[Federal Register Volume 59, Number 130 (Friday, July 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16608]
[[Page Unknown]]
[Federal Register: July 8, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[A-580-807]
Polyethylene Terephthalate Film, Sheet, and Strip From the
Republic of Korea; Preliminary Results of Antidumping Duty
Administrative Review
AGENCY: Import Administration/International Trade Administration/
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
-----------------------------------------------------------------------
SUMMARY: In response to requests from three respondents, three U.S.
producers, and one interested party, the Department of Commerce (the
Department) has conducted an administrative review of the antidumping
duty order on polyethylene terephthalate film, sheet, and strip from
the Republic of Korea. The review covers four manufacturers/exporters
of the subject merchandise to the United States generally for the
period November 30, 1990 through May 31, 1992.
We have preliminarily determined that sales have been made below
the foreign market value (FMV). If these preliminary results are
adopted in our final results of administrative review, we will instruct
U.S. Customs to assess antidumping duties equal to the difference
between the United States price (USP) and the FMV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: July 8, 1994.
FOR FURTHER INFORMATION CONTACT: Roy F. Unger, Jr., or Thomas F.
Futtner, 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) 482-0651/3814.
SUPPLEMENTARY INFORMATION:
Background
On June 5, 1991, the Department of Commerce published in the
Federal Register (56 FR 25660) the antidumping duty order on
polyethylene terephthalate (PET) film from the Republic of Korea. On
June 8, 1992, the Department published (57 FR 24244) a notice of
``Opportunity to Request an Administrative Review'' of this antidumping
duty order for the period November 30, 1990, through May 31, 1992 (56
FR 25660). We received timely requests for review from Cheil
Synthetics, Inc. (Cheil), SKC Limited (SKC), Kolon Industries, Inc.
(Kolon), and STC Corporation (STC). The petitioners, E.I. DuPont
Nemours & Co., Inc., Hoechst Celanese Corporation and ICI Americas,
Inc., requested an administrative review for the same four Korean
manufacturers/exporters of PET film.
For most of the respondents the review period covers November 30,
1990 through May 31, 1992, on July 22, 1992 (57 FR 32521). Because
Cheil was determined to have a de minimis margin in the Preliminary
Determination of Sales at Less-Than-Fair-Value (LTFV) (56 FR 16305),
Cheil's period of review (POR) begins on April 22, 1991, when
suspension of its merchandise was first ordered, and runs through May
31, 1992. The Department has now conducted this review in accordance
with section 751 of the Tariff Act of 1930, as amended (the Act).
Scope of the Review
Imports covered by the review are shipments of all gauges of raw,
pretreated, or primed polyethylene terephthalate film, sheet, and
strip, whether extruded or coextruded. The films excluded from this
review are metallized films and other finished films that have had at
least one of their surfaces modified by the application of a
performance-enhancing resinous or inorganic layer of more than 0.00001
inches (0.254 micrometers) thick. Roller transport cleaning film which
has at least one of its surfaces modified by the application of 0.5
micrometers of SBR latex has also been ruled as not within the scope of
the order.
PET film is currently classifiable under Harmonized Tariff Schedule
(HTS) subheading 3920.62.00.00. The HTS subheading is provided for
convenience and for U.S. Customs purposes. The written description
remains dispositive as to the scope of the product coverage. The POR
was November 30, 1990, through May 31, 1992, for SKC, Kolon, and STC.
Cheil's POR was April 22, 1991, through May 31, 1992.
United States Price
In calculating USP, the Department treated respondents' sales as
purchase price (PP), as defined in section 772 of the Act, when the
merchandise was sold to unrelated U.S. purchasers prior to importation.
The Department treated respondents' sales as exporter's sale price
(ESP), as defined in section 772 of the Act, when the merchandise was
sold to unrelated U.S. purchasers after importation.
PP was based on ex-factory, f.o.b. Korean port, f.o.b. customer's
specific delivery point, c.i.f. U.S. port, or packed and delivered
price to unrelated purchasers in the United States. We made
adjustments, where applicable, for Korean and U.S. brokerage and
handling, terminal handling charges, Korean and U.S. inland freight,
ocean freight, marine insurance, containerization expenses and taxes,
sample movement charges, return movement charges, discounts, wharfage
expense, consolidated freight charges, and U.S. duties in accordance
with section 772(d)(2) of the Act.
ESP was based on ex-warehouse, f.o.b. customer's specific delivery
point, or packed and delivered prices to unrelated purchasers in the
United States. We made adjustments, where applicable, for Korean and
U.S. brokerage and handling, Korean and U.S. inland freight, ocean
freight, marine insurance, consolidated freight charges, miscellaneous
handling charges, containerization expenses and taxes, wharfage
expenses, warranty expenses, rebates, discounts, U.S. duties, U.S.
commissions, U.S. credit expense and indirect selling expenses (which
include inventory carrying costs and pre-sale warehousing expenses), in
accordance with section 772(d)(2) of the Act.
For ESP sales, we deducted indirect selling expenses which included
U.S. inventory carrying expenses and U.S. pre-sale warehousing
expenses. We allowed an ESP offset to FMV, where appropriate, amounting
to the lesser of the weighted-average total of home market indirect
selling expenses, or the total U.S. indirect selling expenses in
accordance with 19 CFR 353.56(b)(2).
For both PP and ESP, we added duty drawback, where applicable,
pursuant to section 772(d)(1)(B) of the Act.
Kolon paid an unrelated insurance company a percentage of sales
value on all of its sales to U.S. customers. During verification, we
discovered that Kolon reported the incorrect rate for this insurance.
We corrected Kolon's reported U.S. inland insurance expense to reflect
the correct rate.
We adjusted USP for taxes in accordance with our practice as
outlined in Siliconmanganese from Venezuela, Preliminary Determination
of Sales at Less Than Fair Value, 59 FR 31204, June 17, 1994.
With respect to subject merchandise to which value was added in the
United States by SKC and STC prior to sale to unrelated U.S. customers,
we deducted any increased value in accordance with section 772(e)(3) of
the Act. The value added consists of the cost associated with the
production and sale of the further-processed merchandise, other than
the cost associated with the imported PET film, and a proportional
amount of profit or loss related to the value added. Profit or loss was
calculated by deducting from the sales price of the further-processed
merchandise all production and selling costs incurred by SKC and STC in
the value-added process. The profit or loss was then allocated
proportionally to all components of cost.
No other adjustments were claimed or allowed.
Foreign Market Value
In order to determine whether there were sufficient sales of PET
film in the home market to serve as a viable basis for calculating
foreign market value (FMV), we compared the volume of home market sales
of PET film to the volume of third country sales of PET film, in
accordance with section 773(a)(1) of the Act. All four respondents had
viable home markets with respect to sales of PET film made during the
POR.
In general, the Department relies on monthly weighted-average
prices in the calculation of FMV. However, in accordance with the test
described in the following paragraph, we determined that the annual
weighted-average FMVs did not vary significantly from the monthly
weighted-average FMVs. Therefore, in accordance with section 353.44 of
the Department's regulations, we calculated FMVs for each model based
on annual weighted-average prices.
To determine whether a POR weighted-average price was
representative of the transactions under consideration, we performed a
three-step test. See Antifriction Bearings from Japan, et al.; Final
Results of Review, 58 FR 42289 (1993). First, we compared the monthly
weighted-average home market price for each model with the weighted-
average POR price of that model. We calculated the proportion of each
model's sales whose POR weighted-average price did not vary more than
plus or minus ten percent from the monthly weighted-average prices. We
did this test for each model of PET film. Second, we compared the
volume of sales of all models of PET film whose POR weighted-average
price did not vary more than plus or minus ten percent from the monthly
weighted-average price with the total volume of sales of PET film. If
the POR weighted-average price of at least 90 percent of sales of PET
film did not vary more than plus or minus ten percent from the monthly
weighted-average price, we considered the POR weighted-average price to
be representative of the transactions under consideration. Third, we
tested whether there was any correlation between fluctuations in price
and time for each model. Where the correlation coefficient was less
than 0.05 (where a coefficient approaching 1.0 indicates a direct
relation between price and time), we concluded that there was no
significant relation between price and time.
Based on this analysis, we determined that the POR weighted-average
price of sales of PET film by respondents did not vary more than plus
or minus ten percent from the monthly weighted-average price,
indicating that the POR weighted-average price was representative of
the transactions under consideration. Additionally, we determined that
there was no significant relation between price and time during the
POR. Therefore, we used the POR weighted-average price for purposes of
our calculation.
Because SKC and STC made some home market sales to related parties
during the POR we tested these sales to ensure that, on average, the
related party sales were at ``arms-length.'' See Antifriction Bearings
from France et al.; Final Results of Review, 57 FR 28388 (1992). We
determined that SKC's home market sales of PET film to related parties
were on average at ``arms-length'', while STC's home market sales of
PET film to related parties on average were not at ``arms-length.''
Accordingly, we did not use STC's related party home market sales for
comparison to U.S. sales.
Because many of Cheil's and SKC's sales were determined to have
been made below cost of production (COP) during the original LTFV
investigation, the Department, pursuant to section 773(b) of the Act,
initiated COP investigations of Cheil and SKC for purposes of this
administrative review. Furthermore, based on an allegation by
petitioners, we also determined that reasonable grounds existed to
believe or suspect that sales below cost had been made by Kolon and STC
of PET film. Thus, we initiated a COP investigation with respect to
Kolon and STC.
We performed a model-specific cost of production test, in which we
examined whether each home market sale was priced below the
merchandise's cost of production. The Department defines the cost of
production as the sum of direct material, direct labor, variable and
fixed factory overhead, general expenses, and packaging. For each
model, we compared this sum to the reported home market unit price, net
of price adjustments and movement expenses. In accordance with Section
773(b) of the Tariff Act, we also examined whether the home market
sales of each model were made at prices below their cost of production
in substantial quantities over an extended period of time, and whether
such sales were made at prices which would permit recovery of all costs
within a reasonable period of time in the normal course of trade.
For each model where less than ten percent, by quantity, of the
home market sales during the period of review were made at prices below
the cost of production, we included all sales of that model in the
computation of FMV. For each model where ten percent or more, but less
than ninety percent, of the home market sales during the period of
review were priced below the merchandise's cost of production, we
excluded from the calculation of FMV those home market sales which were
priced below the merchandise's cost of production, provided that these
below-cost sales were made over an extended period of time. For each
model where ninety percent or more of the home market sales during the
period of review were priced below the cost of production, we
disregarded all sales of that model from our analysis.
In order to determine whether below-cost sales had been made over
an extended period of time, we compared the number of months in which
below-cost sales occurred for each product to the number of months
during the period of review in which each model was sold. If a product
was sold in fewer than three months during the review period, we did
not exclude the below-cost sales unless there were below-cost sales in
each month of sale. If a product was sold in three or more months, we
did not exclude the below-cost sales unless there were below-cost sales
in at least three months during the period of review.
We calculated the COP for the merchandise using Cheil's, SKC's,
Kolon's and STC's cost of manufacturing (COM) and general expenses, in
accordance with section 353.51(c) of the Department's regulations (19
CFR 353.51(c)(1993)). Respondents' COM consisted of materials, labor,
and overhead costs incurred during film manufacturing. General expenses
consisted of general and administrative expenses as well as net
interest expenses normally included in general expenses for COP. In our
analysis, we discovered that Cheil did not include home market packing
costs in its calculation of COP. Accordingly, we added Cheil's reported
home market packing costs to each model's COP.
Based upon data collected during verification of Kolon and STC, we
made the following cost adjustments: We reallocated STC's technical
revenues offset against STC's reported general expenses instead of
against STC's materials cost, as reported. We readjusted the reported
labor costs to include all those labor costs actually reported in the
general ledger. We reallocated STC's reported variable overhead cost on
the basis of actual PET film output rather than relying on the reported
basis of production capacity. We disallowed STC's claim for a start-up
costs adjustment because the costs were not actually reflected in STC's
financial records. We readjusted STC's materials costs to reflect arms-
length prices paid to unrelated parties for raw PET chips. For Kolon,
we corrected errors in reported interest rate ratios contained in
Kolon's net interest expense reported for CV purposes.
When all home market sales of a such or similar product in the
contemporaneous month (as identified in the model match) were excluded
from our analysis because the home market sales were priced below the
cost of production, or when no home market sales of such or similar
merchandise were found, then we used the constructed value of the
merchandise sold in the United States as the basis for FMV. We
calculated the constructed value, in accordance with Section 773(e) of
the Tariff Act, as the sum of the cost of manufacture of the product
sold in the United States, home market selling, general and
administrative (SG&A) expenses, and home market profit. The cost of
manufacture of the product sold in the United States is the sum of
direct material, direct labor, and variable and fixed factory overhead
expenses. For home market SG&A expenses, we used the larger of the
actual SG&A expenses reported by the respondents or ten percent of the
cost of manufacture, the statutory minimum for foreign SG&A expenses.
For home market profit, we used the larger of the actual profit
reported by the respondents or the statutory minimum of eight percent
of the sum of cost of manufacture and SG&A expenses.
We calculated FMV based on delivered prices to unrelated customers
and, where appropriate, to related customers in the home market. In
calculating FMV, we made adjustments, where appropriate, for rebates,
Korean inland freight and insurance, Korean brokerage and loading
charges, home market credit expenses. We adjusted for Korean
consumption tax in accordance with our decision in Siliconmanganese
from Venezuela, Preliminary Determination of Sales at Less Than Fair
Value, 59 FR 31204, June 17, 1994. We deducted home market packing
costs from the home market price and added U.S. packing costs to the
FMV. We also made, where applicable, difference-in-merchandise
adjustments. For SKC, we added a duty adjustment where the price SKC
reported did not include import duties.
Due to a clerical error, Kolon incorrectly reported its home market
freight expense in its questionnaire response. During verification, we
determined the actual home market freight expense charge and adjusted
Kolon's home market sales data accordingly.
For comparison to PP sales, pursuant to 19 CFR 353.56, we made
circumstance-of-sale adjustments to FMV, where appropriate, for post-
sale warehousing expenses, Korean and U.S. bank charges, U.S. credit
expenses, and U.S. warranty expenses. We made further adjustments,
where appropriate, for U.S. commissions in accordance with 19 CFR
353.56(a)(2). Where commissions were paid on U.S. sales and not paid on
home market sales, we allowed an offset to FMV amounting to the lesser
of the weighted-average home market indirect selling expenses, or the
U.S. commissions in accordance with 19 CFR 353.56(b) of the
regulations.
For comparison to ESP sales, we allowed an ESP offset to FMV,
amounting to the lesser of the weighted-average total of home market
indirect selling expenses, or the total U.S. indirect selling expenses
in accordance with 19 CFR 353.56(b)(2).
No other adjustments were claimed or allowed.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following margins exist for the periods indicated:
------------------------------------------------------------------------
Manufacturer exporter Percent margin
------------------------------------------------------------------------
November 30, 1990 through May 31, 1992:
SKC Limited............................... 1.03.
Kolon Industries.......................... 0.44 (de minimis).
STC Corporation........................... 5.86.
April 22, 1991 through May 31, 1992:
Cheil Synthetics.......................... 0.05 (de minimis).
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries.
Individual differences between United States price and foreign
market value may vary from the percentages stated above. Upon
completion of the review the Department will issue appraisement
instructions on each exporter directly to the U.S. Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of polyethylene terephthalate film, sheet, and strip,
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 those
rates established in the final results of this review. Since the rates
for Cheil and Kolon were de minimis, there will be no cash deposits on
shipments from these firms of subject merchandise;
(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 in 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; and
(4) If neither the exporter nor the manufacturer is a firm covered
in this or any previous review conducted by the Department, the cash
deposit rates will be 4.82%, the all other rate established in the LTFV
investigation.
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
Interested parties may request disclosure within five days of the
date of publication of this notice, and may request a hearing within
ten days of the date of publication. Any hearing, if requested, will be
held as early as convenient for the parties but not later than 44 days
after the date of publication or the first work day thereafter. Case
briefs or other written comments from interested parties may be
submitted not later than 30 days after the date of publication of this
notice. Rebuttal briefs and rebuttal comments, limited to issues in the
case briefs, may be filed not later than 37 days after the date of
publication. The Department will publish the final results of this
administrative review, including the results of its analysis of issues
raised in any such written comments.
This notice serves as a preliminary 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 administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: June 29, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-16608 Filed 7-7-94; 8:45 am]
BILLING CODE 3510-DS-P
