[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6844]
[[Page Unknown]]
[Federal Register: March 23, 1994]
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DEPARTMENT OF COMMERCE
[A-580-008]
Color Television Receivers From the Republic of Korea; Final
Results of Antidumping Duty Administrative Review
AGENCY: International Trade Administration/Import Administration/
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review.
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SUMMARY: On October 7, 1993, the Department of Commerce published in
the Federal Register the preliminary results of its administrative
review of the antidumping duty order on color television receivers from
the Republic of Korea (58 FR 52262). The period of review covers seven
manufacturers/exporters and the period April 1, 1991, through March 31,
1992.
We gave interested parties an opportunity to comment on our
preliminary results. We did not hold a public hearing on these results,
as the result for a public hearing was withdrawn.
Based on our analysis of the comments received and the correction
of certain clerical errors, we have revised the preliminary results.
The final dumping margins range from zero to 16.57 percent.
EFFECTIVE DATE: March 23, 1994.
FOR FURTHER INFORMATION CONTACT:
Zev Primor or Wendy Frankel, Office of Antidumping Compliance, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230;
telephone: (202) 482-5253.
SUPPLEMENTARY INFORMATION:
Background
On October 7, 1993, the Department of Commerce (the Department
published in the Federal Register the preliminary results (58 FR 52262)
of its administrative review of the antidumping duty order on color
television receivers (CTVs) from the Republic of Korea (ROK) (49 FR
18336, April 30, 1984). The Department has now completed this
administrative review in accordance with section 751 of the Tariff Act
of 1930, as amended (the Tariff Act), and 19 CFR 353.22 (1993).
Scope of the Review
The products covered by this review include color television
receivers, complete and incomplete, from the ROK. The order covers all
CTVs regardless of tariff classification. During the period of review
(POR), the subject merchandise was classified under Harmonized Tariff
Schedule (HTS) item numbers 8528.10.60, 85.29.90.15, 8529.90.20 and
8540.11.00. The HTS item numbers are provided for convenience and
Customs purposes only. The written description remains dispositive as
to the scope of the product coverage.
The review covers seven manufacturers/exporters and the POR April
1, 1991, through March 31, 1992.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received case briefs and rebuttal briefs from
the Independent Radionic Workers of America, the United Electrical
Workers of America, the International Brotherhood of Electrical
Workers, the International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, AFL-CIO, and Industrial Union
Department, AFL-CIO (the Unions), the petitioners in this proceeding,
and three respondents, Goldstar Co., Ltd. (Goldstar), Daewoo
Electronics Co., Ltd. (Daewoo), and Samwon Electronics, Inc. (Samwon).
Two companies, Tongkook General Electronics, Inc., and Cosmos
Electronics Manufacturing Korea, Ltd., did not respond to our requests
for information. When a company fails to provide the information
requested in a timely manner, the Department considers the company
uncooperative and generally assigns to that company the higher of (a)
the highest rate assigned to any company in any previous review,
including the less-than-fair-value (LTFV) investigation, or (b) the
highest rate for a responding company with shipments during the POR.
Therefore, we have used the highest rate from the LTFV investigation as
the best information available (BIA) in determining the margins for
these two companies for this review, because this rate is higher than
the highest rate in the current review. See Allied-Signal Aerospace Co.
v. United States, Appeal No. 93-1049 (Fed. Cir. June 22, 1993). See
also Krupp Stahl AG et al v. United States, 822 F. Supp 789 (CIT May
26, 1993). Two other companies, Samsung Electronics Co. Ltd., and
Quantronics Manufacturing Korea, Ltd., responded to the Department that
they had no sales during the POR.
Petitioners' Comments
Comment 1: Petitioners argue that in the preliminary results of
this review, the Department failed to measure the home market tax
incidence in Korea. Although petitioners admit that the United States
Court of Appeals for the Federal Circuit (CAFC) has recently held that
no measurement of tax incidence is required under the statute,
petitioners argue that the Department should not implement that
approach in light of a petition for ``rehearing and suggestion for
rehearing in banc that has been submitted by petitioners and is yet
pending.''
Respondents argue that the recent CAFC decision (Daewoo Elec. Corp.
v. United States, Slip Op. 92-1558-1562 (Fed. Cir. Sept. 30, 1993)
(Daewoo)), clearly affirmed the Department's longstanding
interpretation of the governing statute, i.e., no requirement to
measure the amount of the pass-through taxes to the Korean consumers.
Consequently, respondents request that the Department retain the same
methodology in the final results of the review.
Department's Position: We disagree with petitioners. The question
of whether the Department was required to measure the Korean home
market tax incidence or ``pass-through'' tax was conclusively resolved
by the CAFC in the Daewoo decision. In that decision, the CAFC rules
that ``the statute does not speak to tax incidence, shifting burdens,
or pass-through, nor does it contain any hint that an econometric
analysis must be performed'' (Daewoo, Slip Op. at 12). Consequently,
the Department has retained its policy of not measuring the pass-
through tax in this review.
Comment 2: Petitioners object to the Department's methodology of
making a circumstance-of-sale (COS) adjustment for differences between
home market and hypothetical U.S. taxes by adding the full amount of
the Korean home market tax to United States price (USP). Citing the
recent Court of International Trade (CIT) decision, Federal-Mogul Corp.
v. United States, 17 CIT--, Slip Op. 93-194 (Oct. 7, 1993) (Federal-
Mogul), petitioners request the Department to recalculate the commodity
tax adjustment to USP.
Goldstar urges the Department to continue to adhere to the CAFC's
decision in Zenith Elec. Corp. v. United States, 988 F. 2d 1573 (Fed.
Cir. 1993) (Zenith), i.e., by adding to USP the absolute amount of home
market taxes, Goldstar claims that the recent Federal-Mogul decision
failed to recognize the critical distinction between the Zenith holding
that the Department may not adjust the foreign market value (FMV) to
neutralize tax amounts, and the separate issue of how the adjustment to
USP for commodity taxes shall be performed. Goldstar further claims
that in the Zenith decision, the Department used an ad valorem
methodology to calculate the adjustment to USP. This methodology,
according to Goldstar, resulted in a multiplier effect on the
underlying dumping margin, a result that the Department had argued
justified making a tax-neutralizing adjustment to FMV. Goldstar notes
that the CAFC held that the express terms of the statute preclude such
an adjustment to FMV. However, Goldstar argues that in footnote four of
that decision, the CAFC indicated that the Department may lawfully
avoid the multiplier effect by performing the adjustment to USP on an
absolute basis rather than on an ad valorem basis.
Daewoo concurs with Goldstar and adds that the Department should
not implement the Federal-Mogul decision unless and until it is
sustained by the CAFC.
Department's Position: We agree with petitioners. The CIT in
Federal-Mogul rejected the practice of making COS adjustments for
differences in tax amounts in USP and FMV. Consequently, we have
revised our methodology and adjusted USP for tax by multiplying the USP
by the home market tax rate at the point in the chain of commerce of
the U.S. merchandise that is analogous to the point in the home market
chain of commerce at which the foreign government applies the home
market consumption tax. In this case we multiplied the U.S. tax base
(gross unit price less discounts) by the Korean VAT rate. This product,
the U.S. tax adjustment, was then added to the net USP.
With regard to the tax treatment in the home market, we included in
the FMV the amount of Korean consumption tax collected in the home
market by multipling the tax base (home market gross unit price) by the
Korean VAT rate.
We also calculated the amount of the tax that was due solely to the
inclusion of price deductions in the original tax base (i.e.,
multiplying VAT rate by the sum of total deductions and additions). The
total amount of U.S. movement and selling expenses was multiplied by
the Korean VAT rate and subtracted from the net USP to determine the
final USP. Similarly, a total amount of all adjustments in the home
market was multiplied by the Korean VAT and deducted from FMV after all
other adjustments had been made.
These adjustments are necessary to prevent our new methodology for
calculating the USP tax adjustment from crating antidumping duty
margins where no margins would exist if no taxes were levied upon
foreign market sales.
Comment 3: Petitioners argue that since Goldstar, in the
preliminary results, a zero margin, it may suggest that no dumping
margin will be found in the final results of review. In that event,
petitioners request that the Department should not count this POR for
the purposes of an antidumping order revocation because the quantity of
the CTVs shipped by Goldstar to the United States during this review
was ``de minimis.'' Petitioners further state that ``a de minimis
volume of shipments is also no indication of the absence of price
discrimination, because any producer seeking to dump its product would
find it advantageous and a simple task to sell a de minimis volume of a
product fair at fair value in the short-term so as to obtain revocation
and then be freed to dump its product in the future.''
Goldstar rebuts this allegation by claiming that: (1) There is no
request for revocation in this review, therefore, the issue is
irrelevant; and (2) the Department should not grant ``advisory
opinions'' on issues not relevant to this review.
Department's Position: We agree with respondent. No request for
revocation has been made and, therefore, this issue is not revelant.
Comment 4: Petitioners allege that respondents under-reported their
U.S. sales during the POR and claim a discrepancy between the reported
U.S. sales and entries of the subject merchandise made during the POR.
Daewoo rejects petitioners' allegations, pointing out the
Department's extensive verification of its sales and the cost of
production (COP) data. Respondents maintain that such a thorough
verification would have revealed any discrepancies.
Department's Position: We disagree with petitioners. The factual
information alleging unreported entries was submitted to the Department
after more than 180 days from the initiation of the review. As such, it
is untimely and cannot be used during the current POR. See 19 CFR
353.31(a)(1). Finally, all sales information and their respective
entries pertaining to the current POR have been verified. We found no
discrepancies between the reported sales volume and the source
documents.
Comment 5: Petitioners submitted comments concerning three computer
programming/clerical errors in the Department's preliminary results
analysis of Daewoo's response.
Department's Position: We agree with the petitioners and have made
the following corrections to the appropriate programs in our final
results calculations for Daewoo: (1) We replaced the gross commission
expense with the net commission expense in the exporter's sales price
(ESP) cap; (2) we did not adjust USP for home market tax when we
compared USP to a constructed value (CV) in both the purchase price
(PP) and ESP sales; and (3) we corrected the cost of manufacturer value
in model DTB-1404PW when it is used in the CV application.
Daewoo's Comment
Comment 6: Daewoo asserts that the Department incorrectly used CV
for a home market model DTB-1404PW when the ``90/60'' day matching
procedure revealed that there were not enough matching sales in every
month of the POR. Instead, Daewoo requests the use of another model in
the home market which, allegedly, can be qualified as similar
merchandise and has sales in every month of the POR.
Petitioners object to the use of another model in the matching
procedure because it does not meet the physical criteria necessary to
qualify as similar merchandise.
Department's Position: We disagree with Daewoo. Prior to
determining FMV under section 773(a)(1) of the Tariff Act, the
department must first select the most similar merchandise. Section
771(16) of the Tariff Act defines such or similar merchandise and
provides a hierarchy of preferences for determining which merchandise
sold in the foreign market is most similar to the merchandise sold in
the United States. Section 771(16) also expresses a preference for the
use identical over similar merchandise. The cost test is not conducted
until after the most similar model match is found under section
771(16).
Moreover, section 771(16) directs us only to ``the first of the
following categories * * *'' and not to the next category when the
first match is below the COP. If this were not the case, the COP test
would inappropriately become part of the basis for determining what
constitutes such or similar merchandise, which is clearly not the
purpose of the COP test. Consequently, it appears that the statute
directs us to the use of CV when the most similar model is sold below
the cost.
In this case, as a result of the COP test, we discarded sales of
the most similar home market model. In conducting the 90/60 day
contemporaneity test, we found no remaining sales of the most similar
model. Therefore, we relied on CV as the basis of FMV (see Tubeless
Steel Disc Wheels from Brazil, 52 FR 6947 (March 20, 1987), see, also,
Import Administration Policy Bulletin, Dec. 15, 1993).
Comment 7: Citing AOC International v. United States, 721 F. Supp.
314, 316 (CIT 1989) (AOC), Daewoo claims that the Department
erroneously excluded from direct warranty costs in the home market the
salaries and benefits of employees in the aftersale service centers.
According to the respondent, the Department's approach is distortive
because it treats all U.S. warranty expenses, incurred in the form of
payments to unrelated parties, as direct selling expenses, while
classifying similar expenses in the home market as indirect selling
expenses simply because the warranty services are provided by the
respondent's own service departments. Because the expenses incurred in
both markets are identical in nature, respondent contends that the
Department should treat such expenses in the same manner in both
markets.
Department's Position: We disagree with Daewoo. According to our
established practice, we consider the home market warranty expenses at
issue to be fixed costs that do not qualify as direct selling expenses.
This is because the respondent would have incurred such costs
regardless of whether they made any sales of the subject merchandise.
In the U.S. market, however, Daewoo's warranty repairs are performed by
the independent service firms which are paid on a per unit basis, as
expense clearly linked to units sold. Consequently, the U.S. warranty
expenses are correctly treated as direct selling expenses. Further, we
note that the decision in AOC is not final, and may yet be reversed.
Therefore, we have continued to treat the home market fixed warranty
expenses as indirect selling expenses for these final results (see
Color Television Receivers from the Republic of Korea, 58 FR 50,333
(Sept. 27, 1993), Comment 16 (Eighth Review), and Color Television
Receivers from the Republic of Korea, 56 FR 12,701 (March 27, 1991),
Comment 20 (Fifth Review)).
Goldstar's Comments
Comment 8: Goldstar submitted comments concerning three computer
programming/clerical errors in the Department's preliminary results
analysis of Goldstar's response.
Petitioners objected to one of the clerical error allegations,
i.e., the inclusion of the U.S. commissions in the ESP ``cap,'' on the
grounds that there are no commissions, for comparable sales, in the
home market.
Department's Position: We agree with Goldstar and have made the
following corrections to the appropriate program in our final results
calculations for Goldstar: (1) We included the warranty, technical
expenses, royalties and promotional fees directly related to the CTV
sales in the home market pool of direct selling expenses; (2) we
included the U.S. indirect warranty, U.S. indirect advertising and U.S.
commission expenses in the ESP cap; and (3) we corrected the amount of
commodity taxes in the home market, however, the correction was made
according to the new methodology explained above (see Comment 2).
With regard to petitioners' concerns regarding the inclusion of the
U.S. commissions in the ESP cap, our regulations state that where there
is a commission paid in one market and none in the other market, we
offset the commission with indirect selling expenses incurred in the
other market to the extent of the lesser of the commission or the
selling expenses (see 19 CFR 353.56(b), see, also, Antidumping Manual,
Import Administration, International Trade Administration, Chapter 8,
p. 31).
Comment 9: Goldstar requests that the Department conform its COS
adjustments in the ESP price comparisons to the methodology ordered by
the CIT in Timken Co. v. United States, 673 F. Supp. 495 (CIT 1987)
(Timken) and in a number of other cases. In Timken, the CIT held that,
in ESP situations, the COS adjustments for U.S. direct selling expenses
should be added to FMV rather than deducted from USP.
Department's Position: We disagree with Goldstar. Section 772(e)(2)
of the Tariff Act states that ESP sales shall be adjusted by being
reduced by the amount of ``expenses generally incurred by or for the
account of the exporter in the United States in selling identical or
substantially identical merchandise'' (emphasis added). Therefore, we
make COS adjustments in ESP comparisons by deducting all selling
expenses from ESP, rather than retaining them in ESP and adding the
relevant amounts to FMV. The litigation in Timken was withdrawn and
there was no conclusive decision in the case. Further, because the
issue of deducting direct selling expenses from USP or adding them to
FMV is currently on appeal before the CAFC, we have followed our
longstanding practice of making COS adjustments in ESP comparisons by
deducting all selling expenses from the ESP for these final results.
See our positions in the Fifth Review, Comment 33, and Eighth Review,
Comment 17.
Samwon's Comments
Comment 10: Samwon argues that the Department erred by excluding
two U.S. sales which occurred outside the POR. Although Samwon
acknowledges that, traditionally, the Department uses the sales date as
a basis for a review, Samwon notes that the products covered by these
sales entered the United States within the POR. Additionally, Samwon
points out that it did not participate in the prior (eighth review);
thus there is no risk of analyzing certain transactions twice.
Petitioners object to the inclusion of sales that fall outside the
POR. They point out the Samwon could have participated in the prior
review but decided against it. Additionally, petitioners urge the
Department to continue its traditional policy of including sales within
the POR using the date of sale and not the date of entry.
Department's Position: We disagree with Samwon. Samwon voluntarily
chose not to participate in the eighth administrative review and,
therefore, forfeited the opportunity to have those sales reviewed.
Because the use of date of sale, rather than date of entry, as a basis
for inclusion in a POR has been the Department's longstanding policy in
this case, we have retained this methodology in these final results
(see Color Picture Tubes from Republic of Korea, 52 FR 44186 (Nov. 18,
1987)).
Final Results of Review
Based on our analysis of comments received, and the correction of
certain clerical errors, we have revised our preliminary results. We
determine the final margins for the period April 1, 1991, through March
31, 1992, to be:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter percentage
------------------------------------------------------------------------
Daewoo Electronics Co., Ltd................................. 1.23
Goldstar Electronics Co., Ltd............................... 0.00
Samwon Electronics, Inc..................................... 0.53
Cosmos Electronics Manufacturing Korea...................... 16.57
Quantronics Manufacturing Korea, Ltd........................ \1\3.63
Samsung Electronics Co., Ltd................................ \1\0.37
Tangkook General Electronics, Inc........................... 16.57
------------------------------------------------------------------------
\1\No shipments; rate from previous review.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and FMV may vary from the percentages stated
above. The Department will issue appropriate appraisement instructions
directly to Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Tariff Act: (1) The cash deposit rate for the reviewed
companies will be as outlined above except for Samsung, which will have
a cash deposit of zero percent, since its rate is de minimis; (2) for
previously reviewed or investigated companies not listed above, the
cash deposit rate will continue to be the company-specific rate
published for the most recent period; (3) if the exporter is not a firm
covered in this review, a prior review, or the original LTFV
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise.
On March 25, 1993, the Court of International Trade (CIT), in
Floral Trade Council v. United States, Slip Op. 93-79, and Federal-
Mogul Corporation v. United States, Slip Op. 93-83, decided that once
an ``all others'' rate is established for a company, it can only be
changed through an administrative review. The Department has determined
that in order to implement these decisions, it is appropriate to
reinstate the original ``all others'' rate from the LTFV investigation
(or that rate as amended for correction of clerical errors or as a
result of litigation) in proceedings governed by antidumping duty
orders.
Because this proceeding is governed by an antidumping duty order,
the ``all others'' rate for the purposes of this review will be 13.90
percent, the ``all others'' rate established in the LTFV investigation
(49 FR 7620, March 1, 1984).
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective orders (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34.(d). Timely written notification
of the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act and 19 CFR 353.22.
Dated: March 17, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-6844 Filed 3-22-94; 8:45 am]
BILLING CODE 3510-DS-M
