[Federal Register Volume 63, Number 170 (Wednesday, September 2, 1998)]
[Notices]
[Pages 46759-46776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23669]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-008]
Color Television Receivers From the Republic of Korea; Final
Results of Changed Circumstances Antidumping Duty Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of affirmative final determination of changed
circumstances antidumping duty review and revocation of order in part.
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SUMMARY: This changed circumstances review covers one manufacturer,
Samsung Electronics Corporation. The International Brotherhood of
Electrical Workers; the International Union of Electronic, Electrical,
Salaried, Machine and Furniture Workers (AFL-CIO); and the Industrial
Union Department (AFL-CIO) are collectively the ``petitioners.''
On December 31, 1997, the Department of Commerce published the
preliminary results of the changed circumstances review of the
antidumping duty order on color television receivers from the Republic
of Korea. At that time, the Department preliminarily determined to
partially revoke this antidumping duty order with respect to Samsung
Electronics Corporation. Based on our analysis of the record evidence,
including interested party comments, we have determined that changed
circumstances warrant revocation of the antidumping duty order on color
television receivers from the Republic of Korea, as it applies to
Samsung Electronics Corporation.
EFFECTIVE DATE: September 2, 1998.
[[Page 46760]]
FOR FURTHER INFORMATION CONTACT: Irene Darzenta Tzafolias or Mark
Manning, Office of AD/CVD Enforcement, Office 4, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-0922 and 482-3936, respectively.
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
regulations as codified at 19 CFR Part 353 (April 1, 1997). Although
the new regulations do not apply in these final results, they are
cited, where appropriate, as a statement of the Department's current
practice. See 62 FR 27296, 27378 (May 19, 1997).
Background
On April 30, 1984, the Department of Commerce (the Department)
published in the Federal Register (49 FR 18336) the antidumping duty
order on color television receivers (CTVs) from the Republic of Korea
(Korea).
On July 20, 1995, the Department received a request by Samsung
Electronics Corporation (Samsung) for a changed circumstances review to
consider revocation of the antidumping duty order, as it applies to
Samsung. The petitioners opposed this request. In its revocation
request, Samsung cited three reasons why the Department should revoke
the antidumping duty order. First, the timing of certain court
decisions on previous administrative reviews of this order prevented
Samsung from filing in a timely manner for revocation under Section
751(a) of the Act. Second, Samsung was found not to be dumping CTVs in
the United States during the six consecutive years in which Samsung had
shipments from Korea. Third, Samsung has not shipped CTVs to the United
States since early 1991. Zenith Electronics Corporation, a domestic
interested party, and petitioners, filed objections to Samsung's
request on August 4 and August 11, 1995, respectively.
Pursuant to Samsung's request, the Department initiated this
changed circumstances review on June 24, 1996. See Color Television
Receivers From the Republic of Korea: Initiation of Changed
Circumstances Antidumping Duty Administrative Review and Consideration
of Revocation of Order (in Part) (61 FR 32426, June 24,
1996).1 On July 16, 1996, the Department issued to the
parties a draft changed circumstances questionnaire for comment. We
received comments from petitioners and Samsung on July 30, 1996, and
August 6, 1996, respectively. On December 6, 1996, the Department
issued a changed circumstances questionnaire to Samsung, who filed its
response on February 24, 1997. Petitioners submitted their comments on
Samsung's questionnaire response on June 17, 1997. Subsequently, both
petitioners and Samsung submitted several additional comments.
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\1\ In a separate but related proceeding, the Department
investigated whether Samsung and other Korean television producers
were circumventing the antidumping duty order on CTVs from Korea
through their production facilities in Mexico. Pursuant to an
application filed by petitioners on August 11, 1995, the Department
initiated the anti-circumvention inquiry on January 19, 1996 (61 FR
1339, January 19, 1996). On December 31, 1997, pursuant to
petitioners' request, the Department terminated the anti-
circumvention inquiry with respect to all companies.
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On December 31, 1997, the Department issued its affirmative
preliminary results in this changed circumstances review of the
antidumping order on CTVs from Korea, partially revoking this order
with respect to Samsung. See Color Television Receivers From Korea;
Preliminary Results of Changed Circumstances Antidumping Duty
Administrative Review (62 FR 68256, December 31, 1997). Petitioners,
Samsung, and LG Electronics (LGE) submitted comments to the Department
concerning the preliminary determination on February 13, 1998 and March
6, 1998. A public hearing was held on March 18, 1998, to allow
interested parties the opportunity to express their views directly to
the Department. Additional information was submitted on March 30, 1998,
and comments were filed by petitioners and Samsung on April 7, 1998,
and May 8, 1998, respectively. This review was conducted in accordance
with Section 751(b) of the Act.
Scope of Order
Imports covered by this order include CTVs, complete and
incomplete, from the Republic of Korea. This merchandise is
classifiable under the 1997 Harmonized Tariff Schedule (HTS) as item
8528.12.04, 8528.12.08, 8528.12.12, 8528.12.16, 8528.12.20, 8528.12.24,
8528.12.28, 8528.12.32, 8528.12.36, 8528.12.40, 8528.12.44, 8528.12.48,
8528.12.52, 8528.12.56, 8528.12.62, 8528.12.64, 8528.12.68, 8528.12.72,
8528.12.76, 8528.12.80, 8528.12.84, and 8528.12.88. The order covers
all CTVs regardless of HTS classification. The HTS subheadings are
provided for convenience and for customs purposes. The Department's
written description of the scope of the order remains dispositive.
Scope of the Review
Imports covered by this review pertain to merchandise as defined by
the ``Scope of the Order'' section above that was produced by Samsung.
Intent to Revoke In Part
Section 751(d) of the Act provides that the Department may revoke
an antidumping order, in whole or in part, after conducting a review
under Section 751(a) or 751(b). 19 U.S.C. 1675(d)(1) (1995). This
changed circumstances review is being conducted pursuant to Section
751(b) of the Act. The Department's regulations at 19 CFR 353.25(d)
permit the Department to conduct a changed circumstances review under
19 CFR 353.22(f) when there is sufficient information to warrant a
review. We stated in the initiation notice that the unique
circumstances presented by Samsung in this proceeding constitute
changed circumstances sufficient to warrant a review under Section
751(b) of the Act and 19 CFR 353.22(f).
Although this review is being conducted pursuant to Sections
353.25(d) and 353.22(f) of the Department's regulations, for guidance
we have relied upon the criteria contained in Section 353.25(a) as a
starting point from which to analyze the case, in addition to any other
factors raised by the parties. Section 353.25(a) states that the
Secretary may revoke an order in part if the Secretary concludes that
(1) a manufacturer or reseller covered at the time of revocation by the
order has sold the subject merchandise at not less than foreign market
value (LTFMV) for a period of at least three consecutive years, (2) it
is not likely that those persons will in the future sell the
merchandise at LTFMV, and (3) the manufacturer or reseller agrees in
writing to the immediate reinstatement of the order if the Secretary
concludes that the manufacturer or reseller, subsequent to the
revocation, sold the merchandise at LTFMV. In the preliminary
determination, the Department found that Samsung met all three of the
above requirements. At that time, we encouraged interested parties to
submit comments concerning whether Samsung was not likely to sell the
subject merchandise at LTFMV in the future.
[[Page 46761]]
With respect to the issue of likelihood, in past cases, we have
considered ``such other factors as conditions and trends in the
domestic and home market industries, currency movements, and the
ability of the foreign entity to compete in the U.S. marketplace
without LTFV sales.'' See Brass Sheet and Strip from Germany; Final
Results of Antidumping Duty Administrative Review and Determination Not
to Revoke in Part (61 FR 49727, 49730; September 23, 1996) (Brass Sheet
and Strip) and Notice of Final Results of Antidumping Duty
Administrative Review and Determination Not To Revoke Order In Part:
Dynamic Random Access Memory Semiconductors of One Megabyte or Above
From the Republic of Korea (62 FR 39809, 39810; July 24, 1997) (DRAMS).
Other criteria the Department has considered in past cases include the
existence of trade restrictions on the sale of the foreign like product
in third world countries and the industry's development of new
technologies in its analysis of the likelihood of future dumping. See,
e.g., Television Receivers, Monochrome and Color, from Japan; Final
Results of Antidumping Duty Administrative Review and Determination Not
To Revoke in Part (54 FR 35517, 35519; August 28, 1989) (TVs from
Japan). As stated in TVs from Japan, the market forces described above
are important in cases, such as this one, where there have been no
shipments of subject merchandise for several years, and there is
therefore little information regarding a respondent's current pricing
practices with regard to the subject merchandise. See TVs from Japan at
35519.
Based upon our analysis of the information on the record of this
case, Samsung has not sold the subject merchandise at LTFMV for a
period of six consecutive years (i.e., April 1, 1985 through March 31,
1991). We consider this to be an important indicator of Samsung's
expected pricing practices in the future. In addition, Samsung has
agreed in writing to its immediate reinstatement in the order if the
Secretary concludes that Samsung, subsequent to the revocation, sells
the merchandise at LTFMV.
With respect to whether Samsung is not likely to resume dumping, we
have examined the information submitted after issuing the preliminary
results. We continue to find that the record supports the conclusion
that Samsung is not likely to sell the subject merchandise at LTFMV in
the future. As more fully explained below, our analysis of whether
Samsung is not likely to resume selling CTVs in the U.S. market at
LTFMV focuses on conditions and trends in the U.S. and Korean CTV
markets, the effects of the Asian economic downturn on Samsung, the
movements of the Korean won and other Southeast Asian currencies,
Samsung's ability to compete in the United States without LTFMV sales,
trade restrictions concerning CTVs in third countries, and the
potential impact of new technologies, specifically high definition
television.
Analysis of Comments Received
Part I--General Comments
Comment 1: Legal Entitlement to a Changed Circumstances Review
Petitioners claim that Samsung missed the opportunity to request
revocation under 19 CFR 353.25(b) and is therefore ineligible for
revocation pursuant to a changed circumstances review under Section
751(b) of the Act and Section 353.25(d) of the Department's
regulations. Petitioners argue that the statute and the regulations
provide two methods to request revocation. Pursuant to Section 751(a)
and 19 CFR 353.25(a)-(c), the Department may consider a respondent's
request for revocation if the respondent has made sales at LTFMV for
three consecutive years in the immediately preceding review periods.
The Department also will consider a request for revocation pursuant to
Section 751(b) and 19 CFR 353.22(f) and 353.25(d) based on other
``changed circumstances.''
Petitioners claim that, in this case, Samsung had the opportunity
to request revocation pursuant to Section 751(a) and 19 CFR 353.25(a)-
(c), but failed to make such a request in a timely manner.
Specifically, petitioners argue that Samsung should have requested
revocation in April 1991 for the eighth review, by which time the
Department had already published its final results in the fourth and
fifth reviews and had determined that Samsung's dumping margins were de
minimis. Furthermore, despite the outcome of litigation in the fourth
review, the Department announced in the final results of the fifth
review, published in March 1991, that it did not agree with the Court
of International Trade's decision in Daewoo Electronics Co. v. United
States, 13 CIT 253, 712 F. Supp. 931 (1989) (Daewoo), and was
consequently calculating its margins for Samsung pursuant to its
standard practice. Based upon the Department's standard commodity tax
methodology, Samsung was able to obtain de minimis margins in the
fourth and fifth reviews. Since the final results of these reviews were
known to Samsung in March 1991, coupled with the Department's
announcement that it did not intend to follow the lower court's
decision in Daewoo, petitioners argue that Samsung clearly had the
basis to certify that it would have no sales at LTFMV in the eighth
review. According to petitioners, Samsung should have requested
revocation in April 1991, but it failed to do so.
Petitioners also argue that although the final results of the sixth
and seventh reviews were not published by the Department until 1996,
this should not have prevented Samsung from requesting revocation in
April 1991 for the eighth review. If Samsung had done so, petitioners
argue, the Department would have known in April 1991 that the results
of the sixth and seventh reviews could have an impact on whether
Samsung would be allowed to obtain revocation in the eighth review.
Presumably, the petitioners reason, the Department could have changed
its administrative process and conducted the sixth, seventh, and eighth
reviews simultaneously to determine whether Samsung had three
consecutive years of no dumping.
Petitioners claim that because Samsung missed its opportunity to
request revocation pursuant to Section 751(a) and 19 CFR 353.25(a)-(c),
it is not eligible for revocation through a changed circumstances
review pursuant to Section 751(b) and 19 CFR 353.22(f) and 353.25(d).
Petitioners claim that, in the past, the Department has conducted
changed circumstances reviews only in cases where domestic parties had
no interest in maintaining the order, or where the request for
revocation was otherwise warranted but could not be obtained through
the normal revocation procedure. In this case, petitioners contend that
Samsung is prohibited from requesting revocation through a changed
circumstances review because it failed to request such a review through
the normal regulatory procedures (i.e., 19 CFR 353.25(a)-(c)).
Moreover, petitioners assert that Samsung is requesting a changed
circumstances review on the basis of the discontinuance of dumping and
cessation of shipments, something that the Department has never done
before. Petitioners contend that Samsung is specifically trying to
avoid the mandate of the law by improperly relying on this alternative
method for revocation. Petitioners assert that the Department's
regulations were revised to prohibit revocation based on no shipments
in recent time periods because the Department recognized that the
absence of shipments by a respondent, even after
[[Page 46762]]
an initial period of no dumping, was not a reliable indication that the
respondent was not likely to dump in the future.
Lastly, petitioners argue that a negative determination in this
changed circumstances review is consistent with the World Trade
Organization's (WTO's) Antidumping Agreement. Petitioners claim that
Article 11 of the Antidumping Agreement provides only basic guidelines
concerning the duration and review of antidumping duties. Beyond
outlining broad principles, Article 11 is silent as to any factors or
considerations that should be taken into account by member countries'
authorities during a review of the need to maintain antidumping duties.
Therefore, petitioners contend that the Antidumping Agreement gives to
each member country's authorities the responsibility and discretion to
establish specific rules for the authorities to evaluate the issue of
revocation. In this capacity, the Department has promulgated
regulations at 19 CFR 353.25(a)-(c) that set forth the criteria
respondents must meet to obtain revocation. Petitioners conclude that
the Department's decision to withhold revocation under its applicable
regulations is in compliance with Article 11.
Samsung claims that the Department's revocation regulations failed
to operate as intended with respect to Samsung because of the timing of
certain court decisions and the systematic failure of the Department to
comply with its regulatory obligation to complete administrative
reviews within 365 days. Specifically, Samsung cites the following six
reasons: (1) the Department improperly determined in 1988 that Samsung
had an above de minimis margin in the third review; (2) the margin in
the third review was not reduced to de minimis until 1995; (3) the
Department amended its revocation regulations in April 1989 to require
that producers file revocation requests only in the anniversary month
immediately following three consecutive years of no sales at LTFMV; (4)
the Department did not issue its final determinations in the fourth and
fifth reviews until June 1990 and March 1991, respectively--in each
case, two years after the 365-day deadline for completion; (5) the
Court of Appeals for the Federal Circuit issued a decision that
resulted in de minimis margins in the third through eighth reviews; and
(6) the Department did not issue final results for the sixth and
seventh reviews until February 1996, six and five years late,
respectively. As a result, Samsung learned for the first time that it
had become eligible to request revocation under the new regulations
long after April 1989, the ``opportunity month'' for requesting such a
review, had passed. However, Samsung states that it does not seek
revocation on the basis that its revocation requests under the new
regulations were timely. Rather, certain facts relied on in those
requests are relevant changed circumstances.
Samsung also argues that under Article 11 of the WTO Antidumping
Agreement, the Department ``shall review the need for the continued
imposition of the duty, where warranted, . . . upon request by any
interested party which submits positive information substantiating the
need for a review.'' Samsung asserts that this provision contains no
time limit in which parties must request a review and establishes no
procedural bars to prevent parties from obtaining a review.
Furthermore, Article 11 states that ``an antidumping duty shall remain
in force only as long as and to the extent necessary to counteract
dumping which is causing injury.'' According to Samsung, under Article
11, the Department is obligated to revoke an order when ``dumping which
is causing injury'' no longer occurs. Given that Samsung has received
de minimis margins for a period of six years and has discontinued
shipments since 1991, Samsung maintains that the Department must,
pursuant to Article 11, revoke the order with respect to Samsung.
Samsung further argues that the House Report on the URAA explains
that ``the changes are made to conform United States law more
specifically to the provisions of the Agreement.'' Samsung contends
that the House Report indicates that Congress recognized that the
Department must comply with the WTO Antidumping Agreement's provisions
governing revocation. Therefore, Samsung asserts that the Department's
changed circumstances review provision authorizes it to conduct
revocation reviews where warranted and to revoke orders that are no
longer necessary, and does not limit the Department to examining only
those situations in which the domestic industry is no longer interested
in an order.
Department's Position: We disagree with petitioners' claim that,
because Samsung missed the opportunity to request revocation under 19
CFR 353.25(b), it is therefore ineligible for revocation pursuant to a
changed circumstances review under Section 751(b) of the Act and
Sec. 353.25(d) of the Department's regulations. A review based upon
changed circumstances, as provided under Sec. 353.25(d) of the
regulations, is a separate and distinct procedure from that of a
revocation review provided for under Secs. 353.25(a)-(c). In the
Department's view, the failure to meet a procedural requirement for a
review under Secs. 353.25(a)-(c) cannot act as a bar to a changed
circumstances review where a company satisfies the requirements for
such a review. Thus, if the facts demonstrate that changed
circumstances exist sufficient to warrant a review, the Department has
authority, under the statute and regulations, to conduct such a review
(see Section 751(b) of the Act and 19 CFR 353.22(f)(1)). In this case,
the facts clearly demonstrate that there were changed circumstances
sufficient to warrant a changed circumstances review. As noted in the
Notice of Initiation, these changed circumstances are (1) the decision
of the Court of Appeals for the Federal Circuit in Daewoo Electronics
Col, Ltd., et al. v. United States, 6 F.3d 1511 (Fed. Cir. 1993), cert.
denied, 114 S. Ct. 2672 (1994), which Samsung claims made it possible
for the first time for it to contemplate the possibility of de minimis
margins for three or more consecutive review periods; (2) as a direct
result of that decision, Samsung was able to establish that it had not
been dumping CTVs in the United States for six consecutive years; and
(3) Samsung has not shipped CTVs to the U.S. since 1991.
Furthermore, petitioners have misunderstood the intended purpose of
the procedural requirement that a respondent seeking revocation submit
a timely request for revocation under Sec. 353.25(b). The requirement
of a timely filed request is not meant to bar consideration of a
company-specific revocation for respondent. Rather, the purpose of the
regulatory requirement is to ensure that the Department has adequate
time to address the issues of revocation, to prepare for and conduct a
proper verification as required under Sec. 353.25(c)(2)(ii), and to
ensure that all parties to the proceeding are provided with an
opportunity to comment on the issues of revocation. Thus, the
Department's decision to grant a changed circumstances review does not
frustrate the purpose of the antidumping law or prejudice the parties
to the proceeding. To the contrary, it is a reasonable exercise of the
Department's authority, consistent with Section 751(b) of the Act and
the Department's regulations.
We also disagree with petitioners' contention that revocation is
not warranted because the Department's regulations prohibit revocation
based upon no shipments. First, we have based revocation upon Samsung's
six
[[Page 46763]]
consecutive years of zero or de minimis margins and a determination
that resumption of dumping by Samsung is not likely, not the absence of
shipments.2 Furthermore, in amending its regulations on
revocation, the Department stated that, in determining whether an order
should be revoked under a changed circumstances review, the Department
``may consider among other things periods of no shipments.''
Antidumping Duties, Final Rule, 54 FR 12742, 12758 (Mar. 28, 1989).
Thus, Samsung's lack of CTV shipments from Korea to the United States
does not prohibit the Department from revoking the order as to Samsung.
To the contrary, that fact may be taken into consideration.
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\2\ In 1991, Samsung ceased, and has not resumed, shipping CTVs
from Korea to the United States. See Color Television Receivers From
the Republic of Korea; Final Results of Antidumping Duty
Administrative Review, 59 FR 13700 (Mar. 23, 1994); Color Television
Receivers From the Republic of Korea; Final Results of Antidumping
Duty Administrative Review, 60 FR 38987 (July 31, 1995); and Color
Television Receivers From the Republic of Korea; Final Results of
Antidumping Duty Administrative Review, 61 FR 59402 (Nov. 22, 1996).
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Comment 2: Revocation Of The Order In Full
LGE, a Korean producer of the subject merchandise and an interested
third party, argues that four significant changed circumstances exist
since the imposition of the Korean CTV order nearly 14 years ago that
warrant the revocation in full of the antidumping duty order on CTVs
from Korea. First, LGE claims that there have been no commercially
significant imports of CTVs from Korea since approximately 1989,
despite zero or very low cash deposit rates for all major Korean
exporters during this period. Therefore, LGE contends that the
antidumping duty order offers no legitimate commercial benefit to the
United States industry. Second, LGE states that the Department's
administrative reviews established a pattern of sustained reduction,
and ultimately virtual elimination, of the dumping margins found by the
Department in its margin calculations for all Korean producers. Third,
LGE asserts that Mexico has supplanted Korea and other Asian nations as
the dominant supplier of CTVs to the U.S. market because many Korean,
Japanese, and American CTV companies have shifted their production
facilities that serve the U.S. market to Mexico. Fourth, due to the
emergence of Mexico as the leading supplier of CTVs sold in the U.S.
market, LGE doubts whether there continues to exist an industry engaged
in the manufacture of CTVs--as distinct from color picture tubes (CPTs)
and other components--in the United States.
Petitioners contend that, apart from the fact that LGE is unable to
satisfy the basic requirements of the regulations and that LGE has been
found to be dumping above de minimis levels during one of the last
periods for which a review was conducted, LGE's comments fail on
several grounds. First, LGE has not participated in this review except
tangentially. Second, LGE has not addressed the significant changes
caused by the recent economic downturn facing Korea which would cause
it, like Samsung, to export its excess production capacity at LTFMV to
obtain foreign exchange to service its debt. Third, petitioners contend
that LGE, like Samsung, has not demonstrated that it is not likely to
resume dumping, and therefore revocation must be denied.
Department's Position: In this case the Department initiated a
changed circumstances review solely with respect to Samsung based upon
specific facts demonstrating changed circumstances sufficient to
warrant a review as to Samsung. Accordingly, this changed circumstances
administrative review was not conducted with respect to any other
company. Thus, the Department's determination in this review pertains
exclusively to Samsung.
Part II--Likelihood Comments
Comment 3: Conditions And Trends In The United States Market
Petitioners argue that Samsung is likely to resume dumping CTVs in
the U.S. market because U.S. CTV prices are steadily declining and will
fall below foreign market value in the near future. Petitioners state
that Samsung's weighted-average price data indicates that, for almost
all screen sizes, particularly the large sizes, Samsung's U.S. prices
have steadily decreased. More broadly, petitioners note that, although
Samsung's prices fell in both the U.S. and Korean markets from 1991
through 1997, its U.S. prices fell approximately twice as fast as those
in Korea. In addition, petitioners claim that the data Samsung obtained
from the Electronics Industries Association (EIA), which lists the
overall U.S. market sales volumes and average unit prices from 1954
through 1998 (projected), demonstrate significant, and continuing,
price declines. Petitioners also claim that the price decline in the
U.S. market will accelerate as Southeast Asian CTV producers respond to
their need for increased revenue, precipitated by the Asian economic
situation, by flooding the U.S. market with significantly discounted
CTVs. Petitioners conclude that, as a result of declining U.S. prices,
amplified by competition among cheap Southeast Asian imports, Samsung
will be forced to lower its U.S. prices below foreign market value and
resume dumping.
Petitioners also claim that the changing pattern of demand in the
U.S. market makes Samsung likely to resume dumping CTVs, especially in
the large (25- and 27-inch) and very large (31-inch and greater)
product segments. In support of their argument, petitioners provide
their estimates, by screen size, of demand in the U.S. CTV market from
1996 through the year 2000. Based on these estimates, petitioners
contend that the U.S. market will exhibit growth in the large and very
large product segments, while decreasing in the small (13-inch and
less) and medium (19- and 20-inch) product segments.
In light of these data, petitioners argue that Samsung is currently
adjusting its domestic production to reflect the shift in United States
demand toward large and very large CTVs. As evidence of Samsung's
shifting production pattern, petitioners provide their estimate of
Samsung's Korean CPT production capacity, on a screen size basis,
through the year 2000. According to petitioners, examination of these
estimates indicates that Samsung is increasing its Korean production of
large and very large-sized CPTs, while cutting back its Korean
production of small and medium-sized CPTs. This point is especially
relevant, state petitioners, because Samsung's CPT plant in Mexico can
only produce medium-sized CPTs. Thus, Samsung could reserve its Mexican
operations for production of medium-sized CTVs, which is the segment of
the U.S. market petitioners claim is showing considerable decline,
while exporting small and large CTV sizes directly to the United States
from Korea.
Samsung characterizes the U.S. CTV market as stable and non-
cyclical. As evidence, Samsung relies on the data it obtained from the
EIA, which indicates that sales volumes in the U.S. CTV market,
measured in units, have been steady throughout the 1990's, and that
average unit prices have shown only slight erosion since 1993. Samsung
also claims that this stability is mirrored in its own U.S. market
prices for its Mexican-made CTVs.
Samsung responds to petitioners' allegation that it is adjusting
its Korean production to reflect the growth in U.S. market demand for
large and very large CTVs by making three points. First, Samsung states
that during the eight administrative reviews in which it
[[Page 46764]]
shipped CTVs to the United States from Korea, it never exported CTVs
with screen sizes of 25 inches or more. Thus, Samsung states there is
no basis on which to conclude that it would resume dumping large screen
size CTVs since it never dumped them in the first place. Second,
Samsung claims it has no need to ship large screen size CTVs from Korea
to the United States because it can fully serve the large screen size
market segment through its Mexican operations. Samsung notes that the
Department verified in the now terminated anti-circumvention proceeding
that all four of its production lines in Mexico can produce CTVs with
screen sizes ranging from 25 to 31 inches. Third, Samsung asserts that
its Korean CPT facilities cannot produce conventional CPTs (4:3 width-
to-height ratio) for certain large screen sizes. For these reasons,
Samsung concludes that it is not adjusting its Korean production
operations to service better the U.S. market.
Department's Position: We disagree with petitioners' claim that
Samsung is likely to resume dumping in the U.S. CTV market because,
according to petitioners, U.S. prices are steadily declining and will
fall below foreign market value in the near future. The U.S. CTV
industry is a non-cyclical, mature industry historically characterized
by modestly declining prices. Although declining U.S. prices and a
competitive U.S. market were factors in rejecting requests for
revocation in certain past cases, the evidence on the record of this
case concerning U.S. market conditions is significantly different from
that in past cases and does not support a similar conclusion.
For example, in DRAMS, the Department noted that the global DRAM
industry is highly cyclical in nature with periods of sharp upturn and
downturn in market prices. In the year prior to the July 1997 final
results of administrative review, the world market experienced a year-
long downturn, resulting in depressed prices and increased DRAM supply,
from which it had not fully recovered by the time of the final results.
We concluded that, due to price fluctuations, there was a large degree
of uncertainty about the market's future direction. See DRAMS at 39816
and 39817. As discussed more fully below, the CTV industry is not
characterized by the large cyclical swings found in the DRAMS industry
and, therefore, does not experience periods of significantly depressed
prices. See Samsung's February 13, 1998, submission at Exhibit H.
In another case, TVs from Japan, we found that prices in the U.S.
television market had declined steadily during the six-year period
immediately preceding the 1989 final determination not to revoke the
order, imported televisions from countries other than Japan (many sold
at LTFMV) had increased as a percentage of U.S. consumption, and that
the competitive pricing pressures in the United States had become
stronger with the emergence of Taiwan and Korea as significant
television producers and exporters. We also noted in TVs from Japan
that these market factors are important where there have been no
shipments for many years, therefore limiting (Japanese) respondents'
U.S. pricing information. See TVs from Japan at 35519.
However, TVs from Japan is substantially different from the current
review because, in this case, we have evidence of how Samsung would
price (compete) in a U.S. market characterized by significant dumped
imports (i.e., Samsung's pricing behavior in the U.S. market during the
1980s when it competed against dumped television receivers from Taiwan,
Japan, and other Korean producers). When making our determination in
TVs from Japan we did not have evidence indicating how the Japanese
respondents requesting revocation (Sanyo and Hitachi) would compete in
a U.S. market characterized by significant dumping, because they had
stopped shipping before the orders on television receivers from Taiwan
and Korea were issued. See Analysis Memorandum dated August 25, 1998.
Therefore, even if Samsung were to resume shipments and compete against
potentially dumped imports from Japan, Taiwan, and other Korean
producers, the fact that Samsung received de minimis margins while
competing against dumped imports during the period 1985 through 1991,
supports a conclusion that Samsung is not likely to resume sales at
LTFMV.
In a third case, Brass Sheet and Strip, we characterized the U.S.
market for the subject merchandise as being mature, known for its price
competitiveness, and a ``desirable market for foreign exporters, by
virtue of its large size relative to other markets.'' See Brass Sheet
and Strip at 49731. However, the Department's decision to reject the
respondent's request for revocation was based on other significant
factors, such as the respondent's under-utilized home market capacity,
the severe decrease in shipments of subject merchandise to the United
States since the imposition of the order, the appreciating home market
currency, and the existence of a U.S. processing plant that required
subject merchandise as feedstock. Unlike in Brass Sheet and Strip, the
current review is not characterized by the combination of factors which
support a conclusion that the respondent is likely to resume sales at
LTFMV.
Samsung provided data it obtained from the EIA listing the total
quantity, value, and the percentage of household penetration of sales
in the U.S. CTV market from 1954 to 1998 (projected). See Samsung's
February 13, 1998, submission at Exhibit H. Close examination of these
data indicates that from 1980 through 1998, the annual average unit
price for the U.S. CTV market has decreased, except for a period of
five consecutive years, from 1989 to 1993, when prices increased.
Specifically, these data indicate that CTV prices, as measured by the
average annual rate of change, declined at a rate of 2.79 percent from
1980 to 1988, increased at a rate of 1.71 percent from 1989 to 1993,
and decreased at a rate of 2.61 percent from 1994 through 1998. In
addition, the EIA data shows that CTVs have held a household
penetration of approximately 98 percent since 1993. The low rates of
annual change in average unit prices, the fact that 12 of the last 18
years have been marked by modestly declining prices, and that the CTV
market has had full household penetration since 1993, are consistent
with the view that the U.S. CTV industry is a non-cyclical, mature
industry.
Furthermore, we note that Samsung's own data supports our
characterization of the U.S. CTV market. As noted above, Samsung placed
on the record data concerning its prices of Mexican-produced CTVs sold
in the U.S. market for the period 1991 through 1997. These data
indicate that, as petitioners note, Samsung's prices in the U.S. market
declined during this period.
Samsung received de minimis margins during the period April 1985
through March 1991. During the first four years, from 1985 to 1988, we
note that the U.S. CTV industry experienced declining prices. Since the
Department normally considers declining U.S. prices to be a factor that
increases the likelihood of continued sales at LTFMV, we note that
Samsung has demonstrated its ability to sell CTVs in the United States
at fair value even in the face of these declining prices.
Furthermore, we disagree with petitioners' claim that Samsung is
changing its Korean production to match what petitioners characterize
as a shift in U.S. demand toward large and very large CTVs.
Petitioners' basis for this argument is that, according to their
estimates, Samsung is increasing its
[[Page 46765]]
production of large and very large CPTs, which will eventually have to
be exported in the form of a completed CTV. As more fully discussed in
Comment 4 below, we conclude that a change in CPT production does not
necessarily produce a corresponding change in CTV production. In
addition, we note that Samsung's Korean CPT facilities cannot produce
conventional CPTs for certain large screen sizes. More importantly, we
agree with Samsung that its Mexican facilities fully serve the U.S.
market with respect to CTVs ranging in screen size from 13 to 31
inches. We note that Samsung has an incentive to continue serving the
U.S. market from Mexico, for all screen size CTVs because, among other
things, such CTVs can receive duty-free treatment under the North
American Free Trade Agreement (NAFTA), provided the merchandise meets
the appropriate rules of origin, while CTVs from Korea are subject to
import duties.
Lastly, petitioners have argued that the shift in U.S. demand
toward large and very large CTVs, in combination with their estimate
that Samsung is increasing Korean production of large and very large
CPTs, is an incentive for Samsung to resume sales at LTFMV in the
United States. As mentioned above, we disagree that an increase in
large-size CPT production necessarily corresponds to an increase in
large-size CTV production in Korea. Moreover, although we agree with
petitioners that the large and very large CTV market segments are
likely to continue to grow over time, while the smaller CTV segments
are likely to shrink, it is not clear that this trend provides Samsung
with any additional incentive to resume sales at LTFMV. It is not
unreasonable to assume that, over the history of the CTV industry,
demand has shifted toward larger screen sizes as each new, and larger,
screen size was introduced as a result of technology advances. During
its six-year period of de minimis margins in the 1980's, it is
reasonable to assume that Samsung faced a similar shifting of demand
toward screen sizes that were at that time the upper end of the CTV
market, but was able to compete without LTFMV sales.
Comment 4: Home Market Conditions And Samsung's Korean Production
Capacity
Petitioners argue that the Korean CTV market is in a depression and
that prices are declining, although not as fast as in the U.S. market.
Petitioners contend that this price decline and Korean demand decrease,
coupled with Samsung's excess CTV capacity in Korea, will force Samsung
to export its excess production to the United States at LTFMV.
Citing a newspaper article entitled ``1998 Home Electronics Product
Forecast,'' which provides an overview of the state of the Korean
consumer electronics industry and its prospects for 1998, petitioners
state that in 1997, Korean demand for CTVs fell by 50,000 units, and,
due to the economic slowdown triggered by the Asian economic situation,
is expected to fall by another 5-10 percent in 1998. See petitioners'
submission dated February 13, 1998, at Enclosure 10. Continuing their
citation of the article, petitioners state that Korean CTV producers
are expected to increase exports in order to sell production no longer
being absorbed by the domestic market.
Petitioners also contend that Samsung has excess CTV capacity in
Korea and that Samsung will dispose of this excess production by
exporting it, most likely to the United States, at LTFMV. Petitioners
state that Samsung and the other Korean producers expanded their
capacity during the years preceding the Asian economic downswing. In
order to calculate the aggregate Korean excess CTV capacity,
petitioners subtract Korean CTV demand from Korean CPT capacity, for
the years 1985 through 1996. Petitioners maintain that because the
Korean market cannot absorb the excess CPT production, this excess must
be exported as completed CTVs. Furthermore, petitioners state that the
condition of excess CPT production over CTV demand in Korea will only
increase as demand falls due to the Korean economy slowing as a result
of the Asian economic situation. Korea's excess capacity, petitioners
state, has contributed to a world-wide oversupply that has resulted in
depressed CTV market conditions across the globe.
Petitioners contend that Samsung, in its position as one of the
major Korean CTV producers and as a direct result of its history of
expansion, helped create the current situation of excess capacity
existing in the Korean CTV industry. Although Samsung's excess capacity
contributed to the world-wide oversupply of CPTs, petitioners maintain
that Samsung will not reduce its Korean CPT production in view of its
dire need to raise hard currencies. On the contrary, petitioners claim,
Samsung will postpone any domestic cuts in CPT production and, as
newspaper articles have reported, increase its exports of CTVs to
enhance revenue flow.
Petitioners also argue that Samsung's sales data concerning its CTV
exports from Korea to third countries do not support its claim that it
has no incentive to export Korean-produced CTVs to the United States.
Although Samsung's data do indicate that exports to Russia, Iran and
the United Arab Emirates increased substantially between 1995 and 1996,
the data for the first half of 1997 indicate that, when annualized,
Samsung's exports to these countries significantly declined. This trend
in declining third country exports, petitioners claim, proves
inaccurate Samsung's characterization of these markets as ``fast
growing'' and further supports petitioners'' argument that Samsung has
an incentive to export its excess CTV capacity to the United States.
Samsung disagrees with petitioners' argument that a decline in the
Korean market's demand will lead to increased pressure to export CTVs
to the United States. Samsung observes that the 50,000 unit decrease
experienced in 1997, as referenced by petitioners, is an insignificant
decrease considering that the Korean market exceeded 2.3 million units
in that year. In regard to the 5-10 percent projected decline in 1998,
Samsung notes that even if such a decline occurs, it will be offset by
a concomitant decline in the market share of foreign CTV suppliers
(currently about 7 percent) which will find it much more difficult to
sell in Korea due to the devaluation of the won. Therefore, Samsung
reasons, even if overall demand declines, Samsung can gain market share
at the expense of more costly foreign CTVs, and not be faced with
unsold inventory which would generate pressure to export. Moreover,
Samsung states that even if it did face increased pressure to export
CTVs due to a decline in domestic demand, there is no reason to assume
such exports would go to the United States since Samsung's Korean
facilities already serve other third countries with growing demand.
Samsung also asserts that petitioners use the phrase ``excess CPT
capacity'' in a misleading manner, attempting to imply that Samsung,
and the other Korean producers, have unutilized capacity which will
force them to export CTVs. While Samsung does not contest that its
Korean CPT production capacity exceeds its Korean CTV sales, it asserts
that this larger CPT production exists because its Korean CPT
production is export-oriented--i.e., the CPTs not incorporated into
CTVs sold in Korea are exported and sold to unrelated CTV producers in
various third countries. Samsung claims that its Korean CPT production
capacity is fully utilized and, as evidence, provides a chart listing
its Korean CPT capacity, production, and utilization rates since 1993.
Samsung explains that this chart
[[Page 46766]]
indicates that, by 1997, Samsung reduced its CPT capacity by a
significant amount and experienced high utilization rates throughout
the five-year period. Samsung explains that these utilization rates are
the functional equivalent of full capacity, after accounting for yield
loss and maintenance downtime. Based on the above reasons, Samsung
concludes that petitioners' implication that it has substantial unused
CPT capacity which would force it to export CTVs to the United States
is incorrect.
Samsung also acknowledges that its Korean CTV production is larger
than its domestic CTV sales. Samsung states that this is because its
CTV production, as with its CPT production, is export-oriented.
Specifically, Samsung states that its Korean CTV facilities produce
CTVs for sale in Russia, the Middle East, and Africa. Samsung further
states that its CTV facility is fully utilized due to its Korean sales
and export sales to these third country markets. To support its claim,
Samsung provides a chart listing its CTV capacity, production, and
utilization rates from 1993 through 1997. Samsung explains that this
chart indicates that its CTV facility operated at or in excess of full
capacity during this period. Therefore, Samsung concludes that,
assuming petitioners' theory was correct and it did have unused CPT
capacity, Samsung does not have any excess CTV production capacity in
Korea which could be used to absorb the alleged excess CPT capacity.
Samsung also provides 1996 data showing the total quantity of
Korean-produced CTVs sold domestically and in third countries. Samsung
asserts that these data show that its overall export strategy for Korea
is well diversified and, specifically, that the markets in Russia,
Iran, and the United Arab Emigrates are ``fast growing.'' Samsung
concludes that even if there is a modest decline in Korean CTV demand,
Samsung can offset that decline with exports to alternative third
country markets. Samsung argues further that in Steel Wire Rope From
the Republic of Korea; Final Results of Antidumping Duty Administrative
Review and Revocation in Part of Antidumping Duty Order, 62 FR 17171,
at 17174 (April 9, 1997) (Steel Wire Rope 1997) and Frozen Concentrated
Orange Juice From Brazil; Final Results and Termination in Part of
Antidumping Duty Administrative Review; Revocation in Part of the
Antidumping Duty Order, 56 FR 52510 (October 2, 1991), the Department
considered a respondent's showing that it was not ``solely dependent on
the United States for financial viability'' as an important factor in
granting revocation.
Furthermore, Samsung states that if petitioners are correct in
their theory that, when Samsung's Korean CPT production capacity
exceeds its domestic CTV sales, it will be forced to increase its CTV
exports to the United States, then this theory must equally apply to
Samsung's Mexican operations. Citing the Department's 1997 verification
report of Samsung's Mexican facilities, generated in the context of the
now terminated anti-circumvention inquiry of CTVs from Korea, Samsung
states that these documents clearly indicate that its CPT capacity in
Mexico far exceeds its Mexican CTV capacity. Samsung asserts that,
according to petitioners' theory, the larger Mexican CPT capacity
should place substantial pressure on Samsung to export CTVs to the
United States from Mexico, rather than from Korea. Petitioners, Samsung
concludes, have ignored this implication of their theory.
Department's Position: Although we agree with petitioners that
prices in the Korean CTV market have been falling and that the current
economic slowdown may increase this trend, we cannot conclude that it
is likely that Samsung will export its production normally absorbed by
the Korean market, but now left unsold, to the United States at LTFMV.
According to Samsung's data, petitioners are correct that Samsung's
annual, weighted-average market prices in Korea declined at a small
rate over the 1991 through 1997 period (averaged across all screen
sizes). See Analysis Memorandum dated August 25, 1998. However, this
rate of price decline is much smaller than that exhibited in other
cases where revocation was ultimately denied. See, e.g., DRAMS at 39816
and 39817 and Brass Sheet and Strip at 49730. Furthermore, Samsung's
Korean and U.S. market price data, in addition to overall U.S. market
price data, indicate that the CTV industry, in both Korea and the
United States, exhibits a trend of consistent, yet gradual, price
declines. Unlike DRAMS, the CTV industry is a mature, non-cyclical
industry. Thus, the steep price declines that occurred in other
industries that contributed to the Department's decision not to grant
revocation are not present in the CTV industry.
Petitioners' claim that the current economic situation will cause a
decrease in demand and accelerate the decline in prices in the Korean
CTV market. Assuming that a decrease in demand occurs, we note that
Samsung has several options from which to choose in meeting a potential
slow-down in home market CTV demand. For example, Samsung could reduce
its CTV production, discount its Korean CTV prices to stimulate
consumer spending, or export unsold CTVs to third country markets. In
regard to petitioners' claim that unsold Korean CTV production is
likely to be exported to the U.S. market and sold at LTFMV, we note
that Samsung has provided evidence that its Korean CTV facilities serve
viable third country markets other than the United States. Therefore,
we do not find that a potential decline in Korean CTV demand supports a
conclusion that Samsung is likely to resume sales at LTFMV in the U.S.
market.
Petitioners also claim that Samsung has excess CTV capacity in
Korea and that Samsung will dispose of this excess production by
exporting it, most likely to the United States, at LTFMV. In past
cases, we have examined a respondent's production capacity when
considering revocation. For example, in Brass Sheet and Strip, the
Department found that excess capacity existed in the home market
``because [the respondent's] level of new orders had been
unsatisfactory.'' With ``capacity utilization in the home market under
threat'' from decreased new orders and increased pressure from imports
into the home market, combined with a plant in the United States that
processed the subject merchandise, among other factors described above,
we determined that the respondent had an incentive to resume sales in
the United States at LTFMV. See Brass Sheet and Strip at 49731.
In the instant case, petitioners claim that Samsung has excess CTV
capacity in Korea by subtracting Korean CTV demand from aggregate
Korean CPT production capacity. We note that subtracting CTV demand
from CPT production is not an appropriate method to calculate excess
CTV capacity. Rather, examining the capacity utilization rate of CTV
production facilities is a more meaningful measure. Furthermore,
petitioners' methodology is not consistent with, or as accurate as the
one used in Brass Sheet and Strip, where we examined directly the
degree to which the respondent was utilizing its production capacity
for subject merchandise. Even if it were, we note that petitioners
applied this methodology on a Korea-wide basis, rather than
specifically to Samsung. Furthermore, we learned in the terminated
anti-circumvention inquiry that Samsung produces its CPTs through its
subsidiary company, Samsung Display Devices-Mexicana, S.A., which sells
its CPTs not only to Samsung's own CTV production facilities, but also
[[Page 46767]]
to unaffiliated CTV manufacturers. See memorandum to the file, dated
August 12, 1998, that transmits the verification report of the November
20-21, 1997, verification of Samsung-Mexico to the record of this
review. For this reason, Samsung's CPT production is not captive for
Samsung's CTV production only. Thus, the one-to-one relationship
between CPT production and CTV production capacity relied upon by
petitioners distorts the analysis of whether Samsung has excess CTV
production capacity. For this reason, we do not find petitioners'
methodology to be an accurate or meaningful way of measuring unutilized
capacity for Samsung. To the contrary, following petitioners'
rationale, we find Samsung's claims with respect to the export
orientation of its CPT production to be more reasonable.
We agree with Samsung that the proper method of determining whether
it has excess CTV production capacity is to examine whether its current
CTV production facilities are fully utilized. To this end, Samsung
provided its production, capacity, and resulting utilization rates for
its CPT and CTV facilities from 1993 through 1997 in Exhibits 20 and 21
of its March 6, 1998 submission. The utilization rates presented by
Samsung are the functional equivalent of full capacity, after
accounting for yield loss and maintenance downtime. In our view, excess
capacity would exist if Samsung's current facilities were underutilized
or if Samsung were building additional CTV production facilities during
a time when there was no unmet demand, either domestically or abroad,
that would absorb the additional output. In this case, Samsung has not
announced, nor have petitioners alleged, that Samsung is currently
building, or will build in the future, additional CTV production
facilities in Korea. In fact, Samsung's utilization charts indicate
that it significantly reduced both CPT and CTV capacity in 1997.
Therefore, we find that Samsung's high utilization rates indicate that
its does not have excess CTV production capacity at this time that,
according to petitioners, would have to be exported and likely sold in
the U.S. market at LTFMV.
Comment 5: The Effects of the Asian Economic Downturn on Samsung
Petitioners claim that the recent Asian economic slowdown has
affected Samsung in three ways: (1) foreign creditors are requesting
repayment of loans in hard currencies, rather than in the depreciated
Korean won; (2) foreign lenders are reluctant to offer new loans to
Samsung so that it can roll-over its current debt; and (3) the drastic
depreciation of the won makes repayment of foreign debt in hard
currencies very expensive. These effects, state petitioners, are
especially relevant because Samsung is currently operating under a very
heavy debt load as a result of financing both its Korean and global
expansion throughout the 1980's and 1990's with foreign debt. This
large amount of debt is illustrated by the Samsung Group's 1997 debt-
to-equity ratio of 267 percent. Petitioners contend that the
combination of this large amount of debt, coupled with the negative
effects of the Asian economic situation, has forced Samsung to enter a
``debt-service mode'' and consequently maximize revenues, rather than
profits, in order to make loan repayments and survive. To obtain the
hard currency revenue it needs to survive, petitioners argue that
Samsung will dramatically increase its exports of all its products from
Korea to the United States, with CTVs leading the export drive.
Pursuant to its need to maximize hard currency revenue, petitioners
state that Samsung will face enormous pressure to lower its prices,
thereby increasing the quantity sold and enhancing revenues.
Petitioners cite the economic theory concerning the behavior of firms
in ``debt-service'' mode, which states that a firm seeking to maximize
revenue, as opposed to profits, is required to lower prices below the
total unit cost of production. As long as the producer's price exceeds
the marginal cost of production, the firm will enhance cash flow even
if the price is below the total unit cost. Petitioners state that this
type of pricing behavior is especially relevant because the CTV
industry is capital-intensive and characterized by high startup costs
and high fixed costs. Thus, the marginal cost of an additional unit
being produced is well below that unit's total cost. Because of
Samsung's need to raise hard currency to pay off foreign debt, and its
excess production capacity that the Korean CTV market cannot absorb,
petitioners conclude that Samsung is likely to export Korean CTVs to
the United States and to price them below foreign market value.
Samsung disagrees with petitioners' portrayal of its foreign debt
situation, claiming that it has not defaulted on any loans and has no
difficulty obtaining additional debt and equity financing in the
international marketplace. As support for its assertions, Samsung
provided documentation showing recent security offerings, renewals and
an extension of credit, and a lease agreement.
In response to petitioners' argument that Samsung is likely to dump
CTVs because it is heavily in debt and has a large debt-to-equity
ratio, Samsung provided its fiscal year end debt-to-equity ratio from
1984 through 1997. Samsung points out that during the period 1985
through 1991, when it received de minimis margins on the CTVs it
shipped directly from Korea to the United States, its debt-to-equity
ratio exceeded the 1997 rate. Additionally, although Samsung ceased
shipments to the United States in 1991, its debt-to-equity ratio in
1991 through 1993 was higher than its current ratio. Samsung claims
that under petitioners' theory, it would have desperately needed to
export CTVs from Korea to the United States from 1991 to at least 1993
because it was in a ``debt-service mode'' at that time. The fact that
it did not, Samsung asserts, disproves petitioners' claims.
Furthermore, Samsung makes the point that the 1997 debt-to-equity ratio
cited by petitioners is lower than the 1996 ratios for Philips
Electronics N.V. and Thompson-CSF, the parent companies of two U.S. CTV
producers. Samsung doubts that petitioners would claim that these two
companies were in a ``debt-service mode'' in 1996 which compelled them
to adopt a strategy of exporting CTVs below the cost of production in
order to maximize revenue and survive.
Lastly, Samsung states that even assuming it had to export goods
from Korea to the United States in order to survive, petitioners never
provide evidence as to why Samsung must export CTVs, rather than other
products it manufacturers, to service its debt. Samsung claims that
relying on revenue from U.S. CTV sales would be a poor strategy and
could not play a significant role in servicing its debt because its CTV
sales in the U.S. market account for a small portion of its overall
corporate sales. As support for this claim, Samsung provides
documentation showing that its total 1996 CTV sales in the United
States by its Mexican subsidiary accounted for a very minor portion of
its total 1996 corporate sales.
Department's Position: We disagree with petitioners' allegation
that as a result of the Asian economic downturn and its debt burden,
Samsung is currently in a ``debt-service mode'' and, in order to
service its debt, is compelled to adopt a strategy of exporting CTVs
below the cost of production, thereby maximizing hard currency revenue.
Although Samsung may be facing a high debt burden in light of the
current economic downturn, the lack of CTV shipments from Korea to the
United States during the 1991 to 1993 period,
[[Page 46768]]
when Samsung's debt-equity-ratio was higher than the current level,
does not support petitioners' contention that Samsung is likely to
export Korean CTVs to the United States because of its current debt
situation.
As an initial matter, we note that, of the numerous newspaper
articles petitioners submitted to the record of this proceeding
concerning the effects of the Asian economic downturn on Korean
companies and the Korean economy in general, the majority of articles
reported the statements and actions of the Samsung Group, while only a
few discussed how the decline specifically affected Samsung, the
company subject to this review, and described what actions the company
is taking in light of the situation. Petitioners, through their
reliance on articles reporting the response of the Samsung Group, have
implied that the actions of the group are synonymous with the actions
of individual companies within the group, such as Samsung. Given that
the Samsung Group consists of approximately 80 individual companies
(see petitioners' February 13, 1998 submission at Enclosure 20)
producing a wide array of products and services, we find that in this
case the actions of the group are of limited value in our analysis of
whether Samsung is likely to resume dumping CTVs in the U.S. market.
Of the few newspaper articles submitted by petitioners that
specifically discuss Samsung, all of them indicate that Samsung intends
to increase its Korean exports of a variety of products. Although the
most commonly mentioned products designated by Samsung to lead its
export drive are kitchen and household appliances, semiconductors, and
telecommunications equipment, two articles include large screen and
digital CTVs on this list. These articles, however, do not state the
destination of the increased CTV exports and fail to mention that
Samsung's Korean CTV operations are historically export-oriented,
serving markets in Africa, the Middle East, and the republics of the
former Soviet Union. However, in our preliminary determination, we
stated that the issue of central importance in the final results of
this review is whether Samsung is likely to resume dumping in the
absence of an antidumping duty order, assuming that shipments occur.
Therefore, arguments that Samsung will resume shipments directly from
Korea are not enough.
The foundation of petitioners' argument that Samsung is likely to
resume dumping as a result of the Asian economic downswing is their
assumption that Samsung is currently operating under an extraordinary
amount of debt. According to petitioners, this debt load, in
conjunction with the drastic depreciation of the won, has made it very
difficult for Samsung to obtain new loans and service its current debt.
As a result, petitioners contend that Samsung must maximize revenues in
order to survive, and will do so by exporting CTVs at LTFMV to the
United States.
In response, Samsung stated that it has not defaulted on any loans
and provided evidence that demonstrates it is able to obtain additional
debt and equity financing in the international marketplace. Moreover,
Samsung has shown that its debt load, as measured by its debt-to-equity
ratio, was actually much higher in previous periods than it is now.
From 1985 through 1991, when it received de minimis margins, Samsung
had debt-to-equity ratios significantly higher than the 1997 ratio
cited by petitioners. See Samsung's March 6, 1998 submission at 20. See
also the August 25, 1998, Analysis Memorandum. Furthermore, from 1991
to 1993, which were the first three years in which Samsung had ceased
CTV shipments to the United States, Samsung's ratio was even higher
than the 1985 to 1991 period.
Thus, the facts of this case do not support petitioners' theory
that Samsung's current level of debt would compel Samsung to resume
shipments of CTVs from Korea to the United States at LTFMV. As Samsung
correctly states, petitioners' theory implies that because Samsung was
servicing substantial debt during the 1985 to 1993 period, it must have
sold CTVs in the U.S. market at LTFMV, which it did not do. Since
Samsung had significantly higher debt-to-equity ratios during periods
in which it had de minimis margins or no shipments, we are not
persuaded by petitioners' arguments.
Comment 6: Currency Movements
Petitioners argue that CTV producers in Malaysia, Singapore,
Thailand, and Indonesia are competitively advantaged over Samsung
because the currencies of these countries devalued to a greater extent
than the won during the Asian economic decline. Moreover, petitioners
claim that because CTV producers in these countries are also in a
``debt-service mode'' and have greater excess capacity than Samsung,
they can be expected to flood the U.S. market with deeply discounted
CTVs. In order to stay competitive and maximize revenue, petitioners
maintain that Samsung will have to match the U.S. prices of its
Southeast Asian competitors, which will quickly be reduced to dumping
levels.
According to petitioners, the currencies of Malaysia, Singapore,
Thailand, and Indonesia significantly depreciated against the U.S.
dollar from the last half of 1997 through January 1998, as the Asian
economic situation unfolded. Citing the exchange rates from this
period, petitioners assert that the magnitude of the Southeast Asian
devaluations often surpassed that of the Korean won. Moreover,
petitioners observe, that since reaching its nadir on December 23,
1997, the won appreciated by 28 percent while the Malaysian ringgit,
Thai baht, and Singapore dollar depreciated by 9 percent, 13 percent,
and 3 percent, respectively. Petitioners claim that the won's recent
appreciation vis-a-vis the other Southeast Asian currencies permits
producers in these countries to discount their U.S. prices to a greater
extent than Samsung. Petitioners state that the reduction in export
value resulting from the depreciation of the won will not be enough to
prevent Samsung from selling at LTFMV because it will have to
drastically lower its U.S. prices to match the deeply discounted prices
of its Asian competitors. Petitioners further state that, since
Samsung's costs and prices are denominated in the relatively stronger
won, and because some of Samsung's parts and components are not sourced
locally in Korea, the same devaluation that provides a margin of safety
in price comparisons correspondingly results in a rise in costs of
production, which will increase the likelihood of sales at LTFMV in the
United States.
Second, petitioners argue that the excess capacity of producers in
Malaysia, Singapore, Thailand, and Indonesia, as measured by aggregate
Southeast Asian CPT capacity minus aggregate Southeast Asian CTV
demand, is greater than the combined excess capacity of the Korean
producers. For this reason, petitioners assert that the Southeast Asian
producers will dispose of their excess inventory by exporting it to the
United States. Petitioners state that the ensuing rounds of competitive
pricing among the imports will drive down the U.S. market price of CTV
imports in all screen size categories, and that Samsung, in order to
stay competitive, will be forced to match these prices, which will most
likely be below normal value.
Third, petitioners state that the Southeast Asian suppliers, unlike
Samsung and the other Korean CTV producers, are not currently subject
to a U.S. antidumping duty order. Therefore, petitioners state, they
are not
[[Page 46769]]
constrained to sell at normal value in the United States and are free
to reduce their export prices to whatever level is necessary to dispose
of their excess capacity. Petitioners also claim that Southeast Asian
CTV producers, like Korean producers, are struggling under large debt
burdens and are motivated to maximize revenue by increasing exports to
the United States. Petitioners conclude that the fierce competition
among increasing cheap Asian imports will force suppliers in the U.S.
market to engage in rounds of head-to-head price reductions. According
to petitioners, Samsung's need to maximize revenue will force it to
participate in the price reductions, leading Samsung to sell CTVs at
LTFMV.
In regard to currency movements, Samsung states that it received de
minimis margins in the fourth through eighth administrative review
periods (April 1986 through March 1991), which were periods when the
Korean won appreciated against the dollar compared to the exchange
rates prevailing in calendar year 1985.
Samsung responds to petitioners' allegation by stating that the CTV
producers in Southeast Asia are primarily subsidiaries of foreign
multinational companies that would not undermine their significant
North American operations by shipping CTVs from their Southeast Asian
facilities to the United States. Samsung provides a chart indicating
that the producers in Malaysia, Indonesia, Thailand, Singapore, and the
Philippines are subsidiaries of Japanese, Korean, and American CTV
manufacturers. Samsung argues that the facilities within Southeast Asia
primarily serve the Asian markets rather than the U.S. market, because
the Asian plants are at a competitive disadvantage to plants in the
United States and Mexico due to higher shipping and inventory costs, as
well as the five percent U.S. import duty on CTVs. Samsung asserts that
it makes no economic sense for these multinational producers to ship
CTVs to the United States from Southeast Asia and thereby undercut
their significant North American operations.
Furthermore, Samsung observes that U.S. import statistics for
January through November 1997 indicate that approximately 90 percent of
CTV exports from Southeast Asia to the U.S. market were of the small
and medium screen sizes. See petitioners' February 13, 1998 submission
at 39 for the above-referenced statistics. Petitioners, Samsung notes,
have made the argument that, since the U.S. demand is growing for large
and very large CTVs, Samsung has adjusted its Korean production to
reflect this shift and can be expected to export these sizes should the
Department grant revocation. Samsung states that petitioners have also
made the argument that stiff competition from Southeast Asian producers
will drive down U.S. prices to dumping levels because these producers
have excess capacity that will be exported to the United States and
enjoy a competitive advantage over Samsung due to the currencies of
Southeast Asia depreciating to a greater extent than the Korean won.
However, Samsung asserts, the import statistics indicate that exports
from Southeast Asia currently compete in segments of the U.S. market
(i.e., small and medium screen sizes) which petitioners argue will not
be the primary target of Samsung's Korean exports.
Samsung claims that Singapore was the one country that exported
significant volumes of larger size CTVs to the United States during the
January to November 1997 period. Samsung states that Philips, Sanyo,
Toshiba, and Mitsubishi, the primary producers in Singapore, will do
nothing to undercut their North American production facilities.
Moreover, Samsung asserts that producers in Singapore are at a
comparative disadvantage vis-a-vis Samsung and the other Korean
producers because the Korean won depreciated further than the
Singaporean dollar did in 1997. Samsung also states that, although the
won depreciated more than the Singapore dollar, it depreciated
approximately the same as the Thai baht and Malaysian ringgit since
December 1996. This roughly equivalent depreciation, Samsung argues,
provides no competitive advantage to producers in Thailand or Malaysia.
Samsung, however, does acknowledge that the Indonesian rupiah
depreciated more than any other Southeast Asian currency. Although this
drastic depreciation would imply a competitive advantage for Indonesian
producers, Samsung dismisses this implication by stating that Indonesia
is not a meaningful supplier of CTVs to the United States.
Lastly, Samsung argues that many producers in Southeast Asia often
purchase many CTV parts from related and unrelated producers outside
the region. Samsung surmises that Southeast Asian producers may not be
able to lower significantly their cost of production in dollar terms,
or reduce their final dollar price, because these parts account for the
bulk of the cost of production of CTVs and the dollar cost of these
parts is not affected by the depreciation of the local currencies.
Department's Position: We disagree with petitioners' argument that
Samsung is likely to sell CTVs in the U.S. market at LTFMV because the
currencies of other Southeast Asian countries have depreciated further
than the Korean won, thereby granting a competitive advantage to CTV
producers in these countries, who can be expected to flood the U.S.
market with deeply discounted imports and drive down U.S. prices to
extremely low levels.
Petitioners' argument that Samsung is likely to resume sales at
LTFMV because of the recent currency movements precipitated by the
Asian economic downswing is based upon the assumption that Korean and
other CTV producers essentially compete against one another only on the
basis of price. Due to this assumption, petitioners argue that a
greater depreciation in Southeast Asian currencies vis-a-vis the won
necessarily means that Samsung will have to lower its U.S. price to
stay competitive with CTV producers from these countries who export
subject merchandise to the United States and are benefitting from the
deeper currency depreciations. We disagree with petitioners' assumption
that CTV producers compete only on the basis of price. We note that
CTVs are not commodity products; they are produced in several different
sizes, vary in quality, are visually distinct due to differently styled
cabinets, and contain different types and quantities of features.
Certain producers can also command a price premium on their CTVs due to
brand name recognition. For these reasons, it is plausible to conclude
that consumers include differences in size, features, brand name, and
other factors into their decision when purchasing a CTV. Therefore, we
find that CTV producers compete against one another with respect to
more than price alone.
The ramification of petitioners' argument that CTV producers
compete only on the basis of price is that if a foreign producer lowers
its U.S. price, as may happen from a home market currency devaluation,
then all other producers must fully match this price decrease or they
will be uncompetitive, eventually lose market share and possibly exit
the market. Due to the product differentiation discussed above, it is
reasonable to assume that a price reduction by one CTV producer does
not necessarily mean that competitors must follow suit to the same
degree. The strength of a brand name or feature mix may be sufficient
to allow a producer to
[[Page 46770]]
remain competitive, even in the face of decreasing prices by
competitors.
Moreover, there are many factors that, in combination, constitute
the competitive position of a producer in relation to its competitors.
The relative strength of a producers' home market currency is only one
such factor. While a devaluation of the other Southeast Asian
currencies may make producers in these countries more competitive in
the U.S. market, it also increases these producers' cost of capital and
imported inputs, and may cause home market prices and costs to rise.
For example, if a producer in Indonesia imports a large percentage of
the parts and components used to produce a CTV in Indonesia, the deep
depreciation of the rupiah may increase the production costs to a
degree that might actually diminish this producers' overall competitive
position rather than enhance it. Therefore, while it is correct that a
depreciating currency may tend to decrease the pressure for a
respondent to make LTFMV sales in the U.S. market, these linkages are
not absolute and must not be considered in isolation. With respect to
this case, there is very little information on the record concerning
Samsung's home market costs or to what degree Samsung and the other
Southeast Asian producers import parts and components used in the
production of CTVs. Therefore, there is not sufficient evidence on the
record to say conclusively how the exchange rate movements of the won
and other Southeast Asian currencies have affected the competitive
position of Samsung and CTV producers in these countries.
Petitioners assert that the Southeast Asian currencies depreciated
further than the Korean won, which grants a competitive advantage to
producers in these countries. Although this may have been the situation
in December 1997, more recent exchange rate data indicates that this is
no longer the case. We examined the exchange rates for the Singapore
dollar, Indonesian rupiah, Malaysian ringgit, Thai baht, and Korean won
from December 31, 1996, through June 30, 1998. See petitioners'
submission dated February 13, 1998, at 37. See also the Analysis
Memorandum, dated August 25,1998. Using the petitioners' methodology of
indexing each currency's exchange rate data to the spot rate that
prevailed on December 31, 1996, we were able to analyze the relative
depreciations of the five Southeast Asian currencies. We found that by
June 1998, the Singapore dollar and baht depreciated the least,
retaining over 80 percent of their indexed value, while the rupiah
depreciated the most, retaining only 20 percent of its indexed value.
Although the won and ringgit depreciated at different rates over the
length of the period we analyzed, by June 1998, the indexed exchange
rates for these two currencies had converged to roughly the same point,
with each currency retaining over 60 percent of its indexed value.
These data indicate that only one currency, the rupiah, has
consistently depreciated further than the won and, as Samsung points
out, U.S. import statistics provided by petitioners indicate that
Indonesia is not a significant supplier of CTVs to the U.S. market.
Given Samsung's history of receiving zero or de minimis dumping margins
in the face of an appreciating currency (see Samsung's February 13,
1998, submission at 8) and a larger debt burden than the debt
experienced in 1997 (see Comment 5 above), we find that the weight of
the evidence on the record indicates that Samsung is not likely to
resume dumping in the U.S. market.
Petitioners support their main argument that Samsung is likely to
resume sales at LTFMV because the won has depreciated less than the
other Southeast Asian currencies by making several allegations
concerning the CTV producers in other Southeast Asian countries. In
order to address each of petitioners' concerns, we provide the
following discussion.
With respect to petitioners' allegation that Southeast Asian CTV
producers have large excess capacity that will motivate them to dispose
of their surplus inventory by exporting it to the United States, as we
noted in Comment 4 above, subtracting CTV demand from CPT production is
not an appropriate method to calculate excess CTV capacity. Rather,
examining the capacity utilization rate of a company's CTV production
facilities is a more meaningful measure. Since petitioners have not
placed any evidence on the record concerning the utilization rates of
the CTV factories in Southeast Asia, we are not able to agree with
petitioners' conclusion that producers in these countries have excess
capacity.
Petitioners also claim that, because Southeast Asian CTV producers
are not constrained by U.S. antidumping duty orders and are suffering
from the negative effects of the Asian economic situation, they will
increase exports to the United States and engage in aggressive price
reductions that will eventually force Samsung to dump. Petitioners are
correct in that the Department does not currently have any antidumping
duty orders on CTVs from Malaysia, Indonesia, Singapore, or Thailand,
and that Southeast Asian producers therefore do not have an externally
enforced discipline on their pricing behavior. Since there is nothing
on the record of this proceeding to indicate significant increases in
exports and aggressive pricing by Southeast Asian producers, we
disagree with petitioners that the absence of an antidumping duty order
on CTVs from the Southeast Asian countries provides any additional
incentive to producers from these countries to sell their merchandise
at low prices, leading Samsung to eventually sell CTVs at LTFMV.
Finally, since petitioners have placed no data on the record of
this review concerning the financial condition of CTV producers in
Southeast Asia, we cannot agree with petitioners that these producers
carry unmanageable debt loads, are unable to service their current
debt, and are therefore forced to increase their exports to the United
States at very low prices. Therefore, we disagree with petitioners that
these factors, in conjunction with their main argument concerning
currency movements, are likely to force Samsung to compete in the U.S.
market at LTFMV.
Comment 7: Ability To Compete In The United States Market Without LTFMV
Sales
Petitioners argue that Samsung's own cost and pricing data show
that Samsung is likely to sell its CTVs in the U.S. market at below
FMV. In its questionnaire response dated February 24, 1997, Samsung
submitted price and cost information covering the period 1991 through
the first half of 1996 for its sales and expenses of Korean-produced
CTVs in Korea and its sales of Mexican-produced CTVs in the United
States. With respect to its price data, Samsung reported its
distributor sales prices, calculated as a single weighted-average price
for all models within each screen size category. Korean prices and
costs were converted to U.S. dollars with the weighted-average exchange
rate for the first half of 1996.
Using the weighted-average price data reported by Samsung,
petitioners compared U.S. market prices to Korean market prices and
found that the U.S. prices for 25-, 27-, and 31-inch CTVs were
consistently lower than those in Korea throughout the 1991-1996 period.
With respect to 13-, 19-, and 20-inch CTVs, petitioners claim that,
although Samsung's data were more varied throughout the 1991-1996
period, by the first half of 1996, U.S. prices were lower than Korean
prices for these screen sizes. Thus, petitioners contend that these
weighted-average price-to-price comparisons indicate that
[[Page 46771]]
significant dumping margins would exist if Samsung resumed CTV
shipments directly from Korea. Petitioners defend their use of U.S.
prices of Mexican-produced CTVs in their comparisons to Korean CTV
prices because Samsung's cessation of CTV shipments directly from Korea
has made current pricing data of CTVs produced in Korea and sold in the
United States impossible to obtain. Given the competitive market for
CTVs in the United States, petitioners assert it is reasonable to
presume that Samsung's prices in the United States would not vary
depending on the production location.
Furthermore, petitioners claim that the data for the first half of
1996 indicates that Samsung was selling at below its cost of production
in the home market for 31-inch CTVs. In this situation, petitioners
contend that the Department would not rely on Samsung's home market
price to calculate the dumping margin, but would instead resort to
constructed value (CV). Using a CV methodology, based on adding a
profit amount to Samsung's cost of production to determine the
appropriate normal value, petitioners perform a CV-to-price comparison
for 31-inch CTVs and calculate an even higher dumping margin. Moreover,
petitioners argue that the dumping margin based on CV is not eliminated
even if Samsung's cost of production is converted into U.S. dollars at
the significantly depreciated January 1998 exchange rate.
In their case brief, petitioners also compare specific 28- and 32-
inch CTV models sold in Korea and the United States using 1997 retail
prices obtained from a U.S. and Korean consumer electronics catalog.
Petitioners use the January 1998 exchange rate to convert the retail
prices of the Korean models to U.S. dollars, compare the converted
Korean price to the retail price of comparable 32-inch models sold in
the United States, and then calculate dumping margins. Petitioners
state that any true comparison of home market and U.S. prices should be
based on actual selling prices to distributors, with circumstance-of-
sale adjustments, difference-in-merchandise adjustments, and
adjustments for movement charges, data which is only available to
Samsung and has not been provided on the record of this proceeding.
Petitioners contend that these basic comparisons support their claim
that Samsung is likely to resume dumping, especially in the large and
very large screen models, should shipments directly from Korea
recommence.
Petitioners conclude that Samsung's own price data and the retail
price data from Korea and the United States indicate that Samsung
cannot compete in the U.S. market without sales at LTFMV. According to
petitioners, it is entirely predictable that Samsung has resolved to
reenter the U.S. market and, in the face of competing and aggressively
priced imports, will be forced to price its Korean CTVs unfairly.
Petitioners note that Samsung has not sold a Korean-produced CTV in the
United States for nearly seven years. By emphasizing that it has chosen
to supply the U.S. market from Mexico, petitioners maintain that
Samsung has acknowledged that it cannot competitively produce, ship,
and sell CTVs to the United States from Korea. Petitioners conclude
that Samsung's six years of de minimis margins provide no evidence of
any current ability to compete without unfair pricing if the order were
revoked.
Samsung responds to petitioners' allegation that its price and cost
data reveal that dumping is likely to occur by stating that petitioners
have relied upon stale 1996 data for their weighted-average price-to-
price comparisons rather than using the more recent 1997 data Samsung
submitted on the record of this proceeding. For example, Samsung states
that using the price data for the first half of 1997 and the January
1998 exchange rate, the weighted-average price of its 31-inch CTVs sold
in Korea, after being converted in dollar terms, is well below the
weighted-average price for its 31-inch (Mexican-produced) CTVs sold in
the U.S. market.
Samsung further states that any type of weighted-average price-to-
price comparison of Korean CTV models to U.S. CTV models is invalid.
Samsung argues that, although it is true that the price information it
submitted shows that the weighted-average price of all models of a
particular screen size sold in the United States were often lower than
the weighted-average price of all models of that same screen size sold
in Korea, petitioners incorrectly conclude that this is evidence that
dumping would resume. According to Samsung, this conclusion is
erroneous because weighted-average prices mask the fact that individual
model prices within a particular screen size can vary widely. Samsung
elaborates that the model mix and features contained in the models sold
in the United States and Korea are significantly different. Samsung
states that CTVs sold in Korea have a larger number of expensive
features than the models its sells in the United States. In order to
show that the lower U.S. weighted-average prices are accounted for by
the differences in features between U.S. and Korean models, Samsung
conducts a model-to-model comparison of its largest selling U.S. models
(Mexican-produced) to the most physically similar models produced and
sold in the Korean market and makes adjustments for selling expenses,
duty drawback, and physical differences. According to Samsung, these
comparisons indicate that Korean prices did not exceed U.S. prices for
these models.
Using similar logic, Samsung argues that the problems inherent in
comparing weighted-average prices also apply to comparing weighted-
average costs of production. For this reason, Samsung claims that
petitioners' allegation of below-cost sales in the home market is not
valid because that allegation is based on a comparison of weighted-
average costs of production to weighted-average prices, per screen
size.
In regard to petitioners' comparison of specific 28- and 32-inch
models, Samsung claims that these comparisons are invalid for several
reasons. First, petitioners use Korean and U.S. retail prices, rather
than wholesale prices, to demonstrate that Samsung would be likely to
sell CTVs in the United States at dumped prices. Samsung states in its
questionnaire response that it has two levels of trade in the United
States, sales through its U.S. distribution subsidiary and sales
Samsung describes as being to original equipment manufacturer (OEM)
customers. Since it does not sell at the retail level in the United
States, Samsung contends that retail prices should not be used in a
``likely'' dumping calculation. Second, Samsung claims that the Korean
retail prices used by petitioners include special excise tax, value
added tax, and other taxes which together total a significant percent
of the wholesale price. Additionally, Samsung states that the Korean
retail prices do not include the substantial rebates it usually grants
to its customers. Third, Samsung claims that the Korean 28- and 32-inch
models used by petitioners are not comparable to the United States
models because the Korean models have a 16:9 CPT width/height ratio
while the U.S. 32-inch models have a 4:3 ratio. Samsung asserts that
the materials cost of a wide-screen CPT is greater than the cost of
producing a normal screen CPT, and, therefore, any comparisons of these
models at issue for dumping purposes would be distorted.
Samsung argues that its six years of de minimis margins, from the
third through eighth reviews, constitute substantial evidence that it
can compete in the United States market without pricing CTVs at LTFMV.
Samsung notes that
[[Page 46772]]
during this six-year period of no dumping, its level of shipments to
the United States remained substantial, its product mix remained
varied, and it received de minimis margins even during periods of
significant appreciation of the won (the fourth through eighth review
periods). Most importantly, Samsung notes that it has invested millions
of dollars in its Mexican production facilities that can, and do, fully
serve the United States market. Samsung concludes that it has no need
to ship CTVs from Korea to the United States, and even if it did, there
is no evidence indicating that it would dump them on the U.S. market.
Department's Position: We disagree with petitioners' claim that
Samsung is not able to compete in the U.S. market without LTFMV sales.
In arguing their point, petitioners conduct rough dumping margin
calculations on Samsung's U.S. and home market prices, both on a
weighted-average by screen size basis and on a model-specific basis. We
acknowledge that any type of dumping margin analysis conducted in this
review is problematic due to Samsung's cessation of CTV shipments to
the United States from Korea in early 1991. Unlike the pricing analyses
conducted in past cases such as DRAMS and Brass Sheet and Strip, in
this case a pricing analysis cannot be based on a comparison of home
market and U.S. prices of Korean-produced CTVs, as the latter price is
not available due to the cessation of shipments. Rather, in this case,
the comparison involves home market prices of Korean-produced CTVs to
U.S. prices of Mexican-produced CTVs. It is reasonable to presume that
prices of Mexican- and Korean-produced CTVs reflect the cost structure
of producing CTVs in Mexico and Korea, respectively. While the cost
structures of Mexican and Korean CTVs vary, we conclude that in this
case, use of the U.S. price for Mexican-produced CTVs is a reasonable
surrogate for the U.S. price of Korean-produced CTVs because Samsung's
pricing of its Mexican-produced CTVs sold in a competitive market, such
as the U.S. market, provides some indication of the price for which
Samsung's Korean-produced CTVs would be sold. Moreover, we note that
there are no other pricing data available pertaining to Samsung.
In DRAMS, unlike the instant case, we determined the DRAM industry
to be ``highly cyclical in nature with periods of sharp upturn and
downturn in market prices.'' See DRAMS at 39810. Due to the position of
the United States as the ``world's largest regional market for DRAMs,
with considerable potential growth,'' we determined that companies had
the economic incentive to ``ride out industry downturns'' in order to
maintain market share. See DRAMS at 39819. The fact that DRAM producers
had historically been found to have dumped during downturns supported
our conclusion. However, in this case, we have determined that the U.S.
CTV industry, as described in our discussion of Comment 3 above, is not
highly cyclical and does not have ``periods of sharp downturn and
upturn in market price.'' Rather, the U.S. CTV industry is a
competitive and mature industry, that has reached approximately 98
percent household penetration. Samsung's reported U.S. prices and the
price data it provided for the overall U.S. CTV industry indicate that
this industry is generally stable, exhibiting a historic trend of
modest, annual price decreases. See Comment 3 above. Since Samsung
received de minimis margins during four consecutive years of price
decreases, from April 1985 through March 1988, we determine that it has
demonstrated the ability to compete in the U.S. market without LTFMV
sales.
In their analysis, petitioners compared the weighted-average prices
Samsung reported, by screen size, for its Korean and U.S. sales. Based
on this comparison, petitioners argue that Samsung's Korean prices are
higher than its U.S. prices in the large and very large product
segments, which indicates that dumping would occur given the resumption
of shipments. We disagree with this conclusion. First, we note that
comparing weighted-average prices between the Korean and U.S. markets
is problematic, as Samsung states, because in the CTV industry the
prices of individual models within the same screen size category can
vary widely, the model mix within each screen size is different across
markets, and the types and quantity of features contained in specific
models are significantly different between markets. Since Korean models
may contain a larger number of expensive features, this may account, at
least in part, for the differences in prices observed by petitioners
for the 25-, 27-, and 31-inch CTVs sold in the two markets. Absent
evidence to the contrary on the record of this proceeding, it is not
unreasonable that the Korean weighted-average price for a given screen
size is higher than the U.S. weighted-average price in that same size.
Moreover, the model-to-model comparisons that Samsung conducted, in
order to show that the lower U.S. weighted-average prices are accounted
for by the differences in features between U.S. and Korean models,
showed that after adjusting the initial prices of the Korean and U.S.
models for selling expenses, duty drawback, and physical differences,
the alleged dumping margins suggested by the models' unadjusted prices
were eliminated. See Samsung's letter to the Secretary, dated August
22, 1997, at Exhibit A. These comparisons were done for 13 of Samsung's
largest selling U.S. models, accounting for approximately 50 percent of
its total U.S. sales, and support the conclusion that the petitioners'
analysis cannot be relied upon as a basis to determine that Samsung is
likely to resume sales at LTFMV.
In regard to petitioners' allegation of below-cost sales in Korea,
we agree with Samsung that in the CTV industry, comparing the weighted-
average cost of production to the weighted-average home market price on
a screen size-specific basis is problematic because prices and costs of
production of individual models within the same screen size category
can vary widely due to the differences in the types and quantities of
features contained in specific models. This reasoning is especially
relevant in large and very large screen sizes, which tend to contain
more features than smaller CTVs.
With respect to petitioners' comparison of prices for specific 28-
and 32-inch models sold in the U.S. and Korean markets, we agree with
Samsung that these comparisons are of limited value because these
prices have not been adjusted for taxes, rebates, and other expenses
and that some of the models compared to one another contain CPTs of
different width/height ratios.
In addition, during its six years of de minimis margins, Samsung
exported substantial quantities of subject merchandise in a varied
product mix. See Samsung's submission dated February 13, 1998, at page
8. This fact pattern is different from Brass Sheet and Strip, where we
denied partial revocation of the order because, among other factors,
the respondent had ``severe decreases in shipments of brass sheet and
strip to the U.S. since the imposition of the order,'' culminating in
the respondent selling at not LTFMV a single model in a single
transaction during the eighth administrative review of that order.
Additional evidence that Samsung can compete in the U.S. market without
LTFMV sales is that Samsung's shipments from Korea occurred while the
won was appreciating.
[[Page 46773]]
Comment 8: Third Country Trade Restrictions
Petitioners state that Samsung's Korean CTV operations are
extremely export-oriented and that the United States, due to its open
economy, is the likely recipient of these exports. As evidence,
petitioners note that the United States duty rate on the majority of
imported CTVs is 5 percent, in contrast to the 14 percent external
tariff found within the European Union (EU). More importantly,
petitioners observe that the EU has placed antidumping duties against
Korean and other Southeast Asian CTVs. Specifically, the EU imposed on
Samsung antidumping duties of up to 10.5 percent on small CTVs and 13.7
percent on all other sizes that are shipped directly from Korea. Thus,
petitioners conclude, Samsung faces cumulative ordinary and antidumping
duties on exports to Europe of up to 27.7 percent, as compared to an
antidumping duty deposit of zero and an ordinary duty rate of 5 percent
on exports to the United States.
Petitioners argue that, contrary to Samsung's assertions, its
strategy of localizing production within its major CTV markets around
the world may have more to do with gaining access to markets with
barriers to CTV imports than with relative advantages in terms of
production or shipping costs. Although Samsung claimed in its
questionnaire response that it has not faced any barriers to exporting
CTVs, petitioners maintain that the recurring pattern of having sales
within a third country jump significantly once the local facility began
production supports the thesis that market barriers provided the
incentive to establish local production. Therefore, petitioners
conclude that because Samsung faces significant trade restrictions in
third countries, as its localization strategy implicitly acknowledges,
it has a strong incentive to ship its excess CTV production to the
United States and, in combination with the other factors discussed by
petitioners, sell this merchandise at LTFMV in the U.S. market.
Samsung does not dispute the regular and antidumping duty rates
provided by petitioners for the EU and United States. However, Samsung
notes that these European duties have been in effect since 1990 and
have not compelled Samsung to export CTVs to the United States from
Korea during the last eight years. In regard to barriers to trade in
third countries, Samsung stated in its questionnaire response that it
has not encountered any barriers to trade in third countries that have
made it difficult to sell CTVs in those counties. Samsung claims that
its localization strategy was adopted in order to reduce costs and meet
demand in markets within each localized facility's geographic region.
Department's Position: Although the topic of third country trade
restrictions goes more toward the issue of whether Samsung is likely to
resume shipping, rather than dumping, we provide the following
discussion in order to address fully all of petitioners' concerns.
We disagree with petitioners' argument that tariff barriers in
major CTV markets will motivate Samsung to export CTVs to the United
States from its Korean production facilities and sell such exports at
LTFMV. Petitioners observe that Samsung's Korean exports face
cumulative ordinary and antidumping duties in Europe of up to 27.7
percent, while, if the U.S. antidumping duty order is revoked, such
exports are subject to the smaller 5 percent regular tariff in the
United States. Therefore, petitioners state that it is reasonable to
conclude that a large volume of Samsung's CTV exports from Korea will
be shipped to the United States.
In past cases, we have examined trade restrictions in third country
markets in making its determination on the likelihood of the respondent
resuming sales at LTFMV. In TVs from Japan, we agreed with the
petitioner's argument that since other countries (specifically, the EU)
had instituted more restrictive import controls over consumer products,
the Japanese producers would increasingly depend on sales in the U.S.
market. See TVs from Japan at 35519. However, the issue of whether the
Japanese producers had other, substantial CTV markets besides the U.S.
and EU was not addressed in the final determination of that case. More
recently, we have stated that it is important to examine whether the
respondent is ``solely dependent on the U.S. for financial viability''
and if it made significant sales in other third countries when
considering revocation. See Steel Wire Rope 1997 at 17174. In the case
of Samsung, the facts demonstrate that the company has access to third
country markets and, thus, does not rely solely on the U.S. market.
For example, petitioners' argument that Samsung has an incentive to
resume shipments to the United States because it faces high import
barriers in the EU, a major CTV market, fails to take into account
Samsung's CTV operations in Eastern and Western Europe, which Samsung
states serve the CTV markets of these two regions. See Samsung's
February 24, 1997, submission at Appendix 1. The existence of these
operations limits the importance of EU trade restrictions on Samsung's
Korean-produced CTVs in our analysis of whether Samsung is not likely
to resume dumping in the U.S. market in the absence of an antidumping
duty order.
In addition, petitioners' argument does not take into account that
Samsung's Mexican operations have served the U.S. market since 1991. In
the context of the terminated anti-circumvention inquiry, the
Department verified Samsung's Mexican CTV production facilities. As the
verification report states, the Department found that these facilities
include a CTV assembly plant, parts and components plant, CPT plant, a
proposed glass plant, and several feeder plants established and
operated by unrelated Korean suppliers to Samsung. See the memorandum
to the file, dated August 12, 1998, that transmits the November 26,
1997, verification report to the record of this review. From these
facilities, Samsung produces CTVs ranging from 13 to 31 inches that are
sold throughout North, Central, and South America. During the first
half of 1997, most of the Mexican-produced CTVs exported to the United
States enter the country duty-free under NAFTA tariff preference
provisions. Using the same logic employed by petitioners, that Samsung
will export CTVs to the market with the lowest tariff barriers, we can
only conclude that Samsung will continue to service the U.S. market
from Mexico because CTVs produced in Mexico can enter the U.S. duty-
free under NAFTA, provided they meet NAFTA rules of origin. In addition
to its Korean and Mexican facilities, Samsung also has CTV production
operations in West Europe, East Europe, East Asia, and South East Asia.
See Samsung's February 24, 1997, questionnaire response at Appendix 1.
Because Samsung has access to these markets based upon its localization
process, the third country restrictions to trade are not significant in
this case.
Comment 9: New Technologies--High-Definition Television
Petitioners contend that although this changed circumstances review
should not be used as a surrogate scope inquiry, high-definition
television (HDTV) and other new technologies, are within the scope of
this order and the development of such technology should be factored
into the Department's revocation analysis. Specifically, petitioners
state that HDTV will be capable of producing a video image and
receiving a television
[[Page 46774]]
signal, and that these features in and of themselves are sufficient to
satisfy the scope requirements. In regard to Samsung's claim that HDTVs
will include other features or be used for purposes other than
receiving a broadcast signal, petitioners state that these claims were
not dispositive in the Final Affirmative Scope Ruling--Antidumping Duty
Order on Color Television Receivers from Taiwan (A-583-009); Coach
Master International Corporation, 63 FR 805 (January 7, 1998), and
should not be so here. Furthermore, petitioners assert that the
Department has consistently found that new technologies, such as liquid
crystal diode TVs, are included within the scope of the CTV order. See,
e.g., Television Receiving Sets, Monochrome and Color, from Japan, 56
FR 66841 (December 26, 1991). Petitioners maintain that in these cases,
uncertainties about the future marketing, prices, or demands have never
been dispositive factors in deciding whether these new technologies are
within the scope of the order.
Petitioners claim that Samsung has consistently denied throughout
the course of this segment of the proceeding that it would be producing
HDTVs, or any other new television technology, in Korea. As evidence
for their assertion, petitioners cite excerpts from Samsung's
questionnaire response and subsequent submissions where Samsung
characterized its current state of HDTV development as still in the
research and development stage, where mass production was not in the
foreseeable future. In actuality, petitioners argue, Samsung has
invested millions of dollars into developing this technology and has
reached the point where mass production of HDTVs is scheduled to begin
during the second half of 1998. In support of its argument, petitioners
note that Samsung displayed a fully functional HDTV unit at the January
1998 consumer electronics show in Las Vegas, Nevada. Petitioners
explain that the promotional literature Samsung distributed during the
trade show described the new, proprietary digital television chipset
architecture Samsung developed and discussed the long list of features
the HDTV model will contain.
Petitioners also claim that Samsung's argument that HDTV production
will not occur for many years away due to, in part, the long schedule
for transition to digital broadcasting is suspect because Samsung, in
its own promotional literature, includes the Federal Communications
Commission's transition schedule, which states that by May 1999, 20
percent of the U.S. population will be able to receive digital signals
and, by November 2000, digital signal broadcasts will cover 50 percent
of the U.S. population. Petitioners maintain that these numbers
indicate that in just over two years, half of the U.S. television
market will be receiving digital signals and potentially be ready to
purchase a digital receiver.
According to petitioners, the first type of HDTVs sold in the
United States will be projection-style CTVs. Petitioners assert that
because Samsung does not produce projection-style CTVs in Mexico, it
does not currently have the capacity to assemble projection-style HDTVs
in Mexico. However, since Samsung sells and presumably produces the
projection-style CTVs in Korea, combined with the fact that Korea has
recently adopted the advanced television systems committee (ATSC)
standard for digital broadcast, petitioners conclude that Samsung has
the ability and motivation to produce projection-style HDTVs in Korea
for sale in the Korean market and export to the United States.
Petitioners also argue that HDTVs are likely to be sold in the
United States at less than normal value. Petitioners base this
allegation on an estimate by Thomson Consumer Electronics (Thomson)
that the cost of manufacture for a projection-style HDTV will be a
large multiple of the cost of manufacture for a 31-inch CTV. Starting
with Samsung's 1996 cost of production for a 31-inch conventional CTV,
petitioners convert this cost to U.S. dollars using the January 1998
exchange rate, and then inflate this amount by a large multiple to
arrive at an estimate of Samsung's cost of production for a HDTV. Using
Samsung's 1996 financial statement, petitioners calculate amounts for
SG&A expenses, interest expenses, and profit. These amounts are added
to their estimated cost of production to produce a final CV for HDTV.
Petitioners then take Samsung's estimated retail U.S. price range for
HDTVs and reduce it by a certain percentage to adjust for retail
markup. Petitioners claim that without making further adjustments to
the U.S. price to account for freight and other movement expenses
involved in transporting the HDTVs from Korea to the United States, a
CV-to-price comparison indicates that Samsung would be dumping its
HDTVs in the United States.
Samsung argues that HDTV will be outside the scope of the order on
Korean CTVs because this new technology does not meet the four criteria
for determining whether ``later-developed-merchandise'' is within the
scope of an outstanding order. First, with respect to physical
characteristics, Samsung notes that HDTVs use a digital signal
technology, while conventional CTVs use non-compatible analog
technology. HDTV will have a 16:9 width/height ratio compared to a 4:3
ratio for a conventional CTV. HDTV will have advanced hardware and
software that allows it to display roughly twice the resolution of a
conventional CTV. Additionally, HDTV will have the ability for
interactive use and receipt of data services. Second, Samsung claims
that due to the better picture and sound quality, along with the data
service capability, the expectations of an ultimate purchaser of a HDTV
will be vastly different from those of a purchaser of a conventional
CTV. Third, with respect to the ultimate use of HDTV, Samsung contends
that it will differ significantly from a conventional CTV precisely
because of the interactive function and the ability to receive data
transmission, such as stock pricing, home shopping information, and
electronic newspapers. Fourth, Samsung states that it is highly
unlikely that it will sell HDTVs through the same channels of
distribution as it sells conventional CTVs. Since HDTVs will have a
price of over $5,000, Samsung will have to sell HDTVs through dealers
which specialize in high-tech and luxury products, rather than its
current distribution channel of companies selling more affordable
products, such as Circuit City, Best Buy, Sears, and Wal-Mart. For
these reasons, Samsung concludes, HDTVs will not be within the scope of
the order on Korean CTVs and, therefore, the development of such
technology should not be considered a factor in the Department's
revocation analysis.
Samsung states that HDTV is a very new and complicated technology,
and it will take many years for CTV producers to develop the ability to
mass produce HDTV sets. As support, Samsung cites several press
articles that indicate the HDTV market will be characterized by
prohibitively high prices, low sales volume, and slow market
penetration. For these reasons, Samsung states that it does not intend
to produce HDTV in commercial quantities in the reasonably foreseeable
future.
More specifically, Samsung states that commercial production cannot
begin until it completes all three stages of research and development.
Samsung states that it has completed only the first stage, development
of a prototype, as evidenced by the functional unit displayed at the
January 1998 consumer electronics trade show. Samsung claims that the
second and third stages, respectively the development
[[Page 46775]]
verification test and the manufacturing verification test, have yet to
begin. However, Samsung contends that these stages cannot begin until
the ATSC approves the software standards for HDTV. Samsung claims that
this approval is not expected until September 1998.
Samsung contends that in addition to the technical reasons
preventing immediate commercial production, such production is not
feasible until broadcasters have converted to digital signals.
According to the regulations governing this transition, conversion to
digital broadcasting in the United States is not scheduled for
completion until the year 2002, at the earliest. Until the transition
is completed, Samsung argues, the market in the United States will not
be large enough to justify commercial production of HDTVs. Therefore,
due to the technical restrictions and the long transition schedule,
Samsung concludes that commercial production of HDTV in the United
States is at least four years away.
Samsung next argues that when commercial production begins, it will
occur in Mexico, rather than in Korea, because it makes economic sense
to do so. Samsung claims that it will be more expensive to produce
HDTVs in Korea, rather than Mexico, for the following reasons: (1)
Samsung would have to pay freight costs on many of the components used
in its HDTV design because most of the major components are
manufactured in the United States and Japan, (2) shipping,
transportation, and inventory charges would be higher due to the large
size of rear-projection sets, and (3) Samsung would have to pay the
regular 5 percent duty on finished CTVs if HDTV is ultimately
determined to be within the scope of the CTV order. Samsung concludes
that most of these expenses would be avoided if Samsung produced the
HDTV units in Mexico. Lastly, Samsung contends that there is no
material difference in the nature of the assembly facilities in Mexico
and Korea, as the Department verified in the context of the terminated
anti-circumvention inquiry. Samsung claims that in both facilities new
HDTV production lines will need to be constructed and petitioners have
not provided evidence to the contrary. Although petitioners argue that
Samsung's existing production capacity in Korea for rear-projection
convention CTVs offers an economic advantage to locating production of
rear-projection HDTVs in Korea, Samsung states that petitioners have
provided no evidence to substantiate their claim. Samsung states that
petitioners have excellent information sources within the CTV industry
and could have provided factual information concerning the
characteristics or cost of an HDTV production line or the ability of a
producer to utilize and/or convert an existing conventional rear-
projection CTVs production line to produce HDTVs. According to Samsung,
the fact that petitioners did not provide such evidence indicates that
there is no credible reason why Samsung cannot produce HDTVs in Mexico.
Samsung argues that petitioners' estimate of the likelihood of
Samsung dumping HDTVs in the United States is based on wholly
unsubstantiated allegations concerning Samsung's price and cost
structure, which has yet to be established because Samsung has not
started to sell or commercially produce HDTVs. Specifically, Samsung
states that petitioners have no concrete basis for their HDTV cost
allegation, but instead must rely on a cost estimate certified by
Thomson. Furthermore, Samsung states that petitioners' claim that
Thomson's cost of manufacture of a projection-style HDTV is a large
multiple of the cost of a 31-inch CTV, is inherently unreliable given
the enormous technical differences between analog CTV and HDTV. Lastly,
Samsung argues that petitioners' effort to adjust the expected U.S.
retail price for HDTVs to the wholesale level by adjusting for a
``typical retail mark-up'' is problematic given that no retail or
wholesale sales have been made by any producer.
Department's Position: This discussion should not be viewed as a
surrogate scope inquiry. In an official scope inquiry, parties
typically place on the record very technical data, including product
specifications, of a product that has actually been produced and sold
in the United States. There is no such data on the record in this
segment of the proceeding. However, based on the presumption that the
scope covers all CTVs unless expressly excluded, the Department will
consider, as we did in TVs from Japan, the development of new
technology in our analysis of whether it is not likely that Samsung
would renew dumping. See TVs from Japan at 35519.
Although we agree with petitioners that HDTV is presumed to be
subject merchandise within the scope of the order for purposes of this
changed circumstances review, we cannot reasonably conclude, based on
the record evidence, that Samsung is likely to sell HDTV at LTFMV, even
if Samsung were to produce such merchandise in Korea. The fact that an
industry is developing new technologies is not, by itself, a sufficient
argument on which to base a claim that these new technologies are
likely to be dumped. There must be credible evidence to indicate not
only that these new technologies are soon to be introduced into the
U.S. market, but also that such merchandise is likely to be sold at
LTFMV. In TVs from Japan, we found that new technological trends in the
television industry, such as LCD TVs, were likely to be developed and
produced in Japan and that ``the incentive to sell such products at
LTFMV will depend on competitive market pressures.'' See TVs from Japan
at 35519. Furthermore, we stated that ``given the number of companies
currently pursuing new technologies and the high production costs in
Japan combined with the high value of the yen,'' we could not conclude
that there was no likelihood of selling new products at LTFMV in the
future. Id. at 35519. The Department found that the evidence on the
record of that case indicated that new technologies were to be produced
in the home market (Japan), the home market currency (the yen) was
appreciating, home market production costs were high, and that
competition would be strong given the number of companies pursuing such
technology. Based on the totality of the circumstances in that case,
the Department could not conclude that the respondents (Sanyo and
Hitachi) were not likely to sell the new products at LTFMV in the
future.
In this case, the petitioners' arguments with respect to sales of
HDTV being sold at LTFMV are not persuasive. First, HDTV technology has
been under development for more than 10 years and has yet to become
commercially viable. Second, the fact that petitioners' estimate of
Samsung's cost of production for HDTV is based on the cost of
production for an 31-inch analog CTV, which is technically very
different from HDTV, is problematic because it is highly speculative of
the real costs of HDTVs. Samsung has not produced or sold commercial
quantities of HDTV. Moreover, the estimates provided by petitioners
cannot reasonably be relied upon because petitioners have not
demonstrated any cost relation between 31-inch analog CTVs and HDTV,
nor have they explained the derivation or calculation of the large
multiple used in their analysis. Absent some reasonable explanation,
the Department cannot rely on those highly speculative estimates as a
valid indicator of the cost of production for HDTV.
Although in past cases we have found that new technology is
developed in the home market (i.e., TVs from Japan), we
[[Page 46776]]
cannot reach the same conclusion in this case. Specifically, we note
that the bill of materials Samsung provided for its HDTV prototype
revealed that none of the four major components (i.e., the chipset,
CPT, lens, and screen panel) were produced in Korea. In light of the
won's depreciation, the cost of importing these components has risen
and may be a disincentive to Samsung in keeping HDTV production in
Korea. Therefore, based on the evidence on the record, we cannot
conclude that HDTVs, once fully developed by Samsung, will be produced
in Korea or dumped in the United States.
Affirmative Final Determination of Changed Circumstances
Based on the foregoing analysis, we determine, pursuant to Section
353.25(d) of the Department's regulations, that changed circumstances
warrant partially revoking the antidumping duty order on CTVs from
Korea with respect to merchandise exported by Samsung that is also
manufactured by Samsung. Pursuant to our final results, we will
instruct the U.S. Customs Service (Customs) to end the suspension of
liquidation of merchandise subject to the order on CTVs from Korea, as
it applies to Samsung, on or after the publication date of this notice
of final determination, and to refund any estimated antidumping duties
collected, for all unliquidated entries of such merchandise made on or
after the publication date of this notice of final determination. We
will also instruct Customs to pay interest on such refunds in
accordance with Section 778 of the Act.
This final affirmative changed circumstances determination is in
accordance with Section 751(b) of the Act and 19 C.F.R. 353.22(f).
Dated: August 26, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-23669 Filed 9-1-98; 8:45 am]
BILLING CODE 3510-DS-P
