03-14444. Certain Polyester Staple Fiber from Korea; Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of 2001-2002 administrative review.

SUMMARY:

The Department of Commerce is conducting an administrative review of the antidumping duty order on certain polyester staple fiber from Korea. The period of review is May 1, 2001, through April 30, 2002. This review covers imports of certain polyester staple fiber from two producers/exporters.

We have preliminarily found that sales of subject merchandise have been made below normal value. If these preliminary results are adopted in our final results, we will instruct the U.S. Bureau of Customs and Border Protection to assess antidumping duties.

Interested parties are invited to comment on these preliminary results. We will issue the final results not later than 120 days from the date of publication of this notice.

DATES:

EFFECTIVE DATE: June 9, 2003.

FOR FURTHER INFORMATION CONTACT:

Andrew McAllister, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC 20230; telephone [phone].

SUPPLEMENTARY INFORMATION:

Background

On May 25, 2000, the Department of Commerce (“the Department”) published an antidumping duty order on certain polyester staple fiber (“PSF”) from Korea. (See 65 FR 33807). On May 6, 2002, the Department published a notice of “Opportunity to Request Administrative Review” of this order. (See 67 FR 30356). On May 30, 2002, Daeyang Industrial Co., Ltd. (“Daeyang”), Sunglim Co., Ltd. (“Sunglim”), Huvis Corporation (“Huvis”), and Estal Industry Co., Ltd. (“Estal”) requested administrative reviews. On May 31, 2002, Sam Young Synthetics Co., Ltd. (“Sam Young”), Mijung Ind. Co., Ltd. (“Mijung”), Keon Baek Co., Ltd. (“Keon Baek”), and East Young Co., Ltd. (“East Young”) made similar requests for administrative reviews. Also, on May 31, 2002, Stein Fibers, Ltd. (“Stein Fibers”), an interested party in this review, requested an administrative review of imports of the subject merchandise produced by Sam Young, Mijung, Keon Baek, East Young, Huvis, Daeyang, and Estal. On June 25, 2002, the Department published a notice initiating the review for the period May 1, 2001, through April 30, 2002. (See 67 FR 42753).

On July 10, 2002, we issued antidumping questionnaires in this review. On August 2, 2002, Sunglim withdrew its request for review. On August 16, 2002, Sam Young, Mijung, Keon Baek, Estal, and Daeyang withdrew their requests for review. Also, on August 16, 2002, Stein Fibers withdrew its request for administrative reviews of the shipments of Sam Young, Mijung, Keon Baek, Daeyang, and Estal. See “Partial Rescission” section, below.

We received responses from East Young and Huvis on September 5, 2002. As a result of certain below cost sales being disregarded in the previous administrative review, on October 17, 2002, we instructed Huvis to respond to the cost questionnaire. On November 14, 2002, we received Huvis' response to the cost questionnaire.

On September 30, 2002, in accordance with 19 CFR 351.301(d)(2)(ii), Arteva Specialties S.a.r.l., d/b/a KoSa and Wellman, Inc. (“the petitioners”), alleged that East Young had made sales to the United Kingdom, East Young's reported third-country market, at prices below the cost of production (“COP”) during the POR. On October 2, 2002, East Young submitted an objection to the petitioners' September 30, 2002, COP allegation on the basis that it was untimely filed, inasmuch as the deadline for alleging that East Young made sales in its third-country market at prices below the COP was September 26, 2002. However, we accepted the petitioners' allegation of sales below COP and proceeded to examine the sufficiency of the allegation because it was not submitted so late that the Department would be unnecessarily delayed in reviewing the substance of the allegation nor would it cause other interested parties difficulties in representing their interests. See Memorandum from Team to Susan Kuhbach, “Petitioners' Allegation of Sales Below Cost of Production,” dated October 21, 2002, which is on file in the Central Records Unit (“CRU”) in room B-099 of the main Department building.

On October 29, 2002, East Young submitted further objections to the timeliness and merits of the petitioners' cost allegation. On November 4, 2002, the petitioners rebutted East Young's October 29, 2002, submission. On November 6, 2002, East Young rebutted the petitioners' November 4, 2002, submission. On December 6, 2002, we found that the petitioners' allegation did not provide a reasonable basis to initiate a COP investigation on East Young's U.K. sales because the below-cost sales were not representative of the broader range of foreign models that may be used to determine normal value (“NV”) for comparison to U.S. sales. See Memorandum from Team to John Brinkmann, “Petitioners' Allegation of Sales Below the Cost of Production for East Young Co., Ltd.,” dated December 6, 2002, which is on file in the CRU.

In its section B Questionnaire response, East Young reported the United Kingdom as its comparison market. In their September 30, 2002, cost allegation and in an October 28, 2002, letter, the petitioners alleged that the United Kingdom was not an appropriate third-country market for calculating East Young's NV because of the existence of a dumping finding on PSF from Korea in the European Union. On November 4, 2002, East Young submitted an objection to the petitioners' October 28, 2002, submission, stating that the United Kingdom is its most representative comparison market. In the Memorandum to Susan Kuhbach, “Selection of Comparison Market for East Young,” dated November 20, 2002 (“East Young Comparison Market Memorandum”), which is on file in the CRU, we recognized that the European Union has made a finding of dumping concerning PSF from Korea that includes PSF currently subject to an order in the United States and which applies to East Young's merchandise. As a result, we indicated that reliance on East Young's sales to the United Kingdom may not be appropriate for purposes of calculating NV in this review. While we did not immediately dismiss East Young's sales to the United Kingdom, we instructed East Young to submit a revised section B response that includes sales both to the United Kingdom and to its next largest third-country market for which no finding of dumping exists and which meets the criteria of section 773(a)(1)(B)(ii) of the Tariff Act of 1930, as amended (“the Act”). See East Young Comparison Market Memo; see also “Selection of Comparison Market” section, below.

In November and December 2002 and February 2003, we issued supplemental questionnaires to East Young and Huvis. We received responses to these supplemental questionnaires in December 2002 and January and February 2003.

On January 9, 2003, in accordance with section 751(a)(3)(A) of the Act, we published a notice extending the time limit for the completion of the preliminary results in this case by 120 days (i.e., until no later than June 2, 2003). (See 68 FR 1177).

Scope of the Order

For the purposes of this order, the product covered is certain polyester staple fiber (“PSF”). PSF is defined as synthetic staple fibers, not carded, combed or otherwise processed for spinning, of polyesters measuring 3.3 decitex (3 denier, inclusive) or more in diameter. This merchandise is cut to lengths varying from one inch (25 mm) to five inches (127 mm). The merchandise subject to this order may be coated, usually with a silicon or other finish, or not coated. PSF is generally used as stuffing in sleeping bags, mattresses, ski jackets, comforters, cushions, pillows, and furniture. Merchandise of less than 3.3 decitex (less than 3 denier) currently classifiable under the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheading 5503.20.00.20 is specifically excluded from this order. Also specifically excluded from this order are polyester staple fibers of 10 to 18 denier that are cut to lengths of 6 to 8 inches (fibers used in the manufacture of carpeting). In addition, low-melt PSF is excluded from this order. Low-melt PSF is defined as a bi-component fiber with an outer sheath that melts at a significantly lower temperature than its inner core.

The merchandise subject to this order is currently classifiable in the HTSUS at subheadings 5503.20.00.45 and 5503.20.00.65. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under order is dispositive.

Partial Rescission

As noted above, Sunglim, Sam Young, Mijung, Keon Baek, Estal, and Daeyang withdrew their requests for review, and Stein Fibers withdrew its request for review of Sam Young, Mijung, Keon Baek, Daeyang, and Estal. Because these withdrawals were timely filed and no other party requested a review of these companies, pursuant to 19 CFR 351.213(d)(1) we are rescinding this review with respect to these companies. We will instruct the U.S. Bureau of Customs and Border Protection (“BCBP”) to liquidate any entries from these companies during the period of review and to assess antidumping duties at the rate that was applied at the time of entry.

Verification

As provided in section 782(i) of the Act, in March and May 2003, we verified information provided by East Young and Huvis using standard verification procedures, including on-site inspection of the manufacturers' facilities, examination of relevant sales, cost and financial records, and selection of original documentation containing relevant information. The Department reported its findings from the sales verifications on May 12, 2003. See Memorandum to the File, “Verification of the Sales Response of East Young Co., Ltd.,” dated May 12, 2003 (“East Young Verification Report”), and Memorandum to the File, “Verification of the Sales Response of Huvis Corporation,” dated May 12, 2003 (“Huvis Sales Verification Report”), which are on file in the CRU. Due to the timing of the cost verification of Huvis, the Department will report its findings from the cost verification after the preliminary results.

Fair Value Comparisons

To determine whether sales of PSF by the respondents to the United States were made at less than NV, we compared, as appropriate, export price (“EP”), to NV, as described in the “Export Price” and “Normal Value” sections of this notice.

Pursuant to section 777A(d)(2) of the Act, we compared the EPs of individual U.S. transactions to the weighted-average NV of the foreign like product where there were sales made in the ordinary course of trade, as discussed in the “Cost of Production Analysis” section below.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all products produced by the respondents covered by the description in the “Scope of the Order” section, above, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. In accordance with section 773(a)(1)(C)(ii) of the Act, 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 volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. (For further details, see the “Normal Value” section, below.)

We compared U.S. sales to sales made in the appropriate comparison market within the contemporaneous window period, which extends from three months prior to the POR until two months after the POR. Where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. Where there were no sales of identical or similar merchandise made in the ordinary course of trade in the comparison market to compare to U.S. sales, we compared U.S. sales to constructed value (“CV”). In making product comparisons, consistent with our final determination in the original investigation, we matched foreign like products based on the physical characteristics reported by the respondents in the following order: (1) composition; (2) type; (3) grade; (4) cross section; (5) finish; and (6) denier (see Notice of Final Determination of Sales at Less Than Fair Value: Certain Polyester Staple Fiber From the Republic of Korea, 65 FR 16880, 16881 (March 30, 2000)).

Date of Sale

In its original questionnaire responses, East Young reported comparison market and U.S. sales using invoice date as the date of sale. Based on the description of the sales process provided by East Young, we note that, in the company's normal commercial practice, the sales invoice is normally issued after the date of shipment. Because the date of shipment almost always precedes the reported date of sale, we preliminarily find that the date of shipment better reflects the date on which East Young established the material terms of sale, in accordance with 19 CFR 351.401(i). Accordingly, we have relied on the date of shipment as the date of sale.

Export Price

For sales to the United States, we calculated EP, in accordance with section 772(a) of the Act, because the merchandise was sold prior to importation by the exporter or producer outside the United States to the first unaffiliated purchaser in the United States and because constructed export price methodology was not otherwise warranted. We calculated EP based on the FOB, C&F, CIF, EDDP (ex-dock duty paid), or CFR packed price to unaffiliated purchasers in the United States. We made deductions, where appropriate, consistent with section 772(c)(2)(A) of the Act, for the following movement expenses: inland freight from the plant to port of exportation, foreign brokerage and handling, wharfage, container tax, bill of lading charge, terminal handling charge, international freight, marine insurance, and U.S. customs duty.

We increased EP, where appropriate, for duty drawback in accordance with section 772(c)(1)(B) of the Act. East Young and Huvis claim to have received duty drawback under the two systems in place in Korea: either the individual-rate system or the fixed-rate system (i.e., the simplified fixed drawback system). In prior investigations and administrative reviews, the Department has examined the individual-rate system and found that the government controls in place enable the Department to examine the criteria under this system for receiving a duty drawback adjustment (i.e., that (1) the rebates received were directly linked to import duties paid on inputs used in the manufacture of the subject merchandise, and (2) there were sufficient imports to account for the rebates received). See Final Results of Antidumping Duty Administrative Review and Partial Termination of Administrative Review: Circular Welded Non-Alloy Steel Pipe From the Republic of Korea, 62 FR 55574, 55577 (October 27, 1997). Huvis provided documentation demonstrating that it received duty drawback under the individual-rate system. We examined this documentation and confirmed that Huvis met the Department's two-prong test for receiving a duty drawback adjustment. Accordingly, we are allowing the full duty drawback adjustment on all of Huvis' U.S. sales.

For all sales by East Young, duty drawback was received under the fixed-rate system. The Department has found that the Korean fixed-rate duty drawback system does not sufficiently link import duties paid to rebates received upon export. Therefore, the fixed-rate system does not, in and of itself, meet the Department's criteria, i.e., that the rebates received were directly linked to import duties paid on inputs used in the manufacture of the subject merchandise, and that there were sufficient imports to account for the rebates received. See id. In this case, East Young was unable to demonstrate successfully that duty drawback which it received under the fixed-rate system met the Department's criteria for a duty drawback adjustment. See East Young Verification Report at 22. Accordingly, for purposes of these preliminary results, we are not granting East Young duty drawback adjustments claimed under the fixed-rate system.

Finally, we made the following company-specific changes to EP. For East Young, we reclassified certain expenses reported by the respondent as direct selling expenses (i.e., wharfage, container tax, bill of lading charge, terminal handling charge) as movement expenses. Also, based on our findings at verification, we recalculated East Young's reported packing costs and corrected the reporting of the U.S. matching control numbers to include a missing characteristic. For further detail on these changes, see Memorandum to the File, “Preliminary Results Calculation Memorandum for East Young Co., Ltd.,” dated June 2, 2003 (“East Young Calculation Memorandum”), which is on file in the CRU.

For Huvis, based on our verification findings, we revised the reporting of product finish and corrected the matching control numbers for certain product types. In addition, we revised foreign brokerage and handling expense, credit expense, and bank fees for certain observations. For further detail on these changes, see Memorandum to the File, “Preliminary Results Calculation Memorandum for Huvis Corporation,” dated June 2, 2003 (“Huvis Calculation Memorandum”), which is on file in the CRU.

Normal Value

A. Selection of Comparison Market

In order to determine whether there was a sufficient volume of sales of certain PSF in the home market to serve as a viable basis for calculating NV, we compared each respondent's home market sales of the foreign like product to its volume of U.S. sales of the subject merchandise, in accordance with section 773(a) of the Act. In the case of Huvis, because the aggregate volume of home market sales of the foreign like product was greater than five percent of the aggregate volume of U.S. sales for the subject merchandise, we determined that the home market provided a viable basis for calculating NV. Therefore, for Huvis, in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the prices at which the foreign like product was first sold for consumption in the exporting country in the usual commercial quantities and in the ordinary course of trade.

East Young reported that its home market sales of PSF during the POR were less than five percent of its sales to the United States. Therefore, East Young did not have a viable home market for purposes of calculating NV. As noted above in the “Background” section, East Young reported that the United Kingdom was its largest third-country market and, consequently, submitted its sales to the United Kingdom for purposes of calculating NV. Pursuant to section 773(a)(1)(B)(ii) of the Act, sales to a particular third-country market may be utilized if (I) the prices in such market are representative; (II) the aggregate quantity of the foreign like product sold by the producer or exporter in the third-country market is five percent or more of the aggregate quantity of the subject merchandise sold in or to the United States; and (III) the Department does not determine that a particular market situation in the third-country market prevents a proper comparison with the U.S. price. Based on our review of these criteria, the Department found that East Young had more than one potential comparison market that satisfied these criteria. See East Young Comparison Market Memo.

In accordance with 19 CFR 351.404(e), in selecting a third-country market where prices in more than one third country satisfy the criteria of section 773(a)(1)(B)(ii) of the Act, the Department will generally select the third country based on the following criteria: (1) the foreign like product exported to a particular third country is more similar to the subject merchandise exported to the United States than is the foreign like product exported to other third countries; (2) the volume of sales to a particular third country is larger than the volume of sales to other third countries; and (3) such other factors as the Department considers appropriate. Regarding the third criterion, the Department has never formally specified “such other factors” that the Department considers appropriate and, therefore, the Department's determination of whether other factors exist is made on a case-by-case basis. See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27358 (May 19, 1997).

We believe that the existence of a dumping finding in a third-country market which includes the merchandise and the company that is being investigated or reviewed by the Department is a relevant factor in determining whether to use such market as a basis for determining NV. Such a scenario signifies a clear reason to believe or suspect that a NV calculated using sales in such market would potentially be understated, thereby undermining the validity and accuracy of our dumping calculations. See also Alloy Piping Products, Inc. v. United States, 201 F. Supp.#2d 1267, 1277 (CIT 2002) (noting that “the goal of accuracy cannot be achieved if Commerce relies upon dumped third country prices to calculate NV”). Accordingly, because the European Union has made a finding of dumping concerning PSF from Korea which includes the PSF currently subject to an order in the United States and to which East Young is subject, we are rejecting the use of the United Kingdom as a third-country comparison market for purposes of determining NV. Instead, for purposes of determining NV, we are relying on East Young's sales to its next largest third-country market for which no finding of dumping exists and which meets the criteria of section 773(a)(1)(B)(ii) of the Act, i.e., Morocco.

B. Level of Trade

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same level of trade (“LOT”) as the EP. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. Id.; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market (i.e., the “chain of distribution”),^[1] including selling functions,² class of customer (“customer category”), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales (i.e., NV based on either home market or third country prices³), we consider the starting prices before any adjustments. See Micron Technology, Inc. v. United States, et. al., 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001) (affirming this methodology).

When the Department is unable to match U.S. sales to sales of the foreign like product in the comparison market at the same LOT as the EP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP sales at a different LOT in the comparison market, where available data show that the difference in LOT affects price comparability, we make a LOT adjustment under section 773(a)(7)(A) of the Act.

Huvis reported that it made direct sales to distributors and end users in both the home market and in the United States, and also to the United States through a trading company. East Young made direct sales to an end user in the comparison market and to distributors and end users in the United States. Each respondent has reported a single channel of distribution and a single level of trade in each market, and has not requested a level of trade adjustment. We examined the information reported by each respondent regarding its marketing process for making the reported comparison market and U.S. sales, including the type and level of selling activities performed and customer categories. Specifically, we considered the extent to which sales process, freight services, warehouse/inventory maintenance, and warranty services varied with respect to the different customer categories (i.e., distributors and end users) within each market and across the markets. Based on our analyses, we found a single level of trade in the United States, and a single, identical level of trade in the comparison market for both respondents. Thus, it was unnecessary to make a LOT adjustment for East Young or Huvis in comparing EP and comparison market prices.

C. Sales to Affiliated Customers

Huvis made sales in the home market to an affiliated customer. To test whether these sales were made at arm's length, we compared the starting prices of sales to the affiliated customer to those of unaffiliated customers, net of all movement charges, direct and indirect selling expenses, discounts, and packing. Where the price to the affiliated customer was on average 99.5 percent or more of the price to Huvis' unaffiliated customers, we determined that the sales made to the affiliated customer were at arm's length and included those sales in our calculation of NV pursuant to 19 CFR 351.403(c).⁴ Where prices to Huvis' affiliated customer were, on average, less than 99.5 percent of the prices to unaffiliated customers, we determined that these sales were not at arm's length and excluded them from our analysis.

D. Cost of Production Analysis

As discussed in the “Background” section above, there were reasonable grounds to believe or suspect that Huvis made sales of the subject merchandise in its comparison market at prices below the COP in accordance with section 773(b) of the Act.

1.Calculation of COP

We calculated the COP on a product-specific basis, based on the sum of Huvis' costs of materials and fabrication for the foreign like product, plus amounts for selling, general and administrative (“SG&A”) expenses, including interest expenses, and the costs of all expenses incidental to placing the foreign like product in a condition packed ready for shipment in accordance with section 773(b)(3) of the Act.

We relied on COP information submitted by Huvis in its cost questionnaire responses, except for the following adjustments. First, we adjusted Huvis' reported cost of manufacturing to account for purchases of terephthalic acid and ethylene glycol from affiliated parties at non-arm's length prices. See Memorandum from Robert Greger to Neal Halper, Director, Office of Accounting, “Cost Adjustments,” dated June 2, 2003 (“Huvis Cost Memorandum”), which is on file in the CRU. Second, we adjusted Huvis' submitted G&A expenses to exclude foreign exchange gains and losses, revenue from the sale of test materials, revenue on further processing and revenue on the sale of raw materials. See Huvis Cost Memorandum. Third, we adjusted Huvis' submitted financial expense ratio to include the total net foreign exchange gains and losses from the financial statements. See Huvis Cost Memorandum.

2. Test of Comparison Market Prices

For Huvis, on a product-specific basis, we compared the adjusted weighted-average COP figures for the POR to the comparison market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether these sales were made at prices below the COP. On a product-specific basis, we compared the COP, consisting of the cost of manufacturing, G&A and interest expenses, to the comparison market prices, less any applicable movement charges, rebates, discounts, and direct and indirect selling expenses. In determining whether to disregard comparison market sales made at prices less than their COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

3. Results of COP Test

Pursuant to section 773(b)(1), where less than 20 percent of Huvis' sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of Huvis' sales of a given product are at prices less than the COP, we determine that the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act.

We found that, for certain specific products, more than 20 percent of Huvis' comparison market sales were at prices less than the COP and, thus, the below-cost sales were made within an extended period of time in substantial quantities. In addition, these sales were made at prices that did not provide for the recovery of costs within a reasonable period of time. Therefore, we excluded these sales and used the remaining sales, if any, as the basis for determining NV, in accordance with section 773(b)(1).

E. Calculation of Normal Value Based on Comparison Market Prices

We calculated NV based on the price to unaffiliated customers. We made adjustments for differences in packing in accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act. We also made adjustments, where appropriate, consistent with section 773(a)(6)(B)(ii) of the Act, for the following movement expenses: inland freight from the plant to the port of exportation, inland freight from the plant to the customer, foreign brokerage and handling, wharfage, container tax, bill of lading charge, terminal handling charge, and international freight. In addition, we made adjustments for differences in circumstances of sale (“COS”) in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS adjustments, where appropriate, by deducting direct selling expenses incurred on comparison market sales (credit expenses, bank charges, less charges, and letter of credit charges) and adding U.S. direct selling expenses (credit expenses, bank charges, and less charges). For East Young, we did not increase NV for duty drawback because, as stated in the “Export Price” section, East Young was unable to demonstrate successfully that duty drawback which it received under the fixed-rate system met the Department's criteria for a duty drawback adjustment.

Finally, we made the following company-specific changes to NV. For East Young, we reclassified certain expenses reported by the respondent as direct selling expenses (i.e., wharfage, container tax, bill of lading charge, terminal handling charge) as movement expenses. Also, based on our findings at verification, we recalculated East Young's reported packing costs. See East Young Calculation Memorandum.

For Huvis, based on our findings at verification, we revised the reporting of product finish and recalculated the matching control numbers for certain product types. We also recalculated credit expenses by revising the short-term interest rate and correcting the credit periods for certain customers who purchase PSF on open payment terms. Finally, based on our verification findings, we made several revisions to the respondent's reported inland freight expenses. See Huvis Calculation Memorandum.

F. Calculation of Normal Value Based on Constructed Value

Section 773(a)(4) of the Act provides that, where NV cannot be based on comparison-market sales, NV may be based on CV. Accordingly, for East Young, when sales of comparison products could not be found because there were no sales of a comparable product, we based NV on CV.

In accordance with sections 773(e)(1), (e)(2)(A), and (e)(3) of the Act, we calculated CV based on the sum of the cost of materials and fabrication for the merchandise, plus amounts for selling expenses, G&A (including interest), profit and U.S. packing costs. We calculated the cost of materials and fabrication based on the methodology described in the “Calculation of COP” section of this notice. In accordance with section 773(e)(2)(A) of the Act, we based selling expenses, G&A, and profit on the amounts incurred and realized by East Young in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the foreign country. For a discussion of the calculation of G&A and interest expense ratios for East Young, see East Young Calculation Memorandum.

For price-to-CV comparisons, we made adjustments to CV in accordance with section 773(a)(8) of the Act. Where we compared CV to EP, we made circumstance-of-sale adjustments.

Preliminary Results of the Review

We determine that the following dumping margins exist for the period May 1, 2001, through April 30, 2002:

Exporter/manufacturer	Weighted-average margin percentage
East Young Co., Ltd.	4.07
Huvis Corporation	0.22 (de minimis)

Any interested party may request a hearing within 30 days of publication of this notice. Any hearing, if requested, will be held 42 days after the publication of this notice, or the first workday thereafter. Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument with an electronic version included.

The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or hearing, within 120 days of publication of these preliminary results.

Assessment Rates and Cash Deposit Requirements

Pursuant to 19 CFR 351.212(b), the Department calculates an assessment rate for each importer of the subject merchandise. The Department will issue appropriate assessment instructions directly to the BCBP within 15 days of publication of the final results of this review. Upon issuance of the final results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will instruct the BCBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered quantity of the merchandise. For assessment purposes, we calculated importer-specific assessment rates for the subject merchandise by aggregating the dumping duties due for all U.S. sales to each importer and dividing the amount by the total entered quantity of the sales to that importer.

The following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of certain polyester staple fiber from Korea 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 Act: (1) the cash deposit rate for the reviewed companies will be the rate established in the final results of this administrative review (except no cash deposit will be required if its weighted-average margin is de minimis, i.e., less than 0.5 percent); (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original less-than-fair-value investigation or a previous review, the cash deposit will continue to be the most recent rate published in the final determination or final results for which the manufacturer or exporter received an individual rate; (3) if the exporter is not a firm covered in this review, the previous review, or the original 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; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous reviews, the cash deposit rate will be 11.35 percent, the “all others” rate established in Notice of Amended Final Determination of Sales at Less Than Fair Value: Certain Polyester Staple Fiber from the Republic of Korea, and Antidumping Duty Orders: Certain Polyester Staple Fiber from the Republic of Korea and Taiwan, 65 FR 33807 (May 25, 2000).

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: June 2, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Footnotes

1.  The marketing process in the United States and comparison markets begins with the producer and extends to the sale to the final user or customer. The chain of distribution between the two may have many or few links, and the respondents' sales occur somewhere along this chain. In performing this evaluation, we considered the narrative responses of each respondent to properly determine where in the chain of distribution the sale appears to occur.

2.  Selling functions associated with a particular chain of distribution help us to evaluate the level(s) of trade in a particular market. For purposes of these preliminary results, we have organized the common selling functions into four major categories: sales process and marketing support, freight and delivery, inventory and warehousing, and quality assurance/warranty services. Other selling functions unique to specific companies were considered, as appropriate.

3.  Where NV is based on CV, we determine the NV LOT based on the LOT of the sales from which we derive selling expenses, general and administrative (“G&A”) expenses, and profit for CV, where possible.

4.  We note that the Department recently adopted a new arm's length test whereby sales to affiliates will be determined to be at arm's length if the prices are, on average, within a range of 98 percent to 102 percent of prices to unaffiliated customers. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002). The Department's new arm's length test is only applicable to investigations and reviews initiated on or after November 23, 2002, which is subsequent to the initiation of this review.