exporters of the subject merchandise to the United
States identified in the petition. In June of 1998 the Department
received Kumho's response to Section A of the questionnaire. Kumho
submitted its response to Sections B and C of the questionnaire in July
of 1998.
On July 21, 1998, pursuant to section 733(c)(1)(A) of the Act, the
petitioners made a timely request to postpone the preliminary
determination. The petitioners filed an explanatory amendment to that
request on July 23, 1998. We granted this request and, on July 28,
1998, postponed the
[[Page 59515]]
preliminary determination until no later than October 28, 1998 (see
Notice of Postponement of Preliminary Determinations of Sales at Less
Than Fair Value: Emulsion Styrene-Butadiene Rubber From Brazil, the
Republic of Korea, and Mexico (63 FR 41544, August 4, 1998)).
On July 27, 1998, pursuant to section 773(b) of the Act, the
petitioners submitted a timely allegation, that Kumho had made sales in
the home market below the cost of production (COP). Our analysis of
that allegation indicated that there were reasonable grounds to believe
or suspect that Kumho sold ESBR in the home market at prices at less
than the COP. Accordingly, on August 21, 1998, we initiated a COP
investigation with respect to Kumho pursuant to section 773(b) of the
Act (see Memorandum from Team to Louis Apple, Director, Office 5, dated
August 21, 1998).
We issued supplemental questionnaires for Sections A, B, and C to
Kumho in August 1998 and received responses to these supplemental
questionnaires, along with revised U.S. and home market sales listings,
in September 1998.
We received Kumho's response to Section D of the questionnaire in
September 1998. We issued a supplemental questionnaire for Section D on
October 13, 1998, but the response to the supplemental questionnaire
was not received in time to be considered for purposes of the
preliminary determination. We will consider it, however, for the final
determination.
On September 24, 1998, the petitioners alleged that there is a
reasonable basis to believe or suspect that critical circumstances
exist with respect to imports of ESBR from Korea. We requested shipment
data from Kumho on September 28, 1998, and received this information on
October 13, 1998. The critical circumstances analysis for the
preliminary determination is discussed below under ``Critical
Circumstances.''
Postponement of Final Determination and Extension of Provisional
Measures
On October 21, 1998, Kumho requested that, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone its final determination until no later than 135
days after the publication of this notice in the Federal Register,
pursuant to section 735(a)(2)(A) of the Act. In addition, Kumho
requested that the Department extend provisional measures pursuant to
section 733(d) of the Act from four months to not more than six months.
In accordance with 19 CFR 351.210(e), because: (1) Our preliminary
determination is affirmative; (2) Kumho accounts for a significant
proportion of exports of the subject merchandise; (3) no compelling
reasons for denial exist; and (4) Kumho has requested an extension of
provisional measures, we are granting this request and are postponing
the final determination until no later than 135 days after the
publication of this notice in the Federal Register. Suspension of
liquidation will be extended accordingly.
Scope of Investigation
For purposes of this investigation, the product covered is ESBR.
ESBR is a synthetic polymer made via free radical cold emulsion
copolymerization of styrene and butadiene monomers in reactors. The
reaction process involves combining styrene and butadiene monomers in
water, with an initiator system, an emulsifier system, and molecular
weight modifiers. ESBR consists of cold non-pigmented rubbers and cold
oil extended non-pigmented rubbers that contain at least one percent of
organic acids from the emulsion polymerization process.
ESBR is produced and sold, both inside the United States and
internationally, in accordance with a generally accepted set of product
specifications issued by the International Institute of Synthetic
Rubber Producers (IISRP). The universe of products subject to this
investigation are grades of ESBR included in the IISRP 1500 series and
IISRP 1700 series of synthetic rubbers. The 1500 grades are light in
color and are often described as ``Clear'' or ``White Rubber.'' The
1700 grades are oil-extended and thus darker in color, and are often
called ``Brown Rubber.'' ESBR is used primarily in the production of
tires. It is also used in a variety of other products, including
conveyor belts, shoe soles, some kinds of hoses, roller coverings, and
flooring.
Products manufactured by blending ESBR with other polymers, high
styrene resin master batch, carbon black master batch (i.e., IISRP 1600
series and 1800 series) and latex (an intermediate product) are not
included within the scope of this investigation.
The products under investigation are currently classifiable under
subheading 4002.19.0010 of the Harmonized Tariff Schedule of the United
States (HTSUS). Although the HTSUS subheading is provided for
convenience and customs purposes, the written description of the scope
of this investigation is dispositive.
Period of Investigation
The period of investigation (POI) is April 1, 1997, through March
31, 1998.
Facts Available
Section 776(a)(2) of the Act provides that, if an interested party:
(A) Withholds information that has been requested by the Department;
(B) fails to provide such information in a timely manner or in the form
or manner requested; (C) significantly impedes a proceeding under the
antidumping statute; or (D) provides such information but the
information cannot be verified, the Department shall, subject to
subsections 782(c)(1) and (e), use facts otherwise available in
reaching the applicable determination. Because Hyundai failed to
respond to the Department's questionnaire and because that failure is
not overcome by the application of subsections (c)(1) and (e) of
section 782, we must use facts otherwise available to calculate the
dumping margins for this company.
Section 776(b) of the Act provides that adverse inferences may be
used against a party that has failed to cooperate by not acting to the
best of its ability to comply with the Department's requests for
information. See also Statement of Administrative Action accompanying
the URAA, H.R. Rep. No. 316, 103d Cong., 2d Sess. 870 (1994) (SAA).
Hyundai's decision not to reply to the Department's antidumping
questionnaire demonstrates that it has failed to act to the best of its
ability to comply with a request for information under section 776 of
the Act. Thus, the Department has determined that, in selecting among
the facts otherwise available, an adverse inference is warranted.
Consistent with Department practice, as adverse facts available,
the Department is assigning to Hyundai the higher of: (1) The highest
margin stated in the petition; or (2) the highest margin calculated for
any respondent in this investigation. In this case, this margin is
118.88 percent, which is the highest margin alleged in the petition for
any Korean producer (see Initiation Checklist and the Notice of
Initiation for a discussion of the margin calculations in the
petition).
Section 776(b) states that an adverse inference may include
reliance on information derived from the petition or any other
information placed on the record. See also SAA at 829-831. Section
776(c) provides that, when the Department relies on secondary
information (e.g., the petition) as the facts otherwise available, it
must, to the extent practicable, corroborate that
[[Page 59516]]
information from independent sources that are reasonably at its
disposal. We reviewed the adequacy and accuracy of the information in
the petition during our pre-initiation analysis of the petition, to the
extent appropriate information was available for this purpose (e.g.,
import statistics, call reports, and data from business contacts). See
Notice of Initiation and April 21, 1998, ``Office of Antidumping
Investigations Initiation Checklist'' (``Initiation Checklist'').
For purposes of the preliminary determination, we were only able to
reexamine part of the information in the petition. We reexamined the
export price data provided in the petition in light of information
obtained during the investigation and, to the extent that it could be
corroborated, found that it continues to be of probative value.
However, the Department was provided no other useful information by the
respondents or other interested parties, and is aware of no other
independent sources of information, that would enable it to further
corroborate the remaining components of the margin calculation in the
petition. See the October 27, 1998, Memorandum to Louis Apple on The
Facts Available Rate and Corroboration of Secondary Information:
Preliminary Determination of Emulsion Styrene-Butadiene Rubber from the
Republic of Korea. We note that the SAA at 870 specifically states
that, where ``corroboration may not be practicable in a given
circumstance,'' the Department may nevertheless apply an adverse
inference.
Fair Value Comparisons
To determine whether sales of ESBR from Korea to the United States
were made at less than fair value, we compared the export price (EP) to
the Normal Value (NV), as described in the ``Export Price'' and
``Normal Value'' sections of this notice, below. In accordance with
section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs
for comparison to weighted-average NVs.
On January 8, 1998, the Court of Appeals for the Federal Circuit
issued a decision in CEMEX v. United States, 1998 WL 3626 (Fed Cir.).
In that case, based on the pre-URAA version of the Act, the Court
discussed the appropriateness of using constructed value (CV) as the
basis for foreign market value when the Department finds home market
sales to be outside the ``ordinary course of trade.'' This issue was
not raised by any party in this proceeding. However, the URAA amended
the definition of sales outside the ``ordinary course of trade'' to
include sales below cost. See Section 771(15) of the Act. Consequently,
the Department has reconsidered its practice in accordance with this
court decision and has determined that it would be inappropriate to
resort directly to CV, in lieu of foreign market sales, as the basis
for NV if the Department finds foreign market sales of merchandise
identical or most similar to that sold in the United States to be
outside the ``ordinary course of trade.'' Instead, the Department will
use sales of similar merchandise, if such sales exist. The Department
will use CV as the basis for NV only when there are no above-cost sales
that are otherwise suitable for comparison. Therefore, in this
proceeding, when making comparisons in accordance with section 771(16)
of the Act, we considered all products sold in the home market as
described in the ``Scope of Investigation'' section of this notice,
above, that were in the ordinary course of trade for purposes of
determining appropriate product comparisons to U.S. sales. Where there
were no sales of identical merchandise in the home market made in the
ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade, based on the characteristics listed in
Sections B and C of our antidumping questionnaire.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the EP or constructed export price
(CEP) transaction. The NV LOT is that of the starting-price sales in
the comparison market or, when NV is based on CV, that of the sales
from which we derive selling, general and administrative (SG&A)
expenses and profit. For EP, the LOT is also the level of the starting-
price sale, usually the price of the exporter to the importer. For CEP
transactions, it is the level of the constructed sale from the exporter
to the importer.
To determine whether NV sales are at a different level of trade
than EP or CEP, we examined stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customer. If the home market sales are at a different LOT
than sales made to the United States, and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales at different levels of trade in the home
market, we make a LOT adjustment under section 773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level is more remote from the factory
than the CEP level and there is no basis for determining whether the
difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the
CEP-offset provision). See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997).
With respect to home market sales, Kumho reported two customer
categories (i.e., end users and distributors) and two channels of
distribution corresponding to each customer category. For its sales to
the United States, it also reported two customer categories (i.e., end
users and distributors) and two channels of distribution corresponding
to each customer category. Kumho reported only EP sales in the U.S.
market, and claimed that the selling functions that it performs in
connection with its home market and U.S. sales do not vary by customer
category or by distribution channel. In addition, Kumho considers all
home market and U.S. sales to be at the same level of trade.
Based on our analysis of the selling functions in the home market,
we found the selling functions to end users to be similar to the
selling functions to distributors. In addition, we noted that the two
U.S. channels of distribution did not differ with respect to selling
activities. Similar services, such as sales administration, billing,
warranties, and freight & delivery arrangement, where applicable, were
offered to all or some portion of customers in each channel.
Furthermore, we noted that EP sales involved basically the same selling
functions associated with the home market sales. Therefore, based upon
this information, we determined that the level of trade for all EP
sales is the same as that of the home market sales and to consider them
as constituting the same LOT in the two markets. Accordingly, all
comparisons are at the same LOT and an adjustment pursuant to section
773(a)(7)(A) of the Act is not warranted.
Export Price
In accordance with sections 772(a) and (c) of the Act, we
calculated EP for all of Kumho's sales, since the merchandise was sold
to the first unaffiliated purchaser in the United States prior to
importation, and CEP was not otherwise warranted based on the facts of
record.
We calculated EP based on the packed delivered price to
unaffiliated
[[Page 59517]]
purchasers in the United States. In accordance with section
772(c)(1)(B) of the Act, we added an amount for uncollected import
duties in Korea. We made deductions from the starting price for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these included, where appropriate, foreign domestic inland freight,
foreign brokerage and handling, international freight, and marine
insurance.
Affiliated-Party Transactions and Arm's-Length Test
Kumho reported that it made sales in the home market to affiliated
end users. Sales to affiliated customers in the home market not made at
arm's-length prices (if any) were excluded from our analysis because we
considered them to be outside the ordinary course of trade. See 19 CFR
351.102 (1998). To test whether these sales were made at arm's-length
prices, we compared on a model-specific basis the starting prices of
sales to affiliated and unaffiliated customers net of all movement
charges, direct selling expenses, and packing. Where, for the tested
models of subject merchandise, prices to the affiliated party were on
average 99.5 percent or more of the price to the unaffiliated parties,
we determined that sales made to the affiliated party were at arm's
length. See 19 CFR 351.403(c) (1998). In instances where no price ratio
could be constructed for an affiliated customer because identical
merchandise was not sold to unaffiliated customers, we were unable to
determine that these sales were made at arm's-length prices and,
therefore, excluded them from our LTFV analysis. See Final
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled
Carbon Steel Flat Products from Argentina (58 FR 37062, 37077 (July 9,
1993)). Where the exclusion of such sales eliminated all sales of the
most appropriate comparison product, we made a comparison to the next
most similar model.
Normal Value
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV, we
compared Kumho's volume of home market sales of the foreign like
product to the volume of its U.S. sales of the subject merchandise, in
accordance with section 773(a)(1)(C) of the Act. Because Kumho's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales of the
subject merchandise, we determined that the home market was viable for
Kumho.
Based on the information contained in the cost allegation submitted
by the petitioners, the Department found reasonable grounds to believe
or suspect that Kumho made sales in the home market at prices below
their COPs, in accordance with section 773(b)(1) of the Act. As a
result, the Department initiated an investigation to determine whether
Kumho made home market sales at prices below their COPs during the POI,
within the meaning of section 773(b) of the Act. See Memorandum from
the Team to Louis Apple, Director, Office 5, dated August 21, 1998.
Before making any fair value comparisons, we conducted the COP analysis
described below.
We calculated the COP based on the sum of Kumho's cost of materials
and fabrication for the foreign like product, plus amounts for home
market SG&A expenses, financial expenses, and packing costs, in
accordance with section 773(b)(3) of the Act. In addition, we made the
following adjustments to Kumho's reported COP as follows: (1) we
recalculated Kumho's interest expense factor on a consolidated basis,
and (2) we adjusted the direct labor costs reported in the COP and CV
databases to reflect Kumho's weighted-average direct labor costs (see
Memorandum to the File from Stan Bowen, dated October 28, 1998).
We compared Kumho's weighted-average COP figures to home market
sales of the foreign like product, as required under section 773(b) of
the Act, in order to determine whether sales had been made at prices
below their COPs. On a product-specific basis, we compared the COP to
home market price, less any applicable movement charges, direct and
indirect selling expenses, and packing expenses.
In determining whether to disregard home market sales made at
prices below the COP, we examined whether such sales were made: (1) In
substantial quantities within an extended period of time; and (2) at
prices which permitted the recovery of all costs within a reasonable
period of time in the normal course of trade, pursuant to section
773(b)(1) of the Act.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of Kumho's sales of a given product were at prices less than
the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of Kumho's sales
of a given product during the POI were at prices less than the COP, we
determined such sales to have been made in ``substantial quantities''
within an extended period of time, in accordance with section
773(b)(2)(B) of the Act. In such cases, we also determined that such
sales were not made at prices which would permit recovery of all costs
within a reasonable period of time, in accordance with section
773(b)(2)(D) of the Act. Therefore, we disregarded the below-cost
sales. Where all sales of a specific product were at prices below the
COP, we disregarded all sales of that product.
We found that, for certain models of ESBR, more than 20 percent of
Kumho's home market sales within an extended period of time were at
prices less than COP. Further, the prices did not provide for the
recovery of costs within a reasonable period of time. We, therefore,
disregarded the below-cost sales and used the remaining above-cost
sales as the basis for determining NV, in accordance with section
773(b)(1) of the Act. For those U.S. sales of ESBR for which there were
no comparable home market sales in the ordinary course of trade, we
compared the EP to CV, in accordance with section 773(a)(4) of the Act.
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Kumho's cost of materials, fabrication, SG&A
expenses, profit, and U.S. packing costs. 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 Kumho in connection with the
production and sale of the foreign like product in the ordinary course
of trade, for consumption in Korea. As noted above, we recalculated
Kumho's interest expense factor on a consolidated basis, and we
adjusted the direct labor costs reported in the COP and CV databases to
reconcile with amounts reported in the Section D response.
We calculated NV for Kumho as noted in the ``Price to Price
Comparisons'' and ``Price to CV Comparisons'' sections of this notice,
below.
Price-to-Price Comparisons
We calculated NV based on packed, FOB or delivered prices to home
market unaffiliated customers and prices to affiliated customers that
we determined to be at arm's length. We made deductions, where
appropriate, for movement expenses consistent with section 773(a)(6)(B)
of the Act; these included inland freight and warehousing expenses. In
addition, we made adjustments for differences in cost attributable to
differences in physical characteristics of the merchandise pursuant to
section 773(a)(6)(C)(ii) of the Act, as well as for differences in
circumstances of sale (COS) in
[[Page 59518]]
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410. We made COS adjustments for imputed credit expenses, bank
charges and commissions. We made no adjustment for imputed credit
expenses related to the pre-payment of value-added taxes (VAT), in
accordance with our long-standing practice. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Sulfur Dyes, Including
Sulfur Vat Dyes, from the United Kingdom, 58 FR 3253 (Jan. 8, 1993),
Notice of Final Determination of Sales at Not Less Than Fair Value:
Stainless Steel Bar from Italy, 59 FR 66921 (Dec. 28, 1994),
Ferrosilicon from Brazil; Final Results of Antidumping Duty
Administrative Review, 61 FR 59407 (Nov. 22, 1996), and Notice of
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Stainless Steel Wire Rod From
Italy, 63 FR 10831 (March 5, 1998). In those instances where Kumho had
not reported payment dates, we recalculated reported credit expenses
using the date of the preliminary determination as the payment date.
Because Kumho paid commissions to an unaffiliated agent on sales to the
United States, in calculating NV, we offset these commissions using the
weighted-average amount of indirect selling expenses, including
inventory carrying costs, incurred on the home market sales for the
comparison product, up to the amount of the U.S. commissions, in
accordance with 19 CFR 351.410(e). Finally, we deducted home market
packing costs and added U.S. packing costs, in accordance with section
773(a)(6)(A) and (B) of the Act.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act. Where we compared CV to
EP, we deducted from CV the weighted-average home market direct selling
expenses and added the weighted-average U.S. product-specific direct
selling expenses (i.e., credit expenses, bank charges, and commissions)
in accordance with section 773(a)(6)(C)(iii) of the Act. We offset U.S.
commissions using the weighted-average amount of indirect selling
expenses and inventory carrying costs incurred on the home market sales
for the comparison product, up to the amount of the U.S. commissions,
in accordance with 19 CFR 351.410(e).
Currency Conversion
Our preliminary analysis of Federal Reserve dollar-won exchange
rate data shows that the won declined rapidly at the end of 1997,
losing over 40% of its value between the beginning of November and the
end of December. The decline was, in both speed and magnitude, many
times more severe than any change in the dollar-won exchange rate
during the previous eight years. Had the won rebounded quickly enough
to recover all or almost all of the initial loss, the Department might
have been inclined to view the won's decline at the end of 1997 as
nothing more than a sudden, but only momentary drop, despite the
magnitude of that drop. As it was, however, there was no significant
rebound. Therefore, we have preliminarily determined that the decline
in the won at the end of 1997 was so precipitous and large that the
dollar-won exchange rate cannot reasonably be viewed as having simply
fluctuated during this time, i.e., as having experienced only a
momentary drop in value. Therefore, in making this preliminary
determination, the Department used daily rates exclusively for currency
conversion purposes for home market sales matched to U.S. sales
occurring between November 1 and December 31, 1997.
In the recently completed preliminary determination of Mushrooms
from Indonesia, an issue was raised regarding the use of two averaging
periods in the margin calculations to account for the effect of the
devaluation of the Indonesian rupiah. See, Notice of Preliminary
Determination of Sales at Less Than Fair Value and Postponement of
Final Determination: Certain Preserved Mushrooms from Indonesia
(Mushrooms from Indonesia) 63 FR 41783 (August 5, 1998). The
petitioners in Mushrooms from Indonesia argued that the Department
should calculate the weighted-average export price for two averaging
periods--January through June 1997 and July through December 1997--in
order to avoid a distortion of the dumping margins caused by the rapid
devaluation of the rupiah. The Department did not calculate two
averaging periods in the preliminary determination in Mushrooms from
Indonesia, but we are continuing to evaluate this issue. Although the
issue of using two different averaging periods has not been raised in
the instant investigation, the Korean won experienced a precipitous
drop in value during the POI. Therefore, in both this investigation and
Mushrooms from Indonesia, we will continue to examine this issue for
the final determinations. We invite the interested parties to comment
on this issue.
Critical Circumstances
On September 24, 1998, the petitioners alleged that there is a
reasonable basis to believe or suspect that critical circumstances
exist with respect to imports of ESBR from Korea. In accordance with 19
CFR 351.206(c)(2)(i), since this allegation was filed 20 days prior to
the Department's preliminary determination, we must issue our
preliminary critical circumstances determination not later than the
preliminary determination.
Section 733(e)(1) of the Act provides that if a petitioner alleges
critical circumstances, the Department will determine whether there is
a reasonable basis to believe or suspect that:
(A)(i) There is a history of dumping and material injury by reason
of dumped imports in the United States or elsewhere of the subject
merchandise, or
(ii) The person by whom, or for whose account, the merchandise was
imported knew or should have known that the exporter was selling the
subject merchandise at less than its fair value and that there was
likely to be material injury by reason of such sales, and
(B) There have been massive imports of the subject merchandise over
a relatively short period.
To determine that there is a history of dumping of the subject
merchandise, the Department normally considers evidence of an existing
antidumping duty order on ESBR in the United States or elsewhere to be
sufficient. The petitioner did not provide any information indicating a
``history of dumping'' of ESBR from Korea. Furthermore, we investigated
the existence of antidumping duty orders on ESBR from Korea in the
United States or elsewhere, and did not find any. We were also unable
to find other information that would have indicated a ``history of
dumping'' of ESBR.
In determining whether an importer knew or should have known that
the exporter was selling subject merchandise at less than fair value
and thereby causing material injury, the Department normally considers
margins over 15 percent for CEP sales and 25 percent for EP sales to
impute knowledge of dumping and of resultant material injury. In this
investigation, Kumho does not have a margin over 25 percent for EP
sales, and there are no CEP sales. Based on these facts, we determine
that the first criterion for ascertaining whether critical
circumstances exist is not satisfied. Therefore, we have not analyzed
the shipment data for this company to examine whether imports of ESBR
have been massive over a relatively short period. Thus, we
preliminarily determine that there is no reasonable basis to believe or
suspect that critical
[[Page 59519]]
circumstances exist with respect to exports of ESBR from Korea by Kumho
(see, e.g., Notice of Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Collated Roofing
Nails From Korea, 62 FR 25895, 25898 (May 12, 1997)). Regarding all
other exporters, because we do not find that critical circumstances
exist for Kumho, we determine that critical circumstances do not exist
for Hyundai, or for companies covered by the ``All Others'' rate. We
will make a final determination concerning critical circumstances when
we make our final determination in this investigation, if that final
determination is affirmative.
Verification
As provided in section 782(i) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. We will instruct the Customs Service to require a
cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds the export price, as indicated in the
chart below. These suspension-of-liquidation instructions will remain
in effect until further notice. The weighted-average dumping margins
are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
Korea Kumho Petrochemical Co., Ltd......................... 13.91
Hyundai Petrochemical Co., Ltd............................. 118.88
All Others................................................. 13.91
------------------------------------------------------------------------
Pursuant to section 735(c)(5)(A) of the Act, the Department has
excluded any zero and de minimis margins, and any margins determined
entirely under section 776 of the Act, from the calculation of the
``All Others Rate.''
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least ten copies must
be submitted to the Assistant Secretary for Import Administration no
later than February 5, 1999, and rebuttal briefs no later than February
12, 1999. A list of authorities used and an executive summary of issues
should accompany any briefs submitted to the Department. Such summary
should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on February 15, 1999, time and room to be determined, at
the U.S. Department of Commerce, 14th Street and Constitution Avenue,
NW, Washington, DC 20230. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days of the publication of this notice. Requests should
contain: (1) The party's name, address, and telephone number; (2) the
number of participants; and (3) a list of the issues to be discussed.
Oral presentations will be limited to issues raised in the briefs. If
this investigation proceeds normally, we will make our final
determination by no later than 135 days after the publication of this
notice in the Federal Register.
This determination is issued and published pursuant to sections
773(d) and 777(i) of the Act.
Dated: October 28, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-29552 Filed 11-3-98; 8:45 am]
BILLING CODE 3510-DS-P
