35886 Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices

The project consists of the installation

of a set of culverts under Highway 384

at its intersection of Black Bayou. The

culverts would re-establish a hydrologic

connection in Black Bayou at Highway

384 to help give relieve to high water

conditions within the fresh water marsh

basin.

The Notice of a Finding of No

Significant Impact (FONSI) has been

forwarded to the Environmental

Protection Agency and to various

federal, state, and local agencies and

interested parties. A limited number of

copies of the FONSI are available to fill

single copy requests at the above

address. Basic data developed during

the environmental assessment are on

file and may be reviewed by contacting

Bruce Lehto, Assistant State

Conservationist/Water Resources,

Natural Resources Conservation Service,

3737 Government Street, Alexandria,

Louisiana 71302, telephone (318) 473–

7756.

No administrative action on

implementation of the proposal will be

taken until 30 days after the date of this

publication in the Federal Register.

(This activity is listed in the Catalog of

Federal Domestic Assistance under

NO.10.904, Watershed Protection and Flood

Prevention, and is subject to the provision of

Executive Order 12372, which requires

intergovernmental consultation with State

and local officials.)

Dated: May 24, 2000.

Donald W. Gohmert,

State Conservationist.

[FR Doc. 00–14066 Filed 6–5–00; 8:45 am]

BILLING CODE 3410–16–M

DEPARTMENT OF COMMERCE

International Trade Administration

[A–580–812]

Dynamic Random Access Memory

Semiconductors of One Megabit or

Above From the Republic of Korea:

Preliminary Results of Antidumping

Duty Administrative Review and Notice

of Intent Not To Revoke Order in Part

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of

Antidumping Duty Administrative

Review and Notice of Intent Not to

Revoke Order in Part.

SUMMARY: In response to requests from

one manufacturer/exporter and one U.S.

producer of the subject merchandise,

the Department of Commerce (‘‘the

Department’’) is conducting an

administrative review of the

antidumping duty order on dynamic

random access memory semiconductors

of one megabit or above (‘‘DRAMs’’)

from the Republic of Korea (‘‘Korea’’).

The review covers two manufacturers/

exporters and four resellers of subject

merchandise to the United States during

the period of review (‘‘POR’’), May 1,

1998 through April 30, 1999. Based

upon our analysis, the Department has

preliminarily determined that dumping

margins exist for both manufacturers/

exporters and the four resellers during

the POR. If these preliminary results are

adopted in our final results of

administrative review, we will instruct

the United States Customs Service

(‘‘Customs’’) to assess antidumping

duties as appropriate. Interested parties

are invited to comment on these

preliminary results. Parties who submit

arguments in this proceeding are

requested to submit with the argument

(1) a statement of the issue, and (2) a

brief summary of the argument.

EFFECTIVE DATE: June 6, 2000.

FOR FURTHER INFORMATION CONTACT:

Alexander Amdur or John Conniff, AD/

CVD Enforcement, Group II, Office 4,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th and Constitution

Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482–5346 or (202) 482–

1009, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise stated, all citations

to the Tariff Act of 1930, as amended

(‘‘the Act’’), are references to the

provisions as of January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (‘‘URAA’’). In addition,

unless otherwise indicated, all

references to the regulations of the

Department are to 19 CFR part 351

(1999).

Background

On May 10, 1993, the Department

published in the Federal Register (58

FR 27250) the antidumping duty order

on DRAMs from Korea. On May 28,

1999, the petitioner, Micron Technology

Inc., (‘‘Micron’’) requested an

administrative review of Hyundai

Electronics Industries Co., Ltd.

(‘‘Hyundai’’) and LG Semicon Co., Ltd.

(‘‘LG’’), Korean manufacturers of

DRAMs, and four Korean resellers of

DRAMs, the G5 Corporation (‘‘G5’’),

Kim’s Marketing, Jewon Trading

(‘‘Jewon’’), and Wooyang Industry Co.,

Ltd. (‘‘Wooyang’’), for the period May 1,

1998 through April 30, 1999.

Additionally, the petitioner requested a

cost investigation of LG and Hyundai

pursuant to section 773(b) of the Act.

On May 28, 1999, LG requested that the

Department conduct a review of its

exports of the subject merchandise to

the United States. On May 28, 1999, LG

also submitted a timely request that the

order be revoked with respect to LG. LG

based its revocation request on its

appeal of the Department’s inclusion of

unreported sales in the fourth review

which, LG claimed, if successful, would

result in a de minimis margin in the

fourth review for LG; and the final

results of the fifth review, which had

not been issued at the time of LG’s

revocation request. On June 30, 1999 (64

FR 35124), the Department initiated an

administrative review of Hyundai, LG,

G5, Kim’s Marketing, Jewon, and

Wooyang, including cost investigations

of Hyundai and LG, covering the POR.

On November 17, 1999, Micron

submitted a request for postponement of

the preliminary results. On December

20, 1999, the Department published in

the Federal Register (64 FR 7111) a

notice extending the time for the

preliminary results from January 30,

2000, until May 30, 2000. The

Department is conducting this review in

accordance with section 751 of the Act.

Scope of the Review

Imports covered by the review are

shipments of DRAMs from Korea.

Included in the scope are assembled and

unassembled DRAMs. Assembled

DRAMs include all package types.

Unassembled DRAMs include processed

wafers, uncut die, and cut die.

Processed wafers produced in Korea,

but packaged or assembled into memory

modules in a third country, are included

in the scope; wafers produced in a third

country and assembled or packaged in

Korea are not included in the scope.

The scope of this review includes

memory modules. A memory module is

a collection of DRAMs, the sole function

of which is memory. Modules include

single in-line processing modules

(‘‘SIPs’’), single in-line memory modules

(‘‘SIMMs’’), or other collections of

DRAMs, whether unmounted or

mounted on a circuit board. Modules

that contain other parts that are needed

to support the function of memory are

covered. Only those modules which

contain additional items which alter the

function of the module to something

other than memory, such as video

graphics adapter (‘‘VGA’’) boards and

cards, are not included in the scope.

The scope of this review also includes

video random access memory

semiconductors (‘‘VRAMS’’), as well as

any future packaging and assembling of

DRAMs; and, removable memory

Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices 35887

modules placed on motherboards, with

or without a central processing unit

(‘‘CPU’’), unless the importer of

motherboards certifies with the Customs

Service that neither it nor a party related

to it or under contract to it will remove

the modules from the motherboards

after importation. The scope of this

review does not include DRAMs or

memory modules that are reimported for

repair or replacement.

The DRAMS and modules subject to

this review are currently classifiable

under subheadings 8471.50.0085,

8471.91.8085, 8542.11.0024,

8542.11.8026, 8542.13.8034,

8471.50.4000, 8473.30.1000,

8542.11.0026, 8542.11.8034,

8471.50.8095, 8473.30.4000,

8542.11.0034, 8542.13.8005,

8471.91.0090, 8473.30.8000,

8542.11.8001, 8542.13.8024,

8471.91.4000, 8542.11.0001,

8542.11.8024 and 8542.13.8026 of the

Harmonized Tariff Schedule of the

United States (‘‘HTSUS’’). Although the

HTSUS subheadings are provided for

convenience and customs purposes, the

Department’s written description of the

scope of this review remains

dispositive.

Intent Not To Revoke

LG submitted a request that the order

be partially revoked with respect to

itself pursuant to 19 CFR 351.222(e)(1).

Under the Department’s regulations, the

Department may revoke an order, in

part, if the Secretary concludes that,

among other things: (1) ‘‘[o]ne or more

exporters or producers covered by the

order have sold the merchandise at not

less than normal value for a period of

at least three consecutive years’’; (2)

‘‘[i]t is not likely that those persons will

in the future sell the merchandise at less

than normal value’’; and (3) ‘‘the

exporter or producer agrees in writing to

its immediate reinstatement in the

order, as long as any exporter or

producer is subject to the order, if the

Secretary concludes that the exporter or

producer, subsequent to the revocation,

sold the merchandise at less than

normal value.’’ See 19 CFR

351.222(b)(2). In this case, LG does not

meet the first criterion for revocation. In

the two previous segments of this

proceeding, the Department found that

LG sold subject merchandise at less than

normal value. See Dynamic Random

Access Memory Semiconductors of One

Megabit or Above from the Republic of

Korea, 63 FR 50867 (September 23,

1998) (‘‘Final Results 1998’’) and

Dynamic Random Access Memory

Semiconductors (DRAMs) of One

Megabit or Above from the Republic of

Korea, 64 FR 69694 (December 14, 1999)

(‘‘Final Results 1999’’). Since LG has not

met the first criterion for revocation, i.e.,

zero or de minimis margins for three

consecutive reviews, the Department

need not reach a conclusion with

respect to the second and third criteria.

Therefore, on this basis, we have

preliminarily determined not to revoke

the Korean DRAM antidumping duty

order with regard to LG.

Verification

As provided in section 782(i) of the

Act, we verified information provided

by LG and Hyundai. We used standard

verification procedures, including onsite inspection of the respondents’

facilities, examination of relevant sales,

financial, and/or cost records, and

selection of original documentation

containing relevant information. G5,

Jewon, Kim’s Marketing and Wooyang

were not verified because the companies

did not respond to the Department’s

questionnaires.

Facts Available (‘‘FA’’)

1. Application of FA

Section 776(a)(2) of the Act provides

that if any interested party: (A)

withholds information that has been

requested by the Department; (B) fails to

provide such information in a timely

manner or in the form or manner

requested; (C) significantly impedes an

antidumping investigation; or (D)

provides such information but the

information cannot be verified, the

Department shall use facts otherwise

available in making its determination.

On July 8, 1999, the Department sent

Hyundai, LG, G5, Jewon, Kim’s

Marketing and Wooyang questionnaires

requesting that they provide information

regarding any sales that they made to

the United States during the POR. We

did not receive any replies from G5,

Jewon, Kim’s Marketing or Wooyang.

On March 3, 2000, the Department

sent letters informing G5, Jewon, Kim’s

Marketing and Wooyang that not

responding to the Department’s

questionnaires could result in a

determination based on FA. We did not

receive any replies from the four

companies.

Because G5, Jewon, Kim’s Marketing

and Wooyang have failed to respond to

our questionnaires, pursuant to section

776(a) of the Act, we have applied FA

to calculate their dumping margins.

2. Selection of Adverse FA

Section 776(b) of the Act provides

that, in selecting from the facts

available, adverse inferences may be

used against a party that failed to

cooperate by not acting to the best of its

ability to comply with requests for

information. See also Statement of

Administrative Action (‘‘SAA’’)

accompanying the URAA, H.R. Doc. No.

316, 103d Cong., 2d Sess. 870 (1994).

Section 776(b) states further that an

adverse inference may include reliance

on information derived from the

petition, the final determination, the

final results of prior reviews, or any

other information placed on the record.

See also Id. at 868. In addition, the SAA

establishes that the Department may

employ an adverse inference ‘‘to ensure

that the party does not obtain a more

favorable result by failing to cooperate

than if it had cooperated fully.’’ See

SAA at 870. In employing adverse

inferences, the SAA instructs the

Department to consider ‘‘the extent to

which a party may benefit from its own

lack of cooperation.’’ Id.

Because G5, Jewon, Kim’s Marketing

and Wooyang did not cooperate by

complying with our request for

information, and in order to ensure that

they do not benefit from their lack of

cooperation, we are employing an

adverse inference in selecting from

among the facts otherwise available. The

Department’s practice when selecting an

adverse FA rate from among the

possible sources of information has been

to ensure that the margin is sufficiently

adverse so ‘‘as to effectuate the purpose

of the FA rule to induce respondents to

provide the Department with complete

and accurate information in a timely

manner.’’ See Static Random Access

Memory Semiconductors From Taiwan;

Final Determination of Sales at Less

Than Fair Value, 63 FR 8909, 8932

(February 23, 1998).

In order to ensure that the rate is

sufficiently adverse so as to induce

future cooperation from G5, Jewon,

Kim’s Marketing and Wooyang, we have

assigned these companies, as adverse

FA, the highest calculated margin from

any segment of this proceeding, 10.44

percent, which is the rate calculated for

Hyundai in the fifth administrative

review. See Final Results 1999.

Information from prior segments of

the proceeding, such as involved here,

constitutes ‘‘secondary information’’

under section 776(c) of the Act. Section

776(c) of the Act provides that the

Department shall, to the extent

practicable, corroborate secondary

information used for FA by reviewing

independent sources reasonably at its

disposal. The SAA provides that to

‘‘corroborate’’ means simply that the

Department will satisfy itself that the

secondary information to be used has

probative value. See SAA at 870. As

noted in Tapered Roller Bearings and

Parts Thereof, Finished and Unfinished,

35888 Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices

from Japan, and Tapered Roller

Bearings, Four Inches or Less in Outside

Diameter, and Components Thereof,

from Japan; Preliminary Results of

Antidumping Duty Administrative

Reviews and Partial Termination of

Administrative Reviews, 61 FR 57391,

57392 (November 6, 1996) (‘‘TRBs’’), to

corroborate secondary information, the

Department will, to the extent

practicable, examine the reliability and

relevance of the information used.

However, unlike other types of

information, such as input costs or

selling expenses, there are no

independent sources from which the

Department can derive calculated

dumping margins; the only source for

margins is administrative

determinations. Thus, in an

administrative review, if the Department

chooses as total adverse FA a calculated

dumping margin from a prior segment of

the proceeding, it is not necessary to

question the reliability of the margin for

that time period.

As to the relevance of the margin used

for adverse FA, the Department stated in

TRBs that it will ‘‘consider information

reasonably at its disposal as to whether

there are circumstances that would

render a margin irrelevant. Where

circumstances indicate that the selected

margin is not appropriate as adverse FA,

the Department will disregard the

margin and determine an appropriate

margin.’’ Id.; see also Fresh Cut Flowers

from Mexico; Preliminary Results of

Antidumping Duty Administrative

Review, 60 FR 49567 (February 22,

1996), where we disregarded the highest

margin in the case as best information

available because the margin was based

on another company’s uncharacteristic

business expense resulting in an

extremely high margin.

As stated above, the highest rate

determined in any prior segment of the

proceeding is 10.44 percent, a

calculated rate from Final Results 1999.

In the absence of information on the

administrative record that application of

the 10.44 percent rate to G5, Jewon,

Kim’s Marketing and Wooyang would

be inappropriate as an adverse FA rate

in the instant review, that the margin is

not relevant, or that leads us to reexamine this rate as adverse facts

available in the instant review, we have

applied, as FA, the 10.44 percent margin

from a prior administrative review of

this order, and have satisfied the

corroboration requirements under

section 776(c) of the Act.

Third Country Transshipments

In the fourth and fifth administrative

reviews of this proceeding, we

determined that LG had knowledge, or

should have had knowledge, that a

substantial amount of its sales to third

country customers were destined for the

United States. See Final Results 1998

and Final Results 1999. Furthermore,

during the current review, the petitioner

made several allegations that Hyundai’s

and LG’s affiliates in other countries,

such as Hong Kong, made sales during

the POR to companies that shipped the

merchandise to the United States.

Consequently, we requested information

from Hyundai and LG about their third

country sales during the POR and, for

the first time, conducted verifications of

Hyundai’s and LG’s Hong Kong

affiliates.

LG did not report the requested third

country sales through an affiliated party.

However, LG subsequently provided

clarifying information about these sales.

As a result of this clarification, we have

made no adjustment for these sales. For

further discussion, See Memorandum

on LG’s Third Country Sales dated May

30, 2000.

We also have made no adjustments in

this review for Hyundai’s or LG’s

reported third country sales because we

did not find evidence that Hyundai or

LG had knowledge, or should have had

knowledge, that any of their sales to

third country customers were destined

for the United States. In the future, we

intend to continue to closely monitor

any transshipments of Korean DRAMs

to the United States from all countries,

and will particularly scrutinize

transshipments of Korean DRAMs

through Hong Kong.

Fair Value Comparisons

To determine whether sales of

DRAMs from Korea to the United States

were made at less than fair value

(‘‘LTFV’’), we compared the constructed

export price (‘‘CEP’’) to the normal

value (‘‘NV’’), as described in the CEP

and NV sections of this notice, below.

In accordance with section 771(16) of

the Act, we considered all products as

described in the ‘‘Scope of Review’’

section of this notice, above, that were

sold in the home market in the ordinary

course of trade for purposes of

determining appropriate product

comparisons to U.S. sales. Where there

were no sales of the identical or the

most similar merchandise in the home

market that were suitable for

comparison, we compared U.S. sales to

sales of the next most similar foreign

like product, based on the

characteristics listed in Section B and C

of our antidumping questionnaire.

CEP

For Hyundai and LG, in calculating

United States price, the Department

used CEP, as defined in section 772(b)

of the Act, because the merchandise was

first sold to an unaffiliated U.S.

purchaser after importation. We

calculated CEP based on delivered

prices to unaffiliated customers in the

United States.

We made deductions from the starting

price, where appropriate, for discounts,

rebates, billing adjustments, foreign and

U.S. brokerage and handling, foreign

inland insurance, export insurance, air

freight, air insurance, U.S. warehousing

expense, U.S. duties and direct and

indirect selling expenses to the extent

that they are associated with economic

activity in the United States in

accordance with sections 772(c)(2) and

772(d)(1) of the Act. These deductions

included credit expenses and

commissions, as applicable, and

inventory carrying costs incurred by the

respondents’ U.S. subsidiaries. We

added duty drawback received on

imported materials, where applicable,

pursuant to section 772(c)(1)(B) of the

Act.

For both respondents, for DRAMs that

were further manufactured into memory

modules after importation, we deducted

all costs of further manufacturing in the

United States, pursuant to section

772(d)(2) of the Act. These costs

consisted of the costs of the materials,

fabrication, and general expenses

associated with further manufacturing

in the United States. Pursuant to section

772(d)(3) of the Act, we also reduced the

CEP by the amount of profit allocated to

the expenses deducted under section

772(d)(1) and (2).

We corrected for certain clerical errors

found during verification, including

corrections that Hyundai and LG

identified in their responses in the

course of preparing for verification.

Level of Trade (‘‘LOT’’)

In accordance with section

773(a)(1)(B) of the Act, to the extent

practical, we determined NV based on

sales in the comparison market at the

same LOT as the CEP sales. The NV

LOT is that of the starting-price sales in

the comparison market or, when NV is

based on constructed value (CV), that of

the sales from which we derive selling,

general, and administrative (SG&A)

expenses and profit. For CEP, it is the

level of the constructed sale from the

exporter to the importer.

To determine whether NV sales are at

a different LOT than the CEP sales, we

examined stages in the marketing

process and selling activities along the

chain of distribution between the

producer and the unaffiliated customer.

If the comparison-market sales are at a

different LOT, and the difference affects

Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices 35889

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. Finally, 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 Notice of Final

Determination of Sales at Less Than

Fair Value: Certain Cut-to Length

Carbon Steel Plate from South Africa,

62 FR 61731 (November 19, 1997).

We reviewed the questionnaire

responses of Hyundai and LG to

establish whether there were sales at

different LOTs based on the distribution

system, selling activities, and services

offered to each customer or customer

category. For both respondents, we

identified one LOT in the home market

with direct sales by the parent

corporation to the domestic customer.

These direct sales were made by both

respondents to original equipment

manufacturers (‘‘OEMs’’) and to

distributors. In addition, all sales,

whether made to OEM customers or to

distributors, included the same selling

functions. For the U.S. market, all sales

for both respondents were reported as

CEP sales. The LOT of the U.S. sales is

determined for the sale to the affiliated

importer rather than the resale to the

unaffiliated customer. We examined the

selling functions performed by the

Korean companies for U.S. CEP sales (as

adjusted) and preliminarily determine

that they are at a different LOT from the

Korean companies’ home market sales

because the companies’ CEP

transactions were at a less advanced

stage of marketing. For instance, at the

CEP level, the Korean companies did

not engage in any general promotion

activities, marketing functions, or price

negotiations for U.S. sales. Because we

compared CEP sales to home market

sales at a more advanced LOT, we

examined whether a LOT adjustment

may be appropriate. In this case, both

respondents only sold at one LOT in the

home market. Therefore, there is no

basis upon which either respondent can

demonstrate a pattern of consistent

price differences between levels of

trade. Further, we do not have

information which would allow us to

examine pricing patterns based on the

respondents’ sales of other products and

there is no other record information on

which such an analysis could be based.

Because the data available do not

provide an appropriate basis for making

a LOT adjustment and the LOT in the

home market is at a more advanced

stage of distribution than the LOT of the

CEP sales, a CEP offset is appropriate.

Both respondents claimed a CEP offset.

We applied the CEP offset to adjusted

home market prices or CV, as

appropriate. The CEP offset consisted of

an amount equal to the lesser of the

weighted-average U.S. indirect selling

expenses and U.S. commissions or

home market indirect selling expenses.

See the Memorandum on LOT for LG,

dated May 30, 2000, and Memorandum

on LOT for Hyundai, dated May 30,

2000.

NV

Home Market Viability

In order to determine whether there

were sufficient sales of DRAMs in the

home market to serve as a viable basis

for calculating NV, we compared the

respondents’ volume of home market

sales of the foreign like product to the

volume of U.S. sales of the subject

merchandise, in accordance with

section 773(a)(1)(C) of the Act. Because

the aggregate volume of home market

sales of the foreign like products for

both Hyundai and LG was greater than

five percent of the respective aggregate

volume of U.S. sales of the subject

merchandise, we determined that the

home market provides a viable basis for

calculating NV for all respondents.

Cost of Production (‘‘COP’’)

We disregarded Hyundai’s and LG’s

sales found to have been made below

the COP in Final Results 1998, the most

recent segment of this proceeding for

which final results were available at the

time of the initiation of this review.

Accordingly, the Department, pursuant

to section 773(b) of the Act, initiated

COP investigations of both respondents

for purposes of this administrative

review.

We calculated the COP based on the

sum of the costs of materials and

fabrication employed in producing the

foreign like product, SG&A expenses,

and the cost of all expenses incidental

to placing the foreign like product in

condition, packed, ready for shipment,

in accordance with section 773(b)(3) of

the Act. We compared weighted-average

quarterly COP figures for each

respondent, adjusted where appropriate

(see below), to home market sales of the

foreign like product, as required under

section 773(b) of the Act, in order to

determine whether these sales had been

made at prices below the COP. In

determining whether to disregard home

market sales made at prices below the

COP, we examined 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 in the normal course of

trade, in accordance with sections

773(b)(1)(A) and (B) of the Act. In

accordance with section 773(b)(2)(D) of

the Act, we conducted the recovery of

cost test using annual cost data.

Pursuant to section 773(b)(2)(C)(i) of

the Act, where less than 20 percent of

home market sales of a given model

were at prices less than the COP, we did

not disregard any below-cost sales of

that model because the below-cost sales

were not made in ‘‘substantial

quantities.’’ Where 20 percent or more

of a respondent’s sales of a given

product were at prices below the COP,

we found that sales of that model were

made in ‘‘substantial quantities’’ within

an extended period of time, in

accordance with section 773(b)(2)(B)

and (C) of the Act. To determine

whether prices provided for recovery of

costs within a reasonable period of time,

we tested whether the prices which

were below the per-unit cost of

production at the time of the sale were

also below the weighted-average perunit cost of production for the POR, in

accordance with section 773(b)(2)(D) of

the Act. If they were, we disregarded the

below-cost sales in determining NV.

We found that for both respondents,

more than 20 percent of their home

market sales for certain products were

made at prices that were less than the

COP. Furthermore, the prices did not

permit the recovery of costs within a

reasonable period of time. We, therefore,

disregarded the below-cost sales and

used the remaining above-cost sales as

the basis for determining NV, in

accordance with section 773(b)(1). For

those sales for which there were no

comparable home market sales in the

ordinary course of trade, we compared

CEP to CV pursuant to section 773(a)(4)

of the Act.

Adjustments to COP

Research & Development (‘‘R&D’’)

Consistent with our past practice in

this case, the R&D element of COP was

based on R&D expenses related to all

semiconductor products, not productspecific expenditures. See, e.g., Final

Results 1999, 64 FR at 69701–69702.

In addition, Hyundai and LG, in 1998,

completely deferred certain R&D costs

and amortized other R&D costs over five

years using the straight-line method.

This is the same methodology for

recognizing R&D costs that Hyundai and

35890 Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices

LG began to use in 1997, after

previously expensing all R&D costs as

incurred (except for Hyundai, which

began to defer certain R&D costs in

1996). Both Hyundai and LG based the

R&D expenses that they reported to the

Department for this POR on the amount

of R&D costs that they expensed in

1998.

Section 773(f)(1)(A) of the Act directs

the Department to rely on ‘‘the records

of the exporter or producer of the

merchandise, if such records are kept in

accordance with the GAAP of the

exporting country (or the producing

country where appropriate) and

reasonably reflect the costs associated

with production and sale of the

merchandise.’’ Section 773(f)(1)(A) of

the Act also states that the Department

will consider whether ‘‘such allocations

have been historically used by the

exporter or the producer.’’ Hyundai’s

and LG’s methodology for recognizing

R&D costs is in accordance with Korean

GAAP. However, the legacy of

Hyundai’s and LG’s inconsistency in

R&D accounting practices continues to

distort the cost calculation for

antidumping purposes, in a similar

manner to the distortions that we noted

in 1997 in the fifth administrative

review. See Final Results 1999, 64 FR at

69696–69700.

Hyundai and LG have repeatedly

changed their accounting method for

R&D expenses throughout the course of

these proceedings (i.e., from capitalizing

and amortizing, to expensing in the year

incurred, and now back to capitalizing

and amortizing). When Hyundai and LG

do not consistently expense or amortize

R&D costs, they will recognize, in

relation to amounts that would be

recognized if either method was

constantly applied, aberrationally high

amounts of R&D expense in some years,

and aberrationally low amounts of R&D

expense in other years, that do not

reasonably reflect the costs of producing

the subject merchandise. In 1998, as in

1997, Hyundai and LG, as a

consequence of their change in

accounting methods for R&D costs in

1997, in only their second consecutive

year of amortizing R&D costs,

recognized, and reported to the

Department, an aberrationally low

amount of R&D expenses.

Also in 1998, as in 1997, Hyundai and

LG completely deferred R&D costs for

certain long-term projects until they

realize revenues from these projects, or

until they foresee no possibility of

realizing revenue from these projects.

This practice exacerbates the low level

of R&D expenses that the respondents

recognize in relation to the amount of

expenses actually incurred. As we

found in Final Results 1999, 64 FR at

69699, we find that, for dumping

purposes, this methodology does not

reasonably reflect the cost of producing

the subject merchandise.

The Court of International Trade, in

Micron Technology v. United States,

Slip Op. 99–51 (June 16, 1999), at 6,

specifically stated that ‘‘the object of the

cost of production exercise is . . . to

capture . . . those expenses that

reasonably and accurately reflect a

respondent’s actual production costs for

period of review.’’ However, as a result

of their recent change to amortizing and

deferring R&D expenses, Hyundai and

LG are not capturing those expenses that

reasonably and accurately reflect their

actual R&D costs for this POR. Rather,

because of their change in R&D

accounting methodologies, their latest

method of capitalization of R&D

produces a distorted and meaningless

(for the cost of production exercise)

result that does not reasonably reflect

the actual cost of producing the subject

merchandise.

We have therefore determined that it

is appropriate to recognize for

antidumping purposes all of Hyundai’s

and LG’s 1998 current R&D costs

incurred in order to reasonably and

accurately reflect their actual R&D costs

for a given year. The Department also

continues to believe that, in general,

recognizing the current year’s R&D costs

incurred is a reasonable method to

recognize R&D expenses. This

methodology is consistent with both

Korean and U.S. GAAP, and is the same

methodology that Hyundai and LG had

followed prior to 1997.

Foreign Translation Gains & Losses

In 1998, both Hyundai and LG

changed how they recognized their

long-term foreign currency translation

gains and losses. In 1998, Hyundai and

LG recognized all of their long-term

translation gains and losses, while in

1997, the previous year, they had

capitalized such gains and losses and

amortized the amounts over the lives of

the corresponding liabilities. In

addition, in 1998, these two companies

offset the vast majority of their

respective consolidated deferred

translation losses (part of which were

due to be expensed in 1998) with the

revaluation increment from the

revaluation of their physical assets. The

revaluation increment is an equity type

adjustment on the statement of retained

earnings. As a result, the deferred

translation losses are never reflected on

the companies’ income statement. While

these accounting changes are in

accordance with Korean GAAP, the

Department considers the new

accounting treatment of these gains and

losses to be distortive.

Hyundai’s and LG’s changed

treatment of their long-term translation

gains and losses results in the

diminution of the impact of their

translation losses, and the exaggeration

of the impact of their translation gains.

In 1997, Hyundai and LG incurred

significant long-term translation losses

when the Korean Won dropped

precipitously. By offsetting much of

these translation losses in 1998 with the

revaluation increment, Hyundai and LG

avoided recognizing almost all of the

deferred losses from 1997, while still

recognizing gains (including deferred

gains from 1997) in 1998 on those same

liabilities that experienced the 1997

losses. In addition, by switching from

amortizing over the life of the liabilities

in 1997, to expensing as incurred in

1998, when Hyundai and LG

experienced net long-term translation

gains, Hyundai and LG heightened the

impact of those 1998 gains by

recognizing all of the gains immediately.

In order to neutralize the effect of the

changed treatment of the long-term

translation gains and losses, we

consider it appropriate to amortize all

long-term translation gains and losses

over the life of the loans. This treatment

is consistent with Hyundai’s and LG’s

accounting treatment in 1997, and is the

same method the Department followed

in the fourth administrative review

covering 1996, when both Hyundai and

LG did not recognize in their income

statements any of their long-term

translation gains and losses. See Final

Results 1998, 63 FR at 50872.

Hyundai, for the first time in 1997,

and again in 1998, capitalized in its

construction in progress (‘‘CIP’’) account

a part of its long-term translation gains

and losses. LG also capitalized in its CIP

account a part of its long-term

translation gains and losses in 1997 and

1998. The Department considers this

distortive, since the gains and losses

generated by the same debt are

amortized over different periods (the life

of the corresponding financial liabilities

and, for the part capitalized to CIP, the

life of physical assets). We therefore

included the capitalized translation

gains and losses in the amount of

translation gains and losses that we

amortized over the life of the loans.

Depreciation

Hyundai and LG, in another

accounting change in 1998, increased

the useful lives over which they

depreciate certain assets. Our practice,

pursuant to section 773(f)(1)(A) of the

Act and the SAA at 834, is to use those

accounting methods and practices that

Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices 35891

respondents have historically used. As

this is the sixth review of this order, we

do not consider it appropriate for the

respondents to dramatically change the

useful lives of their assets for

antidumping purposes. We find that the

useful lives that both Hyundai and LG

adopted for certain assets in 1998

greatly exceed the useful lives that they

have employed for these assets in the

past. This is the second time since 1996

that the respondents have extended the

useful lives of their assets. While the

Department accepted the respondents’

1996 minor useful life adjustment (see

Final Results 1998, 63 FR at 50870–

50871), the useful lives that Hyundai

and LG adopted in 1998 are in some

instances greater than fifty percent

longer than the previous useful lives.

Moreover, we do not believe that the

useful lives Hyundai and LG previously

employed were unreasonable, especially

considering that these two companies

themselves argued that the previous

useful lives were reasonable in Final

Results 1998. We therefore adjusted

Hyundai’s and LG’s reported

depreciation expense using the pre-1998

useful lives.

Company-Specific Adjustments

Hyundai

1. We adjusted Hyundai’s reported

interest expense rate by recalculating

the long-term translation gains and

losses, as explained above, and

excluding offsets of long-term interest

income related to certain restricted longterm deposits, consistent with Final

Results 1999, 64 FR at 69707.

2. We adjusted Hyundai’s reported

general and administrative (‘‘G&A’’)

expense rate by excluding the foreign

currency transaction gains and losses

that we accounted for in the interest

expense calculation, and all unspecified

foreign currency transaction gains and

losses; and including foreign currency

gains and losses related to account

payables.

3. We excluded certain non-operating

expenses from Hyundai’s R&D expenses.

4. In addition to the adjustments for

depreciation noted above, we adjusted

Hyundai’s depreciation expenses to

reflect the net effect of increasing

depreciation, consistent with Final

Results 1998, for special depreciation

that would have been taken had the

respondent continued to take special

depreciation on certain equipment for

the period of the first half of 1998, and

decreasing depreciation expenses to

reflect the amount of special

depreciation which the Department

expensed in Final Results 1998, but

which Hyundai expensed in its own

books and records, and reported in its

response, for the current POR.

See Memorandum on Hyundai

Electronics Industries Co., Ltd.:

Calculations for the Preliminary Results,

dated May 30, 2000.

LG

1. We adjusted LG’s reported interest

expense rate by recalculating the longterm translation gains and losses, as

explained above.

2. We adjusted LG’s reported G&A

expense rate by excluding the foreign

currency transaction gains and losses

that we accounted for in the interest

expense calculation, foreign currency

transaction gains and losses related to

account receivables, and unspecified

foreign currency transaction gains and

losses; and including foreign currency

gains and losses related to account

payables.

See Memorandum on LG Semicon

Co., Ltd.: Calculations for the

Preliminary Results, dated May 30,

2000.

CV

In accordance with section 773(e) of

the Act, we calculated CV based on the

respondents’ cost of materials and

fabrication employed in producing the

subject merchandise, SG&A expenses,

the profit incurred and realized in

connection with the production and sale

of the foreign like product, and U.S.

packing costs. We used the cost of

materials, fabrication, and G&A

expenses as reported in the CV portion

of the questionnaire response, adjusted

as discussed in the COP section above.

We used the U.S. packing costs as

reported in the U.S. sales portion of the

respondents’ questionnaire responses.

For selling expenses, we used the

average of the selling expenses reported

for home market sales that survived the

cost test, weighted by the total quantity

of those sales. For actual profit, we first

calculated, based on the home market

sales that survived the cost test, the

difference between the home market

sales value and home market COP, and

divided the difference by the home

market COP. We then multiplied this

percentage by the COP for each U.S.

model to derive an actual profit.

Price Comparisons

For price-to-price comparisons, we

based NV on the price at which the

foreign like product is first sold for

consumption in the exporting country,

in the usual commercial quantities and

in the ordinary course of trade, and to

the extent practicable, at the same LOT,

in accordance with section

773(a)(1)(B)(i) of the Act. We compared

the U.S. prices of individual

transactions to the monthly weightedaverage price of sales of the foreign like

product. In the case of LG, we

calculated NV based on delivered prices

to unaffiliated customers and, where

appropriate, to affiliated customers in

the home market.

With respect to LG, we tested those

sales that LG made in the home market

to affiliated customers to determine

whether they were made at arm’s length

and could be used in our analysis. See

19 CFR 351.102(b). To test whether

these sales were made at arm’s length

prices, we compared, on a modelspecific basis, prices of sales to affiliated

and unaffiliated customers, net of

discounts, all movement charges, direct

selling expenses, and packing. For

tested models of the subject

merchandise, prices to an affiliated

party were on average 99.5 percent or

more of the price to unaffiliated parties

and we therefore determined that sales

made to the affiliated party were at

arm’s length. See 19 CFR 351.403(c) and

Preamble to the Department’s

regulations, 62 FR at 27355.

With respect to both CV and home

market prices, we made adjustments,

where appropriate, for inland freight,

inland insurance, and discounts. We

also reduced CV and home market

prices by packing costs incurred in the

home market, in accordance with

section 773(a)(6)(B)(i) of the Act. In

addition, we increased CV and home

market prices for U.S. packing costs, in

accordance with section 773(a)(6)(A) of

the Act. We made further adjustments to

home market prices, when applicable, to

account for differences in physical

characteristics of the merchandise in

accordance with section 773(a)(6)(C)(ii)

of the Act. Finally, pursuant to section

773(a)(6)(C)(iii) of the Act, we made an

adjustment for differences in

circumstances of sale by deducting

home market direct selling expenses

(credit expenses and bank charges) and

adding any direct selling expenses

associated with U.S. sales not deducted

under the provisions of section

772(d)(1) of the Act.

For home market sales by Hyundai

and LG that were invoiced in U.S.

dollars, and paid for in won, we

calculated a won-denominated price,

used a won borrowing rate, and based

the expenses reported for these sales on

the won-denominated price.

Preliminary Results of Review

As a result of this review, we

preliminarily determine that the

following weighted-average dumping

margins exist for May 1, 1998 through

April 30, 1999:

35892 Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Notices

Manufacturer/exporter Percent margin

The G5 Corporation .............. 10.44

Hyundai Electronic Industries

Co., Ltd ............................. 5.32

Jewon Microelectronics ........ 10.44

Kim’s Marketing .................... 10.44

LG Semicon Co., Ltd ............ 3.08

Wooyang Industry Co., Ltd ... 10.44

Pursuant to 19 CFR 351.224(b), the

Department will disclose to parties to

the proceeding any calculations

performed in connection with these

preliminary results within 5 days of the

date of publication of this notice. Any

interested party may request a hearing

within 30 days of the date of publication

of this notice. Parties who submit

arguments in this proceeding are

requested to submit with each

argument: (1) a statement of the issue

and (2) a brief summary of the

argument. All case briefs must be

submitted within 30 days of the date of

publication of this notice. Rebuttal

briefs, which are limited to issues raised

in the case briefs, may be filed not later

than seven days after the case briefs are

filed. A hearing, if requested, will be

held two days after the date the rebuttal

briefs are filed or the first business day

thereafter.

The Department will publish a notice

of the final results of this administrative

review, which will include the results of

its analysis of the issues raised in any

written comments or at the hearing,

within 120 days from the publication of

these preliminary results.

The Department shall determine, and

Customs shall assess, antidumping

duties on all appropriate entries. The

Department will issue appraisement

instructions directly to Customs. The

final results of this review shall be the

basis for the assessment of antidumping

duties on entries of merchandise

covered by the determination and for

future deposits of estimated duties. We

have calculated importer-specific ad

valorem duty assessment rates based on

the ratio of the total amount of dumping

margins calculated for the examined

sales to the entered value of sales used

to calculate those duties. These rates

will be assessed uniformly on all entries

of each particular importer made during

the POR.

Furthermore, the following deposit

requirements will be effective upon

completion of the final results of these

administrative reviews for all shipments

of DRAMs from Korea entered, or

withdrawn from warehouse, for

consumption on or after publication

date of the final results of these

administrative reviews, as provided by

section 751(a)(1) of the Act: (1) the cash

deposit rate for the reviewed companies

will be the rate established in the final

results of this administrative review,

except if the rate is less than 0.5 percent

ad valorem and, therefore, de minimis,

no cash deposit will be required; (2) for

exporters not covered in this review, but

covered in the original LTFV

investigation or a previous review, the

cash deposit rate will continue to be the

company-specific rate published in the

most recent period; (3) if the exporter is

not a firm covered in this review, a

previous review, or the original LTFV

investigation, but the manufacturer is,

the cash deposit rate will be the rate

established for the most recent period

for the manufacturer of the

merchandise; and (4) if neither the

exporter nor the manufacturer is a firm

covered in this or any previous reviews

or the LTFV investigation, the cash

deposit rate will be 4.55 percent, the

‘‘all-others’’ rate established in the

LTFV investigation. These deposit

requirements, when imposed, shall

remain in effect until publication of the

final results of the next administrative

review.

This notice serves as a preliminary

reminder to importers of their

responsibility under 19 CFR 351.402(f)

of the Department’s regulations 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.

This administrative review and this

notice are in accordance with sections

751(a)(1) and 777(i)(1) of the Act.

Dated: May 30, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 00–14204 Filed 6–5–00; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–351–605]

Frozen Concentrated Orange Juice

from Brazil; Preliminary Results of

Antidumping Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

SUMMARY: In response to a request by the

petitioners and one producer/exporter

of the subject merchandise, the

Department of Commerce is conducting

an administrative review of the

antidumping duty order on frozen

concentrated orange juice from Brazil.

This review covers one manufacturer/

exporter of the subject merchandise to

the United States, Citrovita Agro

Industrial Ltda. The period of review is

May 1, 1998, through April 30, 1999.

We have preliminarily determined

that sales have been made below the

normal value by the company subject to

this review. If these preliminary results

are adopted in the final results of this

administrative review, we will instruct

the Customs Service to assess

antidumping duties on all appropriate

entries.

We invite interested parties to

comment on these preliminary results.

Parties who wish to submit comments

in this proceeding are requested to

submit with each argument: (1) a

statement of the issue; and (2) a brief

summary of the argument.

EFFECTIVE DATE: June 6, 2000.

FOR FURTHER INFORMATION CONTACT:

Shawn Thompson or Irina Itkin, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW, Washington, DC 20230;

telephone (202) 482–1776 or (202) 482–

0656, respectively.

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Act), are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (URAA). In addition,

unless otherwise indicated, all citations

are to the Department’s regulations at 19

CFR part 351 (1999).

SUPPLEMENTARY INFORMATION:

Background

On May 19, 1999, the Department of

Commerce (the Department) published

in the Federal Register a notice of

‘‘Opportunity to Request an

Administrative Review’’ of the

antidumping duty order on frozen

concentrated orange juice (FCOJ) from

Brazil (64 FR 27235).

In accordance with 19 CFR

351.213(b)(1), on May 27, 1999, the

petitioners, Florida Citrus Mutual,

Caulkins Indiantown Citrus Co., Citrus

Belle, Citrus World, Inc., Orange-Co of

Florida, Inc., Peace River Citrus

Products, Inc., and Southern Gardens

Citrus Processors Corp., requested an

administrative review of the

antidumping order covering the period