[Federal Register Volume 70, Number 107 (Monday, June 6, 2005)]
[Notices]
[Pages 32756-32760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2877]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-839]
Certain Polyester Staple Fiber from Korea: Preliminary Results of
Antidumping Duty Administrative Review and Partial Rescission of Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on certain polyester staple fiber
from Korea. The period of review is May 1, 2003, through April 30,
2004. This review covers imports of certain polyester staple fiber from
one producer/exporter. We have preliminarily found that sales of the
subject merchandise have been made below normal value. If these
preliminary results are adopted in our final results, we will instruct
U.S. Customs and Border Protection to assess antidumping duties.
Interested parties are invited to comment on these preliminary results.
We will issue the final results not later than 120 days from the date
of publication of this notice.
EFFECTIVE DATE: June 6, 2005.
FOR FURTHER INFORMATION CONTACT: Andrew McAllister or Yasmin Bordas,
AD/CVD Operations, Office 1, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington DC 20230; telephone (202) 482-1174
and (202) 482-3813, respectively.
SUPPLEMENTARY INFORMATION:
Background
On May 25, 2000, the Department of Commerce (``Department'')
published an antidumping duty order on certain polyester staple fiber
(``PSF'') from Korea. (See 65 FR 33807). On May 3, 2004, the Department
published a notice of ``Opportunity to Request Administrative Review''
of this order. (See 69 FR 24117). On May 28, 2004, Wellman, Inc.;
Arteva Specialties, Inc. d/b/a KoSa; and DAK Fibers, LLC (collectively,
``the petitioners'')\1\ requested administrative reviews of Huvis
Corporation (``Huvis'') and Saehan Industries, Inc. (``Saehan''). On
May 28, 2004, Huvis and Saehan made similar requests for administrative
reviews. On June 30, 2004, the Department published a notice initiating
the review for the aforementioned companies. (See 69 FR 39409). The
period of review (``POR'') is May 1, 2003, through April 30, 2004.
On June 30, 2004, we issued antidumping questionnaires in this
review. On September 27, 2004, Saehan withdrew its request for review.
On September 28, 2004, the petitioners withdrew their request for
administrative review of Saehan. See ``Partial Rescission'' section,
below.
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\1\ On March 11, 2005, the Department was informed that Arteva
Specialties, Inc. d/b/a KoSa had changed its name to Invista
S.a.r.l. Presently, the petitioners are Wellman, Inc.; Invista
S.a.r.l.; and DAK Fibers.
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As a result of certain below-cost sales being disregarded in the
previous administrative review, we instructed Huvis to respond to the
cost questionnaire. We received a questionnaire response from Huvis on
September 10, 2004.
In October 2004, December 2004, and February 2005, we issued
supplemental questionnaires to Huvis. We received responses to these
supplemental questionnaires in November 2004, January 2005, and March
2005.
Scope of the Order
For the purposes of this order, the product covered is PSF. PSF is
defined as synthetic staple fibers, not carded, combed or otherwise
processed for spinning, of polyesters measuring 3.3 decitex (3 denier,
inclusive) or more in diameter. This merchandise is cut to lengths
varying from one inch (25 mm) to five inches (127 mm). The merchandise
subject to this order may be coated, usually with a silicon or other
finish, or not coated. PSF is generally used as stuffing in sleeping
bags, mattresses, ski jackets, comforters, cushions, pillows, and
furniture. Merchandise of less than 3.3 decitex (less than 3 denier)
currently classifiable in the Harmonized Tariff Schedule of the United
States (``HTSUS'') at subheading 5503.20.00.20 is specifically excluded
from this order. Also specifically excluded from this order are
polyester staple fibers of 10 to 18 denier that are cut to lengths of 6
to 8 inches (fibers used in the manufacture of carpeting). In addition,
low-melt PSF is excluded from this order. Low-melt PSF is defined as a
bi-component fiber with an outer sheath that melts at a significantly
lower temperature than its inner core.
The merchandise subject to this order is currently classifiable in
the HTSUS at subheadings 5503.20.00.45 and 5503.20.00.65. Although the
HTSUS subheadings are provided for convenience and customs purposes,
the written description of the merchandise under order is dispositive.
Partial Rescission
As noted above, Saehan withdrew its request for review, and the
petitioners also withdrew their request for review of Saehan. Because
these withdrawals were timely filed and no other party requested a
review of this company, pursuant to 19 CFR 351.213(d)(1), we are
rescinding this review with respect to Saehan. We will instruct U.S.
Customs and Border Protection (``CBP'') to liquidate any entries from
this company during the POR and to assess antidumping duties at the
rate in effect at the time of entry.
Revocation
The Department ``may revoke, in whole or in part'' an antidumping
duty order upon completion of a review under section 751 of the Tariff
Act of 1930 (``the Act''), as amended. While Congress has not specified
the procedures that the Department must follow in revoking an order,
the Department has developed a procedure for revocation that is
described in 19 CFR 351.222. This regulation requires, inter alia, that
a company requesting revocation must submit the following: (1) a
certification that the company has sold the subject merchandise at not
less than normal value (``NV'') in the current review period and that
the company will not sell at less than NV in the future; (2) a
certification that the company sold the subject merchandise in each of
the three years forming the
[[Page 32757]]
basis of the request in commercial quantities; and, (3) an agreement to
reinstatement of the order if the Department concludes that the
company, subsequent to the revocation, sold subject merchandise at less
than NV. See 19 CFR 351.222(e)(1).
Pursuant to 19 CFR 351.222(e)(1), Huvis requested revocation of the
antidumping duty order as it pertains to Huvis. According to 19 CFR
351.222(b)(2), upon receipt of such a request, the Department may
revoke an order, in part, if it concludes that (1) the company in
question has sold subject merchandise at not less than NV for a period
of at least three consecutive years; (2) the continued application of
the antidumping duty order is not otherwise necessary to offset
dumping; and (3) the company has agreed to its immediate reinstatement
in the order if the Department concludes that the company, subsequent
to the revocation, sold subject merchandise at less than NV.
We preliminarily find that the request from Huvis does not meet all
of the criteria under 19 CFR 351.222. With regard to the criterion of
19 CFR 351.222(b)(2)(i), Huvis received a weighted average margin of
1.54 percent in the 2002-2003 Administrative Review, and thus has not
sold subject merchandise at not less than NV for a period of three
consecutive years. See Polyester Staple Fiber from Korea: Final Results
of Antidumping Duty Administrative Review, 69 FR 61341 (October 18,
2004) (``2002-2003 PSF Final''), covering the period May 1, 2002,
through April 30, 2003. Therefore, we preliminarily find that Huvis
does not qualify for revocation of the order on PSF pursuant to 19 CFR
351.222(b)(2).
Fair Value Comparisons
To determine whether the respondent's sales of PSF to the United
States were made at less than NV, we compared export price (``EP'') to
NV, as described in the ``Export Price'' and ``Normal Value'' sections
of this notice.
Pursuant to section 777A(d)(2) of the Act, we compared the EP of
individual U.S. transactions to the weighted-average NV of the foreign
like product, where there were sales made in the ordinary course of
trade, as discussed in the ``Cost of Production Analysis'' section,
below.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondent in the home market covered
by the description in the ``Scope of the Order'' section, above, to be
foreign like products for purposes of determining appropriate product
comparisons to U.S. sales. In accordance with section 773(a)(1)(C)(ii)
of the Act, in order to determine whether there was a sufficient volume
of sales in the home market to serve as a viable basis for calculating
NV, we compared the respondent's volume of home market sales of the
foreign like product to the volume of its U.S. sales of the subject
merchandise. (For further details, see the ``Normal Value'' section,
below.)
We compared U.S. sales to monthly weighted-average prices of
contemporaneous sales made in the home market. Where there were no
contemporaneous sales of identical merchandise in the home market, we
compared sales made within the window period, which extends from three
months prior to the POR until two months after the POR. Where there
were no sales of identical merchandise in the home market made in the
ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade. Where there were no sales of identical or
similar merchandise made in the ordinary course of trade in the home
market to compare to U.S. sales, we compared U.S. sales to constructed
value (``CV''). In making product comparisons, consistent with our
final determination in the original investigation, we matched foreign
like products based on the physical characteristics reported by the
respondent in the following order: 1) composition; 2) type; 3) grade;
4) cross section; 5) finish; and 6) denier (see Notice of Final
Determination of Sales at Less Than Fair Value: Certain Polyester
Staple Fiber From the Republic of Korea, 65 FR 16880, 16881 (March 30,
2000)).
Export Price
For sales to the United States, we calculated EP, in accordance
with section 772(a) of the Act, because the merchandise was sold prior
to importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
calculated EP based on the FOB, C&F, CIF, EDDP (ex-dock duty paid) FOB
U.S. port, EDDP C&F, or EDDP CIF price to unaffiliated purchasers in
the United States. Where appropriate, we made deductions, consistent
with section 772(c)(2)(A) of the Act, for the following movement
expenses: inland freight from the plant to port of exportation, foreign
brokerage and handling, international freight, marine insurance, and
U.S. customs duty.
We increased EP, where appropriate, for duty drawback in accordance
with section 772(c)(1)(B) of the Act. Huvis provided documentation
demonstrating that it received duty drawback under Korea's individual-
rate system. In prior investigations and administrative reviews, the
Department has examined Korea's individual-rate system and found that
the government controls in place generally satisfy the Department's
requirements for receiving a duty drawback adjustment (i.e., that 1)
the rebates received were directly linked to import duties paid on
inputs used in the manufacture of the subject merchandise, and 2) there
were sufficient imports to account for the rebates received). See,
e.g., Final Results of Antidumping Duty Administrative Review and
Partial Termination of Administrative Review: Circular Welded Non-Alloy
Steel Pipe From the Republic of Korea, 62 FR 55574, 55577 (October 27,
1997). We examined the documentation submitted by Huvis in this
administrative review and confirmed that it meets the Department's two-
prong test for receiving a duty drawback adjustment. Accordingly, we
are allowing the reported duty drawback adjustment on Huvis' U.S.
sales.
Normal Value
A. Selection of Comparison Market
To determine whether there was a sufficient volume of sales of PSF
in the home market to serve as a viable basis for calculating NV, we
compared the respondent's home market sales of the foreign like product
to its volume of U.S. sales of the subject merchandise, in accordance
with section 773(a) of the Act. Pursuant to sections 773(a)(1)(B) and
(C) of the Act, because the respondent's aggregate volume of home
market sales of the foreign like product was greater than five percent
of its aggregate volume of U.S. sales of the subject merchandise, we
determined that the home market was viable for comparison.
B. Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (``LOT'') as the EP. Sales are made at different
LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition
[[Page 32758]]
for determining that there is a difference in the stages of marketing.
Id.; see also Notice of Final Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62
FR 61731, 61732 (November 19, 1997). In order to determine whether the
comparison sales were at different stages in the marketing process than
the U.S. sales, we reviewed the distribution system in each market
(i.e., the ``chain of distribution''),\2\ including selling
functions,\3\ class of customer (``customer category''), and the level
of selling expenses for each type of sale.
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\2\ The marketing process in the United States and comparison
markets begins with the producer and extends to the sale to the
final user or customer. The chain of distribution between the two
may have many or few links, and the respondent's sales occur
somewhere along this chain. In performing this evaluation, we
considered the narrative responses of the respondent to properly
determine where in the chain of distribution the sale appears to
occur.
\3\ Selling functions associated with a particular chain of
distribution help us to evaluate the level(s) of trade in a
particular market. For purposes of these preliminary results, we
have organized the common selling functions into four major
categories: sales process and marketing support, freight and
delivery, inventory and warehousing, and quality assurance/warranty
services.
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Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for EP and comparison market sales (i.e., NV based on
either home market or third country prices)\4\, we consider the
starting prices before any adjustments. See Micron Technology, Inc. v.
United States, et. al., 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001)
(affirming this methodology).
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\4\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, G&A
expenses, and profit for CV, where possible.
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When the Department is unable to match U.S. sales to sales of the
foreign like product in the comparison market at the same LOT as the
EP, the Department may compare the U.S. sale to sales at a different
LOT in the comparison market. In comparing EP sales at a different LOT
in the comparison market, where available data show that the difference
in LOT affects price comparability, we make an LOT adjustment under
section 773(a)(7)(A) of the Act.
Huvis reported that it made direct sales to distributors and end
users in both the home market and in the United States. Huvis has
reported a single channel of distribution and a single level of trade
in each market, and has not requested an LOT adjustment. We examined
the information reported by Huvis regarding its marketing process for
making the reported home market and U.S. sales, including the type and
level of selling activities performed, and customer categories.
Specifically, we considered the extent to which sales process, freight
services, warehouse/inventory maintenance, and warranty services varied
with respect to the different customer categories (i.e., distributors
and end users) within each market and across the markets. Based on our
analyses, we found a single level of trade in the United States, and a
single, identical level of trade in the home market. Thus, it was
unnecessary to make a LOT adjustment for Huvis in comparing EP and home
market prices.
C. Sales to Affiliated Customers
Huvis made sales in the home market to an affiliated customer. To
test whether these sales were made at arm's length, we compared the
starting prices of sales to the affiliated customer to those of
unaffiliated customers, net of all movement charges, direct and
indirect selling expenses, discounts, and packing. Where the price to
the affiliated party was, on average, within a range of 98 to 102
percent of the price of the same or comparable merchandise to the
unaffiliated parties, we determined that the sales made to the
affiliated party were at arm's length. See Modification Concerning
Affiliated Party Sales in the Comparison Market, 67 FR 69186 (November
15, 2002). In accordance with the Department's practice, we only
included in our margin analysis sales to an affiliated party that were
made at arm's length.
D. Cost of Production Analysis
As discussed in the ``Background'' section above, there were
reasonable grounds to believe or suspect that the respondent made sales
of the subject merchandise in its comparison market at prices below the
cost of production (``COP'') within the meaning of section 773(b) of
the Act.
1. Calculation of COP
We calculated the COP on a product-specific basis, based on the sum
of the respondent's costs of materials and fabrication for the foreign
like product, plus amounts for selling, general and administrative
(``SG&A'') expenses, including interest expenses, and the costs of all
expenses incidental to placing the foreign like product packed and in a
condition ready for shipment, in accordance with section 773(b)(3) of
the Act.
We relied on COP information submitted in Huvis' cost questionnaire
responses, except for the following adjustments. We adjusted Huvis'
reported cost of manufacturing to account for purchases of modified
terephthalic acid (``MTA'') and qualified terephthalic acid (``QTA'')
from affiliated parties at non-arm's-length prices. We preliminarily
find that MTA and QTA are interchangeable for the following reasons: 1)
the production processes of MTA and QTA are essentially the same; 2)
Huvis has stated it may, in certain instances, use a type of
terephtalic acid (``TPA'') different from the one normally used in
production of a particular chip without significant changes to the end
product; and 3) Huvis' decision to use MTA or QTA in the production
process is driven by plant proximity to the chemical supplier. Huvis
did not provide market price information for QTA.\5\ See Memorandum
from Team to the File, ``Preliminary Results Calculation Memorandum -
Huvis Corporation,'' dated May 31, 2005 (``Huvis Calculation
Memorandum''), which is on file in the Central Records Unit (``CRU'')
in room B-099 of the main Department building.
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\5\ The petitioners submitted a market research study with
suggested market prices for TPA. See Submission from Petitioners to
the Department, ``Market Research Study,'' dated December 23, 2004.
In this instance, the Department preliminarily finds that the
information in the petitioners' market study is not supported by
adequate sales documentation. Specifically, the price quotes do not
distinguish between the different types of TPA used by Huvis in its
production of PSF nor are they associated with actual sales
transactions. In contrast, Huvis was able to support its reported
market prices of MTA with invoices from the supplier. Therefore, for
the preliminary results, we are relying on Huvis' reported market
prices to calculate MTA and QTA. See Huvis Calculation Memorandum.
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We also revised the sales, general, and administrative (``SG&A'')
ratios for Huvis' affiliated suppliers. Consistent with the
Department's normal practice, we included expenses that Huvis had
improperly excluded from its calculation of the numerator of the SG&A
ratios. See Huvis Calculation Memorandum.
In its net interest expense calculation, Huvis offset its interest
expenses. For the preliminary results, we have excluded this offset
because it is not related to interest income incurred on short-term
investments of working capital. See Huvis Calculation Memorandum.
2. Test of Home Market Prices
On a product-specific basis, we compared the adjusted weighted-
average COP figures for the POR to the home market sales of the foreign
like product, as required under section 773(b) of the Act, to determine
whether these sales were made at prices below the COP. The prices were
exclusive of any applicable movement charges and indirect selling
expenses. In determining whether to disregard home market sales made at
prices less than
[[Page 32759]]
their COP, we examined, in accordance with sections 773(b)(1)(A) and
(B) of the Act, whether such sales were made (1) within an extended
period of time in substantial quantities, and (2) at prices which
permitted the recovery of all costs within a reasonable period of time.
3. Results of COP Test
Pursuant to section 773(b)(1), where less than 20 percent of the
respondent's sales of a given product are at prices less than the COP,
we do not disregard any below-cost sales of that product, because we
determine that in such instances the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of the
respondent's sales of a given product are at prices less than the COP,
we determine that the below-cost sales represent ``substantial
quantities'' within an extended period of time, in accordance with
section 773(b)(1)(A) of the Act. In such cases, we also determine
whether such sales were made at prices which would not permit the
recovery of all costs within a reasonable period of time, in accordance
with section 773(b)(1)(B) of the Act.
We found that, for certain specific products, more than 20 percent
of the respondent's home market sales were at prices less than the COP
and, thus, the below-cost sales were made within an extended period of
time in substantial quantities. In addition, these sales were made at
prices that did not permit the recovery of costs within a reasonable
period of time. Therefore, we excluded these sales and used the
remaining sales of the same product, as the basis for determining NV,
in accordance with section 773(b)(1).
E. Calculation of Normal Value Based on Home Market Prices
We calculated NV based on the price to unaffiliated customers, and
to an affiliated customer to which sales were made at arm's length. We
made adjustments for differences in packing in accordance with sections
773(a)(6)(A) and 773(a)(6)(B)(i) of the Act. We also made adjustments,
where appropriate, consistent with section 773(a)(6)(B)(ii) of the Act,
for inland freight from the plant to the customer. In addition, we made
adjustments for differences in circumstances of sale (``COS''), in
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410. We made COS adjustments, where appropriate, by deducting
direct selling expenses incurred on home market sales (i.e., credit
expenses and bank charges) and adding U.S. direct selling expenses
(i.e., credit expenses and bank charges).
For some of its home market sales, Huvis reported that payments
were made within an open account system, i.e., periodic payments were
made on outstanding account balances. For these open account sales,
Huvis calculated the payment date using an average payment period for
each customer. For two of Huvis' home market customers, we have
adjusted the credit period for open account sales. We also recalculated
credit expenses for home market sales that were incurred in U.S.
dollars using Huvis' reported U.S. interest rate. See Huvis Calculation
Memorandum.
Preliminary Results of the Review
We find that the following dumping margins exist for the period May
1, 2003, through April 30, 2004:
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Weighted-average
Exporter/manufacturer margin percentage
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Huvis Corporation................................... 5.87
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Any interested party may request a hearing within 30 days of
publication of this notice. Any hearing, if requested, will be held 42
days after the publication of this notice, or the first workday
thereafter. Issues raised in the hearing will be limited to those
raised in the case and rebuttal briefs. Interested parties may submit
case briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 35 days after the date of
publication of this notice. Parties who submit case briefs or rebuttal
briefs in this proceeding are requested to submit with each argument
(1) a statement of the issue and (2) a brief summary of the argument
with an electronic version included.
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
such written briefs or hearing, within 120 days of publication of these
preliminary results.
Assessment Rates and Cash Deposit Requirements
Pursuant to 19 CFR 351.212(b), the Department calculates an
assessment rate for each importer or customer of the subject
merchandise. The Department will issue appropriate assessment
instructions directly to CBP within 15 days of publication of the final
results of this review. Upon issuance of the final results of this
administrative review, if any importer- or customer-specific assessment
rates calculated in the final results are above de minimis (i.e., at or
above 0.5 percent), the Department will instruct CBP to assess
antidumping duties on appropriate entries by applying the assessment
rate to the entered quantity of the merchandise. For assessment
purposes, we calculated importer- or customer-specific assessment rates
for the subject merchandise by aggregating the dumping duties due for
all U.S. sales to each importer or customer and dividing the amount by
the total entered quantity of the sales to that importer or customer.
The following deposit requirements will be effective upon
completion of the final results of this administrative review for all
shipments of PSF from Korea entered, or withdrawn from warehouse, for
consumption on or after the publication date of the final results of
this administrative review, as provided by section 751(a)(1) of the
Act: (1) the cash deposit rate for the reviewed company will be the
rate established in the final results of this administrative review
(except no cash deposit will be required if its weighted-average margin
is de minimis, i.e., less than 0.5 percent); (2) for merchandise
exported by manufacturers or exporters not covered in this review but
covered in the original less-than-fair-value investigation or a
previous review, the cash deposit rate will continue to be the most
recent rate published in the final determination or final results for
which the manufacturer or exporter received an individual rate; (3) if
the exporter is not a firm covered in this review, the previous review,
or the original investigation, but the manufacturer is, the cash
deposit rate will be the rate established for the most recent period
for the manufacturer of the merchandise; and (4) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
reviews, the cash deposit rate will be 7.91 percent, the ``all others''
rate established in Certain Polyester Staple Fiber from the Republic of
Korea: Notice of Amended Final Determination and Amended Order Pursuant
to Final Court Decision, 68 FR 74552 (December 24, 2003).
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
[[Page 32760]]
We are issuing and publishing these results in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: May 31, 2005.
Susan H. Kuhbach,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-2877 Filed 6-3-05; 8:45 am]
BILLING CODE 3510-DS-S