[Federal Register Volume 75, Number 134 (Wednesday, July 14, 2010)]
[Notices]
[Pages 40784-40788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17170]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-807]
Polyethylene Terephthalate Film, Sheet, and Strip from the
Republic of Korea: Preliminary Results of Antidumping Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on polyethylene terephthalate
film, sheet and strip (PET film) from the Republic of Korea (Korea).
This review covers one company, Kolon Industries Inc. (Kolon) and the
period June 1, 2008, through May 31, 2009. We preliminarily determine
that Kolon has not made sales below normal value (NV). The final
results of this review shall be the basis for the assessment of
antidumping duties on entries of merchandise covered by the final
results of this review and for future deposits of estimated duties,
where applicable.
Interested parties are invited to comment on these preliminary
results. We will issue the final results no later than 120 days from
the date of publication of this notice.
DATES:Effective Date:
July 14, 2010.
FOR FURTHER INFORMATION CONTACT: Maryanne Burke or Robert James, AD/CVD
Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
5604 or (202) 482-0649, respectively.
SUPPLEMENTARY INFORMATION:
Background
On June 1, 2009, the Department published in the Federal Register a
notice of ``Opportunity to Request Administrative Review'' of the
antidumping duty order on PET film from Korea. See Antidumping or
Countervailing Duty Order, Finding, or Suspended Investigation;
Opportunity to Request Administrative Review, 74 FR 26202 (June 1,
2009).
In accordance with Section 751(a)(1) of the Tariff Act, as amended
(the Act) and 19 CFR 351.213(b)(2), on June 30, 2009, Kolon requested
an administrative review of the antidumping duty order on PET film from
Korea. On June 30, 2009, DuPont Teijin Films (DuPont), Mitsubishi
Polyester Film, Inc. (Mitsubishi), and Toray Plastics America Inc.
(Toray) (collectively ``Petitioners''), also requested a review of
Kolon.
On July 29, 2009, the Department initiated an administrative review
for Kolon covering the period June 1, 2008, through May 31, 2009. See
Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Deferral of Administrative Review, 74 FR 37690 (July 29,
2009).
On August 6, 2009, we issued our antidumping questionnaire to
Kolon. We received Kolon's response to our questionnaire on September
16, 2009 (Section A) and October 13, 2009 (Sections B, C, and D). On
February 1, 2010, we issued a supplemental questionnaire to Kolon which
covered sections A through D. Kolon responded to this supplemental
questionnaire on March 1, 2010. Then, on June 15, 2010 we issued a
second supplemental questionnaire to Kolon which covered sections B
through D. Kolon filed its response to this questionnaire on June 29,
2010.
On March 3, 2010, we extended the deadline for the preliminary
results of this review until no later than July 7, 2010. See
Polyethylene Terephthalate Film, Sheet and Strip from the Republic of
Korea: Extension of Time Limit for Preliminary Results of the
Antidumping Duty Administrative Review, 75 FR 9579 (March 3, 2010).
Scope of the Order
Imports covered by this order are shipments of all gauges of raw,
pretreated, or primed polyethylene terephthalate film, sheet, and
strip, whether extruded or coextruded. The films excluded from this
review are metallized films and other finished films that have had at
least one of their surfaces modified by the application of a
performance-enhancing resinous or inorganic layer more than 0.00001
inches (0.254 micrometers) thick.
PET film is currently classifiable under Harmonized Tariff Schedule
of the United States (HTSUS) subheading 3920.62.00. The HTSUS
subheading is provided for convenience and for
[[Page 40785]]
customs purposes. The written description remains dispositive as to the
scope of the product coverage.
Period of Review
The period of review (POR) is June 1, 2008, to May 31, 2009.
Comparisons to Normal Value
To determine whether sales of PET film from Korea to the United
States were made at less than normal value (NV), we compared Kolon's
constructed export price (CEP) or export price (EP) sales made in the
United States to unaffiliated purchasers to NV, as described in the
``United States Price'' and ``Normal Value'' sections of this notice,
below. In accordance with section 777A(d)(2) of the Act, we compared
the CEP and EP of individual transactions to monthly weighted-average
NVs.
Product Comparisons
In accordance with section 771(16) of the Act we considered all
products produced by Kolon covered by the description in the ``Scope of
the Order'' section, above, and sold in the home market during the POR,
to be foreign like products for purposes of determining appropriate
product comparisons to U.S. sales. We first attempted to compare
contemporaneous U.S. and comparison-market sales of products that are
identical with respect to the following characteristics: 1)
specification; 2) thickness; 3) surface treatment; and 4) grade.
Consistent with the methodology employed in the 2007-2008
administrative review of this order, and in the less than fair value
(LTFV) investigation of PET film from Thailand, we used the actual
thicknesses of the film rather than a range of thicknesses for product
comparison purposes. See Polyethylene Terephthalate Film, Sheet, and
Strip from the Republic of Korea: Preliminary Results of Antidumping
Duty Administrative Review, 74 FR 31922, 31923 (July 6, 2009)
(unchanged in final results.) See also, Notice of Preliminary
Determination of Sales at Not Less Than Fair Value: Polyethylene
Terephthalate Film, Sheet, and Strip from Thailand, 73 FR 24565, 24567
(May 5, 2008) (unchanged in final determination). Where we were unable
to compare sales of identical merchandise, we compared U.S. sales to
home market sales of the most similar merchandise based on the above
characteristics. Where there were no sales of the foreign like product
of the identical merchandise in the ordinary course of trade in the
home market to compare to a U.S. sale, we compared the price of the
U.S. sale to constructed value (CV).
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we base NV on sales made in the home market at the same
level of trade (LOT) as the CEP or EP sales in the U.S. market. The NV
LOT is defined as the starting-price sales in the home market or, when
NV is based on CV, as the sales from which selling, general, and
administrative (SG&A) expenses and profit are derived. See 19 CFR
351.412(c)(1). The EP LOT is defined as the starting price in the
United States to the unaffiliated U.S. customer. With respect to CEP
transactions in the U.S. market, the CEP LOT is defined as the level of
the constructed sale from the exporter to the importer. See 19 CFR
351.412(c)(1)(ii) of the Act.
To determine whether NV sales are at a different LOT than CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. See 19 CFR 351.412(c)(2). If the home-market
sales are at different LOTs, and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the LOT of the export transaction, we make a LOT
adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the
NV level is more remote from the factory than the CEP level and there
is no basis for determining whether the difference in the levels
between NV and CEP affects price comparability, we adjust NV under
section 773(a)(7)(B) of the Act (the CEP offset provision). See, e.g.,
Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from
Brazil; Preliminary Results of Antidumping Duty Administrative Review,
70 FR 17406, 17410 (April 6, 2005); unchanged in Notice of Final
Results of Antidumping Duty Administrative Review: Certain Hot-Rolled
Flat-Rolled Carbon Quality Steel Products from Brazil, 70 FR 58683
(October 7, 2005). For CEP sales, we consider only the selling
activities reflected in the price after the deduction of expenses and
CEP profit under section 772(d) of the Act. See Micron Technology, Inc.
v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect
that if the LOTs claimed by the respondent are the same, the functions
and activities of the seller should be similar. Conversely, if a party
claims that the LOTs are different for different groups of sales, the
functions and activities of the seller should be dissimilar. See
Porcelain-on-Steel Cookware from Mexico: Final Results of
Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying
Issues and Decisions Memorandum at Comment 6.
We obtained information from Kolon regarding the marketing stages
involved in making its reported foreign market and U.S. sales to
unaffiliated customers. Kolon provided a description of all selling
activities performed, along with a flowchart and tables comparing the
LOTs among each channel of distribution and customer category for both
markets. See Kolon's September 16, 2009, questionnaire response at
Exhibit A-12.
For the home market, Kolon identified two channels of distribution
described as follows: 1) direct shipments (i.e., products produced to
order); and 2) warehouse shipments from inventory. Id. Within each of
these two channels of distribution, Kolon made sales to unaffiliated
customers. Id. We reviewed the level at which Kolon performed each of
these selling functions with respect to each claimed channel of
distribution and customer category. For all of the activities listed
(which included sales forecasting, strategic and economic planning,
sales promotion, order processing, and technical assistance), the level
of performance for both direct shipments and warehouse shipments was
identical across all types of customers. Based on our analysis of all
of Kolon's home market selling functions, we find all home market sales
were made at a single LOT, the NV LOT. We also found that Kolon
provided a similar level of selling functions on all of its EP sales,
and that the level of these EP selling functions was comparable to the
level of selling functions Kolon performed on its home market sales.
Based on the foregoing, we determine there is one level of trade for
Kolon's EP sales and that the EP LOT is comparable to the home market
LOT.
Kolon also indicated it made CEP sales through its U.S. affiliate,
Kolon USA. Id. We then compared the CEP LOT to the NV LOT. The CEP LOT
is based on the selling activities associated with the transaction
between Kolon and its affiliated importer, Kolon USA, whereas the NV
LOT is based on the selling activities associated with the transactions
between Kolon and unaffiliated customers in the home market. Our
analysis indicates the selling functions performed for sales to
unaffiliated home market customers are either performed at a higher
degree of intensity or are greater in number than the selling functions
performed for sales to Kolon USA. For example, in
[[Page 40786]]
comparing Kolon's selling activities, we find there are more functions
performed in the home market which are not a part of CEP transactions
(e.g., sales promotion, inventory maintenance, sales and marketing
support). For selling activities performed for both home market sales
and CEP sales (e.g., processing customer orders, freight and delivery
arrangements), we find Kolon actually performed each activity at a
higher level of intensity in the home market.
We note that CEP sales from Kolon to Kolon USA generally occur at
the beginning of the distribution chain, representing essentially a
logistical transfer of inventory that resembles ex-factory sales. In
contrast, all sales in the home market occur closer to the end of the
distribution chain and involve smaller volumes and more customer
interaction which, in turn, require the performance of more selling
functions. Id. Based on the foregoing, we conclude that the NV LOT is
at a more advanced stage than the CEP LOT. Because we found the home
market and U.S. sales were made at different LOTs, we examined whether
a LOT adjustment or a CEP offset may be appropriate in this review. As
we found only one LOT in the home market, it was not possible to make a
LOT adjustment to home market prices, because such an adjustment is
dependent on our ability to identify a pattern of consistent price
differences between the home market sales on which NV is based and home
market sales at the LOT of the export transaction. See 19 CFR
351.412(d)(1). Furthermore, we have no other information that provides
an appropriate basis for determining a LOT adjustment. Because the data
available do not form an appropriate basis for making a LOT adjustment,
and because the NV LOT is at a more advanced stage of distribution than
the CEP LOT, we have made a CEP offset to NV in accordance with section
773(a)(7)(B) of the Act.
United States Price
Section 772(a) of the Act defines EP as ``the price at which the
subject merchandise is first sold (or agreed to be sold) before the
date of importation by the producer or exporter of the subject
merchandise outside of the United States to an unaffiliated purchaser
in the United States or to an unaffiliated purchaser for exportation to
the United States, as adjusted under subsection (c) of this section.''
Section 772(b) of the Act defines CEP as ``the price at which the
subject merchandise is first sold (or agreed to be sold) in the United
States before or after the date of importation by or for the account of
the producer or exporter of the subject merchandise or by a seller
affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted under subsections (c) and
(d).'' For purposes of this administrative review, Kolon classified all
of its U.S. sales shipped directly from Korea to the United States as
EP sales. Kolon reported all sales that were invoiced through its U.S.
subsidiary Kolon USA as CEP transactions. For these preliminary
results, we have accepted these classifications. The merchandise
shipped directly to unaffiliated customers in the U.S. market was not
sold through an affiliated U.S. importer, and we find no other grounds
for treating these transactions as CEP sales. We, therefore,
preliminarily determine that these transactions were EP sales. We have
classified as CEP transactions the merchandise invoiced through Kolon
USA because these sales were ``sold in the United States'' within the
meaning of 772(b) of the Act.
Export Price
We calculated EP in accordance with section 772(a) of the Act. We
based EP on packed prices to customers in the United States. We made
adjustments for the following movement expenses in accordance with
section 772(c)(2)(A) of the Act: foreign inland freight, foreign
brokerage and handling charges, bank charges and ocean freight.
Finally, we made an addition to U.S. price for duty drawback in
accordance with section 772(c)(1)(B) of the Act based upon Kolon's
demonstration that it received duty drawback on imported materials used
in the production of PET film. See Kolon's October 13, 2009, Section C
response at C-34 to C-35 and Exhibit C-16.
Constructed Export Price
In accordance with section 772(b) of the Act, for those sales to
the first unaffiliated purchaser that took place after importation into
the United States, we calculated CEP. We based CEP on packed prices to
unaffiliated purchasers in the United States. We made adjustments for
billing adjustments and early payment discounts. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these included foreign inland freight, foreign brokerage and handling
charges, U.S. brokerage and handling, ocean freight, marine insurance,
U.S. inland freight, and U.S. customs duties. As further directed by
section 772(d)(1) of the Act, we deducted those selling expenses
associated with economic activity in the United States including direct
selling expenses (i.e., commissions, warehousing, and U.S. credit
expenses), inventory carrying costs, and other U.S. indirect selling
expenses. We also made an adjustment for profit in accordance with
section 772(d)(3) of the Act. Finally, we made an addition to U.S.
price for duty drawback in accordance with section 772(c)(1)(B) of the
Act based upon Kolon's demonstration that it received duty drawback on
imported materials used in the production of PET film. See Kolon's
October 13, 2009, Section C response at C-34 to C-35 and Exhibit C-16.
Normal Value
A. Selection of Comparison Market
To determine whether there is a sufficient volume of sales in the
home market to serve as a viable basis for calculating NV (i.e., the
aggregate volume of home market sales of the foreign like product is
greater than five percent of the aggregate volume of U.S. sales), we
compared Kolon's volume of home market sales of the foreign like
product to the volume of its U.S. sales of the subject merchandise, in
accordance with section 773(a)(1)(B) of the Act. Because Kolon'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 for
subject merchandise, we determined the home market was viable. See
Kolon's September 16, 2009, questionnaire response at Exhibit A-1.
B. Cost of Production Analysis
Pursuant to 773(b)(2)(A)(ii) of the Act, because the Department had
disregarded certain of Kolon's sales in the Polyethlylene Terephthalate
Film, Sheet, and Strip from the Republic of Korea: Final Results of
Antidumping Duty Changed Circumstances Review and Reinstatement of the
Antidumping Duty Order 73 FR 18259 (April 3, 2008) (the most recently
completed review in which Kolon participated), the Department had
reasonable grounds to believe or suspect that Kolon made home market
sales at prices below Kolon's costs of production (COP) in this review.
As a result, the Department was directed under section 773(b) of the
Act to determine whether Kolon made home market sales during the POR at
prices below its COP.
In accordance with section 773(b)(3) of the Act, we calculated COP
based on the sum of Kolon's cost of materials and fabrication for the
foreign like product, plus amounts for selling, general, and
administrative expenses (SG&A), interest expenses, and home market
[[Page 40787]]
packing costs. We relied on the COP information provided by Kolon.
To determine whether Kolon's home market sales had been made at
prices below the COP, we computed weighted-average COPs during the POR,
and compared the weighted-average COP figures to home market sales
prices of the foreign like product as required under section 773(b) of
the Act. On a product-specific basis, we compared the COP to the home
market prices net of billing adjustments, discounts and rebates, any
applicable movement charges, selling expenses, and packing expenses.
In determining whether to disregard home market sales made at
prices below the COP, we examined, in accordance with sections
773(b)(1)(A) and (B) of the Act, whether, within an extended period of
time, such sales were made in substantial quantities, and whether such
sales were made at prices which did not permit the recovery of all
costs within a reasonable period of time in the normal course of trade.
Where less than 20 percent of the respondent's home market sales of a
given model were at prices below the COP, we did not disregard any
below-cost sales of that model because we determined that the below-
cost sales were not made within an extended period of time and in
``substantial quantities.'' See section 773(b)(2)(C) of the Act. Where
20 percent or more of the respondent's home market sales of a given
model were at prices less than the COP, we normally disregard the
below-cost sales because: (1) they were made within an extended period
of time in ``substantial quantities,'' in accordance with sections
773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of
prices to the weighted-average COPs for the POR, they were at prices
which would not permit the recovery of all costs within a reasonable
period of time, in accordance with section 773(b)(2)(D) of the Act.
Our cost test for Kolon revealed that, for home market sales of
certain models, less than 20 percent of the sales of those models were
at prices below the COP. We therefore retained all such sales in our
analysis and used them as the basis for determining NV. Our cost test
also indicated that for home market sales of other models, more than 20
percent were sold at prices below the COP within an extended period of
time and were at prices which would not permit the recovery of all
costs within a reasonable period of time. Thus, in accordance with
section 773(b)(1) of the Act, we excluded these below-cost sales from
our analysis and used the remaining above-cost sales as the basis for
determining NV.
C. Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Kolon's material and fabrication costs, SG&A
expenses, profit, and U.S. packing costs. We calculated the cost of
materials for CV as described above in the ``Cost of Production
Analysis'' section of this notice. In accordance with section
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the
amounts incurred and realized by the respondent in connection with the
production and sale of the foreign like product in the ordinary course
of trade, for consumption in the foreign country.
D. Price-to-Price Comparisons
We calculated NV based on prices to unaffiliated customers in
Korea. We used Kolon's adjustments and deductions as reported. We made
deductions, where appropriate, for foreign inland freight pursuant to
section 773(a)(6)(B) of the Act. In addition, for comparisons involving
similar merchandise, we made adjustments for differences in cost
attributable to differences in physical characteristics of the
merchandise compared pursuant to section 773(a)(6)(C)(ii) of the Act
and 19 CFR 351.411. We also 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 for imputed credit expenses. As noted above in the ``Level
of Trade'' section of this notice, we also made an adjustment for the
CEP offset in accordance with section 773(a)(7)(B) of the Act. Finally,
we deducted home market packing costs and added U.S. packing costs in
accordance with sections 773(a)(6)(A) and (B) of the Act.
E. Price-to-CV Comparisons
If we were unable to find a home market match of such or similar
merchandise, in accordance with section 773(a)(4) of the Act, we based
NV on CV. Where appropriate, we made adjustments to CV in accordance
with section 773(a)(8) of the Act.
Currency Conversion
We made currency conversions into U.S. dollars based on the
exchange rates in effect on the dates of the U.S. sales, as certified
by the Federal Reserve Bank, in accordance with section 773A(a) of the
Act.
Preliminary Results of Review
We preliminarily determine the following weighted-average dumping
margin exists for the period June 1, 2008 through May 31, 2009:
------------------------------------------------------------------------
Weighted Average
Manufacturer / Exporter Margin
(percentage)
------------------------------------------------------------------------
Kolon Industries, Inc............................... 0.30% (de minimis)
------------------------------------------------------------------------
The Department will disclose to parties the calculations performed
in connection with these preliminary results within five days of the
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to
19 CFR 351.309, interested parties may submit case briefs not later
than 30 days after the publication of this notice. Rebuttal briefs,
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, (2) a brief
summary of the argument; and (3) a table of authorities.
Interested parties who wish to request a hearing or to participate
if one is requested must submit a written request to the Assistant
Secretary for Import Administration, Room 1870, within 30 days of the
date of publication of this notice. Requests should contain: (1) the
party's name, address and telephone number; (2) the number of
participants; and (3) a list of the issues to be discussed. See 19 CFR
351.310(c). Issues raised in the hearing will be limited to those
raised in the case briefs.
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
written briefs, not later than 120 days after the publication of this
notice, pursuant to section 751(a)(3)(A) of the Act.
Assessment
Pursuant to 19 CFR 351.212(b), the Department will determine, and
CBP shall assess, antidumping duties on all appropriate entries. The
Department will issue appropriate assessment instructions directly to
CBP 15 days after the date of publication of the final results of this
review. For assessment purposes, where possible, we calculated
importer-specific (or customer-specific) ad valorem assessment rates
for PET film from Korea based on the ratio of the total amount of the
dumping duties calculated for the examined sales to the total entered
value of those same sales. See 19 CFR 351.212(b). However, where Kolon
did not report the entered value
[[Page 40788]]
for its sales, we will calculate importer-specific (or customer-
specific) per unit duty assessment rates. We will instruct CBP to
assess antidumping duties on all appropriate entries covered by this
review if any assessment rate calculated in the final results of this
review is above de minimis.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided for by section
751(a)(2)(C) of the Act: (1) the cash deposit rate for Kolon will be
the rate established in the final results of review (except, if the
rate is zero or de minimis, i.e., less than 0.5 percent, no cash
deposit will be required for Kolon); (2) if the exporter is not a firm
covered in this review or the LTFV investigation, but the manufacturer
is, the cash deposit rate will be the rate established for the most
recent period for the manufacturer of the merchandise; and (3) if
neither the exporter nor the manufacturer is a firm covered in this or
any previous review, the cash deposit rate will be the all-others rate
of 21.50 percent from the LTFV investigation. See Polyethylene
Terephthalate Film, Sheet, and Strip From the Republic of Korea; Notice
of Final Court Decision and Amended Final Determination of Antidumping
Duty Investigation, 62 FR 50557 (September 26, 1997).
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.
These preliminary results of administrative review are issued and
this notice is published in accordance with sections 751(a)(1) and
777(i)(1) of the Act.
Dated: July 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-17170 Filed 7-13-10; 8:45 am]
BILLING CODE 3510-DS-S