Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of Korea: Preliminary Results of Changed Circumstances Review and Intent To Reinstate Kolon Industries, Inc. in the Antidumping Duty Order, 56048-56052 [E7-19423]

Download as PDF 56048 Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / Notices SUMMARY: This notice lists the newspapers that will be used by all Ranger Districts, Forests, Grasslands, and the Regional Office of the Northern Region to publish legal notices for public comment and decisions subject to appeal and predecisional administrative review under 36 CFR 215, 217, and 218. The intended effect of this action is to inform interested members of the public which newspapers will be used to publish legal notices for public comment or decisions; thereby allowing them to receive constructive notice of a decision, to provide clear evidence of timely notice, and to achieve consistency in administering the appeals process. DATES: Publication of legal notices in the listed newspapers will begin with decisions subject to appeal that are made on or after October 1, 2007. The list of newspapers will remain in effect until another notice is published in the Federal Register. FOR FURTHER INFORMATION CONTACT: Acting Regional Appeals Coordinator; Northern Region; P.O. Box 7669; Missoula, Montana 59807. Phone: (406) 329–3381. The newspapers to be used are as follows: rmajette on PROD1PC64 with NOTICES Northern Regional Office Regional Forester decisions in Montana: The Missoulian, Great Falls Tribune, and The Billings Gazette. Regional Forester decisions in Northern Idaho and Eastern Washington: Coeur d’Alene Press and Lewiston Tribune. Regional Forester decisions in North Dakota: Bismarck Tribune. Regional Forester decisions in South Dakota: Bismarck Tribune. Beaverhead/Deerlodge NF - Montana Standard. Bitterroot NF - Ravalli Republic. Clearwater NF - Lewiston Tribune. Custer NF - Billings Gazette (Montana). Rapid City Journal (South Dakota). Dakota Prairie Grasslands - Bismarck Tribune (North and South Dakota). Flathead NF - Daily Inter Lake. Gallatin NF - Bozeman Chronicle. Helena NF - Independent Record. Idaho Panhandle NFs - Coeur d’Alene Press. Kootenai NF - Daily Inter Lake. Lewis & Clark NF - Great Falls Tribune. Lolo NF - Missoulian. Nez Perce NF - Lewiston Tribune. Supplemental notices may be placed in any newspaper, but time frames/ deadlines will be calculated based upon VerDate Aug<31>2005 15:35 Oct 01, 2007 Jkt 214001 notices in newspapers of record listed above. EFFECTIVE DATE: Dated: September 25, 2007. Kathleen A. McAllister, Deputy Regional Forester. [FR Doc. 07–4847 Filed 10–1–07; 8:45 am] Michael J. Heaney 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) 482–4475 or (202) 482– 0649, respectively. SUPPLEMENTARY INFORMATION: BILLING CODE 3410–11–M DEPARTMENT OF COMMERCE October 2, 2007. FOR FURTHER INFORMATION CONTACT: International Trade Administration Background [A–580–807] On June 5, 1991, the Department published in the Federal Register the antidumping duty order on PET film from Korea. See Antidumping Duty Order: Polyethylene Terephthalate Film Sheet and Strip From Korea, 56 FR 25660 (June 5, 1991). On November 14, 1996 , the Department revoked the order with respect to Kolon after having determined that Kolon sold the merchandise at not less than normal value for a period of at least three consecutive years. See Revocation. The three administrative reviews forming the basis of the revocation are the June 1, 1992 through May 31, 1993, review; the June 1, 1993, through May 31, 1994, review; and the June 1, 1994, through May 31, 1995, review. The final results of the June 1992 through May 31, 1993, and the June 1993 through May 31, 1994, administrative reviews were published on July 5, 1996. See Polyethylene Terephthalate Film Sheet and Strip from Korea; Final Results of Antidumping Duty Administrative Review and Notice of Revocation in Part 61 FR 35177, (July 5, 1996) (Second and Third Final Results). The final results of the June 1994 through May 31, 1995, administrative review were published on November 14, 1996. See Polyethylene Terephthalate Film, Sheet, and Strip from Korea; Final Results of Antidumping Duty Administrative Review and Notice of Revocation in Part 61 FR 58374, (November 14, 1996) (Fourth Final Results). Pursuant to 19 CFR 353.25(b) of the regulations in effect at the time, and as part of its request for revocation, on June 28, 1996, Kolon agreed to immediate reinstatement in the Order should the Department conclude that subsequent to the revocation, Kolon sold the subject merchandise at less than normal value (NV). (19 CFR 353.25(b) has been superceded by 19 CFR 351.222(b)(2)(i)(B).) However, the language in 19 CFR 351.222(b)(2)(i)(B) is largely unchanged from 19 CFR 353.25. See CCR Initiation at 530. Due to allegations of resumed dumping submitted by DuPont Teijin Films (DuPont), Mitsubishi Polyester Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of Korea: Preliminary Results of Changed Circumstances Review and Intent To Reinstate Kolon Industries, Inc. in the Antidumping Duty Order Import Administration, International Trade Administration, Department of Commerce. SUMMARY: On November 14, 1996, the Department of Commerce (the Department) revoked in part the antidumping duty order on polyethylene terephthalate film, sheet and strip (PET film) from the Republic of Korea (Korea) with respect to subject merchandise manufactured and exported by Kolon Industries, Inc. (Kolon). See Polythylene Terephthalate Film, Sheet, and Strip from the Republic of Korea: Final Results of Antidumping Duty Administrative Review and Notice of Revocation in Part, 61 FR 58734 (November 14, 1996) (Revocation). As the result of an adequate allegation from domestic interested parties in this proceeding, the Department, pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), is now conducting a changed circumstances review to determine whether Kolon has resumed dumping PET film and whether the antidumping order should be reinstated for PET film manufactured and exported by Kolon. See Initiation of Antidumping Duty Changed Circumstances Review: Polyethylene Terephthalate Film Sheet and Strip from Korea, 72 FR 527 (January 5, 2007) (CCR Initiation). We preliminarily determine that Kolon has sold PET film at less than normal value (NV) and that the order on PET film from Korea should be reinstated with respect to PET film manufactured and exported by Kolon. We will instruct U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of PET film manufactured and exported by Kolon and entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. AGENCY: PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 E:\FR\FM\02OCN1.SGM 02OCN1 Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / Notices rmajette on PROD1PC64 with NOTICES Film, Inc. (Mitsubishi), and Toray Plastics America Inc. (Toray) (collectively DuPont, Mitsubishi, and Toray are the Petitioners), we initiated a changed circumstance review on January 5, 2007,1 to determine whether Kolon has resumed dumping and whether we should reinstate the antidumping duty order for subject merchandise manufactured and exported by Kolon. See CCR Initiation at 528–9. On December 27, 2006, we documented our analysis regarding the reasonableness of the data presented by Petitioners in their allegations. See the December 27, 2006, ‘‘Initiation Checklist for the Changed Circumstances Review of Polyethylene Terephthalate Film Sheet and Strip from Korea.’’ On January 4, 2007, we issued a questionnaire to Kolon. Kolon submitted its response to Sections A, B, C, and D of our questionnaire on February 28, 2007. On April 3, 2007, we issued our first supplemental questionnaire to Kolon. Kolon submitted its response to our April 3, 2007, questionnaire on April 30, 2007. On June 8, 2007, we issued a second supplemental questionnaire to Kolon to which Kolon responded on June 29, 2007. Based on our analysis of Kolon’s home market and U.S. sales data, we preliminarily determine that Kolon sold PET film at issue at less than NV during the July 1, 2005 through June 30, 2006 period of review. Verification As provided in section 782(i)(3) of the Act and 19 CFR 351.307(b)(iv), the Department verified the cost of production (COP), constructed value (CV), home market sales, and U.S. sales questionnaire responses of Kolon. We conducted the COP/CV verification from August 6 to August 10, 2007. We conducted the home market and U.S. sales verification from August 11 to August 15. We used standard verification procedures, including on– site inspection of Kolon’s facilities, and examination of relevant sales and financial records. Our verification results are outlined in the COP/CV and home market and U.S. sales verification reports for Kolon. For a further discussion, see Memorandum to the file through Neal Halper, from Ernest Gziryan (‘‘COP/CV verification report’’), and Memorandum to the File through Robert James, from Michael Heaney and Maryanne Burke (‘‘Home market and U.S. sales verification report’’.) 1 The initiation notice was signed by the Acting Assistant Secretary for Import Administration on December 27, 2006. VerDate Aug<31>2005 15:35 Oct 01, 2007 Jkt 214001 56049 Scope of the Order Fair Value Comparisons Imports covered by this review 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 of more than 0.00001 inches (0.254 micrometers) thick. PET film is currently classifiable under Harmonized Tariff Schedule (HTS) subheading 3920.62.00. The HTS subheading is provided for convenience and for customs purposes. The written description remains dispositive as to the scope of the product coverage. This changed circumstances review covers Kolon and the period July 1, 2005 through June 30, 2006 To determine whether sales of PET film from Korea to the United States were made at less than NV, we compared Kolon’s constructed export (CEP) and 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 individual CEP and EP sales to monthly weighted– average NVs. Basis for Reinstatement In requesting revocation, Kolon certified, pursuant to the Department’s regulations, that it agreed to immediate reinstatement of the order, so long as any exporter or producer is subject to the order, if the Secretary concluded that subsequent to the revocation, Kolon sold PET film at less than NV. See Revocation at 58374. Under both 19 CFR 353.25(b) (the regulation in effect at the time the Department revoked the order with respect to Kolon) and 19 CFR 351.222(b)(2)(i)(B) (the current regulation governing revocation) as long as an antidumping duty order remains in force, an entity previously granted a revocation may be reinstated under that order if it is established that the entity has resumed the dumping of subject merchandise. In this case, because other exporters in Korea remain subject to the antidumping duty order on Polyethylene Terephthalate Film, Sheet, and Strip from Korea, the order remains in effect, and Kolon may be reinstated in the order. The Department granted Kolon revocation based in part upon its agreement to immediate reinstatement in the antidumping duty order if the Department were to find that the company resumed dumping of PET film from Korea. See Revocation at 58374. As described in the ‘‘U.S. Price’’ and ‘‘Normal Value’’ sections, below, we have examined Kolon’s response and have preliminarily found that Kolon’s dumping margin for the review period is greater than de minimis. Accordingly, we preliminarily intend to reinstate Kolon in the antidumping order. PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 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 Review’’ 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. Where we were unable to compare sales of the identical merchandise, we compared U.S. sales to comparison–market sales of the most similar merchandise based on the above characteristics. Where there were no sales of foreign like product 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 comparison market at the same level of trade (LOT) as the CEP or EP transaction. The NV LOT is defined as the starting–price sales in the home market or, when NV is based on constructed value (CV), as the sales from which selling, general, and administrative (SG&A) expenses and profit are derived. 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 773(a)(7)(A) 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 comparison–market sales are at a different LOT, and the E:\FR\FM\02OCN1.SGM 02OCN1 rmajette on PROD1PC64 with NOTICES 56050 Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / Notices 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., Final Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes From Canada, 67 FR 8781 (February 26, 2002) and accompanying Issues and Decisions Memorandum at Comment 8; see also 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 of 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 Tariff Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314–1315 (Fed. Cir. 2001). We expect that if the claimed LOTs 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 levels of trade among each channel of distribution and customer category for both markets. See Kolon’s February 28, 2007 questionnaire response at A–3. 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. Within each of these two channels of distribution, Kolon made sales to unaffiliated customers. See Kolon’s February 28, 2007, questionnaire VerDate Aug<31>2005 15:35 Oct 01, 2007 Jkt 214001 response at A–5. 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 the same 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 that Kolon performed on its home market sales. Id. Based on the foregoing, we determine that there is one level of trade on Kolon’s EP sales and that the EP LOT is comparable to the HM 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 home market customers are either performed at a higher degree of intensity or are greater in number than the selling functions performed for Kolon USA. For example, in 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, customs clearance). 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. PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 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)(ii). 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 subject merchandise outside of the United States to an unaffiliated purchaser for exportation to the United States.’’ 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.’’ For purposes of this changed circumstances 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 that was invoiced through Kolon USA because these sales E:\FR\FM\02OCN1.SGM 02OCN1 Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / Notices were ‘‘sold in the United States’’ within the meaning 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 billing adjustments and early payment discounts. We also made adjustments for the following movement expenses: foreign inland freight, foreign brokerage and handling charges, ocean freight, marine insurance, U.S. inland freight, and U.S. customs duties. 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, 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, warranties, warehousing, and U.S. credit expenses), inventory carrying costs, and other U.S. indirect selling expenses. Based upon our findings at verification, we used the verified amounts for brokerage and handling (see Home Market and U.S. sales verification report at page 2), international freight (Id. at page 23), inventory carrying costs (Id. at page 2), and U.S. indirect selling expenses (Id.). 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. Normal Value rmajette on PROD1PC64 with NOTICES 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 VerDate Aug<31>2005 15:35 Oct 01, 2007 Jkt 214001 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, e.g., Kolon’s February 28, 2007 supplemental questionnaire response at Appendix A–1. B. Cost of Production Analysis Based upon a timely allegation from Petitioners that Kolon made sales below the cost of production during the POR, we had reasonable grounds to believe or suspect that sales of the foreign like product under consideration for the determination of NV in this review may have been made at prices below the COP, as provided by section 773(b)(2)(A)(ii) of the Act. See letter from Ronald Meltzer to Department, dated July 19, 2006 at 15. Pursuant to section 773(b)(1) of the Act, we initiated a COP investigation of sales by Kolon. See CCR Intiation at 529. 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 general and administrative expenses (G&A), and interest expenses. We relied on the COP information provided by Kolon except in the following three instances: First, during the POR, Kolon purchased PET chips used in the production of PET film. At verification, Kolon did not provide supporting documents showing how the cost of purchased chips was allocated to products, rendering the allocation of the purchased chips cost unverified. Therefore, in accordance with section 776(a)(2)(D) of the Act, as partial facts available, we increased the reported cost of manufacturing of all products by the percentage representing the total cost of purchased chips in the total reported cost of manufacturing. See Cost Verification Report section V.C. and the Cost of Production and Constructed Value Calculation Memorandum for the Preliminary Results. Second, we adjusted the reported G&A expense rate to disallow the offset for the gain on sale of certain assets. Third, we recalculated the interest expense ratio using a cost of sales denominator in which packing costs was removed. See Cost verification report at page 21. 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 PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 56051 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 permitted 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.’’ Where 20 percent or more of the respondent’s home market sales of a given model were at prices less than the COP, we disregarded 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 COP component of CV as described above in the ‘‘Cost of Production Analysis’’ E:\FR\FM\02OCN1.SGM 02OCN1 56052 Federal Register / Vol. 72, No. 190 / Tuesday, October 2, 2007 / Notices 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 rmajette on PROD1PC64 with NOTICES As a result of our review we preliminarily determine the following weighted–average dumping margin exists for the period July 1, 2005 through June 30, 2006: Manufacturer / Exporter Weighted Average Margin (percentage) Kolon ............................. 6.00% The Department will disclose to parties the calculations performed in connection with these preliminary results within ten days of the date of publication of this notice. Interested parties may request a hearing within 30 days of the publication. Any hearing, if requested, will be held 39 days after the publication of this notice or the first workday thereafter. Interested parties may submit case briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication of this notice. Reinstatement and Suspension of Liquidation Since we have preliminarily established that PET film from Korea manufactured and exported by Kolon is being sold at less than NV, Kolon is hereby preliminarily reinstated in the antidumping duty order. We will instruct CBP to suspend liquidation of all entries of subject merchandise manufactured and exported by Kolon entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Furthermore, a cash–deposit requirement of 6.00 percent will be in effect for all shipments of the subject merchandise manufactured and produced by Kolon entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice. This requirement shall remain in effect until publication of the final results of the next administrative review unless the Department finds that Kolon has not resumed dumping in the final results of this changed circumstance review. The Department intends to complete this review within 120 days of the date on which it publishes the preliminary results of this changed circumstances review. In accordance with 19 CFR 351.221(c)(3)(i), the final results of the changed circumstance review will set forth the factual and legal conclusions upon which our results are based, a description of any action proposed based on those results, and our analysis of any comments received. This notice is in accordance with section 751(b)(1) of the Act and 19 CFR 351.216 and 351.222. Dated: September 26, 2007. Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration. [FR Doc. E7–19423 Filed 10–1–07; 8:45 am] BILLING CODE 3510–DS–S VerDate Aug<31>2005 16:48 Oct 01, 2007 Jkt 211001 PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 DEPARTMENT OF COMMERCE International Trade Administration [C–580–851] Dynamic Random Access Memory Semiconductors From the Republic of Korea: Extension of Time Limit for Final Results of Countervailing Duty Administrative Review Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: October 2, 2007. FOR FURTHER INFORMATION CONTACT: Shane Subler at (202) 482–0189 or David Neubacher at (202) 482–5823; AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. AGENCY: Background On September 29, 2006, the Department of Commerce (the Department) published a notice of initiation of administrative review of the countervailing duty order on dynamic random access memory semiconductors (DRAMS) from the Republic of Korea, covering the period January 1, 2005, through December 31, 2005. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 71 FR 57465 (September 29, 2006). On December 11, 2006, the petitioner, Micron Technology, Inc., alleged that the respondent, Hynix Semiconductor, Inc. (Hynix), received new subsidies. The Department published the preliminary results of this administrative review on September 10, 2007. See Dynamic Random Access Memory Semiconductors from the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review, 72 FR 51609 (September 10, 2007). Statutory Time Limits Section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), requires the Department to issue the preliminary results of an administrative review within 245 days after the last day of the anniversary month of an order for which a review is requested and the final results of review within 120 days after the date on which the preliminary results are published. If it is not practicable to complete the review within the time period, section 751(a)(3)(A) of the Act allows the Department to extend these deadlines to a maximum of 365 days and 180 days, respectively. E:\FR\FM\02OCN1.SGM 02OCN1

Agencies

[Federal Register Volume 72, Number 190 (Tuesday, October 2, 2007)]
[Notices]
[Pages 56048-56052]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19423]


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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 Changed Circumstances Review 
and Intent To Reinstate Kolon Industries, Inc. in the Antidumping Duty 
Order

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On November 14, 1996, the Department of Commerce (the 
Department) revoked in part the antidumping duty order on polyethylene 
terephthalate film, sheet and strip (PET film) from the Republic of 
Korea (Korea) with respect to subject merchandise manufactured and 
exported by Kolon Industries, Inc. (Kolon). See Polythylene 
Terephthalate Film, Sheet, and Strip from the Republic of Korea: Final 
Results of Antidumping Duty Administrative Review and Notice of 
Revocation in Part, 61 FR 58734 (November 14, 1996) (Revocation). As 
the result of an adequate allegation from domestic interested parties 
in this proceeding, the Department, pursuant to section 751(b)(1) of 
the Tariff Act of 1930, as amended (the Act), is now conducting a 
changed circumstances review to determine whether Kolon has resumed 
dumping PET film and whether the antidumping order should be reinstated 
for PET film manufactured and exported by Kolon. See Initiation of 
Antidumping Duty Changed Circumstances Review: Polyethylene 
Terephthalate Film Sheet and Strip from Korea, 72 FR 527 (January 5, 
2007) (CCR Initiation). We preliminarily determine that Kolon has sold 
PET film at less than normal value (NV) and that the order on PET film 
from Korea should be reinstated with respect to PET film manufactured 
and exported by Kolon. We will instruct U.S. Customs and Border 
Protection (CBP) to suspend liquidation of all entries of PET film 
manufactured and exported by Kolon and entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register.

EFFECTIVE DATE: October 2, 2007.

FOR FURTHER INFORMATION CONTACT: Michael J. Heaney 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-
4475 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 5, 1991, the Department published in the Federal Register 
the antidumping duty order on PET film from Korea. See Antidumping Duty 
Order: Polyethylene Terephthalate Film Sheet and Strip From Korea, 56 
FR 25660 (June 5, 1991). On November 14, 1996 , the Department revoked 
the order with respect to Kolon after having determined that Kolon sold 
the merchandise at not less than normal value for a period of at least 
three consecutive years. See Revocation. The three administrative 
reviews forming the basis of the revocation are the June 1, 1992 
through May 31, 1993, review; the June 1, 1993, through May 31, 1994, 
review; and the June 1, 1994, through May 31, 1995, review. The final 
results of the June 1992 through May 31, 1993, and the June 1993 
through May 31, 1994, administrative reviews were published on July 5, 
1996. See Polyethylene Terephthalate Film Sheet and Strip from Korea; 
Final Results of Antidumping Duty Administrative Review and Notice of 
Revocation in Part 61 FR 35177, (July 5, 1996) (Second and Third Final 
Results). The final results of the June 1994 through May 31, 1995, 
administrative review were published on November 14, 1996. See 
Polyethylene Terephthalate Film, Sheet, and Strip from Korea; Final 
Results of Antidumping Duty Administrative Review and Notice of 
Revocation in Part 61 FR 58374, (November 14, 1996) (Fourth Final 
Results). Pursuant to 19 CFR 353.25(b) of the regulations in effect at 
the time, and as part of its request for revocation, on June 28, 1996, 
Kolon agreed to immediate reinstatement in the Order should the 
Department conclude that subsequent to the revocation, Kolon sold the 
subject merchandise at less than normal value (NV). (19 CFR 353.25(b) 
has been superceded by 19 CFR 351.222(b)(2)(i)(B).) However, the 
language in 19 CFR 351.222(b)(2)(i)(B) is largely unchanged from 19 CFR 
353.25. See CCR Initiation at 530.
    Due to allegations of resumed dumping submitted by DuPont Teijin 
Films (DuPont), Mitsubishi Polyester

[[Page 56049]]

Film, Inc. (Mitsubishi), and Toray Plastics America Inc. (Toray) 
(collectively DuPont, Mitsubishi, and Toray are the Petitioners), we 
initiated a changed circumstance review on January 5, 2007,\1\ to 
determine whether Kolon has resumed dumping and whether we should 
reinstate the antidumping duty order for subject merchandise 
manufactured and exported by Kolon. See CCR Initiation at 528-9.
---------------------------------------------------------------------------

    \1\ The initiation notice was signed by the Acting Assistant 
Secretary for Import Administration on December 27, 2006.
---------------------------------------------------------------------------

    On December 27, 2006, we documented our analysis regarding the 
reasonableness of the data presented by Petitioners in their 
allegations. See the December 27, 2006, ``Initiation Checklist for the 
Changed Circumstances Review of Polyethylene Terephthalate Film Sheet 
and Strip from Korea.'' On January 4, 2007, we issued a questionnaire 
to Kolon. Kolon submitted its response to Sections A, B, C, and D of 
our questionnaire on February 28, 2007. On April 3, 2007, we issued our 
first supplemental questionnaire to Kolon. Kolon submitted its response 
to our April 3, 2007, questionnaire on April 30, 2007. On June 8, 2007, 
we issued a second supplemental questionnaire to Kolon to which Kolon 
responded on June 29, 2007. Based on our analysis of Kolon's home 
market and U.S. sales data, we preliminarily determine that Kolon sold 
PET film at issue at less than NV during the July 1, 2005 through June 
30, 2006 period of review.

Verification

    As provided in section 782(i)(3) of the Act and 19 CFR 
351.307(b)(iv), the Department verified the cost of production (COP), 
constructed value (CV), home market sales, and U.S. sales questionnaire 
responses of Kolon. We conducted the COP/CV verification from August 6 
to August 10, 2007. We conducted the home market and U.S. sales 
verification from August 11 to August 15. We used standard verification 
procedures, including on-site inspection of Kolon's facilities, and 
examination of relevant sales and financial records. Our verification 
results are outlined in the COP/CV and home market and U.S. sales 
verification reports for Kolon. For a further discussion, see 
Memorandum to the file through Neal Halper, from Ernest Gziryan (``COP/
CV verification report''), and Memorandum to the File through Robert 
James, from Michael Heaney and Maryanne Burke (``Home market and U.S. 
sales verification report''.)

Scope of the Order

    Imports covered by this review 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 of more than 0.00001 
inches (0.254 micrometers) thick.
    PET film is currently classifiable under Harmonized Tariff Schedule 
(HTS) subheading 3920.62.00. The HTS subheading is provided for 
convenience and for customs purposes. The written description remains 
dispositive as to the scope of the product coverage.
    This changed circumstances review covers Kolon and the period July 
1, 2005 through June 30, 2006

Basis for Reinstatement

    In requesting revocation, Kolon certified, pursuant to the 
Department's regulations, that it agreed to immediate reinstatement of 
the order, so long as any exporter or producer is subject to the order, 
if the Secretary concluded that subsequent to the revocation, Kolon 
sold PET film at less than NV. See Revocation at 58374. Under both 19 
CFR 353.25(b) (the regulation in effect at the time the Department 
revoked the order with respect to Kolon) and 19 CFR 351.222(b)(2)(i)(B) 
(the current regulation governing revocation) as long as an antidumping 
duty order remains in force, an entity previously granted a revocation 
may be reinstated under that order if it is established that the entity 
has resumed the dumping of subject merchandise.
    In this case, because other exporters in Korea remain subject to 
the antidumping duty order on Polyethylene Terephthalate Film, Sheet, 
and Strip from Korea, the order remains in effect, and Kolon may be 
reinstated in the order. The Department granted Kolon revocation based 
in part upon its agreement to immediate reinstatement in the 
antidumping duty order if the Department were to find that the company 
resumed dumping of PET film from Korea. See Revocation at 58374.
    As described in the ``U.S. Price'' and ``Normal Value'' sections, 
below, we have examined Kolon's response and have preliminarily found 
that Kolon's dumping margin for the review period is greater than de 
minimis. Accordingly, we preliminarily intend to reinstate Kolon in the 
antidumping order.

Fair Value Comparisons

    To determine whether sales of PET film from Korea to the United 
States were made at less than NV, we compared Kolon's constructed 
export (CEP) and 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 individual 
CEP and EP sales 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 Review'' 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. Where 
we were unable to compare sales of the identical merchandise, we 
compared U.S. sales to comparison-market sales of the most similar 
merchandise based on the above characteristics. Where there were no 
sales of foreign like product 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 comparison market at the 
same level of trade (LOT) as the CEP or EP transaction. The NV LOT is 
defined as the starting-price sales in the home market or, when NV is 
based on constructed value (CV), as the sales from which selling, 
general, and administrative (SG&A) expenses and profit are derived. 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 773(a)(7)(A) 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 comparison-
market sales are at a different LOT, and the

[[Page 56050]]

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., 
Final Determination of Sales at Less Than Fair Value: Greenhouse 
Tomatoes From Canada, 67 FR 8781 (February 26, 2002) and accompanying 
Issues and Decisions Memorandum at Comment 8; see also 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 of 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 Tariff Act. See Micron Technology, Inc. v. 
United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect 
that if the claimed LOTs 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 
levels of trade among each channel of distribution and customer 
category for both markets. See Kolon's February 28, 2007 questionnaire 
response at A-3.
    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. Within each of these 
two channels of distribution, Kolon made sales to unaffiliated 
customers. See Kolon's February 28, 2007, questionnaire response at A-
5. 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 
the same 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 that Kolon performed on its home market sales. Id. Based on 
the foregoing, we determine that there is one level of trade on Kolon's 
EP sales and that the EP LOT is comparable to the HM 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 home market 
customers are either performed at a higher degree of intensity or are 
greater in number than the selling functions performed for Kolon USA. 
For example, in 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, customs clearance). 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)(ii). 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 subject merchandise 
outside of the United States to an unaffiliated purchaser for 
exportation to the United States.'' 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.'' For purposes of this changed circumstances 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 that was 
invoiced through Kolon USA because these sales

[[Page 56051]]

were ``sold in the United States'' within the meaning 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 billing adjustments and early payment discounts. We 
also made adjustments for the following movement expenses: foreign 
inland freight, foreign brokerage and handling charges, ocean freight, 
marine insurance, U.S. inland freight, and U.S. customs duties.

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, 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, 
warranties, warehousing, and U.S. credit expenses), inventory carrying 
costs, and other U.S. indirect selling expenses. Based upon our 
findings at verification, we used the verified amounts for brokerage 
and handling (see Home Market and U.S. sales verification report at 
page 2), international freight (Id. at page 23), inventory carrying 
costs (Id. at page 2), and U.S. indirect selling expenses (Id.). 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.

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, 
e.g., Kolon's February 28, 2007 supplemental questionnaire response at 
Appendix A-1.
B. Cost of Production Analysis
    Based upon a timely allegation from Petitioners that Kolon made 
sales below the cost of production during the POR, we had reasonable 
grounds to believe or suspect that sales of the foreign like product 
under consideration for the determination of NV in this review may have 
been made at prices below the COP, as provided by section 
773(b)(2)(A)(ii) of the Act. See letter from Ronald Meltzer to 
Department, dated July 19, 2006 at 15. Pursuant to section 773(b)(1) of 
the Act, we initiated a COP investigation of sales by Kolon. See CCR 
Intiation at 529.
    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 general and administrative 
expenses (G&A), and interest expenses. We relied on the COP information 
provided by Kolon except in the following three instances:
    First, during the POR, Kolon purchased PET chips used in the 
production of PET film. At verification, Kolon did not provide 
supporting documents showing how the cost of purchased chips was 
allocated to products, rendering the allocation of the purchased chips 
cost unverified. Therefore, in accordance with section 776(a)(2)(D) of 
the Act, as partial facts available, we increased the reported cost of 
manufacturing of all products by the percentage representing the total 
cost of purchased chips in the total reported cost of manufacturing. 
See Cost Verification Report section V.C. and the Cost of Production 
and Constructed Value Calculation Memorandum for the Preliminary 
Results. Second, we adjusted the reported G&A expense rate to disallow 
the offset for the gain on sale of certain assets. Third, we 
recalculated the interest expense ratio using a cost of sales 
denominator in which packing costs was removed. See Cost verification 
report at page 21.
    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 permitted 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.'' Where 20 percent or more of the respondent's home market 
sales of a given model were at prices less than the COP, we disregarded 
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 COP 
component of CV as described above in the ``Cost of Production 
Analysis''

[[Page 56052]]

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

    As a result of our review we preliminarily determine the following 
weighted-average dumping margin exists for the period July 1, 2005 
through June 30, 2006:

------------------------------------------------------------------------
                                                       Weighted Average
               Manufacturer / Exporter                      Margin
                                                         (percentage)
------------------------------------------------------------------------
Kolon...............................................               6.00%
------------------------------------------------------------------------

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within ten days of the 
date of publication of this notice. Interested parties may request a 
hearing within 30 days of the publication. Any hearing, if requested, 
will be held 39 days after the publication of this notice or the first 
workday thereafter. Interested parties may submit case briefs not later 
than 30 days after the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed not 
later than 37 days after the date of publication of this notice.

Reinstatement and Suspension of Liquidation

    Since we have preliminarily established that PET film from Korea 
manufactured and exported by Kolon is being sold at less than NV, Kolon 
is hereby preliminarily reinstated in the antidumping duty order. We 
will instruct CBP to suspend liquidation of all entries of subject 
merchandise manufactured and exported by Kolon entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
this notice in the Federal Register. Furthermore, a cash-deposit 
requirement of 6.00 percent will be in effect for all shipments of the 
subject merchandise manufactured and produced by Kolon entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of this notice. This requirement shall remain in effect until 
publication of the final results of the next administrative review 
unless the Department finds that Kolon has not resumed dumping in the 
final results of this changed circumstance review.
    The Department intends to complete this review within 120 days of 
the date on which it publishes the preliminary results of this changed 
circumstances review. In accordance with 19 CFR 351.221(c)(3)(i), the 
final results of the changed circumstance review will set forth the 
factual and legal conclusions upon which our results are based, a 
description of any action proposed based on those results, and our 
analysis of any comments received. This notice is in accordance with 
section 751(b)(1) of the Act and 19 CFR 351.216 and 351.222.

    Dated: September 26, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E7-19423 Filed 10-1-07; 8:45 am]
BILLING CODE 3510-DS-S