Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32833

reviewed sales for each importer/

customer. We will direct Customs to

assess the resulting percentage margin

against the entered Customs values for

the subject merchandise on each of the

importer’s/customer’s entries during the

review period. While the Department is

aware that the entered value of sales

during the POR is not necessarily equal

to the entered value of entries during

the POR, use of entered value of sales

as the basis of the assessment rate

permits the Department to collect a

reasonable approximation of the

antidumping duties which would have

been determined if the Department had

reviewed those sales of merchandise

actually entered during the POR.

To calculate the cash deposit rate for

each exporter, we divided the total

dumping margins for each exporter by

the total net value (EP or CEP) for that

exporter’s sales of subject merchandise

in the United States during the review

period. The following deposit

requirements will be effective for

shipments of subject merchandise

entered, or withdrawn from warehouse,

for consumption on or after the

publication date of these final results of

administrative review, as provided by

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

the cash deposit rate for the reviewed

companies will be the rates outlined

above; (2) for previously reviewed or

investigated companies not listed above,

the cash deposit rate will continue to be

the company-specific rate published for

the most recent period; (3) if the

exporter is not a firm covered in this

review, a prior review, or the original

less-than-fair-value (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) the cash deposit

rate for all other manufacturers or

exporters will continue to be 7.08

percent, the ‘‘All Others’’ rate made

effective by the final determination of

sales at LTFV, as explained in the 1995/

96 New Shippers Review of this order.

See Certain Welded Carbon Steel Pipes

and Tubes from India; Final Results of

New Shippers Antidumping Duty

Administrative Review, 62 FR 47632,

47644 (September 10, 1997).

These deposit requirements shall

remain in effect until publication of the

final results of the next administrative

review.

This notice also serves as a final

reminder to importers of their

responsibility under 19 CFR 353.26 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 notice also serves as the only

reminder to parties subject to

administrative protective orders (APO)

of their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.34(d)(1).

Timely written notification of the

return/destruction of APO materials or

conversion to judicial protective order is

hereby requested. Failure to comply

with the regulations and the terms of an

APO is a sanctionable violation.

This determination is issued and

published in accordance with sections

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

Dated: June 8, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–15873 Filed 6–15–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–580–809]

Circular Welded Non-Alloy Steel Pipe

From the Republic of Korea; Final

Results of Antidumping Duty

Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of

Antidumping Duty Administrative

Review.

SUMMARY: On December 8, 1997, the

Department of Commerce published the

preliminary results of its administrative

review of the antidumping duty order

on circular welded non-alloy steel pipe

from the Republic of Korea. This review

covers imports of pipe from four

producers/exporters during the period

November 1, 1995 through October 31,

1996.

Based on our analysis of comments

received, these final results differ from

the preliminary results. In addition, we

continue to find for these final results

that sales of subject merchandise were

made below normal value during the

review period.

EFFECTIVE DATE: June 16, 1998.

FOR FURTHER INFORMATION CONTACT:

Cynthia Thirumalai or Craig Matney,

Import Administration, International

Trade Administration, US Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington

DC 20230; telephone (202) 482–4087

and 482–1778, respectively.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department of Commerce’s (the

Department’s) regulations refer to the

regulations, codified at 19 CFR part 353,

April 1997.

Background

This review covers four

manufacturers/exporters, i.e., Hyundai

Pipe Co. Ltd. (Hyundai), Korea Iron and

Steel Co., Ltd. (KISCO) and its affiliate

Union Steel Manufacturing Co., Ltd.

(Union), SeAH Steel Corporation

(SeAH) and Shinho Steel Co., Ltd.

(Shinho), collectively referred to as ‘‘the

respondents.’’ Since the publication of

our Notice of Preliminary Results of

Antidumping Duty Administrative

Review of Circular Welded Non-Alloy

Pipe from the Republic of Korea,

(Preliminary Results) 62 FR 64559

(December 8, 1997), we received revised

home market datasets from the

respondents in December 1998. We also

received case briefs from the

respondents and from the petitioners on

January 20, 1998, and rebuttal briefs on

January 30, 1998.

Scope of Review

The merchandise subject to this

review is circular welded non-alloy

steel pipe and tube, of circular crosssection, not more than 406.4mm (16

inches) in outside diameter, regardless

of wall thickness, surface finish (black,

galvanized, or painted), or end finish

(plain end, beveled end, threaded, or

threaded and coupled). These pipes and

tubes are generally known as standard

pipes and tubes and are intended for the

low-pressure conveyance of water,

steam, natural gas, air, and other liquids

and gases in plumbing and heating

systems, air-conditioning units,

automatic sprinkler systems, and other

related uses. Standard pipe may also be

used for light load-bearing applications,

such as for fence tubing, and as

structural pipe tubing used for framing

and as support members for

reconstruction or load-bearing purposes

in the construction, shipbuilding,

trucking, farm equipment, and other
32834 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

related industries. Unfinished conduit

pipe is also included in this order.

All carbon-steel pipes and tubes

within the physical description outlined

above are included within the scope of

this review except line pipe, oil-country

tubular goods, boiler tubing, mechanical

tubing, pipe and tube hollows for

redraws, finished scaffolding, and

finished conduit. In accordance with the

Department’s Final Negative

Determination of Scope Inquiry on

Certain Circular Welded Non-Alloy

Steel Pipe and Tube from Brazil, the

Republic of Korea, Mexico, and

Venezuela 61 FR 11608 (March 21,

1996), pipe certified to the API 5L linepipe specification and pipe certified to

both the API 5L line-pipe specifications

and the less-stringent ASTM A–53

standard-pipe specifications, which falls

within the physical parameters as

outlined above, and entered as line pipe

of a kind used for oil and gas pipelines

is outside of the scope of the

antidumping duty order.

Imports of these products are

currently classifiable under the

following Harmonized Tariff Schedule

(HTS) subheadings: 7306.30.10.00,

7306.30.50.25, 7306.30.50.32,

7306.30.50.40, 7306.30.50.55,

7306.30.50.85, and 7306.30.50.90.

Although the HTS subheadings are

provided for convenience and customs

purposes, our written description of the

scope of this proceeding is dispositive.

Date of Sale

The respondents have argued that,

contrary to the methodology used in the

Preliminary Results, we should use

invoice date as the date of sale for sales

to the United States. For these final

results, we continue to find contract

date to be the appropriate date of sale

with respect to sales to the United

States. (For further discussion of this

issue, see Comment 1 in the General

Comments section of this notice below.)

Product Comparisons

On January 8, 1998, the Court of

Appeals for the Federal Circuit issued a

decision in CEMEX v. United States

(CEMEX), 1998 U.S. App. LEXIS 163. In

that case, based on the pre-URAA

version of the Act, the Court ruled that

the Department may not resort

immediately to constructed value (CV)

as the basis for foreign market value

(now normal value, or ‘‘NV’’) when the

Department finds home market sales of

the identical or most similar

merchandise to be outside the ordinary

course of trade. This issue was not

raised by any party in this proceeding.

However, the URAA amended the

definition of sales outside the ordinary

course of trade to include sales below

cost. See, Section 771(15) of the Act.

Consequently, the Department has

reconsidered its practice in accordance

with this court decision and has

determined that it would be

inappropriate to resort directly to CV as

the basis for NV where the Department

finds foreign market sales of

merchandise identical or most similar to

that sold in the United States to be

outside the ordinary course of trade.

Instead, the Department will use other

sales of similar merchandise to compare

to the US sales if such sales exist. The

Department will use CV as the basis for

NV only when there are no above-cost

sales that are otherwise suitable for

comparison.

Accordingly, in this proceeding, when

making comparisons in accordance with

section 771(16) of the Act, we

considered all home market sales of the

foreign like product that were in the

ordinary course of trade for purposes of

determining appropriate product

comparisons to US sales. Where there

were no sales of identical merchandise

in the home market in the ordinary

course of trade to compare to US sales,

we compared US sales to sales of the

most similar foreign like product made

in the ordinary course of trade, based on

the characteristics listed in Sections B

and C of our antidumping

questionnaire. Thus, we have

implemented the Court’s decision in

CEMEX to the extent that the data on the

record permitted.

Aside from the preceding, we

followed the methodology outlined in

our Preliminary Results with the

following exception: for certain of

Shinho’s models that had identical

product characteristics but were

assigned non-identical control numbers,

we recoded them with identical control

numbers.

Export Price and Constructed Export

Price

We followed the methodology in the

Preliminary Results with the following

exceptions: (1) We used in our analysis

all export price (EP) transactions that

were entered during the POR; (2) we

recalculated adjustments for duty

drawback for SeAH; (3) we recalculated

the short-term interest rate for KISCO/

Union on a collapsed basis; (4) we

included interest revenue in the

calculation of net price for KISCO/

Union.

Normal Value

We used the same methodology

outlined in the Preliminary Results with

the following exceptions: (1) For sales

with weight conversion factors below

the allowed minimum, we used the

minimum as non-adverse facts

available; (2) sales failing the arm’slength test and resales of products

purchased from other producers were

not included in the product-matching

concordance for Hyundai and SeAH; (3)

we reallocated SeAH’s foreign

brokerage, US duty and US brokerage

expenses on a value basis; (4) sales of

overruns were removed from the arm’s

length test for SeAH; (5) indirect selling

expenses for KISCO/Union were

recalculated; (6) the short-term interest

rate for KISCO/Union was recalculated

on a collapsed basis; (7) we recalculated

Shinho’s CV interest expenses with

respect to short-term interest offsets and

foreign exchange gains/losses; 8) we

recalculated the credit expenses for one

of Shinho’s home market customers.

Level of Trade/CEP Offset

We received no comment from

interested parties on the methodology

we employed in the Preliminary Results

with respect to level of trade. Based on

our analysis of information on the

record as articulated in the Preliminary

Results, we are not changing our

methodology with respect to level of

trade for these final results.

Cost of Production Analysis

As discussed in the Preliminary

Results, we conducted an analysis to

determine whether the respondents

made sales of the foreign like product in

the home market at prices below their

cost of production (COP) within the

meaning of section 773(b)(1) of the Act.

We used the same methodology

employed in the Preliminary Results

with the following exceptions: (1) The

general and administrative (G&A) and

interest factors for all respondents were

recalculated using a denominator

inclusive of packing; (2) we recalculated

KISCO/Union’s G&A and interest

expense on a collapsed basis; (3) we

recalculated Shinho’s interest expenses

with respect to short-term interest

offsets and foreign exchange gains/

losses.

Constructed Value

In calculating CV, we followed the

methodology employed in our

Preliminary Results, with the following

exceptions: (1) The SG&A and interest

factors for all respondents were

recalculated using a denominator

inclusive of packing; (2) we adjusted

Hyundai’s CV for direct selling expenses

incurred in the home market; (3) we

converted CV profit to a theoreticalweight basis for Shinho; (4) we

corrected the circumstance of sale (COS)

adjustment for credit expenses for
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32835

Shinho; (5) we recalculated Shinho’s

interest expenses with respect to shortterm interest offsets and foreign

exchange gains/losses.

Interested Party Comments

General Comments

Comment 1: Invoice Date v. Contract

Date as the Date of U.S. Sale

The respondents note that before the

issuance of the original questionnaire in

this proceeding on January 13, 1997, the

Department adopted the policy of using

invoice date as the presumptive date of

sale in February 1996 with the

publication of its proposed antidumping

regulations (see Antidumping and

Countervailing Duties: Notice of

Proposed Rulemaking and request for

Public Comments, (Proposed

Regulations) 61 FR 7308, 7381 (February

27, 1996)). Consistent with the

instructions in the questionnaire, the

respondents state that they used invoice

date as the date of sale for US sales and

received no indication from the

Department that this was not acceptable

until October 30, 1997, despite meetings

subsequent to the issuing of the

questionnaire with Department officials

on this same issue.

The respondents acknowledge that

the Proposed Regulations and Final

Regulations (i.e., Antidumping Duties;

Countervailing Duties: Final Rule, (Final

Regulations) 62 FR 27926, 27411 (May

19, 1997) codified at 19 CFR

§ 351.401(i)) speak of the use of dates

other than invoice date under

circumstances involving long-term

contracts, sales with exceptionally long

periods of time between invoice and

shipment dates, and situations

involving large custom-made

merchandise. However, the respondents

then point out that the particular

circumstances in this case with respect

to US sales (i.e., long periods of time

between the date on which the material

terms of sale are set and invoice date)

do not fall within these stated

exceptions. The respondents also

emphasize that the Final Regulations

clearly state that exceptions to the

presumption to use invoice date must be

narrowly drawn. Indeed, the

respondents note that in Certain

Stainless Steel Wire Rod from India:

Final Results of New Shipper

Antidumping Duty Administrative

Review, (Certain Stainless from India)

62 FR 38976, 38978 (July 21, 1997), the

Department maintained that the use of

invoice date as the date of sale was

appropriate over the objection of the

petitioners that the lag time of up to

several months between purchase order

date and invoice date was too long. The

respondents also cite other cases in

which the Department held that invoice

date was the appropriate date of sale.

The respondents argue that since their

sales processes are quite typical for

manufactured products, that they

should be afforded typical

consideration—i.e., the use of invoice

date as the date of sale. Otherwise, argue

the respondents, the exception of not

using invoice date as the date of sale

would become the rule, and the

selection of the date of sale would be

purely at the discretion of the

Department.

The respondents point out that even

if the sales terms rarely change after the

contract date, the possibility for change

exists and sometimes does occur. The

respondents then cite to the Preamble to

the Final Regulations where it states

that ‘‘absent satisfactory evidence that

the terms of sale were finally

established on a different date, the

Department will presume that the date

of sale is the date of invoice’’ (Final

Regulations at 27349). According to the

respondents, the sales terms in this case

are subject to change and are not,

therefore, ‘‘finally established’’ within

the meaning of the Preamble to the Final

Regulations until the date of invoice.

In addition, the respondents argue

that using a different date of sale for

home market sales than for US sales

contradicts the Department’s preference

of using a single date of sale for a given

respondent instead of a different date

for each sale, as stated in the Preamble

to the Final Regulations (see 62 FR

27348). As support for using the same

date of sale in both markets, the

respondents cite to Small Diameter

Circular Seamless Carbon and Alloy

Steel Standard, Line Pressure Pipe from

Germany: Preliminary Results of

Antidumping Duty Administrative

Review, (Germany Line Pipe) 62 FR

47446, 47448 (September 9, 1997) in

which the Department used shipment

date (a proxy for invoice date which

occurred after the shipment date)

despite a long lag time between order

confirmation date and shipment date in

order to maintain dates of sale in the

home market and the United States on

the same basis.

The petitioners point out that both the

Proposed and Final Regulations cited by

respondents are not applicable to this

proceeding since it was initiated prior to

the date on which these regulations

became effective. Even if they were, add

the petitioners, the Department’s

decision not to use invoice date as the

date of sale for US sales was fully

consistent with those regulations as they

state:

[T]he Department may use a date other

than the date of invoice if the Secretary is

satisfied that a different date better reflects

the date on which the exporter or producer

establishes the material terms of sale.

See Final Regulations at 27411. The

petitioners take issue with the

respondents’ assertion that the listed

exceptions are the only allowable

circumstances under which the

Department may abandon the use of

invoice date. Instead, state the

petitioners, the list of exceptions is

illustrative and not exhaustive. The

petitioners also note that while the

respondents cite to language in the

regulations speaking generically about

the malleable nature of sales terms up

until the time that payment is

demanded, they have not cited to

evidence on the record of this

proceeding which would demonstrate

that sales terms in this case are not

usually established on the contract date

for sales to the United States. Rather,

state the petitioners, there is more than

satisfactory evidence on the record of

this proceeding showing that contract

date better reflects the date on which

material terms of sale were established

for US sales.

Department’s Position

While we agree with the respondents

that the Department prefers to use

invoice date as the date of sale, we are

mindful that this preference does not

require the use of invoice date if the

facts of a case indicate a different date

better reflects the time at which the

material terms of sale were established.

Indeed, as all parties have recognized,

both the Proposed and Final Regulations

speak to giving the Department

flexibility to abandon the use of invoice

date. In granting this flexibility, the

regulations anticipate the possibility of

inappropriate comparisons via the strict

use of invoice date as the date of sale.

As for the respondents point that the

facts in this case (i.e., long lag times

between contract date and invoice date)

do not fit the exceptions articulated in

the regulations, we note that the

exceptions listed are exemplary and are

not intended to be limiting as can be

seen in the Proposed Regulations where

it states:

[T]he Department recognizes that [invoice]

date may not be appropriate in some

circumstances, such as those involving

certain long-term contracts or sales in which

there is an exceptionally long time between

the date of invoice and the date of shipment.

[Emphasis added.] (Proposed Regulations at

7330.)

If invoice date does not reasonably

approximate the date on which the

material terms of sale were made in
32836 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

either of the markets under

consideration, then its blanket use as

the date of sale in an antidumping

analysis is untenable. The facts in this

case, as explained below, clearly

demonstrate that the use of invoice date

as the date of sale in both markets

would lead to inappropriate

comparisons.

In this case, the sales processes for US

and home market sales differ markedly.

Sales in the home market are typically

out of inventory with the purchase

order/contract, invoice and shipment

dates all occurring within a relatively

short period of time. In contrast, US

sales are usually conducted on a madeto-order basis (CEP sales out of

inventory being an exception.). The

material terms of sale in the US are set

on the contract date and any subsequent

changes are usually immaterial in

nature or, if material, rarely occur. Most

importantly, due to the made-to-order

nature of US transactions, there is a very

long period of time between the contract

date, and the subsequent shipment and

invoicing of the sale. The long periods

between the contract date and invoice/

shipment date for US transactions are

measured in multiple months with some

reaching upwards of six months. As can

be seen from the foregoing, ‘‘invoice’’

dates in both markets, while the same in

name, are materially quite different for

purposes of determining price

discrimination simply because the sales

processes for the two markets are quite

different. If we were to use invoice date

as the date of sale for both markets, we

would effectively be comparing home

market sales in any given month to US

sales whose material terms were set

months earlier— an inappropriate

comparison for purposes of measuring

price discrimination in a market with

less than very inelastic demand.

Notwithstanding the respondents’

comment that the terms of sale are

subject to change and that, therefore, the

final terms are not known until the date

of invoice, we find that, in this case,

there is no information on the record

indicating that the material terms of sale

change frequently enough on US sales

so as to give both buyers and sellers any

expectation that the final terms will

differ from those agreed to in the

contract. Therefore, we are continuing

to use contract date as the date of sale

with respect to US sales for these final

results, except for CEP sales out of

inventory. See also Notice of Final

Results of Antidumping Duty

Administrative Review: Canned

Pineapple Fruit From Thailand, 63 FR

7392, 7394 (February 13, 1998) (For CEP

sales out of inventory, invoice date

reasonably approximates the date on

which the material terms of sale are set

and is, therefore, appropriately used as

the date of sale.).

As for the respondents’ additional

concern that using a ‘‘different’’ date of

sale in home market than in the United

States would be contrary to the

Department’s preference of using a

single date of sale as articulated in the

Preamble to the (see Final Regulations at

27348), we find such concern to be

unwarranted. Given the sales processes

of the different markets, the only dates

which are substantively equivalent for

purposes of measuring price

discrimination, although different in

name, are the invoice date in the home

market and the contract date in the

United States.

Comment 2: Inclusion of All EP Sales

Entered During The POR

SeAH argues that the Department

erroneously excluded from its analysis

EP sales entered during the POR but

with dates of sale outside the POR.

According to SeAH, § 751(a)(2)(A) of the

Act requires that the Department

examine each entry, as opposed to sale,

during the POR by stating:

For the purpose of [administrative reviews

of antidumping duty orders], the

administering authority shall determine

(i) the normal value and export price (or

constructed export price) of each entry of the

subject merchandise * * *

The petitioners counter that the

review covers all ‘‘sales’’ during the

POR as delineated in the questionnaire.

According to the petitioners, it is the

questionnaire which determines the

reporting requirements during a review

and the questionnaire clearly stated,

‘‘State the total quantity and value of the

merchandise under review that you sold

during the period of review’’ (see

January 13, 1997 questionnaire at A–1).

As for the language in the statute cited

by SeAH in support of a review covering

all entries, the petitioners cite to

American Permac v. United States, 783

F. Supp. 1421 (CIT 1992) (American

Permac) to show that the statute does

not preclude the Department from

excluding certain sales if they are

distortive where it says:

The court has a difficult time reading the

‘‘each entry’’ language to compel inclusion of

all sales, no matter how distorting or

unrepresentative. In actuality, both

investigations and periodic reviews examine

sales, not entries, and the methodology is not

distinguishable in any relevant way.

The petitioners also cite to 19 CFR

353.22(b) and, inter alia, Final Results of

Antidumping Duty Administrative

Reviews: Portable Electric Typewriters

from Japan, (Typewriters from Japan) 56

FR 56393, 56397 (November 4, 1991) to

show that the Department has the

discretion to base administrative

reviews on entries, exports or sales.

Department’s Position

We agree with SeAH that all POR

entries of EP sales should be included

in our analysis. The petitioners’ citation

to American Permac does not apply to

this case. In that case, the Court was

examining the issue of whether or not

the Department had the authority to

deny a request which did not arise until

the hearing to exclude a certain number

of US sales from the universe of

reported transactions. One of the

Department’s arguments in American

Permac was that it was required by the

statute to examine all sales in the

reported universe. While the Court

based its final decision to uphold the

Department’s denial of exclusion based

on the untimely nature of the exclusion

request, it did state that it doubted that

Congress ‘‘intended to compel

distortions if exclusion of a few sales

would remedy the problem’’ (see

American Permac at 1424). While

American Permac does support the

authority of the Department to exclude

certain US sales from its analysis, it

does not address the issue of whether

the universe of reported sales is to be

based on entries or sales during the

POR.

Section 751(a)(2)(A) of the Act states

that a dumping calculation should be

performed for each entry during the

POR. While the § 353.22(b) of the

Department’s regulations does give the

Department some flexibility in this

regard by stating that the review can be

based on entries, exports or sales, it is

our preference to base the review on

entries when possible. In this case, we

find no compelling reason to move away

from the use of entries to determine the

universe of US sales to be reported for

EP sales as there are no circumstances

on the record that would require such

a move. Accordingly, we have included

in our analysis for these final results all

entries of EP sales during the POR as

reported by SeAH. In addition, we have

made the same revision in our

calculations for all of the other

respondents.

Comment 3: Inaccurate or Missing

Conversion Factors

The petitioners state the respondents

have reported some conversion factors

for the conversion of home market sales

and cost information to a theoreticalweight basis that are below the

minimum conversion factor allowable

in various grades of standard pipe, as
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32837

determined using maximum industrystandard tolerance of wall thickness.

Where no other conversion factor exists

for such products, the petitioners

propose assigning the highest reported

conversion factor among transactions of

the same specification. In the event

there is no available conversion factor

for a particular product, the petitioners

argue that Department should not apply

any conversion factor.

Hyundai acknowledges that a few of

its conversion factors were calculated

incorrectly and requests that the

Department allow them to correct this

error. Additionally, Hyundai notes that

the error did not impact the Preliminary

Results as the products with the

incorrect conversion factors were not

used in calculating the margin.

KISCO/Union contends that the

petitioners’ argument refers to the

conversion factor between theoretical

and standard actual weight, which may

differ slightly from the actual weight

and that the petitioners have presented

no evidence that the conversion factors

from actual to theoretical weight fall

below the industry-standard. KISCO/

Union also states that the home market

customers have accepted this

merchandise without noting any weight

problems. In the case that the

Department determines that conversion

factors which fall below the industry

standards should not be applied,

KISCO/Union argues that the

Department should substitute the

industry standard for the limited

number of incorrect conversion factors

reported in the response.

SeAH and Shinho acknowledge that

the conversion factors on some home

market sales are below the minimum

but point to the extremely tiny

proportion these sales constitute. In

addition, KISCO/Union, SeAH and

Shinho state that most of these sales

were not used in the Department’s

calculation for the Preliminary Results.

Department’s Position

We disagree with the petitioners that

what amounts to adverse facts available

should be applied to sales with

conversion factors below the minimum

allowed. Such errors in the respondents’

data affect only a minuscule number of

transactions and appear to be

inadvertent. With respect to KISCO/

Union’s argument, we agree the

conversion factor between the

theoretical and standard actual weight

may differ from the factor used to

convert the actual weight to the

theoretical. Nevertheless, we find that

certain reported conversion factors at

issue are aberrational because it is

impossible to produce a pipe that is

within the industry-standard tolerances

with conversion factor below this

minimum. See Final Results of

Antidumping Duty Administrative

Review: Circular Welded Non-Alloy

Steel Pipe from the Republic of Korea,

(First Review Final Results) 62 FR

55574, 55577 (October 27, 1997).

Therefore, we have calculated the

minimum conversion factor allowable

in various grades of standard pipe by

using the maximum industry-standard

tolerance of wall thickness. We used the

calculated minimum factor for those

sales and costs where the reported

factors fell below the minimum.

Comment 4: SG&A and Interest Ratios

The petitioners state that the

respondents have calculated their SG&A

and interest ratios based on a sales

denominator that includes packing.

When this ratio is multiplied by a cost

of manufacturing (COM) that is

exclusive of packing, as was done in the

preliminary calculations, the petitioners

allege that the resulting SG&A amount

is understated. The petitioners suggest

that the Department could add packing

to the COM before the SG&A and

interest expenses are calculated as was

done in the First Review Final Results.

Hyundai agrees with the petitioner

that its SG&A ratio was calculated with

a packing-inclusive denominator and

that packing should be added to COM

before calculating SG&A.

KISCO/Union, SeAH and Shinho state

that the addition of packing to the COM

prior to calculating SG&A and interest

expenses would have only a negligible

effect on the margin calculations and is,

therefore, not necessary.

Department’s Position

In the preliminary results we did in

fact understate SG&A and interest

expenses by multiplying a packingexclusive COM by expense ratios

calculated based on a packing-inclusive

amount. For these final results, we have

corrected this error by adding packing to

the COM before applying the ratios to

calculate SG&A and interest expenses.

Comment 5: Duty Drawback Adjustment

The petitioners argue that duty

drawback rebates received by

respondents, except for KISCO/Union,

were based on a theoretical weight basis

while the payments of the original

duties were on an actual weight basis.

As a result, the petitioners stated that

total rebates received exceed total duties

paid. Since the Act allows only for the

addition to US price of import duties

paid and rebated, the petitioners point

out than any adjustment should be

capped by the amount of duty actually

paid. (See 19 U.S.C. § 1677a(d)(B)

(1994).)

The respondents point out that,

contrary to the petitioners’ assertions,

not all duty drawback rebates are

excessive in that two separate programs

were used. In particular, state the

respondents, rebates under the

individual-application system have

been found by the Department in

previous segments of this proceeding to

be non-excessive; therefore, the

Department was correct in adjusting US

price by the entire amount of the rebate.

The respondents note that the

Department did limit the duty drawback

adjustment to the amount of duties paid

on those transactions receiving rebates

under the fixed-rate system in the

Preliminary Results.

Department’s Position

As stated in the Preliminary Results at

64561, to the extent that duty drawback

rebates are in excess of the actual

amount of duties paid, we agree with

the petitioners that adjustments to US

price should be limited to the amount

of duties paid. The respondents

received duty drawback under two

systems: the fixed rate system and the

individual application system. Rebates

received under the individual

application system are limited to actual

duties paid and are not excessive.

Therefore, we have used the full amount

of rebates under the individual

application system in our analysis for

these Final Results. Under the fixed rate

system, however, rebates exceed actual

duties paid (see First Review Final

Results). In the Preliminary Results, we

did cap the amount of rebates received

under the fixed-rate system, where

applicable, for all respondents except

for SeAH. For these final results, we

have applied the cap to SeAH as well.

Comment 6: Income Offsets to G&A

The petitioners claim that Hyundai,

KISCO/Union and Shinho have

understated their G&A expenses by

offsetting such expenses by various nonoperating income items unrelated to the

subject merchandise. Since it is the

Department’s practice to limit offsets to

G&A to income from operations related

to the production of subject

merchandise, these respondents’ offsets

should be denied. See, Final

Determination of Sales at Not Less Than

Fair Value: Saccharin From Korea

(Saccharin from Korea) 59 FR 58828

(November 15, 1994) and Certain Fresh

Cut Flowers From Colombia: Final

Results of Antidumping Duty

Administrative Reviews (Flowers from

Colombia) 61 FR 42833, 42843 (August

19, 1996).
32838 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

Hyundai maintains that its offsets to

G&A do relate to the production and

sale of subject merchandise. KISCO/

Union argues that non-operating

expenses should not be included in

G&A if non-operating income is found

not to be an allowable offset. Shinho

replies that it has fulfilled the

Department’s requirement to include

only items related to production in its

G&A offset.

Department’s Position

The Department permits offsets to

G&A expenses for income earned from

the company’s production operations.

During the course of this proceeding, we

have received from respondents

responses to our original questionnaire

and multiple supplemental

questionnaires. Based on our

examination of these responses with

respect to the calculation of G&A

expenses and offsets, we are accepting

what respondents have provided with

the exception of dividend income

offsets claimed by Hyundai and KISCO/

Union. See U.S. Steel v. United States,

Slip Op. 98–17, (CIT February 25, 1998).

In particular, we find that the items

petitioners complain about appear, on

their face, to be of a general nature

arising from the companies’ operations.

We are disallowing the offsets to G&A

due to dividend income for Hyundai

and KISCO/Union. We note that

dividend income is generally claimed as

an offset to interest expenses and is

allowable when such income arises

from short-term investments of a

company’s working capital. However, in

this case, we find that Hyundai’s and

KISCO/Union’s dividend income has

not been shown to be derived from

short-term investments.

Comment 7: CV Credit Expenses

The respondents argue that, in the

Preliminary Results, the Department

double-counted imputed credit

expenses in the calculation of CV. The

respondents state that this occurred

because the Department included both

total actual interest expense and

imputed U.S. credit expenses in the CV

calculation. The respondents state that

it is the Department’s practice first to

subtract home market imputed credit

expenses before adding U.S. imputed

credit expenses in calculating a

circumstance-of-sale (COS) adjustment

for CV. As evidence of this practice,

several respondents cite, inter alia,

Certain Stainless Steel Wire Rods from

France: Final Results of Antidumping

Duty Administrative Review, (France

Wire Rods) 62 FR 7206, 7209, (February

18, 1997).

The petitioners dispute that the

Department double-counted the

respondents’ imputed credit expenses in

CV, and state that the Department

calculated CV in accordance with

section 773(e) of the Act. However, the

petitioners concede that the

Department’s new-law practice is to

make a COS adjustment to NV for

differences in credit expenses between

the US and exporting country markets.

Department’s Position

We agree with the petitioners that we

calculated CV in accordance with

section 773(e) of the Act. However, we

also agree with both the petitioners and

the respondents that we made an error

in our COS adjustments to CV by not

deducting home market credit expenses

before adding US credit expenses. It is

the Department’s standard practice to

make such an adjustment. See, e.g.,

France Wire Rods and Stainless Steel

Bar From India: Final Results of

Antidumping Duty Administrative

Review, 63 FR 13622, 13624 (March 20,

1998) (Comment 5). We have adjusted

the calculations accordingly for these

final results.

Company-Specific Comments

Hyundai

Comment 8: Further Processed

Merchandise

Hyundai argues that, in the

Preliminary Results, the Department

improperly treated sales of subject

merchandise that were purchased from

unaffiliated suppliers and further

processed. In Hyundai’s view, US sales

of subject merchandise may only be

compared to sales of the foreign like

product that were produced in the same

country by the same person. Hyundai

states that if sales data consists of

merchandise produced by two different

manufacturers, the Department

normally compares the sales produced

by each company separately. Hyundai

cites Steel Wire Rope from the Republic

of Korea: Preliminary Results of

Antidumping Duty Administrative

Review and Intent To Revoke

Antidumping Duty Order in Part, 62 FR

64353 (December 5, 1997), noting that

respondents sold merchandise in both

the US and home market that was

produced by the respondent and by

unaffiliated suppliers and that the

Department compared the merchandise

according to producer. Hyundai

continues its argument by saying that

the further processing of the purchased

pipe does not convert the pipe from

non-subject to subject merchandise. It

maintains that because the pipe was

already subject merchandise, the

Department must segregate Hyundai’s

sales into two categories (pipe

purchased and further processed by

Hyundai, and pipe manufactured by

Hyundai) and compare the two

categories separately.

Petitioners argue that the

Department’s precedent supports

treating Hyundai as the producer of the

finished products, citing Antifriction

Bearings and Parts Thereof from France,

61 FR 66,472 (December 17, 1996). In

Antifriction Bearings, a respondent

purchased finished bearings from an

unaffiliated subcontractor and resold

them in the home market and United

States. According to the petitioners, the

Department treated sales of goods not

manufactured by a company to be

products of that company because the

subcontractor did not know the

destination of the products, and because

the respondent company controlled the

production and sale of the product. The

petitioners argue that the same facts

exist in this case.

Department’s Position

Because Hyundai engages in what is

often substantial further manufacturing

and because it sells and warrants the

further-processed merchandise as its

own product, it is unclear whether the

Steel Wire Rope methodology is

appropriate in this case. Nevertheless,

the issue is moot, as Hyundai was

unable to provide the necessary

information for us to follow the

methodology. In Steel Wire Rope, the

specific suppliers of each resold item

were identifiable. In this case, the

suppliers for specific sales are not

known; Hyundai is only able to

distinguish whether it manufactured the

product from start to finish, or whether

it purchased the product before further

processing. Thus, even if it were

appropriate, the information provided

by Hyundai does not allow us to employ

the methodology used in Steel Wire

Rope.

Comment 9: Arm’s Length Freight

The petitioners argue that Hyundai

did not adequately demonstrate that the

transactions between Hyundai and an

affiliated transport company were at

arm’s length. The petitioners state that

the Department requested information

on the affiliated company’s provision of

shipping services to non-affiliated

customers and that, because Hyundai

failed to provide this information,

Hyundai’s ocean freight rates should be

based on facts available. Furthermore,

the petitioners note that when the

affiliated transport company arranged

for third parties to transport the subject

merchandise, the affiliate did not charge
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32839

any mark-up, thus providing services for

free, suggesting again that the

transactions were not arm’s length.

Hyundai rebuts that the information

on the record does adequately

demonstrate that the transactions were

arm’s length. Hyundai points to

documents which support their claim,

such as an invoice and other documents

from an unaffiliated company and their

affiliate’s tariff schedule. Hyundai

argues that it is not required to provide

information showing that the affiliate

charged the same rates to unaffiliated

customers. It also notes that it provided

the same kind of evidence supplied in

Certain Cut-to-Length Carbon Steel Plate

from Germany: Final Results of

Antidumping Duty Administrative

Review, 61 FR 13834 (March 28, 1996),

in which the Department determined

that freight services were provided by

an affiliate at arm’s length prices. Lastly,

Hyundai rejects the petitioners’

argument that, because they were not

charged a mark-up by the affiliate when

arranging services from a third party,

the transactions were not arm’s length.

Hyundai states that the affiliate is often

involved in name only and that,

regardless of any supposed lack of markup, it otherwise demonstrated that the

prices paid to its affiliate were

comparable to prices charged to

unaffiliated parties and thus at arm’s

length.

Department’s Position

As stated in the questionnaire issued

to the respondents on January 13, 1997,

‘‘arm’s length transactions are those in

which the selling price between the

affiliated parties is comparable to the

selling prices in transactions involving

persons who are not affiliated.’’

Hyundai demonstrated that the prices

charged by its affiliate were comparable

to prices it is charged by unaffiliated

freight providers. Hyundai is not

required to show that the affiliate

charged a third party comparable prices,

although this is another way in which

arm’s length can be demonstrated. The

Department never specifically asked

Hyundai to supply this kind of

information; rather, we suggested it as

one option Hyundai could choose to

demonstrate arm’s length. The fact that

the affiliate may at times not charge

Hyundai with a mark-up when

arranging third party transactions is not

in itself demonstrative of a non-arm’s

length transaction. Rather, the evidence

in this case that Hyundai pays the

affiliate comparable prices to those paid

to unaffiliated providers is sufficient to

demonstrate arm’s length.

Comment 10: Additional Freight

The petitioners find Hyundai’s

additional freight costs to be unreliable

and argue that the Department should

deny any adjustment to NV for this

additional freight. The petitioners claim

that there are several problems with

Hyundai’s reporting of this expense.

They state that Hyundai did not indicate

whether the service was provided by an

affiliate. They also maintain that

Hyundai has not substantiated the claim

that it is not able to report these costs

on a shipment-specific basis, nor have

they explained sufficiently the basis on

which the charges are incurred. The

petitioners argue that the information on

these additional freight costs is

unreliable, noting for example a change

in the total cost reported from one

supplemental response to the next.

Hyundai responds that it did provide

adequate information on the additional

freight expenses. It explains that the

service in question is not provided by

an affiliate and that because these

services are not invoiced on a shipmentspecific basis they cannot be reported

on a shipment-specific basis.

Department’s Position

After reviewing the information on

the record, we see no reason to deny the

adjustment. Contrary to the petitioners’

claims, the loading service was not

provided by an affiliate. Further, the

way in which Hyundai incurs this cost

prohibits shipment-specific reporting.

Comment 11: Export Price Adjustment

Petitioners assert that the Department

should deduct certain expenses that

they claim relate to movement (e.g.,

communication costs and markups)

incurred by Hyundai’s U.S. affiliates

from export price under section

772(c)(2)(A)of the Act. According to the

petitioners, these costs are incident to

bringing the subject merchandise from

Korea to delivery in the United States,

and thus should be deducted from U.S.

price. Because Hyundai has not reported

all of these expenses in its response,

petitioners advocate that we should

apply, as facts available, a factor based

on the affiliates’ SG&A rates.

Hyundai argues that because its sales

to the United States are export price

sales, the specific expenses discussed by

petitioner cannot be deducted.

Department’s Position

Pursuant to section 772(c)(2)(A) of the

statute, the export price is to be reduced

by any additional costs, charges, or

expenses which are incident to bringing

the subject merchandise from the

exporting country to the United States.

In this case, the Department has made

the appropriate movement-related

reductions to export price by deducting

the costs incurred for moving the

subject merchandise from Korea to the

customer in the United States. In

accordance with our normal practice,

these costs included brokerage and

handling, marine insurance,

international freight, U.S. brokerage and

wharfage, and inland freight charges

incurred in both countries. The

Department does not consider the type

of expenses that the petitioners ask us

to deduct from export price as costs that

are incident to bringing the subject

merchandise from Korea to the place of

delivery in the United States.

Comment 12: Overstatement of

Inventory Carrying Cost

The petitioners state that rather than

using the cost reported in the inventory

records, Hyundai incorrectly used sales

value when computing the inventory

carrying cost adjustment. They assert

that the reported adjustment should be

recalculated downward to compensate

for this difference.

Hyundai argues that it calculated the

adjustment correctly, basing inventory

carrying cost on production cost, not

sales value.

Department’s Position

We agree with the petitioners that

Hyundai’s reported inventory carrying

cost adjustment is overstated. Upon

examination of the record, we are

unable to substantiate the inventory

carrying cost adjustment as reported by

Hyundai. It is not clear on what basis,

value or cost, the adjustment was

calculated. In fact, Hyundai states in its

original response that it calculated the

adjustment by using the ‘‘value’’ of the

inventoried merchandise. The

Department requested that the

respondents calculate inventory

carrying cost adjustment based on the

opportunity cost to maintain inventory,

noting that the cost is normally

calculated by using the merchandise’s

cost or acquisition price. Because

Hyundai’s inventory carrying cost

adjustment is overstated, we have

recalculated this adjustment based on

Hyundai’s reported COM.

Comment 13: Erroneous Coding

The petitioners note that Hyundai

reported inland freight charges on some

home market FOB sales. They state that

the Department should deny any freight

adjustment for these sales, but still

reduce COP by the amount of the

claimed adjustment.

The respondent notes that these sales

were incorrectly coded and should have

been reported delivered, not FOB.
32840 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

Department’s Position

We agree with Hyundai and have

corrected the database for more minor

errors in reporting. Further, we find no

reason to apply an adverse inference to

these transactions, as petitioners

request.

KISCO/Union

Comment 14: Collapsing of Kisco and

Union

KISCO/Union argues that the

Department should reverse its decision

to ‘‘collapse’’ Union and KISCO and

should instead calculate individual

dumping margins for each company

based on the respective sales and cost

data, for the reasons set forth in

previously submitted comments by

Union and KISCO on September 5, 1997

and September 11, 1997.

The petitioners first note that KISCO/

Union’s comment, other than a

reference to their previous submissions,

presents no new arguments on this

issue. As such, the petitioners contend

that KISCO/Union’s comment may not

be considered, in accordance with

section 353.38(c)(2) of the Department’s

regulations which require that the case

brief shall separately present in full all

arguments believed to be relevant to the

final results, ‘‘including any arguments

presented before the date of publication

of the preliminary determination or

preliminary results.’’ In case the

Department chooses to reconsider

Union and KISCO’s previous

submissions on this issue, the

petitioners argue that there is

overwhelming evidence that supports

the Department’s collapsing decision,

discussed in the petitioners’ previously

submitted comments on October 16,

1997 and October 20, 1997.

Department’s Position

For reasons discussed in our

Preliminary Results, we continue to find

that it is appropriate to collapse Union

and KISCO.

Comment 15: Kisco and Union’s

Collapsed Data

On October 22, 1997, the Department

instructed KISCO/Union to resubmit its

cost and sales data on a consolidated

basis. The petitioners argue that KISCO/

Union failed to do this properly. First,

the petitioners state that KISCO/Union’s

methodology of weighing each field in

the COP and CV databases by the

production quantity in each company’s

response creates varying G&A factors

depending on each company’s

production quantity of each product.

The petitioners argue that the

Department should recalculate G&A

expenses such that a single entity-wide

factor is applied to the weighted average

cost of manufacture or base KISCO/

Union’s G&A ratio on facts available.

According to the petitioners, a similar

distortion is created for all adjustments

to NV or export price, such as indirect

selling expenses and all imputed

expenses, that were based on individual

company data instead of aggregated

data.

KISCO/Union first notes that the

manner in which it reported its data is

materially identical to the methodology

used by the Department in the First

Review Final Results, which was not

challenged by the petitioners. KISCO/

Union disagrees with the petitioners’

argument relating to price adjustments,

movement charges, and selling

expenses, arguing the Department’s

longstanding practice is to calculate

such adjustments as specifically as

possible, which it claims was already

done in the individual companies’

responses. Given such policy, KISCO/

Union further argues that use of a single

indirect selling expense ratio is

inappropriate because KISCO and

Union’s sales are handled by completely

separate sales departments within their

respective companies, each with their

own expenses. With respect to the

petitioners’ arguments relating to the

calculation of G&A and interest

expense, KISCO/Union contends

recalculation is unnecessary because the

petitioners have failed to demonstrate

that any material distortion arose from

the methodology used by it.

Alternatively, KISCO/Union states that

the recalculation of G&A and interest

expense on an entity-wide basis can be

performed using data already on the

record and do not require use of facts

available.

Department’s Position

We agree with the petitioners in part.

Because the Department has decided to

collapse Union and KISCO and thus

treat the two companies as a single

entity for purposes of calculating the

dumping margin, we find that G&A,

interest expense, indirect selling

expense ratio and interest rate should be

calculated on an entity-wide basis. We

note that the methodology employed by

the Department in the First Review Final

Results was limited by the information

that was available on the record in that

proceeding.

For these final results, we have

recalculated G&A by adding the G&A

expenses from Union and KISCO and

dividing this sum by the total sum of

cost of goods sold for the two

companies. With respect to interest

expenses for companies that are part of

a consolidated group, the Department’s

policy is to base the interest expense

calculation on the consolidated

financial statements of the group.

Because Union and KISCO are part of

the Dongkuk Steel Mill Group (DSM

group), the interest expense for the

collapsed entity of KISCO/Union should

also be based on the consolidated

financial statement of that group. As

pointed out by KISCO/Union, however,

Union is not included in the

consolidated DSM statements.

Accordingly, we have re-calculated the

interest expense on an entity-wide basis

by adding the net interest expense of the

DSM group with that of Union and

dividing by the total cost of goods sold

for the combined DSM group and

Union. To calculate a collapsed home

market indirect selling expense ratio, we

divided the combined indirect selling

expenses of Union and KISCO by the

combined total domestic sales value of

both companies. We also have recalculated all imputed expenses,

including credit expenses and inventory

carrying costs, using the weightedaverage interest rate for the collapsed

entity.

With respect to other adjustments to

price and NV or movement charges, we

used the information provided because

such items were reported properly by

KISCO/Union.

Comment 16: Consistency of COP and

CV Data

The petitioners argue that KISCO/

Union has reported inconsistent COP

and CV data in their collapsed data. In

one instance, the petitioners state that

the underlying components of total

COM differ between the COP and CV

databases but the total is the same. The

petitioners also note that the production

quantities for many products differ

between the two databases. The

petitioners assert that KISCO/Union has

not provided sufficient explanation of

its methodology to account for such

variations and as such, the Department

must base its final results on facts

available.

KISCO/Union acknowledges that the

databases do contain differences but

contend that they can be corrected

easily. This error occurred when

products were sold only in one market.

With respect to the one instance where

the cost fields varied while the total

COM remained the same, KISCO/Union

explains that the discrepancy resulted

when the conversion factor for

converting from an actual weight basis

to a theoretical weight basis was

inadvertently applied twice to the costs

but not to the total COM itself. KISCO/

Union argues that because only total
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32841

COM is used in the Department’s

dumping margin calculation, the error

has no effect on the margin calculation.

Department’s Position

We have examined KISCO/Union’s

collapsed data and are satisfied that the

discrepancies resulted from simple

ministerial errors. We also find that

KISCO/Union’s error in applying the

conversion factor does not affect the

Department’s calculations. For these

final results, we corrected the databases

and calculated weight-averaged total

COMs using the combined cost

components and production quantities.

Comment 17: Interest Expenses

The petitioners contend that KISCO

failed to demonstrate that the ‘‘interest

from short-term securities,’’ reported in

DSM financial statement, was a proper

offset to interest expenses. The

petitioners further argue that KISCO/

Union failed to show why it did not

account for the foreign exchange and

translation gains and losses as reported

in DSM’s financial statements. Because

KISCO/Union did not provide an

explanation that such gains and losses

are unrelated to DSM’s purchase

transactions or borrowing cost,

petitioners urge that the Department

should include those items in the

calculation of interest expenses.

KISCO/Union counters that the

petitioners’ argument does not apply

because the calculation of its combined

interest expense was not based on the

DSM consolidated financial statements.

Instead, KISCO/Union explains that the

collapsed data reported a weightedaverage interest expense by product,

based on the company-specific interest

expense. KISCO/Union states that the

use of interest rates based on the DSM

statements would be inappropriate

because Union is not included within

the consolidated DSM statements.

With respect to foreign currency

translation gains and losses, KISCO/

Union argues that the Department has

previously held that such items are

properly included in G&A expenses,

which are calculated at the level of the

operating companies, rather than

interest expense, which may be

calculated at the level of the

consolidated group of companies.

Accordingly, KISCO/Union contends

that because DSM is itself an operating

company, its G&A expenses should be

assigned to its own production alone

unless they are shown to be attributable

to subject merchandise or foreign like

product.

Department’s Position

As discussed in Comment 15, we

calculated an entity-wide net interest

expense factor for KISCO/Union by

combining Union’s net interest expense

with the net interest expense from

DSM’s consolidated income statement.

Contrary to petitioners’ argument, we

find no basis on which to exclude

DSM’s interest income as a reduction in

the company’s interest expense. In fact,

DSM’s consolidated financial statements

identify the income amounts as having

been earned by the company from its

investments in short-term securities.

See, Final Results of Administrative

Review of Porcelain-on-Steel Cooking

Ware from Mexico, 61 FR 54,616, 54,621

(October 21, 1996) (describing the

Department’s practice, in calculating

COP and CV, of reducing respondent’s

interest expense by interest income

earned from short-term investments).

With respect to the net foreign

currency exchange loss reported in

DSM’s consolidated financial

statements, we have included this

amount in our calculation of KISCO/

Union’s combined net interest expense.

As noted by petitioners, KISCO/Union

did not explain why it did not account

for any of DSM’s foreign exchange gains

or losses in calculating COP and CV.

Rather, KISCO/Union stated that it

excluded these amounts from costs

because they were properly categorized

as G&A expenses. In past antidumping

cases, however, the Department has

treated the gains and losses arising from

the restatement of foreign currency debt

as part of the respondent’s net financing

costs. See, Notice of Final

Determination of Sales at Less Than

Fair Value: Static Random Access

Memory Semiconductors from Korea, 63

FR 8934, 8940 (February 23, 1998)

(where the Department treated foreign

exchange losses on long-term debt as

part of interest expense). Here, DSM’s

consolidated financial statements report

that the group holds loans denominated

in foreign currencies. DSM, however,

did not attribute to its net financing

costs any of the foreign exchange gain

or loss resulting from restatement of

these loan balances. Therefore, for the

final results, we have recalculated

KISCO/Union’s financial expense to

include the net foreign exchange loss

reported in DSM’s consolidated income

statement as non-adverse facts available.

Comment 18: Indirect Selling Expenses

The petitioners argue that Union’s

indirect selling expense ratio must be

recalculated before being collapsed with

KISCO’s data. Specifically, they claim

Union has misallocated its home market

indirect selling expenses on the basis of

percentage of employees involved in

domestic sales compared to export sales

or sales administration. Instead, the

petitioners claim that the Department,

in accordance with its normal practice,

should allocate such expenses based on

costs of sales in each market.

KISCO/Union contends that the

Department has accepted Union’s

allocation methodology in every

previous review involving Union and

has no reason to depart from the past

practice in the present proceeding.

Department’s Position

Where transaction-specific reporting

is not feasible, the Department’s general

practice is to allow companies to

allocate expenses, provided that the

allocation method used does not cause

inaccuracies or distortions. See

Statement of Administrative Action,

(SAA), H.R. Doc. No. 103–316, vol. 1

(1994) at 153–154. Whether a particular

allocation methodology used is

reasonable is determined on a case-bycase basis. In this instance, we find

Union’s methodology of allocating its

indirect selling expenses based on the

number of employees may cause

inaccurate results because a large

portion of the indirect selling expenses

were not incurred based on the number

of employees. Therefore, we have

recalculated Union’s indirect selling

expense by allocating the total expense

on the basis of percentage of domestic

sales to total sales.

Comment 19: Union’s Freight Forwarder

The petitioners argue that Union

failed to demonstrate that its

transactions with Kukje Transportation,

Union’s affiliated freight forwarder,

were at arm’s length prices. The

petitioners state that the sample

trucking lists provided by Union do not

show that the prices charged by Kukje

were comparable with those charged by

an unaffiliated freight forwarder.

Specifically, the petitioners claim that

the freight fee schedule does not show

that the prices were based on the same

destination and that schedule does not

identify the trucking firm to which it

applies. Accordingly, the petitioners

urge the Department to calculate

Union’s freight forwarding expenses

based on facts available.

KISCO/Union contends that the

destination codes in the freight fee

schedule that Union provided show

clearly that the rates were based on the

same destination, and demonstrate that

identical rates were charged to affiliated

and unaffiliated parties. KISCO/Union

also points out that the name of the
32842 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

trucking firm was clearly identified and

the higher rate applies to a later time.

Department’s Position

We disagree with the petitioners.

Upon a careful examination of the

information submitted by Union

regarding its transactions with Kukje,

we find there is sufficient evidence to

demonstrate that the transactions were

at arm’s length. The sample trucking

lists and fee schedules, which clearly

identify the destination codes and the

name of the unaffiliated trucking firm,

demonstrate that the prices charged by

Kukje were comparable to that charged

by unaffiliated firms.

Comment 20: Home Market Credit

Period For Letter-of-Credit Sales

The petitioners argue that the

Department should deny KISCO/

Union’s claim for credit expenses for

‘‘cash’’ sales in the home market for the

time period when Union must submit

appropriate shipment documents for

review by the bank before payments can

be credited to Union’s account. The

petitioners state that the adjustment

must be denied because there is no

evidence that the check or local letter of

credit is not negotiable by Union upon

receipt. According to the petitioners,

Union’s claimed adjustment actually

constitutes an imputed credit expense

for that waiting period involved in

clearing check or local letter of credit

deposits. The petitioners argue that

because there is no indication that a

similar waiting period is included in

calculating Union’s credit expenses on

US sales, the claim must be rejected.

KISCO/Union asserts that there is no

support for the petitioners’ claim that

the adjustment represents an imputed

credit expense for the waiting period for

clearing check deposits. KISCO/Union

clarifies that ‘‘cash’’ sales simply refer to

local letter of credit sales. KISCO/Union

states that Union has merely calculated

the credit expenses associated with the

period from the date merchandise is

shipped to the date that Union actually

receives payment by negotiating the

shipping documents. KISCO/Union

points out that the Department has

previously adjusted for the credit

expense incurred in such sales in the

First Review Final Results and in other

cases in which Union was a respondent.

Department’s Position

We agree with KISCO/Union. We

normally adjust for imputed credit

expense to account for the opportunity

cost associated with the period of time

between shipment and payment.

Because payment by the bank is not

made until the required documents are

presented by Union, an adjustment for

imputed credit expense for the waiting

period is proper. We have no reason to

believe that the letter of credit is

actually negotiable upon receipt.

Comment 21: Union’s Warehousing

Expenses

The petitioners contend that Union’s

reported pre- and post-sale warehousing

costs are overstated. They argue that

these costs should be calculated by

applying the ratio between the volume

of pipe warehoused for a specific sale

and the total volume of all other

products warehoused, whether as

inventory or in connection with specific

sales. The petitioners argue that the

adjustment must be denied because

there is no information on the record to

determine what share of total

warehousing labor and identifiable costs

were incurred as direct warehousing

costs.

KISCO/Union counters that pursuant

to the URAA, warehousing is treated as

a movement expense without drawing a

distinction between direct and indirect

expenses. Further, KISCO/Union

contends that the Department has

repeatedly accepted Union’s allocation

methodology in the past reviews and

there is no evidence that a volumebased allocation methodology should be

used instead.

Department’s Position

We agree with KISCO/Union. KISCO/

Union is correct in stating under the

URAA, home market movement charges,

which include warehousing expenses,

are to be deducted from NV regardless

of the direct or indirect nature of the

expenses. See section 773(a)(6)(B)(ii) of

the Act. In general, all warehousing

expenses that are incurred after the

merchandise leaves the original place of

shipment are considered as movement

expenses. See, e.g., Certain Cold-Rolled

and Corrosion Resistant Carbon Steel

Flat Products From Korea: Final Results

of Antidumping Duty Administrative

Reviews, 63 FR 13170, 13179 (March 18,

1998). Here, the original place of

shipment is Union’s Pusan plant and

the warehouse is located in Seoul.

Because these warehousing expenses are

incurred after leaving the original place

of shipment, we consider the expenses

proper movement charges.

Where transaction-specific reporting

is not feasible, the Department’s general

practice is to allow companies to

allocate expenses, provided that the

allocation method used does not cause

inaccuracies or distortions. See SAA at

153–154. Whether a particular

allocation methodology used is

reasonable is determined on a case-bycase basis. In this instance, we find that

there is no evidence to indicate that the

allocation methodology used by KISCO/

Union causes inaccuracies or

distortions.

Comment 22: Duty Drawback

The petitioners claim that based on

the reported total weight of hot-rolled

coil imported during the POR the

amount of duty drawback reported by

KISCO on US sales appears to be

excessive when compared to import

duties included in CV. The petitioners

argue that in the First Review Final

Results the Department adjusted the US

price only by the amount of duties

actually included in the product. Using

the same argument, the petitioners

contend that because the CV is intended

to value merchandise exported to the

United States, the actual amount of

duties included in the exported product

for CV purposes should be equal to the

amount of duties paid on the imported

inputs as reported in CV. Accordingly,

the petitioners state that where NV is

based on CV, the Department must

reduce the amount of duty drawback to

that reported in CV, or in the

alternative, lower CV by the amount of

duties and make no adjustment for duty

drawback.

KISCO/Union first points out that

duty drawback is received on the

amount of imported coil incorporated

into merchandise exported by KISCO

during the POR, rather than the amount

of coil imported during the POR.

KISCO/Union explains that because the

duty drawback system in Korea permits

refunds of duties for merchandise

exported up to two years after

importation, KISCO was entitled to

receive duty drawback during the POR

on coil imported before the POR.

KISCO/Union argues that the amount of

duties included in the exported product

is the actual amount and cannot be

made to vary depending on the

comparison NV. Citing Avesta Sheffield,

Inc. v. United States, 838 F. Supp. 608

(CIT 1993), KISCO/Union states that it

is well-established that the duty

drawback adjustment is not limited by

the amount of duties included in NV.

Department’s Position

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

Act, the Department is required to

adjust the EP and CEP by the amount of

duty drawback received on the imported

inputs. As we stated in the First Review

Final Results, the amount of the

adjustment is limited to the amount of

duties actually paid on the input of the

exported product. Because both Union

and KISCO have received duty

drawback under the individual-
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32843

transaction provision of the Korean duty

drawback law, there is no reason to

believe that the duty drawback reported

reflects an amount other than the actual

duties paid (see comment 5 above).

We disagree with the petitioners’

contention that the amount of duties

included in CV should be equal to the

amount of actual duties paid on the

imported inputs. As held by the CIT, the

Department is not required to limit the

drawback adjustment by an average rate

of duty for all raw materials utilized.

See Avesta, 838 F. Supp. at 612 (‘‘As

concerns either raw materials or sales,

there is no requirement that ITA match

overall rebates to overall duties to

achieve balanced numbers on both sides

of the comparison.’’). No changes to the

duty drawback adjustment are therefore

necessary for KISCO/Union.

Comment 23: Packing Costs

The petitioners argue that the

Department should reject KISCO’s

packing costs because they are

unexplained and distortive. The

petitioners contend that KISCO did not

submit any supporting documentation

for packing costs charged by

subcontractors that would explain how

costs were derived. In particular, the

petitioners object to KISCO’s calculation

of thinner and lacquer costs and suggest

that KISCO has ‘‘simply posit(ed)’’ a

per-unit cost of thinner and lacquer.

Furthermore, the petitioners assert that

KISCO’s methodology of allocating

packing costs, including costs for

thinner and lacquer, tags or bands, on

the basis of the number of bundles or

tonnage packed is unreasonable because

such costs vary depending on pipe

thickness or the surface area of the

particular product. The petitioners

argue that these alleged problems

provide more reasons to base the final

results on facts available.

With respect to KISCO’s allocation

methodology, KISCO/Union states that

the petitioners’ argument is ‘‘speculative

and trivial’’ in terms of costs involved,

and also asserts that the same packing

cost methodology was verified and

accepted by the Department in the First

Review Final Results. KISCO/Union

points out that KISCO was never

requested to provide copies of

subcontractor fees schedules or related

documents. KISCO/Union also argues

that KISCO’s original questionnaire

response clearly shows that the per-unit

cost of lacquer and thinner was

calculated by dividing the total cost of

materials by the total quantity packed

during the period.

Department’s Position

Although KISCO did not submit any

supporting documentation for its

packing costs charged by

subcontractors, use of facts available

would be clearly inappropriate in this

case where the information was never

requested specifically by the

Department. Moreover, there is no

evidence on the record that would

indicate that the packing costs provided

by KISCO and the allocation

methodology used by it are inaccurate

or distortive. With respect to the

allocation of lacquer and thinner costs,

KISCO’s response clearly shows that the

per-unit cost was properly calculated by

dividing the total cost of materials by

the total quantity packed during the

period. Moreover, the petitioners have

provided no evidence that variations in

the pipe thickness or surface area of the

particular product, if any, would have

more than an insignificant effect on the

per-unit cost.

Comment 24: Loading Charges

The petitioners contend that KISCO

failed to respond adequately to the

Department’s inquiry regarding KISCO’s

affiliated company, Chunyang

Transportation Company (‘‘Chunyang’’).

The petitioners assert that despite the

Department’s request to provide

evidence demonstrating the arm’s length

nature of the transactions between

KISCO and Chunyang, KISCO failed to

do so by merely submitting Chunyang’s

fee schedule for KISCO without any

other evidence of comparable fees

charged by unaffiliated parties.

Consequently, the petitioners argue that

KISCO’s loading charges must be based

on facts available.

KISCO/Union counters that KISCO

could not provide other evidence of

comparable fees because KISCO and

Chunyang dealt exclusively with each

other during the POR. Therefore,

KISCO/Union asserts that by providing

Chunyang’s fee schedule, KISCO

provided all of the information available

to it. Further, KISCO/Union claims that

in the First Review Final Results, the

same documentation was accepted by

the Department as evidence of arm’s

length nature of transactions, without

protest by the petitioners. KISCO/Union

also notes that the Department did not

find any indications of less than arm’s

length dealings in the verification of the

First Review Final Results. As such,

KISCO/Union argues that the use of

facts available is unwarranted.

Department’s Position

We agree with the petitioners. There

is no evidence supporting KISCO’s

claim that its transactions with

Chunyang for this period of review were

at arm’s-length. As such, the

Department has no way of establishing

that the prices charged to KISCO are at

arm’s-length. In the absence of price

information, KISCO should have

provided information relating to the

costs of Chunyang. Since KISCO did not

provide this information, we find that

the use of facts otherwise available is

appropriate pursuant section 776(a)(1)

of the Act. As facts available, we have

used the highest reported rate of loading

charges of all the respondents in the

present review, which has resulted in

the use of KISCO’s own charges.

Comment 25: Double-Counting of

Inventory Carrying Costs

KISCO/Union claims that the

Department erroneously double-counted

inventory carrying cost for purposes of

the cost test and in the calculation of

CV. According to KISCO/Union,

inventory carrying cost is deducted in

the calculation of net price in the cost

test of the margin program but the COP

to which the net price is compared

includes total actual interest expense

and therefore includes imputed

inventory carrying cost. Consequently,

KISCO/Union argues that the

Department’s calculations unfairly

compares a net price for home market

sales that does not include imputed

inventory carrying cost to a COP that

does. KISCO/Union asserts that because

the Department’s current policy is to

make no deductions for imputed

expenses (i.e., imputed credit and

inventory carrying costs) in calculating

the net home market price for the cost

test, the program must be corrected so

that inventory carrying cost is not

deducted in the calculation of net price

to be compared to COP. Similarly,

KISCO/Union argues that the

Department double-counted inventory

carrying cost in the calculation of CV by

including both total actual interest with

no offset for imputed expenses, and

indirect selling expenses inclusive of

inventory carrying cost.

The petitioners counter that the

Department was correct to add imputed

inventory carrying costs in COP and CV.

The petitioners contend that the actual

net interest expense included in COP

and CV does not include imputed

interest expenses for inventory carrying

costs, which represents an opportunity

cost that is not reflected in the actual

interest expenses of the company.

Therefore, the petitioners state that the

Department correctly deducted

inventory carrying costs from net price

before comparison to COP and correctly

included inventory carrying costs in CV.
32844 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

Department’s Position

We agree with KISCO/Union and have

corrected our program to remove the

deduction of inventory carrying cost

from the net price to be compared with

COP and in from the build up of CV. As

for the petitioners argument that

inventory carrying costs are not

included in a company’s interest

expense, we note that a company’s

‘‘interest’’ expenses will include, among

other items, cost that it incurs in

financing its inventory. While such

costs are not directly calculated as

imputed expenses and directly entered

into the company’s books, they are,

nonetheless, costs that are covered by its

financing expenses.

SeAH

Comment 26: Duty Drawback

Adjustment

The petitioners contend that SeAH

can report duty drawback on a salesspecific basis, but point out that SeAH

has asked for the duty drawback

adjustment to be made on the basis of

an average amount allocated across all

US sales. The petitioners request that

this duty drawback adjustment be

denied.

SeAH states that it provided

transaction-specific data in general, but

could only provide an average for CEP

sales because these sales could not be

linked to individual shipments. SeAH

notes that in the LTFV investigation and

in the Preliminary Results, the

Department accepted the average as a

reasonable methodology for calculating

duty drawback.

Department’s Position

We find that where a respondent

cannot report transactions-specific

adjustments, reasonable allocations are

acceptable. Here, SeAH has calculated

average POR amounts for duty drawback

on its CEP sales since it is unable to link

shipments to subsequent sales. For CEP

sales, we find SeAH’s methodology to

be reasonable.

Comment 27: US Duty, Brokerage, and

Handling on CEP Sales

The petitioners argue that SeAH

should not be allowed to allocate US

Duty, Brokerage, and Handling on CEP

sales. Because SeAH has reported these

foreign charges on an average weight

basis, rather than the value basis in

which they were incurred, and because

the statute requires that margins be

calculated on a sale-specific basis (see

19 U.S.C. § 1675(a)(2)(A)), the petitioner

contends that we should not accept the

allocations. The petitioners suggest a

facts available rate of the highest rate for

any EP sale of that product or the

highest rate reported for any sale for

each expense where EP sales data is not

available.

SeAH states that it is not able to link

inventory sales to original shipments

and therefore must report the charges in

question on an average basis. SeAH

emphasizes that while it may be

theoretically possible to link imports of

subject merchandise with the reported

sale, neither SeAH nor its affiliates

maintain their sales data in this way. A

link could only be found if done

manually. SeAH insists that this

methodology was used in the LTFV

investigation and has not been further

questioned by the Department.

Department’s Position

We find that SeAH’s reporting of US

Duty, Brokerage, and Handling as

allocations on CEP sales is reasonable,

in that CEP sales can not be linked to

shipment-specific information for these

expenses. We agree with the petitioner,

however, in that the allocation for US

Duty and Brokerage on volume is

distortive because it is not on the same

basis in which it is incurred. For these

final results, we have reallocated US

Duty and Brokerage based on value for

CEP sales because these expenses are

incurred on a value basis. We will

continue to accept the allocation of

Handling because it is incurred on a

weight basis.

Comment 28: International Freight

The petitioners suggest that SeAH’s

international freight expenses should be

based on facts available because SeAH

has failed to support its ocean freight

expenses and the information in the

responses is inconsistent. The

petitioners suggest that the Department

use an adverse facts available rate based

on the highest rate charged for any

single shipment.

SeAH reexamined its response and

found that though their source

documents and data presented are

correct, several of their sample

calculations were incorrectly presented.

SeAH insists that this was an error only

in the sample calculation attachments

and not in the sales databases. In

addition, SeAH has provided in an

attachment to the rebuttal brief a sales

trace showing the correct amounts.

Department’s Position

While there were several clerical

errors in the sample calculations, the

source documents and data support the

amounts reported by SeAH for

international freight expenses.

Accordingly, we have not made any

changes to SeAH’s reported

international freight expenses.

Comment 29: US Packing Costs

The petitioners suggest that SeAH’s

US packing costs should be based on

facts available because SeAH has

ignored the Department’s requests to

provide information on the type of

packing materials used, as well as the

average labor hours by packing type and

the average labor cost per hour. The

petitioners also point out that SeAH has

failed to provide a list of overhead

expenses incurred in packing or to

demonstrate how these expenses were

allocated in each packing type. The

petitioners insist that SeAH should have

provided a better explanation of why it

cannot calculate the amount of packing

material used for each product as well

as the methods used to derive the

packing labor costs. The petitioners

suggest a facts available rate of the

highest packing cost for any product

reported by SeAH for US sales and the

lowest reported for home market sales.

SeAH contends that it has provided in

its responses the basis for each packing

calculation by calculating the packing

costs on a metric ton basis,

distinguishing between domestic and

export markets, black and galvanized

pipe, outside diameter dimension

categories, and standard and conduit

pipe. SeAH argues that because packing

labor costs were consistent with the fee

schedule of its subcontractors, they

should be acceptable. SeAH insists that

the allocation of material costs on a

metric-ton basis is appropriate because

these costs were based on the actual

average per metric ton of materials used

during the POR, depending on the type

of pipe and its destination.

Department’s Position

We agree with SeAH that its

methodology for reporting packing costs

is reasonable because it has allocated

the costs on the basis on which they are

incurred. This methodology has been

accepted in prior segments of this

review. We have no reason to believe,

based on the information on the record,

that the reported costs are unreliable.

Comment 30: Affiliated Producers’ Costs

The petitioners find that SeAH’s

reported costs should be rejected

because it has failed to report the costs

of certain affiliated producers. The

petitioners describe the decision by

SeAH not to report these costs as

‘‘unilateral’’, and suggest that SeAH has

not reported direct materials, labor, and

other costs incurred to produce the

merchandise under review. The

petitioners find that products
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32845

manufactured by affiliated producers

are a significant portion of the total

merchandise produced and sold in the

home market, and would have been a

more significant portion if home market

sales reporting had not be limited to

merchandise comparable to that sold in

the United States. The petitioners point

out that excluding some costs from

reporting can cause a large number of

additional sales to fall below cost and

result in a substantial increase in the

use of CV, which can have a significant

effect on the margin calculated. The

petitioners suggest that the Department

reject SeAH’s CV and COP information.

SeAH responds by claiming that the

decision not to report the costs in

question was not ‘‘unilateral’’ because

the Department agreed that SeAH did

not have to report these costs. SeAH

reiterates that the costs of the affiliated

producers are minimal compared to

SeAH’s total costs and would have no

impact on the reported COM. SeAH also

notes that the petitioners’ suggestion

that not all of the merchandise

produced by affiliated producers has

been reported is unsubstantiated.

According to SeAH, comparison

merchandise has been distinguished

from non-comparison merchandise in it

responses. As for the inclusion of the

affiliated producers’ general expenses in

calculating general expenses for SeAH,

SeAH argues that these expenses apply

to very few models and would have no

impact on the CV.

Department’s Position

In the course of this proceeding, we

informed SeAH that it need not report

costs for its affiliated producers pending

the examination of information on their

percentage of SeAH’s production by

model type (see Memorandum to the

File, from IA analyst/Marian Wells,

November 18, 1997). Upon examining

information submitted by SeAH on the

percentage of production by the

affiliated producer, we decided not to

request these costs for purposes of this

review. For any given model, the

affiliated producer’s percentage of

production was small compared to

SeAH’s production; as a result;

including the costs of this affiliated

producer would have had almost no

effect on our calculations.

Comment 31: Indirect Selling Expenses

and ISE Ratio

The petitioners claim that SeAH did

not include several expenses in its

reporting of indirect selling expenses.

The petitioners provide specific

examples of indirect selling expenses

for SeAH’s affiliated resellers that were

not fully explained or appear to be

inconsistent with SeAH’s financial

statements.

SeAH responds to the petitioners’

allegations by stating that it has reported

all incurred expenses either as SG&A or,

if they fit the criteria, as movement

expenses reported as outbound freight

or direct selling expenses. SeAH notes

that the Department has accepted its

reporting methodology since the

beginning of the case.

Department’s Position

All of SeAH’s expenses are identified

and there is nothing on the record to

indicate that these expenses have been

mischaracterized.

Comment 32: Inland Freight Costs and

Plant-To-Warehouse Freight Costs in

G&A

The petitioners argue that SeAH did

not adequately report its inland freight

costs concerning freight from the plant

to the warehouse and from the plant to

the distribution point in its initial

submission. When SeAH responded to

supplemental questionnaires, the

petitioners point out, freight costs and

warehousing costs were inconsistent

with estimates described in SeAH’s

initial response. For example, SeAH

initially stated that it shipped pipe from

the factory to the Pohang warehouse

only occasionally. Later, SeAH found

that it actually shipped much more

frequently than previously reported.

Because of inconsistencies like this one,

the petitioners suggest that SeAH’s

freight and warehousing costs are

incomplete and unreliable. According to

the petitioners, SeAH has also failed to

report inland freight costs on a

shipment-by-shipment basis and should

therefore be considered non-responsive.

The petitioners maintain that because

certain delivery charges have been taken

out of SeAH’s G&A accounts and there

is no indication that they have been

accounted for elsewhere, the use of facts

available is required. As facts available,

the petitioners state that these expenses

should be returned to the calculation of

G&A, and inland freight costs should be

based on facts available and SeAH’s

plant-to-warehouse freight costs should

be added to SeAH’s reported G&A

expense.

SeAH states that the petitioners used

the last reported home market sales

database based on the revised date of

sale methodology to calculate the total

number and volume of warehoused

sales and then compared these figures to

the total sales volume in the earlier

response with a smaller home market

database. This overstated the proportion

of domestic sales that were warehoused.

This same error by the petitioners led

them to overestimate the number of

warehoused sales of comparison

merchandise. Also, SeAH argues that

the calculation of average per metric ton

cost was necessary because there is no

link between shipments to the

warehouse and the sales from the

warehouse inventory. Regarding the

calculation of the average factory-towarehouse freight charges, SeAH states

that the petitioners were in error when

they divided (for the sample months)

sales shipped by truck only by the total

quantity shipped by truck and rail, thus

understating the per-ton freight charge.

SeAH did this calculation correctly and

found that the variance between the

annual average and the monthly average

was relatively small. Monthly freight

charges may contain some variance

because freight charges per ton vary by

the size/type of truck used. Regarding

SG&A charges, SeAH clarifies that the

inland freight charge is recorded in its

books as an indirect selling expense but

was not ‘‘included’’ as an indirect

selling expense for purposes of

responding to the antidumping

questionnaire. SeAH maintains that it

has excluded all freight from its

calculation of indirect selling expenses.

Department’s Position

We agree with SeAH that the

petitioners made errors in their

calculations by mixing together

information from earlier HM datasets

not used for these final results with

newer information that was used. We

find that SeAH has explained

sufficiently how their calculation was

performed in regards to each of the

petitioner’s claims, and its reporting

was reasonable. Where possible, i.e., for

EP sales, SeAH has reported shipmentby-shipment freight costs. Because

SeAH is unable to link shipments to the

warehouse and sales from the

warehouse for CEP sales, we consider

the average per-metric ton costs to be

the most reasonable methodology

available for reporting CEP sales.

We have also found that while SeAH

recorded these plant-to-warehouse

expenses as selling expenses in its

books, this does not mean that they

must be reported for the Department’s

purposes as selling expenses. SeAH’s

plant-to-warehouse freight costs should

not be added to SeAH’s reported G&A

expense because plant-to-warehouse

freight costs are considered movement

expense for antidumping calculation

purposes.

Comment 33: Foreign Brokerage Charges

The petitioners find that SeAH’s

foreign brokerage charges have been

calculated incorrectly because they are
32846 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

based on the FOB value of each

shipment divided by the number of tons

in each shipment. The petitioners find

that this calculation results in

distortions because it does not account

for variance in value. The petitioners

suggest that the Department recalculate

foreign brokerage charges by

multiplying, for each observation, the

per-unit value by the ad valorem

charges for foreign brokerage. For

brokerage on CEP sales, the petitioners

suggest the use of on facts available

because SeAH has not acted to the best

of its ability in reporting expenses on a

transaction-specific basis.

SeAH states that its foreign brokerage

methodology based on volume has not

been questioned by the Department.

SeAH conducted a sample value

allocation of 50 observations (27 sales)

and found it made little difference to the

calculation. SeAH argues that its

methodology is sound and that there is

no reason for a change in methodology

for the final results. If, in fact, the

Department finds reason for a change in

methodology, SeAH provides several

suggestions for the revised calculation.

Department’s Position

We agree with the petitioners. We

have reviewed SeAH’s responses and

found that foreign brokerage should be

reallocated based on value because it is

incurred based on value. We have made

this reallocation in our final results.

Comment 34: SG&A Expenses

The petitioners state that SeAH has

erred in reducing the SG&A component

of CV by the amount of expenses in its

books for factory-to-warehouse freight.

In addition, the petitioners claim that

SeAH is not clear in explaining whether

the credit expenses, container stuffing

charges and postage expenses recorded

in its books that were not included in

SG&A have been included elsewhere.

SeAH states that credit expenses,

container stuffing charges and postage,

as documented in its response, were

incurred on exports of non-subject

merchandise. As for the factory-towarehouse freight, SeAH explained that

this was reported as a movement

expense in the response to the

questionnaire.

Department’s Position

SeAH used the accounts for SG&A

from its books and then deducted

various costs from those accounts when

appropriate (i.e., costs not associated

with subject merchandise and freight

costs which were reported separately).

Therefore, we have not changed SeAH’s

SG&A component of CV.

Comment 35: Selling Expenses of

Affiliated Importers

The petitioners point out that

regardless of how selling expenses of

SeAH’s affiliated importers are

characterized, they should be deducted

from CEP. Each of these companies

incurs SG&A expenses in performing

selling functions that have been

relocated from Korea, including

shipping arrangements, arranging for

entry of the merchandise, issuing

invoices, inventory maintenance, and

collecting payment. Whether they are

considered direct or indirect selling

expenses, the petitioners find that they

should be deducted from the price used

to establish CEP.

SeAH does not disagree that indirect

selling expenses should be deducted

from CEP sales. SeAH stated that

indirect selling expenses were deducted

from CEP sales in the Preliminary

Results margin calculation program.

SeAH believes that there is no reason to

change this portion of the programming

for the final results.

Department’s Position

We deducted indirect and direct

selling expenses from CEP sales for the

Preliminary Results of this review and

have continued to do so for these final

results.

Comment 36: Marine Insurance Costs

The petitioners suggest that based on

information provided in SeAH’s

response, SeAH is able to calculate its

marine insurance costs on a productspecific basis. The petitioners also find

that SeAH’s method of calculating

marine insurance is distortive because it

is an average over all products and not

based on a per-transaction basis.

Because SeAH is able to determine the

marine insurance premium rate

applicable to all reported shipments of

subject merchandise, and can trace the

C&F value of each product for each

shipment, the petitioners claim that it

should have calculated an average permetric ton insurance expense on a

transaction-specific basis. The

petitioners state that SeAH has further

proven itself uncooperative by not at

least reporting average marine insurance

on a product-specific basis. The

petitioners suggest that SeAH’s marine

insurance costs be based on facts

available.

SeAH argues that the Department

should reaffirm the methodology used

in the first reviews of this case. SeAH

maintains that it has explained

adequately why it cannot calculate

marine insurance on a transactionspecific basis in its response.

Department’s Position

We agree with SeAH that it has used

a reasonable and appropriate

methodology to report their marine

insurance costs. SeAH has calculated

the reported amount of marine

insurance on the same basis that it is

incurred by applying the insurance

premium rate to the C&F value of the

shipment as shown on the commercial

invoice. We are accepting SeAH’s

methodology for these final results.

Comment 37: Transaction-specific

Entered Values for CEP Sales

The petitioners suggest that SeAH is

able to calculate the average entered

value during the POR for sales on a

product-specific basis. The petitioners

maintain that SeAH’s reporting of an

average per-unit entered value by

surface finish rather than a transactionspecific entered value proves that SeAH

has not responded to the best of its

ability. The petitioners suggest entered

values for CEP based on facts available.

SeAH argues that its methodology is

consistent with that used in the First

Review, but has provided information if

the Department chooses to calculate an

approximate entered value.

Department’s Position

Since we are calculating assessment

rates on a per-volume, as opposed to

value, basis, this issue is moot.

Shinho

Comment 38: Basis of Indirect Selling

Expense Allocations

The petitioners argue that Shinho

failed to justify its allocation of indirect

selling expenses by the number of

employees in its various divisions. The

petitioners note that the Department

stated in a supplemental questionnaire

that its preferred methodology is to

allocate such expenses on the basis of

sales volume. Furthermore, the

petitioners cite the Notice of Final

Determination of Sales Less Than Fair

Value: Certain Cut-to-Length Carbon

Steel Plate From South Africa, (Carbon

Steel Plate) 62 FR 61731, 61736

(November 19, 1997), as stating that the

Department normally allocates G&A

expenses based on the cost of sales

because an allocation ‘‘based on a single

factor (e.g., head counts, fixed costs) is

purely speculative.’’ The petitioners

also point to Carbon Steel Plate which

it states that to deviate from this

methodology requires ‘‘evidence that

our normal G&A allocation methodology

unreasonably states G&A costs.’’

Therefore, the petitioners conclude that

the Department should allocate
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32847

Shinho’s indirect expenses based on the

cost of sales.

Shinho states that its accounting

records do not separately record (SG&A)

expenses. Thus, in order to assign costs

to each of these functions, Shinho

allocated those expenses not directly

assignable to each division on the basis

of a headcount. Shinho claims that its

allocation methodology for indirect

selling expenses is consistent with its

practice in the original investigation,

which was verified and accepted by the

Department. Furthermore, Shinho

asserts that while the Department

prefers to allocate such expenses based

on sales volume, it will accept

alternatives that are reasonable and fully

explained. Shinho states that it

adequately explained its methodology

and that it is reasonable because many

such expenses are related to the number

of employees in each division.

Department’s Position

Contrary to the petitioner’s assertions,

we note that Shinho did allocate some

indirect selling expense items by value.

As for the items that Shinho allocated

by number of employees, we find its

methodology to be reasonable because

these items vary according to the

number of employees. This

methodology is consistent with that

used in the original investigation (see,

LTFV at 57).

Comment 39: Allocation of Packing

Expenses

The petitioners maintain that Shinho

misallocated the cost of packing clips

and bands by allocating their cost by

metric ton rather than by bundle. The

petitioners argue that Shinho has not

shown that its per-bundle usage rate

approximates its calculated weight

basis. Additionally, the petitioners state

that Shinho has not been cooperative in

reporting its packing costs by (1) failing

to report the average cost of each

packing material as requested by the

Department, (2) not reporting a cost for

the white steel bands noted in their

response, (3) providing packing cost

worksheets that are inconsistent and

irreconcilable, (4) not identifying the

composition of ‘‘common’’ packing

material costs, (5) not fully explaining

the derivation of the allocated coating

materials costs, and (6) using an

improper methodology for calculating

packing labor costs. Thus, the

petitioners argue that the Department

should double Shinho’s reported home

market packing costs for use as facts

available for its U.S. packing costs. In

support of this recommendation, the

petitioners cite Circular Welded NonAlloy Steel Pipes and Tubes from

Mexico: Final Results of Antidumping

Duty Administrative Review, 62 FR

37014, 37020 (July 10, 1997), where the

Department followed such a

methodology when the respondent had

been uncooperative.

With regard to the manner in which

it allocated its packing bands and clips,

Shinho asserts that the distinction

drawn by the petitioners between a perbundle and a per-metric ton allocation

is a ‘‘distinction without a difference.’’

Next, Shinho states that ‘‘white’’ steel

bands do not refer to a separate packing

material but rather to the bands used to

bind galvanized pipe (internally referred

to as ‘‘white’’ pipe) and are included

already in the reported costs.

Additionally, Shinho disputes the

petitioners’ claim that the worksheets it

provided with its response are

inconsistent. According to Shinho, its

worksheets contain the information

necessary to calculate the average cost

of each packing material, including

coating materials, on a product-specific

basis and that these product-specific

costs reconcile with the total material

usage. Moreover, Shinho states that its

allocation of packing labor expenses is

consistent with its normal accounting

methodology. Shinho further asserts

that a per-metric ton allocation of

packing labor expense is appropriate

because Shinho’s operation of a crane

accounts for a substantial amount of the

packing labor expense. According to

Shinho, the capacity of the crane used

for packing is measured in tons, the

same basis used to allocate the expense.

For the aforementioned reasons, Shinho

argues that the Department should reject

the petitioners’ call for the use of

adverse facts available for Shinho’s

home market packing costs.

Department’s Position

For purposes of this review, we find

Shinho’s allocation of the cost of bands

and clips to be reasonable. With regard

to the petitioners’ other points, we find

that the information submitted by

Shinho with regard to packing costs

supports the reported amounts.

Therefore, we find no reason to apply

facts available with regard to Shinho’s

packing costs.

Comment 40: Home Market Credit

Period

The petitioners assert that it is unclear

whether Shinho calculated its customerspecific average credit period on a

monthly or annual basis because Shinho

stated that it maintains its accounts

receivables on a monthly basis and its

notes receivables on an annual basis.

Additionally, the petitioners cite the

example Shinho prepared comparing a

specific customer’s monthly average

accounts receivable period to the yearend accounts receivable for the same

customer. The petitioners state that this

example, based on a customer that

Shinho hand-picked, shows that Shinho

overstated its home market credit

period. Given these apparent

discrepancies, the petitioners request

that the Department not adjust NV for

home market credit expenses.

Shinho states that, in this review, it

reported its home market credit period

on an annual, customer-specific basis.

According to Shinho, this method most

closely approximates the invoicespecific credit period, which is the

Department’s preferred methodology.

Shinho states the Department has

accepted customer-specific reporting in

other cases. See Final Results of

Antidumping Duty Administrative

Reviews and Revocation in Part of an

Antidumping Duty Order: Antifriction

Bearings and Parts thereof from France,

Germany, Italy, Japan, Romania,

Singapore, Sweden, Thailand, and the

United Kingdom, 58 FR 39729, 39747

(July 29, 1993) and Industrial Belts and

Components and Parts Thereof,

Whether Cured or Uncured from Japan:

Final Results of Antidumping

Administrative Review, 58 FR 30018,

30023 (May 25, 1993).

Department’s Position

We find that Shinho’s use of average

annual customer-specific home market

credit periods is reasonable giving the

limitations of its accounting system.

Therefore, we are using Shinho’s

reported customer-specific home market

credit periods for these final results

with the exception of one customer. We

agree with the petitioners that the

supporting documentation Shinho

provided comparing the customerspecific monthly average to the year-end

average credit period for this one

customer showed that the reported

credit period is overstated. Therefore,

we have adjusted the home market

credit period for this customer.

Comment 41: Reliability of Home

Market Short-term Interest Rate

The petitioners argue that the

Department should not make an

adjustment for home market credit

expenses because Shinho’s reported

home market interest rate is unreliable.

The petitioners assert that Shinho’s trial

balance, used by Shinho to support its

claim for its reported US interest rate,

refutes Shinho’s home market credit

calculation. The petitioners state that if

the Department does not reject Shinho’s

home market credit expense adjustment

in its entirety, as facts available, it
32848 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

should instead calculate the expense

using the US interest rate.

Shinho states that the Department

should not reject the firm’s calculation

of its home market short-term interest

rate based on a document provided to

support its calculation of its

corresponding US interest rate. Shinho

argues that the Department did not

request that the company reconcile its

home market credit expense calculation

to supporting company accounting

records, including its trial balance.

Shinho contends, however, that had the

Department made such a request, the

company could easily have shown how

it had derived the figures used in its

home market credit calculation.

Furthermore, Shinho states that the

same methodology was accepted and

verified by the Department in the prior

review.

Department’s Position

We agree with Shinho that we should

not reject or adjust its reported home

market interest rate. We requested a

reconciliation of Shinho’s reported US

interest rate; however, we did not

request such a reconciliation for its

home market interest rate. Thus, we

have no reason to believe that the

reported home market interest rate is

inaccurate.

Comment 42: Interest Expense Factor

The petitioners state that it is the

Department’s policy to require that

interest income used to offset interest

expense for the purpose of calculating

CV be related directly to production and

short-term in nature. See, First Review

Final Results at 55583 and Flowers from

Colombia, at 42833, 42843.

According to the petitioners, Shinho

estimated its short-term interest income

by calculating its ratio of short-term to

long-term deposits. Shinho applied this

ratio to the total interest earned to

calculate the amount of short-term

interest it earned. The petitioners assert

that this ratio overstates the short-term

interest earned because short-term

deposits typically earn less interest than

similar long-term deposits. Furthermore,

the petitioners claim, Shinho did not

identify the short-term deposits that

earned interest income or show that its

accounting records do not track

separately short-term interest income.

Finally, the petitioners argue that

Shinho did not show that the interest

earned from securities was related to

production. For each of these reasons,

the petitioners state that the Department

should reject Shinho’s claimed interest

income as an offset to its interest

expense.

Shinho argues that the Department

should continue to offset the firm’s

interest expense with the short-term

interest income that it reported. Shinho

asserts that its methodology of

calculating short-term interest income is

reasonable given that short-term interest

income earned is not recorded

separately from long-term interest

income in its financial statements.

Shinho states that the Department

accepted a similar approach in the Final

Determination of Sales at Less Than

Fair Value: Certain Stainless Steel Wire

Rods from France, 58 FR 68865, 68872

(December 29, 1993). Shinho maintains

that the petitioners’ citation of the

previous review is erroneous because, in

that review, the Department rejected the

inclusion of a particular investment

because it was not short-term, rather

than rejecting the full offset because it

was calculated by applying a ratio of

short-term to total deposits. Finally,

Shinho states that the Department did

not question the company’s

methodology and that the petitioner,

prior to its briefs, did not raise the issue.

Department’s Position

We agree with the petitioners’

assertion that Shinho’s methodology for

calculating the interest income offset to

interest expense would be distortional

when short-term and long-term deposits

earn interest at different rates. Given

that the records of interest income

earned by Shinho maintained in the

normal course of business do not track

interest income vis-a-vis the term of the

deposit, we have adjusted Shinho’s

reported interest income offset based on

the difference between the short-term

deposit rate and the long-term

government bond rate in Korea.

Additionally, with respect to

petitioners’ argument that we reject the

nature of Shinho’s interest income from

securities, there is no information on the

record which indicates that this income

earned from securities was other than

short-term in nature. Therefore, we have

retained this income in our calculation

of Shinho’s interest expense for COP

and CV.

Comment 43: Exchange Rate Gains &

Losses

The petitioners assert that Shinho

failed to account for its foreign exchange

gains and losses in its cost calculations.

The petitioners state that it is the

Department’s standard practice to

account for these gains and losses when

they are related to production.

Therefore, the petitioners state that the

Department should make the

appropriate adjustment to Shinho’s net

interest expense factor.

Shinho agrees that it did not adjust its

interest factor for foreign exchange gains

and losses. However, Shinho states that

it did provide the Department with the

information necessary to make the

adjustment. Shinho notes that the

requested adjustment is relatively

insignificant.

Department’s Position

It is the Department’s standard policy

to adjust for foreign exchange gains and

losses in a respondent’s net interest

expense factor. We have made this

adjustment for these final results.

Comment 44: Control Number

Uniqueness

The petitioners state that the

Department should consolidate several

of Shinho’s control numbers that have

identical matching criteria.

Shinho agrees that two of the control

numbers at issue are identical under the

Department’s concordance hierarchy,

but that this discrepancy did not have

an impact on the margin calculations in

the Prelimary Results. Shinho disagrees

with the petitioner that a third product

is identical under the Department’s

hierarchy because one of the matching

characteristics is different.

Department’s Position

We have combined the two products

that have identical matching criteria.

We agree that the third product differs

in one of the matching criteria;

therefore, we have not reclassified this

product.

Currency Conversion

We made currency conversions in

accordance with section 773A of the Act

based on the rates certified by the

Federal Reserve Bank. Section 773A(a)

directs the Department to use a daily

exchange rate to convert foreign

currencies into U.S. dollars unless the

daily rate involves a ‘‘fluctuation.’’ It is

our practice to find that a fluctuation

exists when the daily exchange rate

differs from a benchmark rate by 2.25

percent. See Preliminary Results of

Antidumping Duty Administrative

Review: Certain Welded Carbon Steel

Pipe and Tube from Turkey, 61 FR

35188, 35192 (July 5, 1996). The

benchmark rate is defined as the rolling

average of the rates for the past 40

business days.

Final Results of the Review

As a result of this review, we find that

the following margin exists for the

period November 1, 1995, through

October 31, 1996:
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32849

Manufacturer/exporter Margin

(percent)

Hyundai ....................................... 4.01

KISCO/Union .............................. 0.71

Shinho ......................................... 3.34

SeAH ........................................... 3.51

Parties to the proceeding may request

disclosure within five days of the date

of publication of this notice. In

accordance with the methodology in

First Review Final Results we calculated

exporter/importer-specific assessment

values by dividing the total dumping

duties due for each importer by the

number of tons used to determine the

duties due. We will direct Customs to

assess the resulting per-ton dollar

amount against each ton of the

merchandise entered by these importers’

during the review period.

Furthermore, the following deposit

requirements will be effective for all

shipments of welded non-alloy steel

pipe from Korea entered, or withdrawn

from warehouse, for consumption on or

after the publication date of these final

results of administrative review, as

provided by section 751(a)(1) of the Act:

(1) The cash deposit rate for the

reviewed companies will be the rates

established in the final results of this

administrative review (except no cash

deposit will be required for those

companies whose weighted-average

margin is de minimis, i.e., less than 0.5

percent); (2) for merchandise exported

by manufacturers or exporters not

covered in this review but covered in

the original less-than-fair-value

investigation or a previous review, the

cash deposit will continue to be the

most recent rate published in the final

determination or final results for which

the manufacturer or exporter received

an individual rate; (3) if the exporter is

not a firm covered in this review, the

previous review, or the original

investigation, but the manufacturer is,

the cash deposit rate will be the rate

established for the most recent period

for the manufacturer of the

merchandise; and (4) if neither the

exporter nor the manufacturer is a firm

covered in this or any previous reviews,

the cash deposit rate will be 4.80

percent, the ‘‘all others’’ rate established

in the less-than-fair-value investigation.

See LTFV at 42942.

This notice serves as a preliminary

reminder to importers of their

responsibility 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 notice

are in accordance with sections

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

Dated: June 8, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–15874 Filed 6–15–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–559–001]

Certain Refrigeration Compressors

From the Republic of Singapore: Final

Results of Countervailing Duty

Administrative Review

AGENCY: Import Administration/

International Trade Administration/

Department of Commerce.

ACTION: Notice of Final Results of

Countervailing Duty Administrative

Review.

SUMMARY: On December 9, 1997, the

Department of Commerce published the

preliminary results of its administrative

review of the agreement suspending the

countervailing duty investigation on

certain refrigeration compressors from

the Republic of Singapore.

In our preliminary results of review,

we preliminarily determined that the

signatories to the suspension agreement

complied with the terms of the

suspension agreement during the period

of review (POR). We gave interested

parties an opportunity to comment on

our preliminary results. We received

comments from petitioner and

respondents.

We have now completed this review,

the thirteenth review of this Agreement,

and determine that the Government of

the Republic of Singapore (GOS),

Matsushita Refrigeration Industries

(Singapore) Pte. Ltd. (MARIS), and Asia

Matsushita Electric (Singapore) Pte. Ltd.

(AMS), the signatories to the suspension

agreement, have complied with the

terms of the suspension agreement

during the period April 1, 1995 through

March 31, 1996. Based on our analysis

of the comments received, we have not

changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: June 16, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert Bolling or Rick Johnson, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

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

telephone: (202) 482–3434 or 482–0165,

respectively.

SUPPLEMENTARY INFORMATION:

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

to the Department’s regulations are to

the regulations set forth at 19 CFR part

355 (April 1997).

Background

On December 9, 1997, the Department

of Commerce (the Department)

published in the Federal Register (62

FR 64806) the preliminary results of its

administrative review of the agreement

suspending the countervailing duty

investigation on certain refrigeration

compressors from the Republic of

Singapore. We received comments from

interested parties on our preliminary

results. Additionally, the Department

sent out a supplemental questionnaire

to the respondents on December 22,

1997 to obtain additional information

on testing of the subject merchandise.

Petitioner provided comments to

respondents’ subsequent January 6,

1998 submission on January 7, 1998.

See Comments 3 and 6 below. We have

now completed this administrative

review in accordance with section 751

of the Act.

Scope of the Review

Imports covered by this review are

shipments of hermetic refrigeration

compressors rated not over one-quarter

horsepower from Singapore. This

merchandise is currently classified

under Harmonized Tariff Schedule

(HTS) item number 8414.30.40. The

HTS item number is provided for

convenience and Customs purposes.

The written description remains

dispositive.

The review covers the period April 1,

1995 through March 31, 1996, and

includes three programs. The review

covers one producer and one exporter of

the subject merchandise, MARIS and

AMS, respectively.

Under the terms of the suspension

agreement, the GOS agrees to offset

completely the amount of the net

bounty or grant (subsidy) determined by

the Department in this proceeding to

exist with respect to the subject

merchandise. The offset entails the