[Federal Register Volume 63, Number 35 (Monday, February 23, 1998)]
[Notices]
[Pages 8934-8946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4537]
[[Page 8934]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-828]
Notice of Final Determination of Sales at Less Than Fair Value:
Static Random Access Memory Semiconductors From the Republic of Korea
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
EFFECTIVE DATE: February 23, 1998.
FOR FURTHER INFORMATION CONTACT: Robert Blankenbaker or Thomas F.
Futtner, Office of AD/CVD Enforcement 4, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-0989 or (202) 482-3814.
APPLICABLE STATUTE: Unless otherwise indicated, all citations to the
statute are references to the provisions effective January 1, 1995, the
effective date of the amendments made to the Tariff Act of 1930, as
amended (the Act), by the Uruguay Round Agreements Act (URAA). In
addition, unless otherwise indicated, all citations to the Department's
regulations are to 19 CFR part 353 (April 1, 1996).
SUPPLEMENTARY INFORMATION:
Final Determination
We determine that static random access memory semiconductors
(SRAMs) from the Republic of Korea are being sold in the United States
at less than fair value (LTFV), as provided in section 735 of the Act.
The estimated margins are shown in the ``Suspension of Liquidation''
section of this notice.
Case History
Since the preliminary determination in this investigation
(Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Static Random Access Memory
Semiconductors from the Republic of Korea, 62 FR 51437 (October 1,
1997)), the following events have occurred: In November and December of
1997, we verified the Samsung Electronics Co. Ltd. (``Samsung''), and
Hyundai Electronics Industries Co. Ltd. (``Hyundai''), questionnaire
responses. On December 17, 1997, the Department issued its report on
the verification findings for Hyundai. On December 18, 1997, the
Department issued its report on the verification findings for Samsung.
The petitioner and the respondents, Hyundai, Samsung and LG Semicon
Co. Ltd. (``LGS''), submitted case briefs on December 30, 1997, and
rebuttal briefs on January 5, 1998. In addition, five interested
parties, Compaq Computer Corporation (``Compaq''), Cypress
Semiconductor Corporation (``Cypress''), Digital Equipment Corporation
(``Digital''), Integrated Device Technology (``IDT''), and Motorola,
Inc. (``Motorola''), submitted rebuttal briefs on January 7, 1998. We
held a public hearing on January 16, 1998.
Scope of Investigation
The products covered by this investigation are synchronous,
asynchronous, and specialty SRAMs from Korea, whether assembled or
unassembled. Assembled SRAMs include all package types. Unassembled
SRAMs include processed wafers or die, uncut die, and cut die.
Processed wafers produced in Korea, but packaged, or assembled into
memory modules, in a third country, are included in the scope;
processed wafers produced in a third country and assembled or packaged
in Korea are not included in the scope.
The scope of this investigation includes modules containing SRAMs.
Such modules include single in-line processing modules (``SIPs''),
single in-line memory modules (``SIMMs''), dual in-line memory modules
(``DIMMs''), memory cards, or other collections of SRAMs, whether
unmounted or mounted on a circuit board.
We have determined that the scope of this investigation does not
include SRAMs that are physically integrated with other components of a
motherboard in such a manner as to constitute one inseparable amalgam
(i.e., SRAMs soldered onto motherboards). For a detailed discussion of
our determination on this issue, see Comment 6 in the ``Interested
Party Comments'' section of this notice and the memorandum to Louis
Apple from Tom Futtner dated February 13, 1998.
The SRAMs within the scope of this investigation are currently
classified under the subheadings 8542.13.8037 through 8542.13.8049,
8473.30.10 through 8473.30.90, and 8542.13.8005 of the Harmonized
Tariff Schedule of the United States (``HTSUS''). Although the HTSUS
subheadings are 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 January 1, 1996, through
December 31, 1996.
Facts Available
On June 16, 1997, LGS, notified the Department that it was
withdrawing from further participation in this investigation. For
purposes of the preliminary determination, the Department assigned an
adverse facts available rate of 55.36 percent. This margin was higher
than the preliminary margin calculated for either respondent in this
investigation.
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person: (A) Withholds information that has been requested
by the administering authority; (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782; (C) significantly impedes a proceeding under this title; or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority shall, subject
to section 782(d), use the facts otherwise available in reaching the
applicable determination under this title.''
In addition, section 776(b) of the Act provides that if the
Department finds that an interested party ``has failed to cooperate by
not acting to the best of its ability to comply with a request for
information,'' the Department may use information that is adverse to
the interests of the party as the facts otherwise available. The
statute also provides that such an adverse inference may be based on
secondary information, including information drawn from the petition.
(See also Statement of Administrative Action accompanying the URAA,
H.R. Rep. No. 316, 103d Cong., 2d Sess. 870 (SAA).) The failure of LG
to reply to the Department's questionnaire or to provide a satisfactory
explanation of their conduct demonstrates that they have failed to act
to the best of their ability in this investigation. Thus, the
Department has determined that, in selecting among the facts otherwise
available to these companies, an adverse inference is warranted.
In accordance with our standard practice, as adverse facts
available, we are assigning to LG the higher of: (1) The highest margin
stated in the notice of initiation; or (2) the highest margin
calculated for any respondent in this investigation. In this case, this
margin is 55.36 percent, which is the highest margin stated in the
notice of initiation.
Section 776(c) of the Act provides that, when the Department relies
on secondary information (such as the petition) in using the facts
otherwise
[[Page 8935]]
available, it must, to the extent practicable, corroborate that
information from independent sources that are reasonably at its
disposal. When analyzing the petition, the Department reviewed all of
the data the petitioner relied upon in calculating the estimated
dumping margins, and adjusted those calculations where necessary. (See
Initiation Checklist, dated March 17, 1997.) These estimated dumping
margins were based on a comparison of constructed value (CV) to U.S.
price, the latter of which was based on price quotations offered one
company in Korea. The estimated dumping margin, as recalculated by the
Department, was 55.36 percent. For purposes of corroboration, the
Department re-examined the price information provided in the petition
in light of information developed during the investigation and found
that it has probative value. (See the Memorandum to Tom Futtner from
the Team dated September 23, 1997, for a detailed explanation of
corroboration of the information in the petition.)
Time Period for Cost and Price Comparisons
Section 777A(d) of the Act states that in an investigation, the
Department will compare the weighted average of the normal values to
the weighted average of the export prices or constructed export prices.
Generally, the Department will compare sales and conduct the sales
below cost of production test using annual averages. However, when
prices have moved significantly over the course of the POI, it has been
the Department's practice to use shorter time periods. See, e.g., Final
Determination of Sales at Less Than Fair Value: Erasable Programmable
Read Only Memories (EPROMs) from Japan, 51 FR 39680, 39682 (October 30,
1986), Final Determination of Sales at Less Than Fair Value: Dynamic
Random Access Memory Semiconductors of One Megabit and Above From the
Republic of Korea, 58 FR 15467, 15476 (March 23, 1993) (``DRAMs Final
Determination'').
We invited comments from interested parties regarding this issue.
An analysis of these comments revealed that all parties agreed that the
SRAMs market experienced a significant and consistent price decline
during the POI. Accordingly, in recognition of the significant and
consistent price declines in the SRAMs market during the POI, the
Department has compared prices and conducted the sales below cost of
production test using quarterly instead of annual data.
Normal Value Comparisons
To determine whether sales of SRAMs from the Republic of Korea to
the United States were made at less than normal value, we compared the
Constructed Export Price (CEP) and Export Price (EP) to the Normal
Value (NV), as described in the ``Constructed Export Price'', ``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 CEPs and EPs for comparison to weighted-average NVs.
In order to determine whether we should base price-averaging groups
on customer types, we conducted an analysis of the prices submitted by
the respondents. This analysis does not indicate that there was a
consistent and uniform difference in prices between customer types.
Accordingly, we have not based price comparisons on customer types.
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. The Uruguay Round
Agreements Act (URAA) amended the definition of sales outside the
ordinary course of trade to include sales below cost. See Section
771(15) of the Act. Because the court's decision was issued so close to
the deadline for completing this final determination, we have not had
sufficient time to evaluate and apply the decision to the facts of this
post-URAA case. For these reasons, we have determined to continue to
apply our policy regarding the use of CV when we have disregarded
below-cost sales from the calculation of normal value.
In making our comparisons, in accordance with section 771(16) of
the Act, we considered all products sold in the home market, fitting
the description specified in the ``Scope of Investigation'' section of
this notice, above, to be foreign like products for purposes of
determining appropriate product comparisons to U.S. sales. Where there
were no sales of identical merchandise in the home market to compare to
U.S. sales, we compared U.S. sales to the next most similar foreign
like product, based on the characteristics listed in Sections B and C
of the Department's antidumping questionnaire.
Level of Trade and Constructed Export Price Offset
In the preliminary determination, the Department determined that
there was sufficient evidence on the record to establish a distinction
in level of trade between the U.S. CEP sales and the home market sales
used for normal value as well as to justify a CEP offset for each of
the two respondents. We found no evidence at verification to warrant a
change from that preliminary determination. Accordingly, we have made a
CEP offset for each of the respondents in this final determination. For
further discussion, see ``General Comment 5'' in the ``Interested Party
Comments'' section of this notice.
Constructed Export Price
A. Hyundai
We used CEP in accordance with section 772(b) of the Act, because
the sales to unaffiliated purchasers were made after importation. We
calculated CEP based on packed prices, f.o.b. the U.S. affiliate's
warehouse to the first unaffiliated purchaser in the United States. We
made the following deductions from the starting price (``gross unit
price''): foreign inland freight, brokerage and handling; international
freight; and U.S. brokerage, handling and inland freight. We made
additional deductions, in accordance with section 772(d) (1) and (2) of
the Act, for: commissions; credit, inventory carrying costs, and other
indirect and direct selling expenses; and bank and extended test
charges. Pursuant to section 772(d)(3) of the Act, the price was
further reduced by an amount for profit, to arrive at the CEP. The
amount of profit deducted was calculated in accordance with section
772(f) of the Act.
B. Samsung
We used CEP in accordance with section 772(b) of the Act, because
the sales to unaffiliated purchasers were made after importation. We
calculated CEP based on packed prices, f.o.b. the U.S. affiliate's
warehouse to the first unaffiliated purchaser in the United States. We
made the following deductions from the starting price (``gross unit
price''): Foreign inland freight, brokerage, handling, and banking
charges; international freight and insurance; and U.S. inland freight,
brokerage, handling, insurance, and banking charges. We made additional
deductions, in accordance with section 772(d) (1) and (2) of the Act
for commissions, credit, advertising, and royalty expenses; inventory
carrying costs and other direct and indirect
[[Page 8936]]
selling expenses. We also deducted U.S. repacking costs. Pursuant to
section 772(d)(3) of the Act, the price was further reduced by an
amount for profit, to arrive at the CEP. The amount of profit deducted
was calculated in accordance with section 772(f) of the Act.
Export Price
For the Export Price (EP) sales by Samsung, we made deductions from
the gross unit price for the following expenses: foreign inland
freight, brokerage, handling, and banking charges; international
freight and insurance; and U.S. inland freight, brokerage, handling,
and banking charges.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared each respondent's aggregate volume of home market sales of
the foreign like product to the aggregate volume of U.S. sales of the
subject merchandise, in accordance with section 773(a)(1)(C) of the
Act. Each respondent'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. Accordingly, we
determined that the home market was viable for each respondent.
Based on a cost allegation presented in the petition, the
Department found reasonable grounds to believe or suspect that home
market sales by Samsung and Hyundai were made at prices below their
respective costs of production (``COPs''). As a result, the Department
initiated an investigation to determine whether either respondent made
home market sales during the POI at prices below its COP, within the
meaning of section 773(b) of the Act.
We calculated COP as the sum of each respondent's cost of materials
and fabrication for the foreign like product, plus amounts for SG&A and
packing costs, in accordance with section 773(b)(3) of the Act. We used
the respondents' reported COPs, adjusted as discussed below, to compute
quarterly weighted-average COPs for the POI. We compared the weighted-
average COPs to home market sales of the foreign like product as
required under section 773(b) of the Act in order to determine whether
these sales had been made at prices below COP. On a product-specific
basis, we compared COPs to the home market prices, less any applicable
movement charges, discounts, and packing expenses.
In determining whether to disregard home market sales made at
prices below the COP, we examined whether: (1) Within an extended
period of time, such sales were made in substantial quantities; and (2)
such sales were made at prices which permitted the recovery of all
costs within a reasonable period of time in the normal course of trade.
When 20 percent or more of a respondent's sales of a given product
during the POI were at prices below the COP, we found that sales of
that model were made below cost in ``substantial quantities'' within an
extended period of time, in accordance with section 773(b)(2) (B) and
(C) of the Act. To determine whether prices provided for recovery of
costs within a reasonable period of time, we tested whether the prices
which were below the per unit cost of production at the time of the
sale were above the weighted average per unit cost of production for
the POI, in accordance with section 773(b)(2)(D) of the Act. When we
found that a substantial quantity of sales during the POI were below
cost and not at prices that provided for recovery of costs within a
reasonable period of time, we disregarded the below cost sales in the
calculation of NV.
When NV was based on prices, we made appropriate adjustments to
those prices. First, we deducted home market inland freight and home
market packing costs and we added U.S. packing costs.
When there were differences in the merchandise to be compared, we
made adjustments in accordance with section 773(a)(6)(C)(ii) of the Act
to account for those differences. When appropriate, we made
circumstance-of-sale adjustments in accordance with section
773(a)(6)(C)(iii) of the Act. For purposes of CEP sales comparisons, we
deducted home market indirect expenses.
When there were no above cost home market sales for comparison, NV
was based on CV. In accordance with section 773(e)(1) of the Act, we
calculated CV based on the sum of each respondent's cost of materials,
fabrication, SG&A, 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 each respondent in connection with
the production and sale of the foreign like product in the ordinary
course of trade, for consumption in the foreign country.
Although we generally relied, in our COP and CV calculation, on the
data submitted by respondents, we made adjustments in the allocation of
both research and development (``R&D''), the treatment of foreign
exchange gains and losses, G&A expenses and interest expense as
discussed below.
Hyundai
For those comparison products for which there were sales above the
COP, we based NV on delivered prices to home market customers. We made
deductions for inland freight, imputed credit expenses and banking
charges, and home market direct and indirect selling expenses. As
indirect selling expenses, we included inventory carrying costs and
other indirect selling expenses, up to the amount of indirect selling
expenses incurred on U.S. sales, in accordance with 19 CFR
353.56(b)(2).
For all price-to-price comparisons, we deducted home market packing
costs and added U.S. packing costs, in accordance with section
773(a)(6) of the Act. In addition, where appropriate, we made
adjustments to NV to account for differences in physical
characteristics of the merchandise, in accordance with 773(a)(6)(C)(ii)
of the Act and 19 CFR 353.57.
For price-to-CV comparisons, we made deductions, where appropriate,
for credit expenses and banking charges. We also deducted home market
indirect selling expenses, including inventory carrying costs and other
indirect selling expenses, up to the amount of indirect selling
expenses incurred on U.S. sales, in accordance with 19 CFR
353.56(b)(2).
Samsung
For those comparisons for which there were sales above the COP, we
based NV on delivered prices to home market customers. We made
deductions for inland freight, imputed credit, advertising, and royalty
expenses, and home market direct and indirect selling expenses. For
indirect selling expenses, we included inventory carrying costs and
other indirect selling expenses, up to the amount of indirect selling
expenses and commissions incurred on U.S. sales, in accordance with 19
CFR 353.56(b)(2). In the case of letter-of-credit sales, we added in
the amount of any duty drawback.
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,
SG&A, profit and U.S. packing costs. In accordance with section
773(e)(2)(A) of the Act, we based SG&A and profit on the amounts
incurred and realized by the respondent in connection with the
production and sale of the foreign like product in the ordinary course
of trade, for consumption in the home market.
[[Page 8937]]
Currency Conversion
We made currency conversions into U.S. dollars based on the
official exchange rates in effect on the dates of the U.S. sales as
certified by the Federal Reserve Bank. Section 773A(a) of the Act
directs the Department to use a daily exchange rate in order to convert
foreign currencies into U.S. dollars unless the daily rate involves a
fluctuation. It is the Department's practice to find that a fluctuation
exists when the daily exchange rate differs from the benchmark rate by
2.25 percent. The benchmark is defined as the moving average of rates
for the past 40 business days. When we determine that a fluctuation
exists, we substitute the benchmark rate for the daily rate, in
accordance with established practice. Further, section 773A(b) directs
the Department to allow a 60-day adjustment period when a currency has
undergone a sustained movement. A sustained movement has occurred when
the weekly average of actual daily rates exceeds the weekly average of
benchmark rates by more than five percent for eight consecutive weeks.
See Change in Policy Regarding Currency Conversions, 61 FR 9434 (March
8, 1996). Such an adjustment period is required only when a foreign
currency is appreciating against the U.S. dollar. The use of an
adjustment period was not warranted in this case because the Korean Won
did not undergo a sustained movement.
Verification
As provided in section 782(i) of the Act, we verified the
information submitted by Hyundai and Samsung for use in our final
determination. We used standard verification procedures, including
examination of relevant accounting and production records and original
source documents provided by respondents. The verification team
included a semiconductor product expert. The Department has placed on
the record in Room B-099 the following verification reports: (1)
December 19, 1997, ``Verification of Cost of Production and Constructed
Value Data Less Than Normal Value Investigation of Static Random Access
Memory Semiconductors (SRAMS) from Korea-Samsung Electronics Co. Ltd.''
(Samsung Cost Verification Report); (2) December 18, 1997,
``Verification of Home Market Sales Response of Samsung Electronics
Company (SEC) in the Antidumping Investigation of Static Random Access
Memory Semiconductors (SRAMS) from the Republic of Korea'' (Samsung
Home Market Sales Verification Report); (3) December 12, 1997,
``Verification of U.S. Sales Response of Samsung Semiconductor, Inc. in
the Antidumping Investigation of Static Random Access Memory
Semiconductors (SRAMS) from the Republic of Korea'' (Samsung U.S. Sales
Verification Report); (4) December 16, 1997, ``Verification of Cost of
Production and Constructed Value Data Less Than Normal Value
Investigation of Static Random Access Memory Semiconductors (SRAMS)
from Korea-Hyundai Electronics Industries Co. Ltd.'' (Hyundai Cost
Verification Report); (5) December 16, 1997, ``Verification of Home
Market Sales Questionnaire Responses of Hyundai Electronics Industries
in the Antidumping Investigation of Static Random Access Memory
Semiconductors (SRAMS) from the Republic of Korea'' (Hyundai Home
Market Sales Verification Report); and (6) December 16, 1997,
``Verification of the U.S. Sales Questionnaire of Hyundai Electronics
Industries, Static Random Access Memory Semiconductors (SRAMS) from the
Republic of Korea'' (Hyundai U.S. Sales Verification Report).
General Comments
Comment 1: Depreciation. The petitioner contends that the
Department should continue to use the same depreciation adjustment used
in the preliminary determination because of the following: (1) Samsung
and Hyundai avoided losses on their income statements by changing the
amount of depreciation recorded; and (2) the auditors notes to the
financial statements for both respondents confirms that their reported
depreciation understates their actual costs. As argued by the
petitioner, the object of making such an adjustment is to counteract
the effort by respondents to appear to be showing a profit when prices
fell below costs during 1996.
Samsung states that the Department adjusted the reported
depreciation expenses based on an erroneous assumption that Samsung
changed its depreciation methodology for equipment and machinery in
1996. As argued by Samsung, the change was only a change in accounting
estimate, and not a change in accounting principle. Samsung also states
that the adjustment is not warranted since the reported expenses
reasonably reflected costs and were appropriately reported in the
audited financial statements as required by and consistent with the
Korean generally accepted accounting principles (GAAP). Since its
reported depreciation expenses are conservative compared with
depreciation expenses taken by other semiconductor manufacturers,
Samsung contends these expenses cannot be considered unreasonable and
distortive of costs. Further, Samsung maintains that the accounting
methods used to estimate the change in useful life of the equipment are
prospective, under both U.S. and Korean GAAP. They also do not require
any adjustment for the cumulative effect of the change from the date of
purchase since there has been no change in accounting principle, which
would require that the value of the assets be restated. If the
Department does continue to adjust depreciation, Samsung argues that it
must cumulatively restate the effect of the change based on the data
submitted before verification which was fully verified.
Hyundai argues that the Department should not have adjusted the
company's depreciation expense and methodology. According to Hyundai,
the reported depreciation expenses and methodology are fully consistent
with Korean GAAP. Specifically, Hyundai maintains that if the auditor's
opinion attached to its financial statements documents that all
elements of the financial statement, including depreciation, were fully
prepared in accordance with Korean GAAP. As further claimed by Hyundai,
the reported depreciation expenses also reasonably reflected the cost
of producing SRAMS. For example, the five year useful life period used
by Hyundai in 1996 is appropriate for semiconductor equipment. Finally,
Hyundai claims the depreciation expenses as reported are fully
consistent with the company's historical accounting methodology.
DOC Position. We agree with the petitioner in part. Historically
both respondents have been inconsistent in their approach to special
depreciation. For example, both respondents took advantage of the
special depreciation option available to them under the Korean
Corporate Income tax law in 1995. However, no special depreciation was
taken during this current investigation.
It is the Department's normal practice to use costs recorded in the
books and records of the respondent. Section 773(f)(1)(A) of the Act
states that cost ``shall normally be calculated based on the records of
the exporter or producer of the merchandise, if such records are kept
in accordance with the generally accepted accounting principles of the
exporting country (or the producing country where appropriate) and
reasonably reflect the costs associated with production and sale of the
[[Page 8938]]
merchandise.'' Further, as explained in the SAA, ``[t]he exporter or
producer will be expected to demonstrate that it has historically
utilized such allocations, particularly with regard to the
establishment of appropriate amortization and depreciation periods and
allowances for capital expenditures and other development costs.'' (SAA
at 834.)
In contrast to the previous year, both respondents, for this POI,
elected not to take special depreciation. This represents a failure to
report depreciation expenses in a systematic and rational matter. As a
result, disproportionately greater costs were attributed to products
manufactured from when the special depreciation was taken than
subsequent period when it was not taken. See DRAMs Final Determination.
Therefore, for the final determination, we are making an adjustment to
the respondents' reported depreciation. We are adding only special
depreciation to the reported cost of production.
Comment 2: Interest expense. The petitioner maintains that using
tangible fixed assets as the basis for allocating interest expenses is
more appropriate to measure costs than using either total assets or
cost of sales because of the respondents' heavy use of debt to finance
the purchase of tangible fixed assets and because a larger proportion
of total fixed assets is related to the semiconductor line of business
than to other lines of business.
Samsung and Hyundai state that the Department incorrectly allocated
interest expenses on the basis of fixed assets and not on the cost of
goods sold. As argued by both respondents, the Department has a long-
standing practice of allocating interest expense based on the cost of
goods sold. Samsung argues that allocating interest based on fixed
assets overstates financing costs since it does not account for income
generated by the semiconductor division. Samsung contends that if the
Department continues to allocate interest based on assets, it should
use total assets rather than fixed assets because the Department would
fail to account for the total investment required by its various
business units by limiting the allocation base to fixed assets and
would not account for the value of fixed assets used up in prior years
by allocating interest based on the historical value of fixed assets.
Hyundai also maintains that if the Department continues to allocate
interest based on fixed assets, the Department, first, should use Cost
of Goods Sold (``COGS'') to allocate total consolidated corporate
interest to Hyundai, then Hyundai's total interest can be allocated to
SRAMs based upon the ratio of semiconductor fixed assets to total fixed
assets based on the net book value of the assets rather than the
acquisition cost.
DOC Position. We agree with the respondents that interest expense
should be allocated based on COGS. In our preliminary determination, we
allocated interest expense among the various operating units according
to the proportional share of fixed assets. We have reconsidered this
issue for the final determination and concluded that because the COGS
includes a proportional amount of the depreciation of the assets used
in the production of the merchandise, allocation of financing expenses
on the basis of COGS distributes proportionately more interest expense
to those products having higher capital investment. Moreover, we note
that it has been the Department's longstanding policy to allocate
interest expense on the basis of the COGS of the merchandise subject to
investigation. We also note that, for the 1995-1996 administrative
review of DRAMs, we have allocated interest expenses based on COGS
consistent with the methodology in this case. Therefore, interest
expense will be allocated over COGS since it reasonably apportions the
interest expenses between SRAMs and other products.
Comment 3: Research & Development. Hyundai argues that the
Department overstated R&D expenses by allocating a portion of non-
memory R&D expense to SRAMs. According to Hyundai, the preliminary
determination deviates from the long-standing practice of calculating
product-specific R&D and of excluding R&D relating to non-subject
merchandise from its CV calculations. Additionally, the antidumping
statute precludes the Department from attributing expenses relating to
non-subject merchandise to SRAMs. Moreover, Hyundai states that the
Micron case requires the Department to provide substantial evidence
justifying its departure from its practice. As such, Hyundai argues
that the record in the instant case does not support the Department's
preliminary determination. For example, Hyundai claims the September 8,
1997, Memorandum from Dr. Murzy Jhabvala to Thomas Futtner, ``Cross
Fertilization of Research and Development of Semiconductor Memory
Devices'' (``September 8, 1997 Jhabvala Memo'') and the Micron
submissions, used by the Department in the Preliminary Determination,
do not support an assumption of cross-fertilization.
Hyundai also asserts that its organizational structure and
accounting records clearly distinguish between R&D expenditures for
memory and non-memory products. Hyundai maintains that cross
fertilization of memory and non-memory R&D is extremely unlikely
considering the fundamental differences in product design, marketing
and production.
Samsung argues that R&D costs related to non-memory products should
be excluded because R&D performed for micro and logic products do not
benefit memory products such as SRAMs. Samsung disagrees with the
Department's position, stated in the preliminary determination, that
all R&D conducted for semiconductor products benefits all semiconductor
products and, therefore, aggregate R&D costs should be allocated to all
semiconductor products for purpose of determining the cost of
production and CV. Samsung cites the cases Carbon Steel Flat Products
From France (See Certain Carbon Steel Flat Products from France; Final
Determination of Sales at Less than Fair Value 58 FR 37125 (July 9,
1993) and Cell Site Transceivers from Japan (see Cell Site Transceivers
From Japan; Final Determination of Sales at Less than Fair Value 49 FR
43080 (October 26, 1984), as examples of past cases that the Department
has required R&D be calculated on a product-specific basis. Samsung
also cites Micron, in which the court ordered the Department to
``recalculate Samsung's Cost of Production for the LTFV by allocating
Research & Development costs on a product-specific basis.'' (See Micron
Technology, Inc. v. U.S. 893 F.Supp 21 (CIT 1995)). Furthermore,
Samsung contends the Department's finding that R&D expenses incurred
for non-memory merchandise benefits SRAMs is not supported by the
record.
Samsung argues that the R&D costs relating to SRAMs consist of
efforts to apply state-of-the art technology to reduce the size of
circuits utilized in the subject merchandise. Samsung further states
that only after a new generation of memory products has been developed
are the technologies developed for memory products applied to develop
customer and market specific logic devices. These later devices use
existing, mature, process and manufacturing technologies. The R&D that
Samsung conducts to develop new memory products might benefit the later
developed micro products. Thus, the flow of R&D may be from memory to
micro and application specific products, but not vice-versa. Samsung
asserts that it is primarily a memory products company, with a one-way
flow of R&D from memory to micro products.
[[Page 8939]]
Samsung disagrees with the statement prepared by Dr. Murzy Jhabvala
of the National Aeronautics and Space Administration. Samsung claims
that the statement does not provide enough evidence to refute what the
CIT has already ruled upon. Samsung claims that Dr. Jhabvala's
assertion that R&D in a given area of semiconductors, such as micro
devices, is widely disseminated and read by all micro engineers, says
nothing about whether the results of that research benefit development
or production of memory products. Samsung further contends that his
memorandum does not explain how ``cross fertilization'' takes place and
purportedly benefits the development or production of DRAMs (or SRAMs).
Furthermore, Samsung argues that Dr. Jhabvala's December 18, 1997
memorandum does not support the Department's view that R&D expenses on
ASIC and logic devices could benefit the development or production of
SRAMs. Samsung claims that the issue before the Department is how to
allocate the pool of R&D costs, and whether some or all of the expenses
should be allocated to SRAMs production. Moreover, Samsung asserts, Dr.
Jhabvala's memorandum does not demonstrate how the work performed on
non-memory projects benefit SRAMs.
Samsung concludes that because non-memory R&D does not benefit
SRAMs or any other memory products, those expenses cannot be properly
allocated to the cost of producing SRAMs. Samsung recognizes that there
is limited cross-fertilization of R&D within memory products and its
methodology already accounts for any possible cross fertilization
concerns. Samsung states that there is no need to include totally
unrelated R&D undertaken for micro or logic products in the memory
related production costs.
Samsung refers to a letter from Professor Bruce A. Wooley which
states that, ``[I]n the case of circuit design techniques there is
virtually no cross-fertilization among various classes of memories.''
(See Samsung submission dated September 29, 1997.) Samsung claims that
the articles proffered by the petitioner to support its claim that R&D
conducted in one area benefits other areas mainly relate to process
technology which may benefit a variety of products and to the
incorporation of separate designs on a single chip; they do not address
whether design technology from one type of memory product benefits the
design of another. Samsung argues that both its verified R&D
information and the fact that the company separates product-specific
R&D for accounting purposes demonstrate that the R&D conducted by
Samsung is product-specific design R&D, which does not benefit all
products. Samsung argues that, if the Department determines that cross-
fertilization of design R&D among memory products does occur, it should
still not aggregate product-specific R&D for logic products with
product-specific R&D for memory products.
In response to Samsung's and Hyundai's assertions, the petitioner
states that the Department properly allocated all semiconductor R&D
over all semiconductor production. As argued by the petitioner, there
is already sufficient evidence on the record to support the
Department's determination that there is significant cross-
fertilization among the different areas of semiconductor design and
development. Moreover, petitioner contends that logic R&D benefits
SRAMs R&D expenses. Petitioner also claims that since new R&D expenses
for application-specific integrated circuits (ASICs) do not benefit
current production of any product, it must be allocated over all
current semiconductor production. Finally, petitioner states that the
presence of separate accounts for separate R&D projects does not
contradict cross-fertilization.
DOC Position. We agree with the petitioner and have allocated all
semiconductor R&D expenses over the total semiconductor cost of goods
sold. In the DRAMs Final Determination, the Department recalculated
respondents' reported R&D expense based on the ratio of each company's
total semiconductor expenses to the total semiconductor costs of goods
sales. As we stated in the DRAMs Final Determination:
* * * Semiconductors present unique problems related to R&D.
Because the general underlying technology is the same for all
semiconductor products, the benefits from the results of R&D, even
if intended to advance the design or manufacture of a specific
product, provide an intrinsic benefit to other semiconductor
products. It is impossible to measure the extent to which R&D
benefits one semiconductor product relative to another. Thus,
identification of specific R&D costs with any one product causes
overstating or understating of these costs in relation to the
benefits that product derived from the total R&D expenditures for
semiconductors * * *.
(See Dynamic Random Access Memory Semiconductors of One Megabit
or Above From the Republic of Korea; Final Determination of Sales at
Less Than Fair Value 58 FR 15470 (March 23, 1993.))
Subsequent to the Department's final determination, Micron and the
three respondents, Samsung, LG and Hyundai filed lawsuits with the
Court of International Trade challenging that determination.
Thereafter, in Micron Technologies, Inc. v. United States, 893 F.Supp.
21 (CIT 1995), the Court remanded to the Department the allocation of
R&D expenses. The Court stated that the Department had failed to place
on the record any evidence of cross-fertilization in the semiconductor
industry. Therefore, the Court instructed the Department to recalculate
respondents' cost of production by allocating research and development
(R&D) expenses on a product-specific basis. In the remand results, the
Department did so and the remand was affirmed. CIT No. 93-06-00318,
Slip Op. 95-175 (October 27, 1995).
In the 1992-1994 DRAMs review, LG Semicon (LG) argued that the
Department should not have included R&D expenses of non-DRAM products
in the DRAM R&D. See Dynamic Random Access Memory Semiconductor of One
Megabit or Above From the Republic of Korea; Final Results of Review 61
FR 20217 (May 6, 1996) (``1992-1994 DRAMs review''). According to LG,
the Department identified and verified product-specific expenses in its
accounting system. Therefore, LG argued that the Department's decision
to include non-DRAM R&D was inconsistent with the Micron decision. In
the 1992-1994 DRAMs Review final results, the Department stated:
* * * At verification, we confirmed that each R&D project is
accounted for separately in each of the respondent's respective
books and records. Separate accounting, however, does not
necessarily mean that cross-fertilization of scientific ideas does
not occur. Moreover, the CIT specifically stated in Micron
Technology that the Department did not ``direct the court to any
record evidence of R&D cross-fertilization in the semiconductor
industry.'' Micron Technology, 893 F. Supp., at 27. In this review,
the Department has provided such information. See Memorandum from
Karen Park to Holly Kuga regarding Cross-Fertilization of R&D for
DRAMs, August 14, 1995 (cross-fertilization memo). The cross-
fertilization memo includes pages from verification exhibits, a
memorandum from a non-partisan expert from the semiconductor
industry, as well as information from certain articles widely read
by experts in the DRAM R&D field demonstrating the existence of
cross-fertilization of R&D in the DRAM industry * * *
Dynamic Random Access Memory Semiconductor of One Megabit or
Above From the Republic of Korea; Final Results of Review 61 FR
20218 (May 6, 1996).
Due to the forward-looking nature of the R&D activities, the
Department, in this investigation, cannot identify every instance where
SRAM R&D may influence logic products or where logic R&D may influence
SRAM products, but
[[Page 8940]]
the Department's own semiconductor expert has identified areas where
R&D from one type of semiconductor product has influenced another
semiconductor product in the past. Dr. Murzy Jhabvala, a semiconductor
device engineer at NASA with twenty-four years experience, was asked by
the Department to state his views regarding cross-fertilization of R&D
efforts in the semiconductor industry. In a July 14, 1995 Memorandum to
Holly Kuga, `` Cross Fertilization of Research and Development Efforts
in the Semiconductor Industry,'' Dr. Jhabvala stated that ``it is
reasonable and realistic to contend that R&D from one area (e.g.,
bipolar) applies and benefits R&D efforts in another area (e.g., MOS
memory).'' Dr. Jhabvala also stated that:
SRAMs represent along with DRAMs the culmination of
semiconductor research and development. Both families of devices
have benefitted from the advances in photo lithographic techniques
to print the fine geometries (the state-of-the-art steppers)
required for the high density of transistors * * *. Clearly, three
distinct areas of semiconductor technology are converging to benefit
the SRAM device performance. There are other instances where
previous technology and the efforts expended to develop that
technology occurs in the SRAM technology. Some examples of these are
the use of thin film transistors (TFTs) in SRAMs, advanced metal
interconnect systems, anisotropic etching and filling techniques for
trenching and planarization (CMP) and implant technology for
retrograde wells.
( See ``September 8, 1997 Jhabvala Memo.'')
Furthermore, Dr. Jhabvala also participated in the verification of
Samsung's R&D expenses. After interviewing several of Samsung's R&D
engineers, Dr. Jhabvala concluded that ``the most accurate and most
consistent method to reflect the appropriate R&D expense for any
semiconductor device is to obtain a ratio by dividing all semiconductor
R&D by the cost to fabricate all semiconductor sold in a given
period.'' (December 19, 1997, Memorandum from Murzy Jhabvala to the
File, ``Examination of Research and Development Expenses and Samsung
Electronic Corporation '').
We reviewed the views of Samsung's expert on this subject and found
them to be of less probative value than the cases cited above, as
Jhabvala's articles refute Dr. Wooley's assertion that there is no
cross-fertilization among circuit design techniques. In fact, Dr.
Wooley agrees that there can be cross-fertilization in the development
of process technologies among various classes of memories. This
assertion also refutes the claims that there is no cross-fertilization
in the development of process technologies.
The respondents argue we should follow their normal accounting
records which categorize R&D expenses by project and product. While we
do not disagree that each R&D project is accounted for separately in
each of the respondents' respective books and records, we do not find
this argument persuasive since accounting records do not address the
critical issue of whether R&D in one area benefits another area.
Therefore, we do not believe that the R&D expenses associated with
these records reasonably reflect the appropriate cost of producing the
subject merchandise.
Finally, contrary to the respondents' assertion, the methodology we
are applying does calculate product-specific costs. It is the
Department's practice where costs benefit more than one product to
allocate those costs to all the products which they benefit. This
practice is consistent with section 773(f)(1)(A) of the Act because we
have determined that the product-specific R&D accounts do not
reasonably reflect the costs associated with the production and sale of
SRAMs. Therefore, as semiconductor R&D benefits all semiconductor
products, we allocated semiconductor R&D to all semiconductor products.
Comment 4: Foreign exchange loss. The petitioner argues that
current period foreign exchange losses on long-term debt should be
included in cost of production since the Department's practice and U.S.
and international accounting standards all require that current period
foreign exchange losses on long-term debt be included in cost of
production and the Department's past practice has been to disregard
Korea's local accounting standard that called for deferring current
period foreign exchange losses on long-term debt.
Samsung contends that its methodology is consistent with Korean
GAAP and with the Department's past practice of amortizing foreign
exchange losses relating to debt over the life of the loan. Samsung
further maintains that its methodology does not exclude the foreign
exchange losses but rather amortizes them over the life of the loans
and does not distort the dumping calculation. Samsung argues that
foreign exchange losses should not be treated like interest because
they are not functionally equivalent to interest.
Hyundai maintains that its treatment of unrealized foreign exchange
losses is in accordance with Korean GAAP and reasonably reflects the
cost of production. Hyundai argues that Korean GAAP provides for the
recognition of such gains or losses when they are actually incurred and
unrealized long-term foreign currency translation losses do not
represent an actual cost to them. Hyundai further contends that the
Department should reject Micron's contention that the losses be treated
as interest expenses and be allocated over fixed assets because such
foreign exchange losses on long-term debt are not current interest
expenses, but rather reflect fluctuations in exchange rates associated
with year end valuation of foreign currency liabilities.
DOC Position. We agree with the petitioner, in part, and have
included the amortized portion of foreign exchange losses on long-term
debt in the cost of production as part of interest expense. The
translation gains and losses at issue are related to the cost of
acquiring and maintaining debt. These costs are related to production
and are properly included in the calculation of financing expense as a
part of COP. In previous cases, we have found that translation losses
represent an increase in the actual amount of cash needed by
respondents to retire their foreign currency denominated loan balances.
(See Notice of Final Determination of Sales at Less than Fair Value:
Fresh Cut Roses from Ecuador, 24 FR 7019, 7039, (Feb. 6, 1995).)
Furthermore, the Department has amortized these expenses over the
remaining life of the companies' loans in the past. (See Notice of
Final Determination of Sales at Less Than Fair Value: Certain Steel
Concrete Reinforcing Bars From Turkey, 62 FR 9737, 9743, (March 4,
1997).) We have verified deferred foreign exchange translation gains
and losses for both respondents. See Samsung Cost Verification Report
and Hyundai Cost Verification Report. To reasonably reflect the cost of
producing and selling the subject merchandise, it is necessary that the
respondents' cost reflect the additional financial burden represented
by the additional cash need to retire foreign currency denominated
loans. Therefore, for the final determination, the Department amortized
deferred foreign exchange translation gains and losses over the average
remaining life of the loans on a straight-line basis and included the
amortized portion in net interest expense.
Comment 5: CEP Offset. The petitioner contends that the Department
should make no CEP offset adjustment for any respondent for purposes of
the final determination. The petitioner asserts that the Department's
practice of determining the number and comparability of levels of trade
after making all adjustments to CEP, but before adjusting NV, makes CEP
offsets virtually automatic. According to the petitioner, under both
the plain terms of
[[Page 8941]]
the statute and the intent of Congress, such adjustments should be the
exception, not the rule. The petitioner notes that it raised the same
argument in another case and that the issue is now before the courts.
(See Dynamic Random Access Memory Semiconductors of One Megabit or
Above From the Republic of Korea; Final Results of Antidumping Duty
Administrative Review 62 FR 965 (Jan. 7, 1997) (``DRAMs 1994-1995
review'') .
Hyundai disagrees, noting that the statute requires that a level of
trade analysis be performed only after adjustment is made for U.S.
selling expenses. Hyundai further states that the Department has
rejected similar arguments made in the second and third review of
DRAMS. As support for this proposition, Hyundai cites to the second
review, where the Department stated that the level of trade will be
evaluated based on the price after adjustments are made under section
772(d) of the Tariff Act. Hyundai maintains there is nothing new in the
law or the facts of this investigation to suggest that the Department
should reexamine its practice of beginning its level of trade analysis
after adjusting for U.S. expenses
Samsung also disagrees with the petitioners' argument that the
Department should not grant the CEP offset. Samsung cites to the second
and third reviews of DRAMs in which the Department rejected identical
arguments by the petitioner and stated ``while the petitioner is
correct in noting that the starting price for calculating the
Constructed Export Price (CEP) is that of the subsequent resale by the
affiliated importer to an unaffiliated buyer, the Act, as amended by
the URAA, and the SAA clearly specifies that the relevant sale for our
level of trade (LOT) analysis is the CEP transaction between the
exporter and the importer.'' (See Dynamic Random Access Memory from
Korea, 62 FR 39809, 39821 (July 24, 1997) (``DRAMs 1995-1995 review'').
Samsung states that the statute, the SAA, the Department's regulations
and the Department's practice in every case decided under the new law
all mandate that in making the LOT determination, the Department should
compare normal value to CEP.
Samsung also claims that the new regulations issued by the
Department formally codify this policy. 19 CFR 351.412 (c) (ii) states
that for purposes of the LOT analysis, the Department will ``[i]n the
case of constructed export price, the export price as adjusted under
section 772(d) of the Act.'' (See Antidumping Duties; Countervailing
Duties; Final Rule, 62 FR 27296, 27414 (May 19, 1997). Samsung contends
that the SAA instructs the Department ``to establish normal value based
on home market sales at the same LOT as the CEP or the starting price
for the export price''. Samsung asserts that the petitioner has failed
to offer any evidence that the Department's level of trade analysis is
incorrect and should disregard the petitioner's argument.
Samsung further claims that for CEP sales, use of the starting
price, which is the sale to the first unaffiliated customer in the
United States, is inappropriate because the starting price of CEP sales
includes expenses associated with economic activity in the United
States. .
DOC Position. The statute and SAA both support analyzing the level
of trade of CEP sales at the constructed export level price, i.e. after
expenses associated with economic activities in the United States have
been deducted pursuant to section 772(d) of the Act. As we stated in
the second DRAMs review, the Department has:
* * * Consistently stated that, in those cases where a level of
trade comparison is warranted and possible, then for CEP sales the
level of trade will be evaluated based on the price after
adjustments are made under section 772(d) of the Act (see Large
Newspaper Printing Presses and Components Thereof, Whether Assembled
or Unassembled, From Japan; Notice of Final Determination of Sales
at Less Than Fair Value, 61 FR 38139, 38143 (July 23, 1996). In
every case decided under the revised antidumping statute, we have
consistently adhered to this interpretation of the SAA and of the
Act. See, e.g., Aramid Fiber Formed of Poly Para-Phenylene
Terephthalamide from the Netherlands; Preliminary Results of
Antidumping Duty Administrative Review, 61 FR 15766, 15768 (April 9,
1996); Certain Stainless Steel Wire Rods from France; Preliminary
Result of Antidumping Duty Administrative Review, FR 8915, 8916
(March 9, 1996); Antifriction Bearings (Other Than Tapered Roller
Bearings) and parts Thereof from France, et al., Preliminary Results
of Antidumping Duty Administrative Review, 61 FR 25713, 35718-23
(July 8, 1996)'.
Dynamic Random Access Memory Semiconductors of One Megabit or
Above From the Republic of Korea; Final Results of Antidumping Duty
Administrative Review 62 FR 965, January 7, 1997).)
Consistent with this practice, we performed our level of trade
analysis of CEP sales only after adjusting for selling expenses
incurred in the United States. Based on our analysis, we determined
that each respondent sold SRAMs during the POI at a level of trade in
the home market which was different, and more advanced, than the level
of trade of the CEP sales of SRAMs in the United States. In addition,
we did not have the data necessary to consider whether a level of trade
adjustment was appropriate.
Because Samsung and Hyundai provided sufficient data to justify CEP
offset adjustments, we have continued to grant these adjustments.
Comment 6: Scope of the Investigation. The petitioner argues that
the Department should clarify that the scope of the order on SRAMs from
Korea includes the SRAM content of motherboards for personal computers.
The petitioner contends that if SRAMs incorporated on motherboards are
not included in the scope of the order, the respondents will shift a
significant volume of SRAMs into the production of motherboards in
Korea that are destined for the United States, thereby avoiding paying
duties on the SRAMs.
In addition, argues the petitioner, while motherboards viewed as a
whole may be considered to fall within a class or kind of merchandise
separate from SRAMs, the placement of SRAMs on a motherboard does not
diminish their separate identity or function, and should not insulate
them from antidumping duties. The petitioner contends that its position
is supported by: (1) The Department's practice regarding combined or
aggregated products; (2) analogous principles of Customs Service
classification; and (3) the Department's inherent authority to craft an
antidumping order that forestalls potential circumvention of an order.
The petitioner also argues that the Customs Service can administer,
without undue difficulty, an antidumping duty order that covers SRAMs
carried on non-subject merchandise.
At the public hearing held by the Department, the petitioner
asserted that there are fundamental differences between the scope
language in the DRAMs Final Determination and the scope language in
this investigation that distinguish the two cases. The petitioner first
argues distinguishes this investigation from the DRAMs Final
Determination, because in this case there ``is no limitation to the
function of memory.'' See January 16, 1998, Hearing on SRAMs from
Korea, Transcript dated January 22, 1998, at page 225. The petitioner
further argues that, in the DRAM case the function of the product was
memory, which is not the case in this investigation. See January 16,
1998, Hearing on SRAMs from Korea, Transcript dated January 22, 1998,
at page 225.
IDT and Cypress agree with the petitioner, arguing that SRAMs on a
motherboard are no less SRAMs than
[[Page 8942]]
those imported separately and that the Department's failure to cover
such imports would provide an incentive to foreign SRAM producers to
shift their sales to motherboard producers in Taiwan and elsewhere.
Hyundai, Motorola, Compaq, and Digital opposed the petitioner's
position. Compaq, and Digital argue that the petitioner's circumvention
concerns are unfounded. They note that the Department determined in the
DRAMs Final Determination that DRAMs physically integrated with the
other components of a motherboard in a manner that made them part of an
inseparable amalgam (i.e., a motherboard) posed no circumvention risk
and that the same holds true in this case.
In addition, Compaq and Digital argue that, contrary to the
petitioner's assertion, SRAMs affixed to a motherboard do not retain
their separate functional identities. In this case, SRAMs are
integrated onto motherboards by soldering, are interconnected with
other motherboard elements by intricate electronic circuitry, and
become part of a complex electronic processing unit representing an
inseparable amalgam (i.e., a motherboard) constituting a different
class or kind of merchandise that is outside the scope of the
investigation.
Hyundai disputes petitioner's contention that the memory function
of SRAMs is not altered by the placement of chips on a motherboard.
According to Hyundai, the same statement could be made of any product
installed in a finished product. For example, Hyundai argues that the
Department has not determined that the scope of the antifriction
bearings antidumping duty orders should be extended to include the ball
bearing content of imported automobiles. Finally, Compaq and Digital
argue that the petitioner's proposal is unworkable from an
administrative standpoint, since it would require motherboard
manufacturers to track all SRAMs placed in every motherboard throughout
the world. Compaq and Digital note that they cannot determine the value
of Korea SRAMs incorporated in a particular motherboard. In addition,
Compaq, and Digital argue that the petitioner's proposal would be
unadministrable by the Customs Service because the SRAM content of a
motherboard cannot be determined by physical inspection and because the
petitioner has provided no realistic proposition as to how the Customs
Service might carry out the petitioner's proposal on an entry-by-entry
basis, given the enormous volume of trade in motherboards.
With regard to the petitioner's assertion that the scope of the
language in DRAMs Final Determination is fundamentally different from
the scope language in this investigation, Compaq and Digital argue that
the language is quite similar and that there is no ``doubt that
literally the language in this Notice of Investigation and in the
preliminary referred to certain modules, and those are memory modules,
not any kind of board on which other elements are stuffed.'' See
January 16, 1998, Hearing on SRAMs from Korea, Transcript dated January
22, 1998, at page 203.
DOC Position. We disagree with the petitioner. The petitioner's
argument that the scope of the investigation as defined in the
preliminary determination should be interpreted to encompass the SRAM
content of motherboards is unpersuasive for three basic reasons. First,
the SRAM content of motherboards (when affixed to the motherboard) was
not expressly or implicitly referenced in the scope language used, to
date, in this investigation. Second, just as we found in the DRAMs
Final Determination, the petitioner's claims about potential
circumvention of the order are groundless. Third, it is not appropriate
for an antidumping duty order to cover the input content of a
downstream product. As the Department found in DRAMS Final
Determination, a case in which a nearly identical proposal was rejected
by the Department, when a DRAM is physically integrated with a
motherboard, it becomes a component part of the motherboard (an
inseparable amalgam). As there has been no request to include
motherboards within the scope of this investigation, the SRAM content
of motherboards (when physically integrated with the motherboard)
cannot be covered.
As to the first point, we disagree with the petitioner's assertion
that the differences between the scope language in DRAMs From Korea and
the language in this case are so fundamental that the differences can
be interpreted to mean that SRAMs soldered onto motherboards are
included within the scope of this investigation. The SRAM scope
language relied upon by the petitioner includes within the scope of
this investigation ``other collection[s] of SRAMs;'' as the petitioner
notes in its argument, this refers specifically to modules whether
mounted or unmounted on a circuit board. There is similar scope
language in DRAMs From Korea. In that case, we interpreted the language
as not extending to modules which contain additional items which alter
the function of the module to something other than memory. Such an
interpretation, applied to this case, indicates clearly that the SRAM
content of motherboards is not within the scope of this investigation.
We found in DRAMs From Korea that memory boards whose sole function
was memory were included within the definition of memory modules;
however, we further concluded that other boards, such as video graphic
adapter boards and cards were not included because they contained
additional items which altered the function of the modules to something
other than memory. Consequently, at the time of the final
determination, we added language to the DRAMs From Korea scope in order
that these other, enhanced, boards be specifically excluded. Since the
issue of such enhanced boards was not raised in this case, we did not
find it necessary to include an express exclusion for such products.
Thus, the absence of such language should not be interpreted to permit
the inclusion of products which do not fall under the rubric of ``other
collections of SRAMs.''
As to the second point, the petitioner argued in DRAMS Final
Determination that unremovable DRAMs on motherboards should be included
in the scope of the order to counter the potential for circumvention of
the order. We stated in that determination that we considered it
``infeasible that a party would import motherboards with the intention
of removing the integrated DRAM content and, therefore, consider it
unreasonable to expect that any order arising from this investigation
could be evaded in such a fashion.'' (See DRAMS Final Determination,
Case Number A-580-812, ``Memorandum to Joseph Spetrini from Richard
Moreland'', dated March 15, 1993, at page 13). We find it equally
infeasible that an importer would import SRAMs soldered onto a
motherboard for the sole purpose of removing those SRAMs for individual
resale thereby circumventing the antidumping duty order.
As to the third point, our statute does not provide a basis for
assessing duties on the input content of a downstream product. See
Senate Rep. 100-71, 100th Congress, 1st Sess. 98 (1987) (in which the
report notes both the general rule and the ``major input'' exception,
which applies only in an investigation or review of a downstream
product). Thus, where an SRAM loses its separate identity by being
incorporated into a downstream product, and where the investigation
covers SRAMs but does not cover the downstream product, there can be no
basis for assessing
[[Page 8943]]
duties against the SRAMs incorporated in the downstream product.
For a more detailed discussion regarding this issue, see the
Memorandum to Louis Apple from the Team, dated February 13, 1998.
Comment 7: Calculation of CV Profit. Petitioner maintains that the
Department erroneously included in its calculation of CV profit sales
that failed both prongs of the cost test. Samsung disagrees and argues
that the Department, for the purposes of calculating CV profit, should
not have disregarded sales below costs which have not otherwise been
excluded from the calculation of normal value. Furthermore, petitioner
argues that the Department should revise its computer program to ensure
that only sales that are above quarterly costs at the time of sale are
included in the calculation. According to petitioner, sales that fail
the cost test, but pass the ``cost recovery test'' under section
773(b)(2)(D), are deemed to have zero profit even if they are not
excluded from normal value. As a result, an erroneous CV profit rate
was calculated by the Department. Therefore, the Department should
correct the programming language.
Samsung asserts that the Department inadvertently included sales of
models that were found to be one hundred percent below costs in the
calculation of CV profit. It argues that the Department's longstanding
practice is to exclude from the pool of sales used to calculate CV
profit only those sales which have been disregarded in the cost test.
DOC Position. We agree with Samsung. It is the Department's
practice to exclude any home market sales that failed the cost test
from the pool of sales used to calculate CV profit. According to the
SAA, the Department ``will base amounts for SGA and profit only on
amounts incurred and realized in connection with sales in the ordinary
course of trade . . . Commerce may ignore sales it disregards as a
basis for normal value, such as those sales disregarded because they
are made at below-cost prices.'' See SAA at 839. The Department has
revised its preliminary calculations to include in the CV profit only
those sales which have not been disregarded as the basis for normal
value.
Company Specific Issues
A. Petitioner
Comment 1: Untimely Clerical Error Allegation. Petitioner alleges
that the Department accepted an untimely clerical error submission from
Samsung. Samsung's clerical error allegation was that the Department
inadvertently set inventory carrying costs to zero.
DOC Position. We agree with the petitioner. Samsung's submission
was dated after the deadline to submit any allegations for clerical
errors pursuant to the preliminary determination. However, the
Department had already determined that inventory carrying cost had been
set to zero prior to the Samsung submission. Therefore, for this final
determination, we have revised the computer program, accordingly.
Comment 2: Cost Test Methodology. Petitioner claims that the
Department inappropriately compared U.S. models to the next most
similar model in the home market when all of the home market sales of
the identical or most similar product made during a given quarter
failed the cost test. Petitioner claims that if all of the sales made
during a given quarter fail the cost test, the Department should make
comparisons to CV, rather than going to the next most similar model,
even if more than 80 percent of the sales of that home market model
were made above cost during the POI.
DOC Position. Section 773(b)(1) instructs the Department to
disregard sales below cost when they ``(A) have been made within an
extended period of time in substantial quantities; and (B) were not at
prices which permit recovery of all costs within a reasonable period of
time.'' To measure cost recovery of each below-cost sale, the
Department compares each below-cost price to the annual cost of
production of that model, and disregards those sales whose price is
lower than the annual cost of production. The Department defines the
extended period of time and the cost recovery period as the POI. To
measure whether sales have been made in substantial quantities over an
extended period of time, the Department determines the quantity of
sales that were made below cost during the POI. If 80 percent or more
of the sales during the POI were made above cost, then the Department
uses all sales, above and below cost, to determine normal value. If
less than 80 percent of the sales during the POI were above cost, then
the Department uses only the above-cost sales to determine normal
value.
Therefore, in cases where comparisons are made on a POI-basis, the
Department calculates a weighted-average normal value for all models
that had at least one sale above cost during the POI. It resorts to CV
only when there are no sales of identical or similar merchandise or
when all sales of a comparison product fail the cost test.
Comment 3: Depreciation Ratio Adjustment. Petitioner claims that
the Department applied the wrong depreciation ratio adjustment for
components to Samsung's modules.
DOC Position. We agree with petitioner. We inadvertently applied
the wrong depreciation ratio and therefore, have made the adjustment
for the final determination. (See Comment 1.)
Comment 4: Overwritten Data. Petitioner alleges, and Hyundai and
Samsung concur, that the cost test results are applied to the original
sales database in such a way that the cost test data set
inappropriately overwrites the data in the original data set.
DOC Position. We agree with petitioner, Hyundai and Samsung, and
have made the appropriate corrections to our calculations.
Comment 5: Adjustment to Fabrication Costs. Petitioner argues that
the evidence on the record clearly has demonstrated that Samsung
shifted costs from the production of SRAMs to the production of non-
subject merchandise. Therefore, petitioner requests that the Department
make an adjustment to Samsung's fabrication costs. Petitioner claims
the verification team missed the demonstrable under-reporting of costs
of the SRAMs. The team did not do the following: (1) Verify the entire
production of a sample cost center; (2) ask to see the entire
production quantities of subject and non-subject merchandise; (3)
examine all costs; (4) determine if the allocation of costs between
subject and non-subject merchandise was reasonable. Petitioner also
developed a cost model to demonstrate how Samsung's costs were
allocated away from SRAMs to uncovered merchandise. In a parallel
argument, petitioner also alleges that Samsung was unable to provide
contemporaneous ``written'' records of its non letter-of-credit home
market sales. Although it contained price and quantity information,
Samsung's computer-generated sales listing does not constitute a
verifiable document and permits the manipulation of past prices.
Samsung argues that it did not shift costs from SRAMs to non-
subject merchandise. Citing the verification report, Samsung argues
that the Department did the following: (1) Examined and differentiated
between the allocation of costs for SRAMs and non-subject merchandise;
(2) reconciled the allocation of the processing costs between subject
and non-subject merchandise using actual data from the cost system and
the cost submission; (3) tied the reported product costs to the
financial statements; (4) tested the allocations and the standard
machine and labor hours; and (5) summarized
[[Page 8944]]
that all costs were reconciled to the financial statements.
DOC Position. We agree with Samsung and have not made an adjustment
to fabrication costs. Regarding Samsung's costs, the Department
conducted an extensive verification. See Samsung Cost Verification
Report. Moreover, contrary to the petitioner's allegation, the
Department verified the entire cost of several cost centers as well as
production quantities. We determined that the allocation of costs
between subject and non-subject merchandise was reasonable, as based on
Samsung's actual accounting records. We examined these issues during
the overall cost reconciliation and the verification of major cost
components, such as materials, labor, and overhead. Furthermore, the
Department reconciled the total accumulated costs for each cost center
to the total cost of manufacturing for Samsung. Therefore, the
Department fully verified and reconciled all reported costs.
In regard to petitioner's cost model, we note that it was based on
three faulty assumptions: (1) That all models produced on a given line
have the same processing times; (2) that all models produced on the
same line have the same yields; and (3) that the total products
processed on a given line will equal the rated capacity for the
product. The Department examined standard times and yields in detail
and verified that there are differences among products. Also, actual
throughput will vary from rated capacity depending on the operation and
utilization of the resources of the line. For these reasons, we do not
find that petitioner's cost model provides a substantial basis for
disregarding our verification findings
With respect to the sales verification allegation, the Department
examined at length Samsung's computerized record keeping system. The
fact that Samsung did not state the price of the merchandise on the
shipping orders is irrelevant. The Department successfully conducted
extensive sales traces on both pre-selected and surprise sales to
verify prices and received voluminous documentation for each sale, from
shipping orders to bank receipts, which were then tracked into the
sales ledgers and then tied to the audited financial statements. This
process was clearly described in the verification report. As noted in
the verification report, the Department found no discrepancies or
omissions in Samsung's reporting. See Samsung Cost Verification Report.
For these reasons, we are not making changes to Samsung's sales
response except as noted elsewhere in this notice.
B. Samsung
Comment 1: Double-Counting of Duty Drawback. Samsung claims that
the Department double-counted the duty drawback for local letter of
credit sales by adding duty drawback to the sales value in the
determination of revenue in the CEP profit calculation. Samsung argues,
that the Department, however, also reduced direct selling expenses,
which were deducted from Korean revenues, by the amount of duty
drawback. As a result, duty drawback was double-counted.
DOC Position. We disagree with Samsung. We did not inadvertently
double-count duty drawback in the calculation for U.S. and home market
revenue.
Comment 2: Use of Consolidated Financial Statements. Samsung argues
that the Department's use of its unconsolidated financial statements
for determining interest expense is appropriate in this case since the
use of the unconsolidated financial statements is consistent with the
DRAMs Final Determination investigation and the first administrative
review of 1992-1994 DRAMs review. It further contends that calculating
the interest expense based on the consolidated financial statements
would distort the interest expense calculation because it is not
possible for Samsung to break out the short-term interest income which
would be used to offset interest expense on the consolidated basis.
However, Samsung maintains that the requisite data is on the record and
has been verified if the Department decides to use the consolidated
financial statements to calculate the interest expense.
DOC Position. We disagree with Samsung. It is a longstanding
Department policy to use consolidated interest expense because this
practice recognizes the fungible nature of invested capital resources
within a consolidated group of companies. See Kaplan, Kamarck and
Parker Cost Analysis under the Antidumping Law, 21 Geo. Wash. J. Int'l
L & Econ., 357, 387 (1988). The Department previously used the
unconsolidated financial statements for the DRAMs investigation and the
first and second reviews because the consolidated financial statements
were not available at that time. For this final determination, we have
used the used the interest expense as recorded in Samsung's
consolidated financial statement.
Comment 3: Guaranty Fees. Samsung maintains it did not include
guaranty fees in its interest expense because these fees were included
in the G&A calculation. If the fees are an interest expense, Samsung
argues that they should be deducted from G&A to avoid double-counting.
DOC Position. We have not reclassified guaranty fees from G&A
expense to interest expense as it would have no impact on the submitted
costs.
Comment 4: Revised Interest Expense. Samsung claims that the
Department erroneously calculated the revised interest expense as a
percentage of the variable TOTAL, which includes the cost of
manufacturing (COM), G&A and R&D. It maintains that the revised
interest adjustment factor was based on COGS which does not include G&A
or R&D, and, therefore, the revised interest factor should be
calculated as a percentage of COM.
DOC Position. We agree and have revised our calculations in our
computer program
Comment 5: CV Profit Rate Methodology. Samsung claims that the
Department erroneously calculated the overall CV profit rate by first
computing the transaction specific profit rate for each home market
sale, then weight-averaging the transaction specific rates based on
sale quantity to compute the overall CV profit rate. It claims that the
Department's standard practice is to calculate the CV profit rate by
dividing the total home market profit by the total home market cost to
derive a profit ratio. It quotes Certain Stainless Steel Wire Rods from
France, 62 FR 7206, 7209 (February 18, 1997) and Certain Hot-Rolled
Lead and Bismuth Carbon Steel Products from the United Kingdom, 61 FR
56514 (November 1, 1996), as saying that the method used in the
preliminary determination seriously distorts the dumping calculation.
For the final determination, the Department should use its normal
methodology for calculating CV profit.
Petitioner states that it is more appropriate to calculate CV
profit using the methodology in the preliminary determination. Further,
petitioner notes that the two cases cited by Samsung did not make a
judgement as to the general applicability of the CV profit methodology.
Instead, the Department in these two above-cited cases only
acknowledged that it was changing the programming language and not
revising its overall CV profit methodology.
DOC Position. We agree with Samsung. For this final determination,
we have used the normal methodology used to calculate the CV profit
rate for both Samsung and Hyundai. It measures more accurately the
actual profit for sales of the foreign like product made in the
ordinary course of trade. Therefore, for the final determination, the
CV profit ratio was calculated by dividing total
[[Page 8945]]
home market profit by total home market costs, for each respondent, as
both respondents had above-cost sales in the home market.
C. Hyundai
Comment 1: CV Profit on a Quarterly Basis. Hyundai argues that the
Department must calculate CV profit on no longer than a quarterly
basis. For the purposes of the preliminary determination, the
Department recognized that prices during the POI declined significantly
and, therefore, used quarterly data for the comparisons of prices and
sales below cost test. However, the Department did not calculate profit
for CV on a quarterly basis. Hyundai further argues that declining
prices, in turn affect the profit rates earned on sales during the
period of investigation. Since the antidumping comparison is based on
matching comparable products in a comparable period, the Department
should also apply the appropriate quarterly profit rates in the
calculation of CV.
Petitioner contends that the Department properly used the annual
profit figure in the CV calculation. The annual profit rate is the
correct figure since it reflects not only the quarterly cost of
manufacture but also those annual costs, such as general and
administrative and financing expenses, which are non-recurring and must
be calculated on an annual basis to ensure that all costs are captured
in the cost of production.
DOC Position. We agree with the petitioner. The Department applies
the average profit rate for the POI or period of review (POR) even when
the cost calculation period is less than a year. See, e.g., Certain
Fresh Cut Flowers From Colombia; Final Results and Partial Rescission
of Antidumping Duty Administrative Review, 62 FR 53287, 53295 (Oct. 14,
1997) and Silicon Metal from Brazil; Final Results of Antidumping Duty
Administration Review, 61 FR 46763, 46774 (Sept. 5, 1996). The
calculation of profit as an average for the period of investigation or
review is implied by the statute's guidance as to the recovery of cost
test. Section 773(e)(2)(A) of the Act mandates that the Department use
the actual amounts for profit in connection with the production and
sale of the foreign like product in the ordinary course of trade.
Moreover, section 773(b)(2)(D) of the Act directs us to perform the
recovery of cost test on a POI basis. Therefore, in order to be
consistent we must calculate profit on the same basis as the basis used
to determine whether sales were made in the ordinary course of trade.
Comment 2: Reversal of Bad Debt. Hyundai contends that the reversal
of bad debt should be used to offset G&A expense. Hyundai submitted a
revised G&A calculation at verification to reflect this reversal of bad
debt. Hyundai states that the reversal of the allowance for bad debt is
classified under non-operating income in its financial statements.
DOC Position. We agree with Hyundai. The allowance for bad debt is
properly classified as a non-operating general expense. The revised G&A
calculation was properly submitted prior to the beginning of
verification. We have made the appropriate changes for the final
determination.
D. LG Semicon
Comment 1: Facts Available. LG argues that the Department should
not use a facts available rate based on information supplied by the
petitioner that has been determined to be inaccurate in the course of
the Department's investigation. LG contends that because the petition
was based on Samsung's data, and since Samsung received an estimated
margin in the preliminary determination significantly different than
the petition rate, the petition data cannot be used as facts available.
LG maintains that to assign it a rate of 55.36 percent nullifies the
subsequent investigation which led to Samsung having a 1.59 percent
margin. LG cites the case of D & L Supply Co. v United States 113 F.3d
1220 (1997), in which the Federal Circuit ruled that the Department
should use the best information provisions of the Act ``to determine
current margins as accurately as possible.''
Petitioner contends that the Department properly assigned a facts
available rate to LG based on corroborated information from the
petition since LG refused to participate in the investigation. The
Department should not give preferential treatment to LG, a non-
cooperative respondent, by assigning as facts available a margin
calculated for a participating respondent. Petitioner disputes LG's
contention that the petition data was ``seriously flawed.'' Petitioner
argues that the Department compared Samsung's actual prices with the
petitioner's home market and U.S. price quotes, and found them
sufficiently ``close.'' LG had full opportunity to present its own data
and receive its own calculated dumping margin based on that data if it
disagreed with the data presented in the petition. LG chose not to
cooperate.
DOC Position. We agree with petitioner. We have assigned an adverse
facts available rate due to LG's refusal to provide information
pursuant to the investigation. Section 776(a)(2) of the Act provides
that if an interested party: (1) Withholds information that has been
requested by the Department; (2) fails to provide such information in a
timely manner or in the form or manner requested, subject to
subsections 782(c)(1) and (e) of the Act; (3) significantly impedes a
determination under the antidumping statute; or (4) provides such
information but the information cannot be verified, the Department
shall use the facts otherwise available in reaching the applicable
determination. At the time of LG's withdrawal from the investigation,
the Department did not consider LG to be an insignificant supplier to
the U.S. market and did not excuse the company from responding to the
questionnaire. Because LG failed to respond to the Department's
questionnaire, we recommend using the facts otherwise available to
calculate their dumping margins.
When a party fails to cooperate to the best of its ability, the
Department may make an adverse inference when selecting from the facts
otherwise available, and pursuant to Section 776(b) of the Act such an
inference may be based on information in the petition. Section 776(c)
of the Act provides that, when the Department relies on secondary
information (such as the petition) in using the facts otherwise
available, it must, to the extent practicable, corroborate that
information from independent sources that are reasonably at its
disposal. When analyzing the petition, the Department reviewed all of
the data the petitioner relied upon in calculating the estimated
dumping margins, and adjusted those calculations where necessary. These
estimated dumping margins were based on a comparison of CV to U.S.
price, the latter of which was based on price quotations offered by
Samsung. For purposes of corroboration, the Department re-examined the
price information provided in the petition in light of information
developed during the investigation and found that it had probative
value. See September 23, 1997, Memorandum from the Team to Tom Futtner.
In this case, the Department corroborated the sales information
contained in the petition by comparing it to Samsung's actual data. The
Department found that the petition prices reasonably reflected
Samsung's actual reported prices during this investigation. While
Samsung's calculated, weighted-average margin differs from the
weighted-average
[[Page 8946]]
margin based on the petition information, that difference is a result
of the more complete data-set provided by Samsung. Within that data-
set, we have confirmed that some of Samsung's product-specific margins
exceed the 55.36 percentage rate calculated in the petition. Thus,
because the petition rate is not contradicted by the evidence gathered
during the investigation, we continue to find it of probative value in
drawing an adverse inference concerning dumping by LG.
LG's reliance on D&L Supply is misplaced. D&L Supply dealt with a
situation in which the Department attempted to rely on a calculated
margin from a prior review when that calculated margin had been revised
as a result of litigation. The Federal Circuit held that continued use
of the judicially invalidated rate was erroneous. That situation is
significantly different from the present case. In this case, the
petition was based on data from one respondent and the Department has
calculated a different weighted-average dumping margin for that
respondent. A petition rate is normally based on a limited selection of
the products and prices at which subject merchandise has been sold
during the period of the investigation. Only by participation in the
investigation will the Department obtain, for each individual
respondent, more complete data on the products and prices sold by the
respondents throughout the period of investigation. Based on the
complete universe of products and prices for each respondent, the
Department calculates a weighted-average dumping margin for the
respondent. Of course, each respondent's products and prices will be
different and, typically, different from that contained in the
petition. However, it is only by cooperating in the investigation that
the Department obtains the data to determine the extent to which a
respondent's product-mix and price-mix differs from the information
contained in the petition. Finally, LG argues that Samsung's reported
U.S. and home market prices were different from those used in the
petition. It further maintains that had Samsung's reported prices been
used, the result would have lowered the margin. However, the prices
cited in the petition represented a reasonable estimate of Samsung's
prices based on the information available at the time the petition was
filed. Corroboration of the petition does not require the substitution
if actual reported numbers where the Department finds that the
information originally submitted has probative value. Because the
Department has found that the petition prices were probative of the
level of dumping which may have taken place during the period of
investigation, we have continued to rely on it in this final
determination.
Continuation of Suspension of Liquidation
In accordance with section 733(d)(1) and 735(c)(4)(B) of the Act,
we are directing the Customs Service to continue to suspend liquidation
of all entries of SRAMs from Korea that are entered, or withdrawn from
warehouse, for consumption on or after October 1, 1997 (the date of
publication of the preliminary determination in the Federal Register).
The Customs Service shall continue to require a cash deposit or posting
of a bond equal to the estimated amount by which the normal value
exceeds the U.S. price as shown below. These suspension of liquidation
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percentage
------------------------------------------------------------------------
Samsung Electronics Co. Ltd................................ 1.00
Hyundai Electronics Co. Ltd................................ 5.08
LG Semicon Co. Ltd......................................... 55.36
All others rate............................................ 5.08
------------------------------------------------------------------------
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
International Trade Commission (ITC) of our determination. As our final
determination is affirmative, the ITC will, within 45 days, determine
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry. If the ITC determines that material
injury, or threat of material injury does not exist, the proceeding
will be terminated and all securities posted will be refunded or
canceled. If the ITC determines that such injury does exist, the
Department will issue an antidumping duty order directing Customs
officials to assess antidumping duties on all imports of the subject
merchandise entered for consumption on or after the effective date of
the suspension of liquidation.
This determination is published pursuant to section 735(d) of the
Act.
Dated: February 13, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-4537 Filed 2-20-98; 8:45 am]
BILLING CODE 3510-DS-P
