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Import Administration, International Trade Administration, Department of Commerce.
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.
June 6, 2005.Start Further Info
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.End Further Info End Preamble Start Supplemental Information
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.
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.
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.
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 Start Printed Page 32757basis 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.
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)).
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.
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 Start Printed Page 32758for 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”), including selling functions,3 class of customer (“customer category”), and the level of selling expenses for each type of sale.
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).
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.
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 Start Printed Page 32759their 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:
|Exporter/manufacturer||Weighted-average margin percentage|
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.Start Printed Page 32760
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: May 31, 2005.
Susan H. Kuhbach,
Acting Assistant Secretary for Import Administration.
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.Back to Citation
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.Back to Citation
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.Back to Citation
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.Back to Citation
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.Back to Citation
[FR Doc. E5-2877 Filed 6-3-05; 8:45 am]
BILLING CODE 3510-DS-S