[Federal Register Volume 63, Number 184 (Wednesday, September 23, 1998)]
[Notices]
[Pages 50867-50880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25434]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-812]
Dynamic Random Access Memory Semiconductors of One Megabit or
Above From the Republic of Korea: Final Results of Antidumping Duty
Administrative Review, Partial Rescission of Administrative Review and
Notice of Determination Not to Revoke Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review.
-----------------------------------------------------------------------
SUMMARY: On March 9, 1998, the Department of Commerce (``the
Department'') published the preliminary results of its administrative
review of the antidumping duty order on dynamic random access memory
semiconductors of one megabit or above (``DRAMs'') from the Republic of
Korea (``Korea''). The review covers two manufacturers/exporters of the
subject merchandise to the United States and four third-country
resellers from Singapore, Malaysia, Canada, and Hong Kong for the
period May 1, 1996, through April 30, 1997. The two manufacturers/
exporters are Hyundai Electronics Industries, Co. (``Hyundai''), and LG
Semicon Co., Ltd. ( ``LG,'' formerly Goldstar Electronics Co., Ltd.).
The third-country resellers are Techgrow Limited (Hong Kong)
(``Techgrow''), Singapore Resources Pte. Ltd. (``Singapore''), NIE
Electronics Sdn. Bhd. (Malaysia) (``NIE''), and Vitel Electronics
Ottawa Office (Canada) (``Vitel''). With respect to the third-county
resellers, Vitel did not respond, Singapore and NIE stated that they
made no sales of the subject merchandise to the United States during
the period of review (``POR''), and Techgrow did not respond fully.
As a result of our analysis of the comments received, we have
changed the results from those presented in our preliminary results of
review.
EFFECTIVE DATE: September 23, 1998.
FOR FURTHER INFORMATION CONTACT: John Conniff or Thomas Futtner, AD/CVD
Enforcement Office 4, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-
1009 and (202) 482-3814, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise stated, all citations to the Tariff Act of 1930,
as amended (``the Act''), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all references to the Department's regulations are
to 19 CFR 353 (1997).
Background
On March 9, 1998, the Department published in the Federal Register
(63 FR 11411) the preliminary results of its administrative review of
the antidumping duty order on DRAMs from Korea. In our preliminary
review results, we gave interested parties an opportunity to comment on
our application of facts available to certain unreported sales by LG.
On March 24, 1998, we received written comments from LG and petitioner,
Micron Technology Inc. (``Micron''). With respect to the unreported
sales, LG requested that the Department verify the accuracy of the
information and declarations regarding these transactions that LG
attached as exhibits to its March 24, 1998, submission. On May 6, 1998,
Micron and LG submitted rebuttal comments.
On April 1, 1998, Multi Industry Tech, Inc. (``MIT''), and Multi
Teck Computacion, S.A. de C.V. (``MTC'') (collectively ``MultiTech''),
entered an appearance as an interested party under section 771(9)(A) of
the Act and filed a request for an administrative protective order
(``APO''). On April 3, 1998, LG submitted comments opposing the entry
of appearance and MultiTech's request for an APO. On April 14, 1998,
the Department granted MultiTech an APO as an interested party. See
April 14, 1998, Memorandum from Ann Sebastian to Louis Apple, regarding
``Administrative Protective Order Application from Counsel for Multi
Industry Tech, Inc. and Multi Teck Computacion, S.A. de C.V. in the
Administrative Review of the Antidumping Duty Order on Dynamic Random
Access Memory Semiconductors of One Megabit and Above from Korea (A-
580-812) (5/1/96-4/30/97)'', contained in the official case file
located in the Central Records Unit, Room B099 of the main Commerce
Building (``CRU'').
We also gave interested parties an opportunity to comment on our
[[Page 50868]]
preliminary results. The petitioner, Hyundai, and LG submitted case
briefs on April 28, 1998, and rebuttal briefs on May 6, 1998. MultiTech
submitted a case brief on April 28, 1998.
On June 4-5, 1998, the Department held meetings at the headquarters
of LG's U.S. subsidiary, LG Semicon America, Inc. (``LGSA''), in San
Jose, California. At these meetings, the Department reviewed the
declarations and other information from LG's March 24, 1998,
submission. On July 17, 1998, we released our report on the June 4-5,
1998, meetings. We held both public and closed hearings on July 27,
1998. We have now completed this administrative review in accordance
with section 751(a) of the Act.
Scope of Review
Imports covered by the review are shipments of DRAMs of one megabit
or above from Korea. Included in the scope are assembled and
unassembled DRAMs of one megabit and above. Assembled DRAMs include all
package types. Unassembled DRAMs include processed wafers, uncut die,
and cut die. Processed wafers produced in Korea, but packaged or
assembled into memory modules in a third country, are included in the
scope; wafers produced in a third country and assembled or packaged in
Korea are not included in the scope.
The scope of this review includes memory modules. A memory module
is a collection of DRAMs, the sole function of which is memory. Modules
include single in-line processing modules (``SIPs''), single in-line
memory modules (``SIMMs''), or other collections of DRAMs, whether
unmounted or mounted on a circuit board. Modules that contain other
parts that are needed to support the function of memory are covered.
Only those modules which contain additional items which alter the
function of the module to something other than memory, such as video
graphics adapter (``VGA'') boards and cards, are not included in the
scope. The scope of this review also includes video random access
memory semiconductors (``VRAMS''), as well as any future packaging and
assembling of DRAMs; and, removable memory modules placed on
motherboards, with or without a central processing unit (``CPU''),
unless the importer of motherboards certifies with the Customs Service
that neither it nor a party related to it or under contract to it will
remove the modules from the motherboards after importation. The scope
of this review does not include DRAMs or memory modules that are
reimported for repair or replacement.
The DRAMS and modules subject to this review are currently
classifiable under subheadings 8471.50.0085, 8471.91.8085,
8542.11.0024, 8542.11.8026, 8542.13.8034, 8471.50.4000, 8473.30.1000,
8542.11.0026, 8542.11.8034, 8471.50.8095, 8473.30.4000, 8542.11.0034,
8542.13.8005, 8471.91.0090, 8473.30.8000, 8542.11.8001, 8542.13.8024,
8471.91.4000, 8542.11.0001, 8542.11.8024 and 8542.13.8026 of the
Harmonized Tariff Schedule of the United States (``HTSUS''). Although
the HTSUS subheadings are provided for convenience and customs
purposes, the Department's written description of the scope of this
review remains dispositive.
Partial Rescission of Review
Singapore and NIE stated that they made no sales of the subject
merchandise to the United States during the POR. Since we have been
able to confirm that neither company did, in fact, have shipments of
the subject merchandise during the POR, we are rescinding this
administrative review with regard to Singapore and NIE. In the
preliminary results of review, the Department discussed the possible
application of the All Others' duty deposit rate to these firms if
future shipments were to take place. However, we can not predict the
sales arrangements that these firms might make. The ``Final Review
Results'' section of this notice outlines, depending on the facts, how
the cash deposit decision will be made, should these firms start
shipping.
Determination Not To Revoke
LG and Hyundai submitted requests for revocation from the order
covering DRAMs from Korea pursuant to 19 CFR 353.25(a). Under the
Department's regulations, the Department may revoke an order, in part,
if the Secretary concludes that: (1) [o]ne or more producers or
resellers covered by the order have sold the merchandise at not less
than [normal] value for a period of at least three consecutive years;
(2) [i]t is not likely that those persons will in the future sell the
merchandise at less than normal value (``NV''); and (3) the producers
or resellers agree in writing to the immediate reinstatement of the
order, as long as any producer or reseller is subject to the order, if
the Secretary concludes that the producer or reseller, subsequent to
the revocation, sold the merchandise at less than NV. 19 CFR
353.25(a)(2). In this case, neither respondent meets the first
criterion for revocation. The Department has found that both, LG and
Hyundai, sold subject merchandise at not less than NV in the two prior
reviews under this order, but they did sell at less than NV during the
instant review period. Since neither respondent has met the first
criterion for revocation, i.e., zero or de-minimis margins for three
consecutive reviews, the Department need not reach a conclusion with
respect to the other criteria. Therefore, on this basis, we have
determined not to revoke the Korean DRAM antidumping duty order in part
with respect to Hyundai and LG. In light of this decision, interested
party comments on revocation are moot and will not be addressed further
in these final review results.
Fair Value Comparisons
Unless otherwise noted, to determine whether sales of subject
merchandise from Korea to the United States were made at less than fair
value, we compared the Constructed Export Price (``CEP'') to the NV, as
described in the ``Constructed Export Price'' and ``Normal Value''
sections of the preliminary results of review notice. See Dynamic
Random Access Memory Semiconductors (``DRAMs'') of One Megabit or Above
from the Republic of Korea, 63 FR 11411, March 9, 1998) (``Preliminary
Results'').
Facts Available
1. Application of Facts Available
Section 776(a)(2) of the Act provides that if any interested party:
(A) withholds information that has been requested by the Department;
(B) fails to provide such information in a timely manner or in the form
or manner requested; (C) significantly impedes an antidumping
investigation; or (D) provides such information but the information
cannot be verified, the Department shall use facts otherwise available
in making its determination.
Based on information obtained from the Customs Service, we have
determined that a number of sales that LG reported as third-country
sales were actually sales to the United States. Moreover, the
Department has determined that at the time LG made these sales, it
knew, or should have known, that the DRAMs were destined for
consumption in the United States. See the September 8, 1998 Memorandum
from Thomas Futtner and John Conniff to Holly Kuga regarding ``Dynamic
Random Access Memory Semiconductors (DRAMs) of One Megabit and Above
from the Republic of Korea--Whether to Include Certain Unreported Sales
in the Calculation of LG's Margin for the Final Results of the
[[Page 50869]]
96-97 Review'' (``LG Analysis Memo''). Thus, we have determined that LG
withheld information we requested and significantly impeded the
antidumping proceeding.
We have similarly determined that Techgrow, which submitted only a
partial response to our questionnaire, and which failed to provide the
information for sales by its affiliates, withheld information we
requested and significantly impeded this proceeding. See DOC Position
to Techgrow-Specific Comment 1.
Vitel, another respondent in this review, confirmed that it had
received the questionnaire, but it failed to submit a response. Thus,
Vitel failed to provide any information and thereby significantly
impeded this review.
Because LG and Techgrow failed to respond in full to our
questionnaire, and Vitel did not respond at all, pursuant to section
776(a) of the Act, we have applied facts otherwise available to
calculate their dumping margins.
2. Selection of Adverse Facts Available
Section 776(b) of the Act provides that, in selecting from the
facts available, adverse inferences may be used against a party that
failed to cooperate by not acting to the best of its ability to comply
with requests for information. See also Statement of Administrative
Action (``SAA'') accompanying the URAA, H.R. Doc. No. 316, 103d Cong.,
2d Sess. 870 (1994).
Section 776(b) states further that an adverse inference may include
reliance on information derived from the petition, the final
determination, the final results of prior reviews, or any other
information placed on the record. See also Id. at 868.
LG's decision to report as third-country sales a substantial number
of U.S. sales that it knew, or should have known, were U.S. sales,
indicates that LG failed to cooperate to the best of its ability. See
DOC Position to LG-Specific Comment 1. Similarly, Techgrow's failure to
provide information on sales by its affiliated party demonstrates that
Techgrow has failed to cooperate to the best of its ability in this
review. Finally, since Vitel provided no questionnaire response at all,
we have determined that this respondent also failed to cooperate to the
best of its ability in the instant review. Therefore, the Department
has determined that an adverse inference is warranted in selecting
among the facts otherwise available for LG, Techgrow, and Vitel, in
accordance with section 776(b) of the Act. Consequently, we have based
the margins for these three respondents on adverse facts available.
As adverse facts available for LG, we have calculated a dumping
margin based on both LG's reported and unreported sales to the United
States, the latter of which we were able to identify from U.S. Customs
Service data. Regarding the adjustments to LG's unreported sales, we
used as facts available the highest U.S. selling expenses from LG's
reported transactions involving identical products. Where there were no
reported transactions involving identical merchandise, we used the
highest U.S. selling expenses from LG's reported transactions involving
merchandise of the same density. With respect to fair value
comparisons, when there were no contemporaneous sales of identical or
similar merchandise sold in Korea, we compared these unreported sales
to constructed value (``CV''). When there was no quarterly cost data
reported during the same quarter as the date of sale of the unreported
transactions, we used the highest CV available from the remaining
quarters.
As adverse facts available for Techgrow and Vitel, we have assigned
the highest company-specific margin calculated in the history of this
proceeding, which is the rate calculated for LG in the instant review.
General Comments
Comment 1: Research and Development (``R&D'')
Hyundai argues that the Department overstated R&D expenses by
allocating a portion of the R&D expenses associated with non-memory
products to the CV of DRAMs. According to Hyundai, the antidumping
statute precludes the Department from attributing expenses relating to
non-subject merchandise (non-memory) to subject merchandise (memory,
i.e., DRAMs). In addition, Hyundai maintains that the preliminary
results deviate from the Department's long-standing practice of
calculating product-specific R&D. If the Department insists upon
calculating R&D in this manner, Hyundai argues that the Department must
justify its departure from prior practice, citing Micron Technology,
Inc. v. U.S., 893 F.Supp. 21 (CIT 1995) (``Micron Tech'').
Moreover, Hyundai disputes various statements made by the
Department's semiconductor expert with respect to cross-fertilization
issues and states that the record does not support the Department's
preliminary results. Hyundai claims that the allocation methodology
adopted by the Department in the preliminary results is mistakenly
based on an assumption that R&D expenditures for non-memory products
provide equal benefit to memory products. If any cross-fertilization of
R&D between memory and non-memory products exists, Hyundai argues, the
benefits flow from memory to non-memory and not in the other direction.
Hyundai asserts that the Department's methodology has the effect of
increasing its DRAM costs as Hyundai devotes more funds to non-memory
R&D. Hyundai maintains that cross-fertilization of memory and non-
memory R&D is extremely unlikely, given the fundamental differences in
product design, marketing, and production of these semiconductors.
Hyundai contends further that its organizational structure and
accounting records distinguish between R&D expenses for memory and non-
memory products. According to Hyundai, its R&D laboratories responsible
for memory and non-memory R&D have separate budgets, personnel, and
locations. Moreover, respondent asserts its laboratories conduct no
joint projects and compete for funding.
Hyundai argues further that the Department included production
costs related to the manufacturing of non-subject merchandise, such as
application-specific integrated circuits and other non-memory devices,
in its allocation of semiconductor R&D. According to Hyundai, these
chips are produced for specific customers in the company's ``system
IC'' lab and are then sold to the same specific customers. As such,
Hyundai claims that these are not R&D costs, but costs related to the
commercial production of non-memory chips for sale to specific
customers. It asserts that the Department must subtract these
``verified production costs'' from the total semiconductor R&D figure
used in the R&D allocation.
LG requests that the Department revise its allocation for R&D on
the basis of LG's verified, product-specific R&D expenses exclusive of
non-DRAM R&D. LG argues that its ``product-specific'' R&D expenses have
been properly quantified and verified by the Department. LG maintains
that it distinguishes DRAM R&D expenses from other products it
manufactures by tracking and segregating these R&D expenses into DRAM
and non-DRAM categories. Furthermore, LG states that it distinguishes
between product-development R&D (which includes R&D related to
technological improvement of the functionality of the product) and
product-line R&D (which includes R&D related to production-process
improvement). LG argues that the Department has not produced any
evidence supporting cross-fertilization between memory and non-memory
R&D
[[Page 50870]]
as required by the Court in Micron Tech. LG notes that this methodology
raises the R&D expenses for DRAMs, thereby overstating LG's DRAM cost
of production (``COP'').
In response to LG's and Hyundai's assertions, the petitioner states
that the Department allocated all semiconductor R&D properly over all
semiconductor production. The petitioner argues that there is already
sufficient evidence on the record to support the Department's
determination that, in the semiconductor industry, R&D relating to any
aspect of semiconductor production has a significant effect on the
production and sale of all semiconductor products. The petitioner cites
the three prior reviews under this order and the Notice of Final
Determination of Sales at Less Than Fair Value; Static Random Access
Memory Semiconductors From the Republic of Korea, 63 FR 8945 (February
23, 1993) (``SRAMs Final Determination''), where the Department placed
evidence in the record that cited examples of cross-fertilization and
included statements by both the Department's and respondent's
semiconductor experts.
Further, petitioner disputes Hyundai's contention that the
Department should exclude from total R&D expense that part of the
expense that the respondent contends represents commercial production
of non-subject merchandise. According to the petitioner, the Department
rejected this same contention in the SRAMs Final Determination by
noting that Hyundai had categorized these costs as R&D expenses in its
audited financial statements.
DOC Position. We disagree with Hyundai and LG and have allocated
all semiconductor R&D expenses over the total semiconductor cost of
goods sold. This allocation methodology is fully consistent with the
antidumping statute and the R&D calculations we have used throughout
the Korean DRAM and SRAM proceedings.
In the SRAMs Final Determination, we noted that, as a result of the
forward-looking nature of R&D activities, we could not predict every
instance where SRAM R&D may influence logic products or where logic R&D
may influence SRAM products. As a result, we asked Dr. Murzy Jhabvala,
a semiconductor device engineer at the National Aeronautics and Space
Administration with twenty-four years of experience, to state his views
regarding any potential overlap or cross-fertilization of R&D efforts
in the semiconductor industry. In fact, Dr. Jhabvala had identified in
another semiconductor proceeding before the Department areas where R&D
from one type of semiconductor product influenced another semiconductor
product. We have placed on the record of this review these statements
by Dr. Jhabvala, including a statement pertaining to DRAMs dated July
14, 1995. In this memorandum, entitled ``Cross Fertilization of
Research and Development Efforts in the Semiconductor Industry,'' Dr.
Jhabvala stated that ``it is reasonable and realistic to contend that
R&D from one area (e.g., bipolar) applies and benefits R&D efforts in
another area (e.g., MOS memory). In a statement prepared for the SRAMs
Final Determination, Dr. Jhabvala stated that:
SRAMs represent along with DRAMs the culmination of
semiconductor research and development. Both families of devices
have benefitted from the advances in photo lithographic techniques
to print the fine geometries (the state-of-the-art steppers)
required for the high density of transistors . . . In addition to
achieve higher access speeds bipolar (ECL or TTL) output amplifiers
are incorporated directly on chip with the CMOS SRAM memory array, a
process known as BiCMOS. Further efforts to improve speed have
resulted in the combination of the bipolar ECL technology with CMOS
technology with silicon on insulator (SOI) technology.
Clearly, three distinct areas of semiconductor technology are
converging to benefit the SRAM device performance. There are other
instances where previous technology and the efforts expended to
develop that technology occurs in the SRAM technology. Some examples
of these are the use of thin film transistors (TFTs) in SRAMs,
advanced metal interconnect systems, anisotropic etching and filling
techniques for trenching and planarization (CMP) and implant
technology for retrograde wells.
See September 8, 1997, Memorandum from Murzy Jhabvala to U.S.
Department of Commerce/Office of Antidumping Compliance, Attn: Tom
Futtner, regarding ``Cross Fertilization of Research and Development of
Semiconductor Memory Devices (``September 1997 Jhabvala Memo''), on
file in the CRU.
In accordance with the holding in the Micron Tech case, the
Department requested that Dr. Jhabvala participate in the verification
of Samsung's R&D expenses in the SRAMs case. After interviewing several
of Samsung's R&D engineers, Dr. Jhabvala concluded that ``the most
accurate and most consistent method to reflect the appropriate R&D
expense for any semiconductor device is to obtain a ratio by dividing
all semiconductor R&D by the cost to fabricate all semiconductors sold
in a given period.'' See Public Version of December 19, 1997,
Memorandum from Murzy Jhabvala to the File, regarding ``Examination of
Research and Development Expenses and Samsung Electronic Corporation
(SEC),'' on file in the CRU.
In the SRAMs Final Determination, we disagreed with Hyundai's
contention that we must follow Hyundai's normal accounting records
which categorize R&D expenses by project and product. We disagree with
similar contentions from LG and Hyundai in this review. As we have said
in the past, we are not bound by the way a company categorizes its
costs, R&D projects, or laboratory facilities. Moreover, the mere fact
that R&D projects for memory and non-memory products may be run in
different laboratories, that process and product research for memory
and non-memory products may be distinguished, and that each of the
respondents may account for these R&D projects separately their
respective books and records, does not address the core issue of cross-
fertilization in semiconductor R&D. The existence of cross-
fertilization in semiconductor R&D is the central theme of Dr.
Jhabvala's many statements to the Department. Dr. Jhabvala offers
various examples in those statements to illustrate that, regardless of
the accounting or laboratory arrangements, the research results or
developments in the processes and technologies used in the production
and development of one semiconductor family can be (and are) used in
the production and development of other semiconductor families. Dr.
Jhabvala goes so far as to say that it would be ``unrealistic to expect
researchers to work in complete technical isolation constantly
reinventing technology that might already exist.'' See ``September 1997
Jhabvala Memo''. Given this fact, we do not believe that the reported
expenses for DRAM R&D projects reasonably reflect the appropriate cost
of producing the subject merchandise. As a result, we have continued to
allocate all semiconductor R&D expenses over the total semiconductor
cost of goods sold, a methodology which does not overstate costs, but
which we believe more reasonably and accurately identifies the R&D
expenses attributable to subject merchandise.
This is not a change in the Department's approach to this issue. It
is the Department's long-standing practice where costs benefit more
than one product to allocate those costs to all the products which they
benefit. See, e.g., SRAMs Final Determination. We believe that this
methodology results in the calculation of product-specific costs and
that it is consistent with section 773(f)(1)(A) of the Act because we
have
[[Page 50871]]
determined that DRAM-specific R&D account entries do not by themselves
completely and reasonably reflect the costs associated with the
production and sale of subject merchandise.
Finally, we disagree with Hyundai that we included production costs
related to the manufacturing of non-subject merchandise in our
allocation of semiconductor R&D. The Department used Hyundai's verified
R&D expenses, which Hyundai itself provided to the Department. In
addition, while Hyundai argues that these expenses are production
costs, it has not provided any documentation or evidence to support
this claim. We note that Hyundai has categorized these ``costs'' as R&D
expenses in its audited financial statements. Furthermore, we note that
the ``costs'' to which Hyundai refers are not categorized in a manner
which would enable us to separate them from total project expenses. For
these reasons and consistent with the position taken in the SRAMs Final
Determination, we have made no adjustment for this claim in
establishing Hyundai's R&D expenses.
Comment 2: Depreciation
Petitioner maintains that the Department adjusted Hyundai's and
LG's depreciation expense correctly to account for special depreciation
despite the fact that these companies no longer adjust for special
depreciation in their internal accounting systems. However, petitioner
claims that the Department incorrectly failed to adjust Hyundai's and
LG's depreciation by not taking into account the changes respondents
made to the average useful lives (``AULs'') of their assets. Petitioner
argues that neither of these two changes in respondents' accounting
practices are systematic, rational, or justified since nothing changed
with respect to the equipment itself or its usage and that LG and
Hyundai were motivated by the need to show net profits instead of
losses. Petitioner contends that the Department did not explain why it
only adjusted for special depreciation and not for the change in AULs.
According to petitioner, there is no methodological or factual
justification for treating the two changes differently. In conclusion,
petitioner requests that the Department adjust the reported
depreciation amounts fully by denying both types of reporting changes
made by respondents.
LG states that the Department should not make any adjustments to
its reported depreciation expense since the statute mandates the use of
verified records if such records are kept in accordance with the
generally accepted accounting principles (``GAAP'') of the exporting
country and if such expenses reasonably reflect the costs associated
with the production and sale of subject merchandise. LG argues that an
adjustment is not warranted in this case since the reported expenses
reasonably reflect DRAM costs and were appropriately recorded in
accordance with Korean GAAP in its audited financial statement. LG
claims that it made a business decision not to take all available
depreciation charges allowed by Korean law. Further, LG argues that its
change in AUL and the decision not to take special depreciation
constitute changes in accounting estimates only, not accounting
principles.
Hyundai argues that the Department should not have adjusted the
company's depreciation expense and methodology. According to Hyundai,
the reported depreciation expense and methodology are fully consistent
with Korean GAAP. Specifically, Hyundai maintains that the auditor's
opinion attached to its financial statement demonstrates that all
elements of the financial statement, including depreciation, were
prepared in accordance with Korean GAAP. According to Hyundai, the
reported depreciation expense reasonably reflects the cost of producing
DRAMs.
Hyundai claims that, even though it took special depreciation
during previous segments of this antidumping proceeding, neither the
Department nor petitioner objected when Hyundai started to claim this
depreciation expense during those periods. Moreover, Hyundai asserts,
the Department verified and accepted those costs fully. Hyundai also
claims that there is no requirement in U.S. antidumping law that
companies take additional costs nor is there any requirement under
Korean GAAP that a company continue to take a tax benefit that it
claimed in a previous year. Hyundai argues that the depreciation
expense as recorded in its books and records is fully consistent with
the company's historical accounting methodology. Therefore, respondent
states, the Department should use Hyundai's reported expenses for
purposes of this antidumping review.
DOC Position. Section 773(f)(1)(A) of the Act states that costs
``shall normally be calculated based on the records of the exporter or
producer of the merchandise, if such records are kept in accordance
with the GAAP of the exporting country (or the producing country where
appropriate) and reasonably reflect the costs associated with
production and sale of the merchandise.'' Further, as explained in the
SAA, ``[t]he exporter or producer will be expected to demonstrate that
it has historically utilized such allocations, particularly with regard
to the establishment of appropriate amortization and depreciation
periods and allowances for capital expenditures and other development
costs'' (SAA at 834). The issue in this review is whether respondents
have demonstrated that their changes in depreciation accounting are
reasonable and consistent with the depreciation methodologies that
these companies have employed in the past.
With respect to special depreciation, both respondents elected to
claim this expense during the previous three review periods in this
proceeding. Respondents' decision not to claim special depreciation
represents a change in accounting method. In effect, by claiming
special depreciation over the last three years, respondents have been
depreciating their assets on an accelerated basis. The decision to stop
claiming the additional depreciation constitutes a decision to
depreciate assets on a non-accelerated basis. While respondents may
have a right under Korean law to forego this claim, they must explain,
consistent with the SAA, how these changes are consistent with the cost
methodologies and allocations the companies have utilized in the past.
Furthermore, to justify this change and ensure that the Department
receives systematic and rational product costing throughout an
antidumping proceeding, the respondent must explain the underlying
reasons for the change and provide information as to why this change in
method better reflects the actual costs incurred in producing the
merchandise under investigation or review. In this case, there is no
information on the record to justify this change.
In contrast, the AUL assumption both respondents used reflects
their historical experience in establishing the appropriate
depreciation periods. It is common practice within the semiconductor
industry to depreciate machinery and equipment using a three-to five-
year useful-life assumption. Respondents' change in the AUL does not
deviate from this three to five year band. In fact, for one respondent,
we noted that certain machinery and equipment tested at verification
were still in operation after five years. Furthermore, unlike
respondents' decision not to claim special depreciation, the change in
the AUL represents only a change in an accounting estimate. It does not
constitute a change in depreciation methodology.
Therefore, we have accepted the AUL adjustment claimed by
respondents, but
[[Page 50872]]
we have added special depreciation to respondents' reported COP.
Comment 3: Foreign-Exchange Loss
Petitioner argues that the Department properly included an
amortized portion of foreign-exchange translation losses related to
long-term debt as a component of financing costs in respondents' COP.
Petitioner also contends that the newly adopted Korean GAAP for
deferring foreign-exchange losses has not been applied on a consistent
and historical basis and the Department's past practice has been to
disregard Korea's local accounting standard that called for deferring
current-period foreign-exchange losses on long-term debt. Further,
petitioner maintains that foreign-exchange losses are closely tied to a
company's operations and to the higher cost of financing, including the
retirement of foreign-currency-denominated debt. According to
petitioner, this is no more hypothetical than is depreciation of a
capital asset or other costs for which the cash outlay may be made
during a different accounting period.
LG contends that its reported financial expenses are consistent
with Korean GAAP. LG argues that the Department's statutory mandate is
to calculate a respondent's actual costs for subject merchandise based
on the books and records of the company. LG maintains that the
application of U.S. GAAP in LG's circumstances would be distortive
because the company borrows mainly in foreign currencies, the loans are
mostly long term, and Korean exchange rates fluctuate significantly.
Hyundai maintains similarly that its treatment of unrealized
foreign-exchange translation losses is in accordance with Korean GAAP
and reasonably reflects its COP. Hyundai argues that Korean GAAP
provides for the recognition of such gains or losses when they are
actually incurred. Hyundai also asserts that unrealized long-term
foreign-currency translation losses do not represent an actual cost.
Hyundai maintains further that the Department was incorrect to include
the cost of unrealized foreign-exchange gains and losses in COP. If
such unrealized gains and losses continue to be included in COP,
Hyundai contends that the Department must apply the methodology it used
in the preliminary results of amortizing the unrealized gains and
losses over the average outstanding loan balances.
DOC Position. In this case, we have verified unrealized foreign-
exchange translation gains and losses for both respondents. The
translation gains and losses at issue are related to the cost of
acquiring debt. As the record indicates, these loans represent the
financing of new buildings and machinery. Consequently we consider
these costs related to production. Including these gains and losses in
the calculation of COP is, therefore, proper and consistent with our
position in previous cases where we have found that translation losses
represent an increase in the actual amount of cash needed by
respondents to retire their foreign-currency-denominated loan balances.
See Fresh Cut Roses from Ecuador: Final Determination of Sales at Less
than Fair Value, 24 FR 7019, 7039 (Feb. 6, 1995). For these final
results, therefore, and consistent with our practice in other cases, we
amortized deferred foreign-exchange translation gains and losses over
the average remaining life of the loans on a straight-line basis and
included the amortized portion in the net interest expense portion of
COP. See Certain Steel Concrete Reinforcing Bars From Turkey; Final
Determination of Sales at Less Than Fair Value, 62 FR 9737, 9743 (March
4, 1997).
Comment 4: Level of Trade (``LOT'')/CEP Offset
Petitioner disagrees with the Department's determination of LOT by
comparing an unadjusted NV to an adjusted CEP. Petitioner maintains
that, due to this improper comparison, the Department concluded
erroneously in its preliminary analysis that different LOTs existed in
both markets, resulting in a CEP-offset adjustment to NV for both
respondents. According to petitioner, a recent ruling by the Court of
International Trade (``CIT'') determined that the Department's CEP-
offset methodology is not in accordance with the antidumping statute.
In this ruling, petitioner asserts, the court stated that ``Commerce's
limited adjustment to price before LOT analysis contravenes the purpose
of the statute,'' citing Borden, Inc. v. United States, Slip Op. 98-36
(March 26, 1998) (``Borden''). Petitioner argues that, if the
Department conducted the LOT analysis in accordance with Borden, it
would not have made the adjustment to NV.
Hyundai contends that the Department should continue to determine
LOT by comparing NV to an adjusted CEP and, thus, continue to make a
CEP offset. Hyundai argues that the Department has rejected
petitioner's argument in the second (94/95) and third (95/96) reviews
of the order on Korean DRAMs and, most recently, in the SRAMs Final
Determination. Additionally, Hyundai requests that the Department not
apply the Borden case in this review since the decision was based on an
incorrect interpretation of the law. According to Hyundai, the court in
the Borden case misinterpreted the statute by ruling erroneously that
adjustments must be disregarded when defining the LOT of the CEP sale
for the purposes of the offset. Moreover, Hyundai also argues that the
record clearly supports Hyundai's request for a CEP offset since its
home market (``HM'') sales are made at a more advanced LOT and are not
comparable to its U.S. sales. In fact, according to Hyundai, there is
no LOT in the HM equal to the CEP level.
LG asserts that the Department made a CEP offset correctly. LG also
maintains that the Department should not apply the Borden case to the
instant review. According to LG, the court held mistakenly that the
Department's adjustments to CEP starting prices (by removing certain
expenses) are inconsistent with section 773(a)(7) of the Act. LG claims
that the court believed that such adjustments distort the LOT analysis
and that this ``pre-adjustment'' creates an automatic CEP offset in
addition to any CEP-offset or LOT adjustment made after a comparison of
adjusted CEP to HM price. LG contends that the Department's methodology
does not create a ``pre-adjustment'' and removes correctly from the
starting U.S. price only those expenses related to the resale
transaction between the U.S. affiliate and the unaffiliated U.S.
customer.
DOC Position. We disagree with petitioner. We note that the holding
in the Borden case is not final and conclusive. Moreover, both the
statute and the SAA clearly support analyzing the LOT of CEP sales at
the CEP level--that is, after expenses associated with economic
activities in the United States have been deducted pursuant to section
772(d) of the Act. The Department has clearly stated this in previous
cases. See, e.g., SRAMs Final Determination. As set forth in section
773(a)(1)(B)(i) of the Act and the SAA, to the extent practicable, the
Department will calculate NV based on sales at the same LOT as the U.S.
sale. See SAA at 829. The SAA makes clear that there cannot be two
different LOTs where the selling functions are the same. When the
Department is unable to find sales in the comparison market at the same
LOT as the U.S. sales, the Department may compare sales in the U.S. and
foreign markets at different LOTs.
In accordance with section 773(a)(7)(A) of the Act, if we compare a
U.S. sale at one LOT to NV sales at a different LOT, we will adjust the
NV to account for the difference in LOT if the
[[Page 50873]]
differences affect price comparability as evidenced by a pattern of
consistent price differences between sales at the different LOTs in the
market in which NV is determined. If, for CEP sales, the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the difference in levels between NV and CEP
affects price comparability, we adjust NV under the CEP-offset
provision of the statute. See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997).
In order to determine whether a LOT adjustment or CEP offset was
warranted for LG or Hyundai in this review, we compared their CEP sales
to their HM sales in accordance with the principles discussed above.
For purposes of our analyses, we examined information regarding the
distribution systems in both the U.S. and Korean markets, including the
selling functions, classes of customer, and selling expenses for each
company. We found that respondents performed substantial selling
functions in their HM transactions, ranging from inventory maintenance
and warranty services to advertising and technical services. In
contrast, the services offered to the U.S. importer tended to relate
solely to the transfer of the merchandise from Korea to the U.S.
subsidiary. See September 8, 1998, Memorandum from John Conniff to Tom
Futtner, regarding ``Dynamic Random Access Memory Semiconductors
(DRAMs) from the Republic of Korea (A-580-812)--Final Results of Review
Level of Trade Analysis Memorandum--Hyundai Electronics, Co., Ltd'' and
September 8, 1998, Memorandum from John Conniff to Tom Futtner,
regarding ``Dynamic Random Access Memory Semiconductors (DRAMs) from
the Republic of Korea (A-580-812)--Final Results of Review Level of
Trade Analysis Memorandum--LG Semicon, Co., Ltd.''. Based on this
analysis, we determined that both respondents sold the comparison
merchandise during the period at a LOT in the HM which was different,
and more advanced, than the LOT of the CEP sales of subject merchandise
in the United States. As there is no HM LOT comparable to that of
respondents' sales to the United States, we do not have the data
necessary to make a LOT adjustment for either LG or Hyundai. Therefore,
we have made a CEP-offset adjustment to NV in our calculations for each
of these companies pursuant to section 773(a)(7)(B) of the Act.
Company-Specific Issues
A. Hyundai
Comment 1: Synchronous DRAMs (``SDRAMs'')
Petitioner alleges that Hyundai understated the cost of producing
memory modules. According to petitioner, these module costs include
placing the SDRAMs on the module and the cost of materials added to the
module. In support of its allegation, petitioner claims that Hyundai is
selling SDRAM modules at the same price as the price which it charges
for the aggregate number of individual SDRAMs on the module.
Hyundai states that the Department verified module-building costs
and found all costs were reported for this review period. Moreover,
Hyundai claims that petitioner's allegations concerning SDRAMs are
untimely and irrelevant. Hyundai argues that petitioner submitted two
invoices as source documentation for its allegation after the deadline
for the submission of factual information. Furthermore, these
allegations, Hyundai asserts, are irrelevant since they are related to
transactions which occurred after the POR.
DOC Position. We agree with Hyundai. Since the information on
SDRAMs was first submitted in petitioner's case brief, we have treated
the allegation as untimely within the meaning of 19 CFR 353.31(a)(2).
Assuming, arguendo, that the allegation was timely, we also consider
the claim irrelevant to this review since the two invoices that
petitioner submitted in its brief covered transactions which took place
outside the POR.
Comment 2: CV Profit on a Quarterly Basis
Hyundai notes that, for the purposes of the preliminary results,
the Department recognized that prices during the POR declined
significantly and used quarterly data in its sales-below-cost test.
However, Hyundai asserts, the Department did not calculate profit for
its CV calculations on a quarterly basis. Hyundai argues further that
declining prices, in turn, affect the profit rates it earned on sales
during the POR. Since antidumping comparisons are based on matching
comparable products during a comparable period, Hyundai contends that
the Department should also apply the appropriate quarterly profit rates
in the calculation of CV.
Petitioner states that the Department calculated an annual average
rate of profit properly based on Hyundai's full-year HM sales made in
the ordinary course of trade. According to petitioner, the annual
profit rate is appropriate since it reflects not only quarterly costs
of manufacture (as reflected in the quarterly CV calculation), but also
annual costs, such as General and administrative (``G&A'') expenses.
Petitioner contends that these expenses are often non-recurring and
must be calculated on an annual basis to ensure that all such costs are
captured in calculating COP. Moreover, petitioner claims that Hyundai's
arguments are inconsistent since they fail to address the Department's
use of annual amounts for selling expenses as well as for G&A expenses.
DOC Position. We agree with the petitioner. The Department applies
the average profit rate for the POR even when the cost calculation
period is less than a year. See, e.g., SRAMs Final Determination and
Certain Fresh Cut Flowers From Colombia; Final Results and Partial
Rescission of Antidumping Duty Administrative Review, 62 FR 53287,
53295 (Oct. 14, 1997). We disagree with Hyundai that the use of annual
profit distorts the analysis. First, a difference between the quarterly
profits and the annual average profit does not automatically mean that
a distortion exists. In fact, there is no evidence on the record that
indicates such a distortion. Second, profit is not solely based on
prices, but is a function of the relationship between price and cost.
Third, the use of annual profit mitigates fluctuations in profits and,
therefore, represents a truer picture of profit. As petitioner states,
the annual profit rate is appropriate since it reflects not only
quarterly costs of manufacture, but also annual costs, such as G&A
expenses, which are often non-recurring and must be calculated on an
annual basis. Therefore, for the purposes of these final review
results, we have continued to calculate the average profit rate on an
annual basis.
Comment 3: Whether the NV of Further-Manufactured Models Should be
Based on CV
Hyundai argues that the Department erred in comparing the prices of
further-manufactured mixed modules to CV. For these mixed modules,
Hyundai asserts that the Department must instead compare the U.S. price
of the two DRAMs which were imported into the United States and then
incorporated into the module to the HM price of the comparable DRAMs.
As maintained by Hyundai, this preference for a price-to-price
comparison has been most recently affirmed by the Court of Appeals for
the Federal Circuit in
[[Page 50874]]
Cemex S.A. v. United States, 133 F.3d 897 (Fed.Cir.1998) (``Cemex''),
which noted that, when HM sales of identical merchandise are
unavailable, the statute requires that NV be based on non-identical,
but similar merchandise, rather than CV.
DOC Position. We agree with Hyundai. The Act and the Department's
regulations set forth a preference for basing NV on the price of the
foreign like product and for making price-to-price comparisons,
whenever possible. See section 773(a)(1)(A) of the Act and 19 CFR
353.46(a). Therefore, for further-manufactured mixed-memory modules,
because there were HM sales of merchandise comparable to the
merchandise imported into the United States, we agree with Hyundai in
this review that, rather than resorting to CV, we should have compared
the U.S. price of the imported product (i.e., DRAMs) to the weighted-
average price of the comparison product sold in the HM. We have made
this correction in the final results. See September 8, 1998, Memorandum
from John Conniff to Thomas F. Futtner regarding ``Dynamic Random
Access Memory Semiconductors (DRAMS) from the Republic of Korea (A-580-
812)--Final Results of Review Analysis Memorandum-Hyundai Electronics,
Inc.'' (``Hyundai Analysis Memo'').
Comment 4: Incorrect Coding
Hyundai argues that the Department used incorrect coding in its
computer program when segregating the HM sales data into quarterly
data.
DOC position. We agree with Hyundai. We corrected the coding in the
programming language that identifies the quarter for HM sales for these
final review results to ensure that our calculations reflect Hyundai's
information correctly.
Comment 5: Identifying All Comparable HM Sales Before Using CV
Hyundai argues that its concordance database does not implement the
Cemex decision since it was submitted prior to the issuance of this
decision. Hyundai submitted new concordance programming which, it
argues, implements the Cemex decision. If the Department uses this
database, Hyundai explains that the program will allow the Department
to identify the appropriate product comparisons if the first-choice
comparison fails the cost test.
Petitioner states that the Department implemented the Cemex case in
the preliminary review results. If, however, the Department accepts
Hyundai's changes, petitioner asserts that the Department should
incorporate a difference-in-merchandise (``DIFMER'') adjustment in the
foreign unit price (``FUPDOL'') statement for the comparisons of
similar merchandise, since, according to petitioner, Hyundai did not
include this adjustment in the program it used for the concordance
database.
DOC position. We agree with Hyundai. As a result, we have
incorporated Hyundai's concordance language in our calculations these
final review results. We also adopted petitioner's corrections
regarding the DIFMER adjustment in the foreign unit price statement for
comparisons of similar merchandise.
Comment 6: Net Price Used in the Sales-Below-Cost Test
Hyundai claims the Department computed the net price that was used
in the sales-below-cost test incorrectly. As an example, Hyundai
asserts that the Department compared a price net of selling expenses
and packing to a cost that included these expenses.
Petitioner agrees with Hyundai that prices net of selling expenses
and packing were compared to costs that included these expenses.
DOC Position. We agree with Hyundai and petitioner. We have made
the appropriate changes to our calculations for these final review
results to ensure an apples-to-apples comparison of prices and costs.
Comment 7: Understated CEP Offset
Hyundai states that the Department made several errors in its
calculations regarding the CEP offset for sales it compared to CV.
According to Hyundai, the Department understated HM indirect selling
expenses because (1) inventory carrying costs were not included in the
pool of indirect expenses, and (2) the U.S. side of the offset was
based on module expenses but HM indirect expenses were based on a
single chip.
DOC Position. We agree with Hyundai. We have made the appropriate
changes to our calculations to include inventory carrying costs in HM
indirect selling expenses and to ensure that U.S. offset expenses are
consistent with the HM indirect selling expenses that we used in our
comparisons (i.e., module-to-module, chip-to-chip).
Comment 8: Programming Code
Hyundai alleges that the Department's computer program included
code from the previous review period that is not relevant to the
current POR and requests that the Department delete the inappropriate
language.
DOC Position. We agree with Hyundai and have deleted the
inappropriate language.
Comment 9: CV Included Imputed Credit and Inventory Credit Carrying
Costs for CEP and Further-Manufactured Sales
Hyundai argues that the Department included imputed credit
(``CREDITCV'') and inventory carrying expenses (``INVCARCH'')
incorrectly in the calculation of CV. These expenses should be replaced
with the non-imputed selling expenses, DSELCV and ISELCV.
Petitioner agrees that DSELCV and ISELCV should be included in the
CV calculation.
DOC position. We agree with both Hyundai and the petitioner. We
have corrected our calculations by removing the imputed expenses,
CREDITCV and INVCARCH, and adding the actual expenses, DSELCV and
ISELCV.
Comment 10: CEP-Profit Calculation
Hyundai asserts that the Department made two mistakes in its
calculation of CEP profit. First, it contends that the Department
excluded below-cost sales in the HM in its calculation of HM profit.
Second, it states that the Department mistakenly included expenses
pertaining to economic activity in Korea in its calculation of CEP
selling expenses used to calculate CEP profit.
Petitioner argues that the expenses in question, while incurred in
Korea, were associated with economic activities in the United States.
Therefore, petitioner contends, the Department must deduct these
expenses from U.S. prices in the calculation of CEP profit.
DOC Position. We agree, in part, with both parties. The SAA states
that ``under new section 772(d), CEP will be calculated by reducing the
price of the first sale to an unaffiliated customer in the United
States by the amount of the following expenses, and profit, associated
with economic activities occurring in the United States.'' See SAA at
823. The expenses in question, banking fees and other direct selling
expenses, are associated with economic activities occurring in the
United States and were reported as such in Hyundai's Section C
questionnaire response. Therefore, we have deducted these expenses from
CEP.
However, we agree with Hyundai that we excluded below-cost sales in
the HM incorrectly from the calculation of the HM-profit portion of the
CEP-profit calculation. Section 772(f) of the Act requires the
Department to use ``total actual profit'' in calculating the CEP-
[[Page 50875]]
profit deduction. Since the calculation of both total actual profit and
total expenses includes sales (whether above or below cost) that are
made at a profit or at a loss, the calculation must include below-cost
sales in order to reflect actual profit. We have corrected our
calculations to account for this.
Comment 11: Net U.S. Price Calculation for Further-Manufactured Modules
Hyundai maintains that the Department erred in its calculation of
net U.S. price for further-manufactured modules by deducting all
selling expenses for chips in the module rather than deducting only the
direct selling expenses associated with economic activities occurring
in the United States.
DOC Position. We agree with Hyundai. In our calculation of net U.S.
price for further-manufactured modules, we inadvertently deducted all
selling expenses for chips in the module rather than eliminating only
the direct selling expenses related to U.S. economic activity. We have
made the appropriate changes to our calculations to accomplish the
correct adjustment for these final review results.
Comment 12: Cost-Recovery Test
According to petitioner, the Department conducted the annual cost
test using the unrevised figure for the total cost of manufacturing
(TOTCOM). Petitioner argues that this figure did not include selling
expenses, G&A expenses, and interest expenses, and it did not reflect
the revisions the Department made to the cost data, in accordance with
the February 27, 1998, Memorandum to the File from Justin Jee regarding
``COP and CV Adjustment Calculations.''
DOC Position. We agree and have made the appropriate changes to our
calculations to ensure that we conducted the cost test properly.
B. LG
Comment 1: Application of Adverse Facts Available to LG ``Unreported
Sales''
LG contends that the Department's decision to apply adverse facts
available to its margin calculation based on the belief that LG did not
report all its U.S. sales is not warranted by the facts or permissible
under the law. According to LG, it had no involvement in, or knowledge
of, the diversion of its shipments (i.e., ``unreported sales'') into
the United States. LG claims that it took numerous precautions to
ensure that third-country sales did not enter the U.S. market. Also, LG
states that it believed, at the time of the sale, that all shipments
reached their appropriate destinations. As a result, LG maintains that
the Department must exclude these sales from its U.S. sales database.
Citing a sale that LG refused because it was being shipped to the
United States, LG argues that it was vigilant about ensuring that its
sales to third-countries were not re-exported or diverted to the United
States. With respect to the concerned third-country purchaser, LG
asserts that it conditioned its agreement to conduct business with this
party on the basis of the purchaser's explicit pledge not to sell LG's
DRAMs in the United States. In addition, LGSA officials inspected the
purchaser's third-country production facility to confirm that it would
consume the LG's DRAMs being acquired and advised the purchaser that it
would need to provide documentation that the DRAMs were delivered and
consumed in the third country. The documentation LG ultimately required
was contemporaneous and included the following: (1) trucking company
receipts substantiating the third-country destination of every LG
shipment; (2) certification that all DRAMs shipped to the purchaser
would not be sold in the customs territory of the United States; and
(3) third-country customs entry forms corroborating that all of LG's
shipments actually reached the third-country. LG argues that, taken
together, the facts show that LG believed reasonably that all of its
DRAMs were being received in the third country by the purchaser and
that LG was the unsuspecting victim of an elaborate scheme of Customs
fraud, a scheme that LG says should be attributed to the third-country
purchaser.
LG further argues that it would have been virtually impossible for
it to have discovered that any diverted goods were entering the United
States. LG notes that the very nature of DRAMs (e.g., small in size,
constantly in demand, and capable of being sold and resold quickly in
large numbers) encourages diversion schemes. Moreover, LG claims that
the DRAMs would have been sold to brokers/distributors. As this is a
sizable market, LG observes that it is not surprising that LG did not
become aware of the diversions. The company also claims that the
Department found no discrepancies in LG's questionnaire response during
verification.
LG further argues that, under the law, the Department had no
justification for assigning facts available on the basis of the
unreported sales since LG had no knowledge of the diversion of these
sales. LG states that the Department and the courts under section
772(a) of the Act have held that a producer's sales to a customer
outside the United States may be treated as U.S. sales by that
producer, rather than as U.S. sales by the reseller, only if the
producer had knowledge at the time of the purchase that the sales were
for importation into the United States. LG compares the diverted sales
in the instant review to the pirated sales the Department excluded from
its analyses in Certain Cut-to-Length Carbon Steel Plate from Ukraine;
Final Determination of Sales at Less Than Fair Value, 62 FR 61754
(November 19, 1997) (``Plate from Ukraine'').
In addition, LG argues that it became aware of the diversion scheme
only when the Department informed LG of unreported sales after the
preliminary results of review were issued. LG cites similar cases where
the respondent gained knowledge of the final destination of the
merchandise at the time the merchandise was shipped, not when it had
been sold. See Final Determination of Sales at Less Than Fair Value:
Pure Magnesium from the Russian Federation, 60 FR 16440 (March 30,
1995) (``Pure Magnesium from Russia''). The Department excluded these
sales from respondent's database.
LG claims that the Department must find that it had actual
knowledge that the ``unreported sales'' were for importation into the
United States. If actual knowledge is absent, then the Department
cannot treat such sales as U.S. sales of the supplier. LG also asserts
that the circumstances surrounding these sales (e.g., in-bond shipment
outside the U.S. Customs territory) do not support the conclusion that
it should have known that the sales were destined for importation into
the United States. LG states that these circumstances are in direct
contrast to those in the Notice of Final Determination of Sales at Less
Than Fair Value: Persulfates from the People's Republic of China, 62 FR
27222 (May 19, 1997) (``Persulfates from China'').
Finally, LG argues that the Department may not apply adverse facts
available against LG by considering LG to be the exporter of the
``diverted shipments'' just because the Department concludes that the
documentation and testimony submitted by LG do not definitively resolve
the circumstances surrounding these transactions and the question of
liability for these shipments.
Petitioner strongly supports the Department's preliminary decision
to use facts available for LG's unreported U.S. sales. Petitioner
states that LG had knowledge, or should have had knowledge, that the
unreported sales were destined for the United States.
[[Page 50876]]
According to petitioner, this is just one of many schemes that LG
employed during the POR to produce zero dumping margins when the
company actually was selling at less than NV.
Regarding these transactions, petitioner argues that LG sold DRAMs
to a U.S. company, ostensibly for sale to a third-country facility. The
U.S. parent company of the customer placed the orders, sent the
purchase orders, and paid for the merchandise. In contrast to other
customers where LG shipped the merchandise to third-country markets
directly, this customer, through its broker, took control of LG's DRAMs
in the United States. Petitioner notes that instead of requiring in-
bond evidence that the merchandise was not imported into the United
States for consumption, LG requested documentation to demonstrate that
the merchandise had been delivered. Consequently, the last thing that
LG knew was that it was shipping DRAMs to the United States. Citing
Persulfates from China, petitioner asserts that the fact that the
merchandise was exported later is immaterial. ``Where there is a direct
sale to an unaffiliated purchaser in the United States, there is no
issue of knowledge'' See 62 FR 27234. Thus, petitioner argues, under
the Department's precedent, LG's sales to this purchaser constitute
U.S. sales. Even if they are not deemed direct sales, petitioner
maintains that LG knew, or should have known, that this merchandise was
destined for the United States and that all such sales should be
included in the Department's dumping analysis. Petitioner additionally
notes that earlier sales made three months before the POR should also
be included in the transactions the Department considers since the
Department did not have knowledge of this diversion before the third
review.
Petitioner further contends that LG's claims are inconsistent.
Petitioner notes that LG was selling merchandise to a customer that
could be expected to ship the vast majority of its merchandise back to
the United States. Petitioner maintains that through its sales network,
LG would have detected, or would have been alerted to, sales of its own
merchandise in the U.S. market. According to petitioner, it is
inexplicable that LG did not check further into this purchaser
considering the fact that it was a relatively small company with
limited credit making substantial purchases, in cash, before the goods
were delivered. Moreover, petitioner argues that the claims that the
DRAMs would be used to refurbish old computers are dubious. Petitioner
further notes that LG's documentation requirements did not start until
months after the sales in question had commenced. In addition, LG's
denial of prior knowledge of the principal and other entities involved
with these unreported sales does not correspond with the numerous links
between LG and those parties. As a result, petitioner claims that LG's
presentation of the facts contains too many internal contradictions to
be accepted as plausible. Petitioner asserts that, taken together, the
facts do not suggest reasonable efforts by a company to ensure that
subject merchandise does not enter the United States for consumption,
but point to LG as a ``knowing participant'' in these transactions.
Petitioner claims that this record is consistent with information
supplied by one of petitioner's employees who described situations in
which petitioner's customers have been approached by LG representatives
directing them to purchase LG DRAMs in third-countries where LG can
offer lower prices than in the U.S. market. Petitioner maintains that
these statements make it clear that LG did not care what specific
customers did with the merchandise. As a consequence, petitioner
dismisses LG's contention that it directed its customers outside the
Customs territory of the United States not to resell subject
merchandise to the United States and argues that any imports of LG's
DRAMs from certain third countries should be deemed to have been sold
by LG with the knowledge that the merchandise was destined for the
United States.
Regarding LG's verification, petitioner states that the Department
simply verified the prices paid to LG. Petitioner notes that the
Department's verification report limits the basis of its conclusions
that it found no evidence of U.S. sales made through intermediaries to
the specific documentation that LG made available to the Department at
that time.
In responding to LG's comments, petitioner emphasizes that the
Department and the courts have recognized that, absent an admission by
the respondent, evidence of actual knowledge may be difficult to
obtain. Citing to INA Walzlager Schaeffler KG v. United States, 957 F.
Supp. 251 (CIT 1997) (``INA 1997''), petitioner states that the court
acknowledged that even if respondent denies knowledge of the
destination of its sales, the Department may rely on extrinsic sources
to determine whether to impute such knowledge. Petitioner argues that,
in contrast to LG's self-serving denials, there is substantial evidence
on the record that LG knew, or had reason to know, that the sales in
question were destined for the United States. Moreover, the claim that
LG would not have noticed the large volume of ``diverted sales'' does
not comport with market reality. Finally, petitioner notes that
consistent with its allegations, the Department found the sales in
question to be made at substantially dumped prices.
DOC Position. We agree with petitioner. A full discussion of our
final conclusion, which requires references to proprietary information,
is included in the LG Analysis Memorandum contained in the official
file for this case. Generally, however, we have found that the record
evidence concerning unreported sales supports the conclusion that LG
knew, or should have known, that at the time it sold the subject DRAMs,
the merchandise was destined for consumption in the United States.
With respect to knowledge, we do not agree with LG's contention
that the Department may not assign a facts available rate on the basis
of the unreported sales since LG had no actual knowledge of the
diversion of these sales. Numerous court decisions, including those by
the U.S. Court of Appeals for the Federal Circuit, have held that the
appropriate standard for making this decision is ``knew or should have
known at the time of the sale that the merchandise was being exported
for the United States.'' Yue Pak, Ltd. v. United States, Slip Op. 96-65
at 9 (CIT), aff'd. 1997 U.S. App. LEXIS 5425 (Fed. Cir. 1997). See also
Peer Bearing Co. v. United States, 800 F. Supp. 959, 964 (CIT 1992).
These holdings confirm the correctness of the Department's consistent
practice in this regard. See, e.g., Certain Pasta From Italy:
Termination of New Shipper Antidumping Duty Administrative Review, 62
FR 66602 (1997); Notice of Final Determination of Sales at Less Than
Fair Value: Manganese Sulfate From the People's Republic of China, 60
FR 51255 (1995). While the statute does not indicate the degree of
knowledge necessary to find that the producer knew the destination of
the merchandise, the courts have stated that even if a respondent
denies knowledge of the destination of its sales, the Department may
review all facets of a transaction, and based on extrinsic source data,
determine that it is appropriate to impute knowledge in a given case.
See INA 1997, 957 F. Supp. at 265.
In the matter of these unreported sales, we note that LG
essentially dealt with a U.S. company. When shipping
[[Page 50877]]
the merchandise, LG took no steps itself to ensure that when the
merchandise was delivered to the United States, it was subsequently
placed under Customs bond and transported to a third country, clearing
Customs upon export from the United States. What the record shows is
that LG sold an enormous amount of DRAMs to a very small company and
turned the merchandise over to the customer in the United States.
Consequently, in contrast to such cases as Plate from Ukraine and Pure
Magnesium from Russia, LG only knew for certain that it was shipping
DRAMs into the United States.
Moreover, this is not a situation where an exporter sells and ships
a relatively small amount of subject merchandise to a third country and
then, sometime much later, the customer reexports the merchandise to
the United States. In this case, we are confronted with a staggering
amount of merchandise that is being shipped by LG directly to the
United States. The merchandise is subsequently being entered for
consumption into the United States within days, if not hours, of it
leaving the possession of LG.
The relative size and nature of the purchaser's operations and the
quantity of acquisitions it made are germane to this case in several
respects. The amount of purchases this customer made are not modest. In
fact, the entered value of these transactions was quite large. However,
based on LG's description of the purchaser's operations, it is clear
that this party was not equipped to absorb such a vast amount of DRAMs.
In particular, LG should have known that the purchaser was buying more
DRAMs than it reasonably could consume in the manufacture of modules or
the refurbishment of computers and printers. Furthermore, the amounts
the customer purchased were so enormous they had to appear inconsistent
with the size of the third-country DRAM markets in question. Moreover,
as petitioner points out, this customer could be expected to sell the
vast majority of its merchandise to the United States. Consequently,
not only was it reasonable to assume that this firm would sell some or
all the subject merchandise that it purchased, but that it would sell
the merchandise to the United States.
In summary, based on the nature and characteristics of these
transactions, we conclude that LG knew, or should have known, that the
merchandise was destined for the United States. Considering the above,
and as more fully described in the above-mentioned agency memorandum,
the Department has decided to include the unreported sales during the
POR in the analysis conducted of LG's sales for these final review
results. See the Facts Available section of this notice for a
discussion of the facts available that were applied in the case of LG.
Concerning the other evasion allegations that petitioner has made
with respect to LG, we have determined that the information is not
sufficient to warrant further action during this POR.
Comment 2: Identifying All Comparable HM Sales Before Using Constructed
Value
LG argues that the Department did not implement the Cemex decision
properly in its calculations for the preliminary review results.
Therefore, LG submitted programming language that would allow the
Department to use its concordance database in accordance with the Cemex
decision.
Petitioner states that no programming changes are necessary.
DOC Position. We agree with LG and have corrected our calculations
for these final review results so that we use the appropriate product
comparisons if the first-choice comparison product fails the cost test.
Comment 3: HM Indirect Selling Expenses
LG contends that the Department did not take HM indirect selling
expenses (``DINDIRSU'') into account for U.S. sales in the calculation
of overall profit for the CEP-profit adjustment.
DOC Position. We agree and have corrected our calculations to
include HM indirect selling expenses in the calculation of the CEP-
profit adjustment for these final review results.
Comment 4: Credit Expenses and Inventory Carrying Costs
LG asserts that the Department added imputed credit expenses
(``CREDITCV'') and inventory carrying costs (``INVCARCV'') erroneously
in the calculation of CV, contending that these variables should be
deducted from CV, rather than added to CV, to offset for imputed
expenses that are deducted from the U.S. price to which CV is compared.
Petitioner says LG is mistaken when it argues that imputed selling
expenses should not be included in revised total CV. Because the
Department had already deducted these expenses, the petitioner contends
that imputed expenses are no longer built into CV and, therefore,
imputed expenses cannot be removed from CV when they were not
originally included in CV.
DOC Position. We agree with LG and have corrected our calculations
to eliminate the inclusion of imputed selling expenses in CV. We also
agree with LG that we should continue to deduct these expenses from CV
when comparing it to U.S. price to offset for imputed expenses that are
deducted from the U.S. price to which CV is compared.
Comment 5: CEP-Offset Adjustment for CV Comparisons
LG maintains that, for CV comparisons, the Department inadvertently
set the HM indirect selling expenses that are used in the CEP offset
equal to zero. These expenses are represented by the variables ISELCV
and INVCARCV.
Petitioner argues that the Department should not deduct INVCARCV
from CV since they were not included in CV.
DOC Position. We agree with LG and have adjusted our calculations
accordingly. See also DOC Position to LG-Specific Comment 4 regarding
the CV deductions.
Comment 6: Packing
LG states that the Department double counted U.S. packing cost in
the calculation of CV. LG also argues that the Department used U.S.
repacking cost twice in the margin calculation.
DOC Position. We agree with LG and have changed our calculations to
account for the double-counting of packing and repacking.
Comment 7: CV Selling Expenses Based on Density
LG argues that the Department should calculate CV selling expenses
based on density since higher-density products such as modules have a
relatively higher sales value and should carry a proportionately higher
share of selling expenses.
DOC Position. We do not agree with LG that we should have
calculated selling expenses for CV based on density. The selling
expenses in CV are not allocated on a model-, category-, or, in this
case, density-specific basis. For this cost factor, it is the
Department's practice to use the average selling expenses of the
foreign like product sold in the selected comparison market. The
foreign like product in this instance encompasses all DRAMs subject to
the order, not specific densities of DRAMs. As we stated in the final
results of the prior review, in this case we base the calculation of
average selling expenses on the quantity of foreign like product sold.
See Dynamic Random Access Memory Semiconductors of One Megabit or Above
from the Republic of
[[Page 50878]]
Korea: Final Results of Antidumping Duty Administrative Reviews and
Notice of Intent Not to Revoke Order, 62 FR 39809 (July 24, 1997).
Therefore, for these final review results, the Department has
calculated the selling expenses for CV based on the number of units of
subject merchandise sold in the HM.
Comment 8: CV-Profit Rate
Petitioner argues that the Department erred when it calculated CV
profit on a different basis than that to which it applied CV profit.
According to petitioner, the HM net prices the Department compared to
COP to establish CV profit included all selling and packing expenses,
but the Department applied this profit figure to costs which did not
include selling and packing expenses.
LG disputes petitioner's allegation that the Department should
apply the CV-profit rate to a COP that includes selling expenses and
packing.
DOC Position. We agree with petitioner. For these final review
results, we have corrected our calculations to ensure that we calculate
and apply the CV-profit rate on a consistent basis.
Comment 9: Duty Drawback
Petitioner argues that, in calculating CEP profit, the Department
should have subtracted duty drawback, not added it to, from movement
expenses.
LG maintains that, with respect to the CEP-profit calculation, the
Department should have added duty drawback to total revenue, not
subtract it from movement expenses.
DOC Position. We agree with LG. Duty drawback is an adjustment to
revenue, not an expense. Consequently, it is not relevant to the
movement expenses. For the CEP-profit calculation in these final review
results, we have added duty drawback to revenue.
Comment 10: Margin Calculation for the Diverted Third-country Sales
LG states that the Department should correct a number of errors it
made in the third-country ``diverted'' sales margin calculation. First,
LG argues that the Department should correct the following errors
regarding invoices: (1) use price information from the altered
invoices; (2) delete a duplicate invoice; (3) delete an invoice without
a proper corresponding entry summary (i.e., outside the POR); and (4)
correct typographic errors in quantities and dates. Second, LG also
argues that the Department did not assign proper control numbers based
on the product code in its calculations. Third, LG argues that the
Department's program failed to assign cost data to the diverted third-
country sales. Fourth, LG asserts that the Department did not identify
proper comparison products for the diverted third-country sales. Fifth,
LG states that the Department should have assigned weighted-average
selling expenses based on control numbers, not product-code numbers.
Finally, LG claims that, if there are no CEP sales of the identical
control number, then the Department must assign selling expenses and
costs based on the next most similar product.
Petitioner argues that the Department should apply adverse facts
available to the diverted third-country sales. Petitioner also argues
that the U.S. sales of the non-responding company, Techgrow, should be
included in the pool of LG's sales the Department uses to calculate the
margin. If, however, the Department uses the same margin calculation
methodology that it used in the preliminary review results, then
petitioner urges the use of the average selling expenses for all
reported sales to establish the selling expenses of the unreported
sales when the sale of identical products have not been reported.
Finally, petitioner argues that the Department should use the unit
prices actually paid to LGSA and not the gross unit prices listed in
the LGSA invoices attached to Customs entry summaries. Since the former
represent the amount ultimately paid, the petitioner contends that they
are best evidence of the actual sales price.
DOC Position. We agree with petitioner that we should use the unit
prices actually paid to LGSA, not the gross unit prices listed in the
LGSA invoices attached to the Customs entry summaries we received. The
invoices attached to the Customs entry summaries do not reflect the
total price adjustments that LG credited to the customers account for
these unreported sales. We also agree, in part, with certain
corrections that LG asked us to make. We deleted any duplicate invoices
and any invoices that were dated outside the POR, and we corrected any
typographical errors in the quantity and date fields of the unreported
sales. We also assigned cost data to all unreported sales and made
corrections to our calculations to ensure that we used proper
comparison models for all unreported sales. However, regarding facts
available, we did not assign weighted-average selling expenses to the
unreported sales based on control number as LG suggested. Because some
of the unreported sales involved product codes that had not been part
of LG's questionnaire response, we did not have control numbers for
these transactions. As we are applying adverse facts available to LG's
unreported sales, we used instead the highest reported selling expenses
from reported transactions involving identical products. Where there
were no reported transactions involving identical merchandise, we used
the highest U.S. selling expenses from sales that LG reported of the
same density. Where we used CV and no quarterly cost data was available
for the quarter in which the unreported sale took place, we used the
highest CV from the remaining available quarters. See LG Analysis Memo.
Regarding Techgrow, we disagree with petitioner's argument that
Techgrow's U.S. sales should be included in the pool of LG's sales used
to calculate LG's margin because there is no information on the record
of this review to support petitioner's contention. Therefore, we have
not included Techgrow's sales in LG's margin calculation.
C. MultiTech
Comment 1: Automatic-Assessment Rate
MultiTech states that, if LG neither knew nor should have known
that the destination of the unreported sales was the United States,
then the Department must attribute the sales of such merchandise to an
independent third-country reseller. Additionally, MultiTech argues that
the Department cannot conduct a review of the independent third-country
reseller's sales since a review was not timely requested. In the
absence of a request for review, the Department, according to
MultiTech, must liquidate all entries of the merchandise attributed to
the third-country reseller and assess the antidumping duties on the
basis of the amount equal to the cash deposited at the time of entry as
required under the automatic-assessment provision in section 353.22 of
the Department's regulations. Therefore, MultiTech maintains that the
appropriate antidumping duty rate for the third-country reseller is
LG's cash deposit rate of zero percent established during the third
POR.
As noted above, LG states that it had no involvement in, or
knowledge of, an evasion of the antidumping law. In addition, LG argues
that the Department is not permitted to treat any diverted shipments as
U.S. sales by LG. However, LG contends, the Department has lawful
discretion to assess appropriate antidumping duties against the party
that imported the goods into the United States. LG maintains that any
antidumping duties which are due on
[[Page 50879]]
these sales must be assessed based on the actual exporter of the
subject merchandise and the antidumping duties must be collected by the
U.S. Customs Service from the actual importer.
Petitioner contends that it requested an administrative review of
all subject merchandise produced by LG and either entered in, sold in,
or sold to the United States during the period under review. With
respect to such entries and sales, petitioner argues that the
automatic-assessment provision is inapplicable because this provision
is only applicable to merchandise not covered by the request.
Petitioner notes that the Department's practice in previous DRAM
reviews has been to apply the producer's dumping margin to all entries
of merchandise produced by that company. As such, in these reviews
petitioner contends the Department will instruct Customs to assess
antidumping duties on DRAMs from Korea on the basis of the producer of
the merchandise. According to the petitioner, the Department did not
limit those instructions to entries that were exported to the United
States by or on behalf of the producer or an affiliate, nor were the
instructions dependent on a finding that a shipment to the United
States through an unaffiliated reseller was made pursuant to a sale
from the producer with knowledge that the goods were destined for the
United States. Petitioner also notes that the Department has issued
broad instructions to Customs which require the assessment of
antidumping duties on Korean DRAMs manufactured by Korean producers,
but imported from fifteen other countries, without regard to identity
of the exporter or reseller.
DOC Position. This issue is moot since we have attributed the sales
in question to LG. See also DOC Position to LG-specific Comment 1
regarding LG's claims.
D. Techgrow
Petitioner states that Techgrow has significantly impeded this
review. Petitioner asserts that Techgrow's failure to cooperate and
submit a verifiable questionnaire response warrants an adverse
inference. Petitioner notes that the Department requested that Techgrow
supplement its response by reporting sales made from its U.S.
affiliate, but the U.S. affiliate declined to respond, and,
subsequently, Techgrow withdrew from further participation in this
review. Moreover, petitioner contends, the Department has rewarded
Techgrow for non-participation by assigning Techgrow a rate of 12.64
percent, the same rate as assigned to Hyundai. As argued by petitioner,
this rate is lower than the rate Techgrow would have received had it
cooperated with the Department.
Petitioner alleges that Techgrow's sales in the HM were made at
prices below LG's COP. As part of this allegation, petitioner
calculated a margin based on (1) a comparison of Techgrow's HM prices
to LG's COP, and (2) a comparison of Techgrow's NV to Techgrow's sales
to its U.S. affiliate. The petitioner states that the margin it
calculated was substantially higher than the 12.64 percent the
Department assigned to Techgrow in the preliminary results. Petitioner
also contends that, if Techgrow had cooperated in this review, even
with adjustments for both CEP and NV, the margin would have been far
greater than 12.64 percent. Therefore, petitioner recommends that, as
facts available, Techgrow must be assigned the margin that results from
a comparison of NV based on CV with Techgrow's reported U.S. sales
prices. Petitioner states that this information must be considered
fully corroborated since it consists of LG cost data that has been
subject to verification and U.S. sales data submitted by Techgrow. In
its arguments on behalf of these calculated margins, petitioner cites
the SAA (at 870) which states:
In conformity with the Antidumping Agreement and current
practice, new section 776(b) permits Commerce and the Commission to
draw an adverse inference where a party has not cooperated in a
proceeding * * * Commerce and the Commission may employ adverse
inferences about the missing information to insure that the party
does not obtain a more favorable result by failing to cooperate than
if it had cooperated fully. In employing adverse inferences, one
factor the agencies will consider is the extent to which a party may
benefit from its own lack of cooperation. Information used to make
an adverse inference may include such sources as the petition, other
information placed on the record, or determinations in a prior
proceeding regarding the subject merchandise.
Petitioner also cites Krupp Stahl A.G. v. United States, 822 F.
Supp. 789, 793 (CIT 1993) for the proposition that the Department may
depart from its standard facts-available methodology on a case-by-case
basis as the circumstances warrant. Petitioner also cites Silicon Metal
From Argentina; Final Results of Antidumping Duty Administrative
Review, 58 FR 65336, 65338 (December 14, 1993) as an example of a case
where the Department used CV information developed by petitioner and
applied it to respondent's sales information to derive respondent's
dumping margin. In this case, the Department stated:
* * * The primary purpose of the BIA rule is to induce
respondents to provide the Department with timely, complete, and
accurate factual information, so that the agency can achieve the
fundamental purpose of the Tariff Act, namely, ``determining current
[dumping] margins as accurately as possible''* * * A secondary
purpose is to ensure that the antidumping duties assessed are not
less than the actual amounts might have been, had we received full
and accurate information.
DOC Position. We agree with the petitioner, in part. Techgrow's
refusal to participate further in this review significantly impeded a
determination under the antidumping statute. Moreover, as we explained
earlier in this notice, we have assigned an adverse facts-available
rate to Techgrow. See section entitled ``Application of Facts
Available''. However, we disagree with petitioner's assertion that, as
a result, Techgrow obtained a more favorable rate than it would have
received had it cooperated fully.
Petitioner's calculations are based on assumptions and
substantially incomplete data. Techgrow's response, for example, did
not contain information pertaining to its sales to unaffiliated
purchasers in the United States. Therefore, petitioner's calculations
are based on transfer prices between Techgrow and its U.S. affiliate,
figures which are not relevant to the calculation of a dumping margin.
Moreover, the rate Techgrow received is clearly adverse when considered
in the context of this proceeding. As mentioned earlier, we have
assigned Techgrow the highest company-specific margin calculated in the
history of this proceeding. Consequently we have continued to apply
LG's rate as facts available to Techgrow for these final review
results.
Final Results of Review
As a result of this review, we have determined that the following
margins exist for the period May 1, 1996 through April 30, 1997:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Hyundai Electronics Industries, Co......................... 3.95
LG Semicon Co., Ltd........................................ 9.28
Techgrow Limited........................................... 9.28
Vitel Electronics.......................................... 9.28
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and NV may vary from the
[[Page 50880]]
percentages stated above. The Department will issue appraisement
instructions directly to the Customs Service. These final results of
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review. For duty-assessment
purposes, we calculated an importer-specific assessment rate by
aggregating the dumping margins calculated for all U.S. sales to each
importer and dividing this amount by the total value of subject
merchandise entered during the POR for each importer.
Furthermore, the following deposit requirements will be effective
upon publication of this notice of final results of review for all
shipments of DRAMs from Korea entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a) of the Act: (1) for the companies named above, the cash
deposit rate will be the rate listed above (2) for merchandise exported
by manufacturers or exporters not covered in this review but covered in
a previous segment of this proceeding, the cash deposit rate will
continue to be the company-specific rate published in the most recent
final results which covered that manufacturer or exporter; (3) if the
exporter is not a firm covered in this review or in any previous
segment of this proceeding, but the manufacturer is, the cash deposit
rate will be that established for the manufacturer of the merchandise
in these final results of review or in the most recent final results
which covered that manufacturer; and (4) if neither the exporter nor
the manufacturer is a firm covered in this review or in any previous
segment of this proceeding, the cash deposit rate will be 3.85 percent,
the all others rate established in the LFTV investigation. These
deposit requirements shall remain in effect until publication of the
final results of the next administrative review.
This notice serves as a final reminder to importers of their
responsibility under 19 CFR 353.26(b) to file a certificate regarding
the reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of doubled antidumping duties.
This notice also serves as the only reminder to parties subject to
APO of their responsibility concerning the disposition of proprietary
information disclosed under APO in accordance with section 353.34(d) of
the Department's regulations. Timely notification of return/destruction
of APO materials or conversion to judicial protective order is hereby
requested. Failure to comply with the regulations and the terms of an
APO is a sanctionable violation.
We are issuing and publishing this in accordance with section
751(i) of the Act.
Dated: September 8, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-25434 Filed 9-22-98; 8:45 am]
BILLING CODE 3510-DS-P
