[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36029-36032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17462]
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DEPARTMENT OF COMMERCE
[A-580-812]
Dynamic Random Access Memory Semiconductors of One Megabit or
Above 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.
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SUMMARY: In response to requests from three respondents and one U.S.
producer, the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on dynamic random
access memory semiconductors of one megabit or above from the Republic
of Korea. The review covers two manufacturers/exporters of the subject
merchandise to the United States for the period of May 1, 1994 through
April 30, 1995. The review indicates that there are no dumping margins
for either manufacturer/exporter during this period of review.
If these preliminary results are adopted in our final results of
administrative review, we will instruct the U.S. Customs Service to
assess antidumping duties equal to the difference between the United
States price and the normal value (NV). Interested parties are invited
to comment on these preliminary results. Parties who submit arguments
in this proceeding are requested to submit with the argument (1) a
statement of the issue, and (2) a brief summary of the argument.
EFFECTIVE DATE: July 9, 1996.
FOR FURTHER INFORMATION CONTACT: Thomas F. Futtner, Office of
Antidumping Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230, telephone: (202)
482-3814.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
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 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Background
On May 10, 1993, the Department published in the Federal Register
(58 FR 27250) the antidumping duty order on dynamic random access
memory semiconductors (DRAMS) from the Republic of Korea. On May 10,
1995, the Department published a notice of ``Opportunity to Request an
Administrative Review'' of this antidumping duty order for the period
of May 1, 1994, through April 30, 1995 (60 FR 24831). We received
timely requests for review from three manufacturers/exporters of
subject merchandise to the United States: Hyundai Electronics
Industries Co. (Hyundai), LG Semicon Co., Ltd. (LGS, formerly Goldstar
Electron Co., Ltd.), and Samsung Electronics Co. (Samsung). The
petitioner, Micron Technologies Inc., requested an administrative
review of these same three Korean manufacturers of DRAMS. On June 15,
1995, the Department initiated a review of the above Korean
manufacturers (60 FR 31447). The period of review (POR) for all
respondents was May 1, 1994, through April 30, 1995. The Department has
now conducted this review in accordance with section 751 of the Act.
In addition, on June 26, 1995, we automatically initiated an
investigation to determine if Hyundai and LGS made sales of subject
merchandise below the cost of production (COP) during the POR based
upon the fact that we disregarded sales found to have been made below
the COP in the original less-than-fair-value (LTFV) investigation,
which was the most recent period for which a review had been completed.
Samsung Electronics Co., Ltd. (Samsung), formerly a respondent in
this administrative review, was excluded from the antidumping duty
order on DRAMS from Korea on February 8, 1996. See Final Court Decision
and Partial Amended Final Determination: Dynamic Random Access Memory
Semiconductors of One Megabit and Above From the Republic of Korea, 61
FR 4765 (February 8, 1996). Accordingly, we terminated this review with
respect to Samsung.
[[Page 36030]]
Scope of the Review
Imports covered by the review are shipments of DRAMs of one megabit
or above from the Republic of Korea (Korea). For purposes of this
review, DRAMS are all one megabit and above DRAMS, whether assembled or
unassembled. Assembled DRAMS include all package types. Unassembled
DRAMS include processed wafers, 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; wafers produced in a third
country and assembled or packaged in Korea are not included in the
scope.
The scope of this review includes memory modules. A memory module
is a collection of DRAMS, the sole function of which is memory. Modules
include single in-line processing modules (SIPs), single in-line memory
modules (SIMMs), or other collections of DRAMS, whether unmounted or
mounted on a circuit board. Modules that contain other parts that are
needed to support the function of memory are covered. Only those
modules which contain additional items which alter the function of the
module to something other than memory, such as video graphics adapter
(VGA) boards and cards, are not included in the scope.
The scope of this review also includes video random access memory
semiconductors (VRAMS), as well as any future packaging and assembling
of DRAMS.
The scope of this review also includes removable memory modules
placed on motherboards, with or without a central processing unit
(CPU), unless the importer of motherboards certifies with the Customs
Service that neither it, nor a party related to it or under contract to
it, will remove the modules from the motherboards after importation.
The scope of this review does not include DRAMS or memory modules that
are reimported for repair or replacement.
The DRAMS subject to this review are classifiable under subheadings
8542.11.0001, 8542.11.0024, 8542.11.0026, and 8542.11.0034 of the
Harmonized Tariff Schedule of the United States (HTSUS). Also included
in the scope are those removable Korean DRAMS contained on or within
products classifiable under subheadings 8471.91.0000 and 8473.30.4000
of the HTSUS. Although the HTSUS subheadings are provided for
convenience and customs purposes, the written description of the scope
of this review remains dispositive. The POR is May 1, 1994, through
April 30, 1995.
United States Price
In calculating U.S. price, the Department used constructed export
price (CEP), as defined in section 772(b) of the Act, when the
merchandise was first sold to an unaffiliated U.S. purchaser after
importation.
We calculated CEP based on packed, ex-U.S. warehouse prices to
unrelated customers in the United States. We made deductions, where
appropriate, for discounts, rebates, foreign brokerage and handling,
foreign inland insurance, air freight, air insurance, U.S. duties,
credit expenses, warranty expenses, royalty payments, U.S. commissions,
advertising and promotion expenses, foreign banking charges, U.S.
subsidiary packing, and U.S. and Korean indirect selling expenses,
including inventory carrying costs in accordance with sections
772(c)(2) and 772(d)(1) of the Act. The U.S. price was increased for
packing expense in accordance with section 772(c)(1) of the Act. We
added duty drawback, where applicable, pursuant to section 772(c)(1)(B)
of the Act. Pursuant to section 772(d)(3) of the Act, we reduced the
United States price by the amount of profit to derive the CEP.
For DRAMS that were further manufactured into memory modules after
importation, we deducted all value added in the United States, pursuant
to section 772(e) of the Act. The value added consists of the costs of
the materials, fabrication, and general expenses associated with the
portion of the merchandise further manufactured in the United States,
as well as a proportional amount of profit or loss attributable to the
value added. Profit or loss was calculated by deducting from the sales
price of the memory module all production and selling costs incurred by
the company for the memory module. The total profit or loss was then
allocated proportionately to all components of cost. Only the profit or
loss attributable to the value added was deducted. In determining the
costs incurred to produce the memory module, we included materials,
fabrication, and general expenses, including selling expenses and
interest expenses. No other adjustments were claimed or allowed.
Normal Value
In order to determine whether there was a sufficient volume of
sales of DRAMS in the home market to serve as a viable basis for
calculating NV, we compared respondents' volume of home market sales of
the foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(B) of the Act.
Because the aggregate volume of home market sales of the foreign like
products for all respondents was greater than five percent of the
respective aggregate volume of U.S. sales for the subject merchandise,
we determined that the home market provides a viable basis for
calculating NV for all respondents, in accordance with section
773(a)(1)(C) of the Act.
Because LGS 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''. To conduct this test, we compared
the gross unit prices of sales to related and unrelated customers net
of all movement charges, direct and indirect selling expenses, value-
added tax and packing. Based on the results of that test, we discarded
from LGS' home market database all sales made to a related party where
that related party failed the ``arm's-length'' test.
We disregarded many of Hyundai's and LGS' sales found to have been
made below the COP during the original LTFV investigation, the most
recent period for which a review had been completed. Accordingly, the
Department, pursuant to section 773(b) of the Act, initiated COP
investigations of both respondents for purposes of this administrative
review.
We calculated COP based on the sum of the costs of materials and
fabrication employed in producing the foreign like product, plus
selling, general, and administrative expenses (SG&A), and the cost of
all expenses incidental to placing the foreign like product in
condition packed ready for shipment, in accordance with section
773(b)(3) of the Act. We relied on the home market sales and COP
information provided by respondents in the questionnaire responses.
In accordance with section 773(b)(1) of the Act, in order to
determine whether to disregard home market sales made at prices below
the COP, we examined whether, within an extended period of time, such
sales were made in substantial quantities, and whether such sales were
made at prices which permit the recovery of all costs within a
reasonable period of time.
Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20
percent of home market sales of a given model were at prices less than
the COP, we did not disregard any below-cost sales of that model
because the below-cost sales were not made in ``substantial
quantities.'' Where 20 percent or more of home market sales of a given
model were at prices less than the COP, we found that sales of that
model were
[[Page 36031]]
made in ``substantial quantities,''in accordance with section
773(b)(2)(B) of the Act. We then determined whether the below-cost
sales of a given product are at prices which would not permit recovery
of all costs within a reasonable period of time, in accordance with
section 773(b)(2)(D) of the Act. If we found that sales had been made
in ``substantial quantities'' and were not at prices which would permit
recovery within a reasonable period of time, we disregarded the below-
cost sales, in accordance with section 773(b)(1) of the Act, and based
normal value on constructed value (CV).
In accordance with section 773(e) of the Act, we calculated CV
based on respondents' cost of materials and fabrication employed in
producing the subject merchandise, SG&A and profit incurred and
realized in connection with the production and sale of the foreign like
product, and U.S. packing costs. We used the costs of materials,
fabrication, and G&A as reported in the CV portion of the questionnaire
response. We used the U.S. packing costs as reported in the U.S. sales
portion of respondents' questionnaire responses. We based selling
expenses and profit on the information reported in the home market
sales portion of respondents' questionnaire responses. See Certain
Pasta from Italy; Notice of Preliminary Determination of Sales at Less
Than Fair Value and Postponement of Final Determination, 61 FR 1344,
1349 (January 19, 1996). For selling expenses, we used the average of
above-cost per-unit HM selling expenses weighted by the total quantity
of home market sales sold. For actual profit, we first calculated the
difference between the home market sales value and home market COP, and
divided the difference by the home market COP. We then multiplied this
percentage by the COP for each U.S. model to derive an actual profit.
For both respondents, the Department relied on the submitted COP
and CV information. There were no adjustments to respondents' reported
COP and CV data.
For price-to-price comparisons, we based NV on the price at which
the foreign like product is first sold for consumption in the exporting
country, in the usual commercial quantities and in the ordinary course
of trade, and to the extent practicable, at the same level of trade, as
defined by section 773(a)(1)(B)(i) of the Act. We compared the U.S.
prices of individual transactions to the monthly weighted-average price
of sales of the foreign like product. We calculated NV based on
delivered prices to unrelated customers and, where appropriate, to
related customers in the home market. In calculating NV, we made
adjustments, where appropriate, for inland freight, inland insurance,
discounts, rebates, and Korean brokerage and handling charges.
Both respondents only had CEP sales during the POR. For comparisons
to CEP sales, we reduced NV, where appropriate, for home market credit
expenses, advertising expenses, royalty expenses, and bank charges in
accordance with section 773(a)(6) of the Act, due to differences in
circumstances of sale. We also reduced NV by packing costs incurred in
the home market, in accordance with section 773(a)(6)(B)(i) of the Act.
In addition, we increased NV for U.S. packing costs, in accordance with
section 773(a)(6)(A) of the Act. We also made further adjustments, when
applicable, to account for differences in physical characteristics of
the merchandise, in accordance with 19 CFR 353.57 of the Department's
regulations.
Level of Trade and CEP Offset
As set forth in section 773(a)(2)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act, at 829-831, to the extent practicable, the Department
will calculate NV based on sales at the same level of trade as the U.S.
sale. When the Department is unable to find sale(s) in the comparison
market at the same level of trade as the U.S. sale(s), the Department
may compare sales in the U.S. and foreign markets at a different level
of trade.
In accordance with section 773(a)(7)(A) of the Act, if we compare a
U.S. sale at one level of trade to normal value sales at a different
level of trade, the Department will adjust the NV to account for the
difference in level of trade if two conditions are met. First, in order
to determine that there are distinct levels of trade, there must be
differences between the actual selling functions performed by the
seller at the level of trade of the U.S. sale and at the level of trade
of the NV sale. Second, the differences must affect price comparability
as evidenced by a pattern of consistent price differences between sales
at the different levels of trade in the market in which normal value is
determined. When constructed export price is applicable, section
773(a)(7)(B) of the Act establishes the procedures for making a
constructed export price offset when: (1) NV is at a different level of
trade, and (2) the data available do not provide an appropriate basis
for a level of trade adjustment. Also, in accordance with section
773(a)(7)(B), to qualify for a CEP offset, the level of trade in the
home market must constitute a more advanced stage of distribution than
the level of trade of the CEP sales.
In order to identify levels of trade, the Department must review
information concerning selling functions of the manufacturer/exporter.
We reviewed the questionnaire responses of both respondents to
establish whether there were sales at different levels of trade based
on selling functions performed and services offered to each customer or
customer class. For both respondents, we identified one level of trade
in the home market with direct sales by the parent corporation to the
domestic customer. These direct sales were made by both respondents to
original equipment manufacturers (OEMs) and to distributors. In
addition, all sales, whether made to OEM customers or to distributors,
included the same selling functions. For the U.S. market, all sales for
both respondents were reported as CEP sales. The level of trade of the
U.S. sales is determined for the sale to the affiliated importer rather
than the resale to the unaffiliated customer. We examined the selling
functions performed by the Korean companies for U.S. CEP sales and
preliminarily determine that they are at a different level of trade
from the Korean companies' home market sales because the Korean
companies engaged in fewer selling functions for the adjusted CEP sales
than for their home market sales. For instance, the Korean companies
did not engage in any general promotion, marketing activities, or price
negotiations for U.S. sales.
Because we compared CEP sales to home market sales at a different
level of trade, we examined whether a level of trade adjustment may be
appropriate. In this case, both respondents only sold at one level of
trade in the home market; therefore, there is no basis upon which
either respondent can demonstrate a consistent pattern of price
differences between levels of trade. Further, we do not have
information which would allow us to examine pricing patterns based on
the respondents' sales of other products and there is no other record
information on which such an analysis could be based. Because the data
available do not provide an appropriate basis for making a level of
trade adjustment but the level of trade in the HM is a more advanced
stage of distribution than the level of trade of the CEP sales, a CEP
offset is appropriate. Both respondents claimed a CEP offset. We
applied the CEP offset to normal value or constructed value, as
appropriate. The level of trade
[[Page 36032]]
methodology employed by the Department in these preliminary results of
review is based on the facts particular to this review. The Department
will continue to examine its policy for making level of trade
comparisons and adjustments for its final results of review.
Because both respondents made sales at differing levels of trade in
the home market and in the United States, and because we determined it
was not possible to quantify the price differences resulting from the
differing levels of trade, we made a CEP offset to NV for both
respondents pursuant to section 773(a)(7)(B) of the Act. The CEP offset
consisted of an amount equal to the lesser of the weighted-average U.S.
indirect selling expenses and U.S. commissions or home market indirect
selling expenses. No other adjustments were claimed or allowed.
Fair Value Comparisons
To determine whether sales of DRAMS by respondents to the United
States were made at less than fair value, we compared the CEP to the
NV, as described in the ``United States Price'' and ``Normal Value''
sections of this notice. In accordance with section 777A(d)(2), we
calculated monthly weighted-average prices for NV and compared these to
individual U.S. transactions.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margins exist for the POR:
------------------------------------------------------------------------
Percent
Manufacturer/exporter margin
------------------------------------------------------------------------
Hyundai Electronic Industries, Inc........................... 0.00
LG Semicon Co., Ltd.......................................... 0.00
------------------------------------------------------------------------
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between United States price and NV may vary from the percentages stated
above. The Department will issue appraisement instructions directly to
Customs. The final results of this review shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
the determination and for future deposits of estimated duties.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of these administrative reviews
for all shipments of DRAMs from Korea entered, or withdrawn from
warehouse, for consumption on or after publication date of the final
results of these administrative reviews, as provided by section
751(a)(1) of the Act: (1) The cash deposit rates for Hyundai and LGS,
because their weighted-average margins were de minimis, will be zero
percent; (2) for merchandise exported by manufacturers or exporters not
covered in this review but covered in the original LTFV 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 a company-specific rate;
(3) if the exporter is not a firm covered in this review, a previous
review, or the original investigation, but the manufacturer is, the
cash deposit rate will be that established for the manufacturer of the
merchandise in the final results of the most recent review, or the LTFV
investigation; 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 3.85 percent, the ``all-others'' rate established in the LTFV
investigation. These deposit requirements, when imposed, 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 of this notice. 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(b) 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 27, 1996/
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-17462 Filed 7-8-96; 8:45 am]
BILLING CODE 3510-DS-P
