Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35177

Sunshine Act Meeting

July 1, 1996.

DATE AND TIME: Friday, July 12, 1996,

9:30 a.m.

PLACE: U.S Commission on Civil Rights,

624 Ninth Street, NW, Room 540,

Washington, DC 20425.

STATUS:

Agenda

I. Approval of Agenda

II. Approval of Minutes of June 14, 1996

Meeting

III. Announcements

IV. Staff Director’s Report

V. Continuation of General Programmatic

Theme Discussion

VI. State Advisory Committee Report

‘‘The Enforcement of Affirmative Action

Compliance in Indiana Under Executive

Order 11246’’ (Indiana)

VII. Future Agenda Items

11:00 a.m. Briefing on Three Strikes and

You’re Out—Mandatory Life Sentences After

Three Felony Convictions

CONTACT PERSON FOR FURTHER

INFORMATION: Barbara Brooks, Press and

Communications (202) 376-8312.

Miguel A. Sapp,

Parliamentarian.

[FR Doc. 96–17268 Filed 7–2–96; 2:10 pm]

BILLING CODE 6335–01–M

DEPARTMENT OF COMMERCE

International Trade Administration

[A–580–807]

Polyethylene Terephthalate Film,

Sheet, and Strip from the Republic of

Korea; Final Results of Antidumping

Duty Administrative Reviews and

Notice of Revocation in Part

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of

Antidumping Duty Administrative

Reviews and Notice of Revocation in

Part.

SUMMARY: On September 29, 1995, the

Department of Commerce (the

Department) published the preliminary

results of administrative reviews and

notice of intent to revoke in part the

antidumping duty order on

polyethylene terephythalate (PET) film,

sheet, and strip from the Republic of

Korea. The reviews cover four

manufacturers/exporters of the subject

merchandise to the United States and

the periods June 1, 1992 through May

31, 1993 and June 1, 1993 through May

31, 1994.

As a result of comments we received,

the antidumping margins have changed

from those we presented in our

preliminary results.

EFFECTIVE DATES: July 5, 1996.

FOR FURTHER INFORMATION CONTACT:

Michael J. Heaney, or John Kugelman,

Office of Antidumping Compliance,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue NW., Washington,

DC 20230, telephone: (202) 482–4475/

0649.

SUPPLEMENTARY INFORMATION:

Background

On September 29, 1995 (59 FR 50547),

the Department published the

preliminary results of administrative

reviews and notice of intent to revoke in

part the antidumping duty order on PET

film from the Republic of Korea (56 FR

25669, June 5, 1991). At the request of

petitioners and three respondents, we

held a hearing on April 9, 1996.

These reviews cover four

manufacturer/exporters: Cheil

Synthetics, Inc. (Cheil), Kolon

Industries (Kolon), SKC Limited (SKC),

and STC Corporation (STC).

We are revoking the order for Cheil

because Cheil has sold the subject

merchandise at not less than foreign

market value (FMV) in these reviews

and for at least three consecutive

periods. Cheil has also submitted

certification that it will not sell at less

than FMV in the future.

Scope of the Review

Imports covered by these reviews are

shipments of all gauges of raw,

pretreated, or primed polyethylene

terephthalate film, sheet, and strip,

whether extruded or coextruded. The

films excluded from this review are

metallized films and other finished

films that have had at least one of their

surfaces modified by the application of

a performance-enhancing resinous or

inorganic layer of more than 0.00001

inches (0.254 micrometers) thick. Roller

transport cleaning film which has at

least one of its surfaces modified by the

application of 0.5 micrometers of SBR

latex has also been ruled as not within

the scope of the order.

PET film is currently classifiable

under Harmonized Tariff Schedule

(HTS) subheading 3920.62.00.00. The

HTS subheading is provided for

convenience and for U.S. Customs

purposes. The written description

remains dispositive as to the scope of

the product coverage.

The reviews cover the periods June 1,

1992 through May 31, 1993 (second

review period) and June 1, 1993 through

May 31, 1994 (third review period). The

Department has conducted these

reviews in accordance with section 751

of the Tariff Act of 1930, as amended

(the Act).

Applicable Statute and Regulations

Unless otherwise stated, all citations

to the statute and to the Department’s

regulations are references to the

provisions as they existed on December

31, 1994.

Analysis of Comments Received

We invited interested parties to

comment on the preliminary results of

this administrative review. We received

timely comments from the petitioners

and all four respondents. At the request

of the petitioners and three respondents,

we held a public hearing on April 9,

1996.

Comment 1: Petitioners argue

generally that the methodologies

employed by SKC and Cheil to value

recycled chip (RC) assign an

unreasonably low cost to recycled resin.

Petitioners contend that the cost of

processing recycled film is directly

associated with the cost of the

chemicals which are reclaimed.

Petitioners assert that to properly

account for the cost of producing PET

film, the Department must include both

the cost of the materials content of the

recycled film and the cost of the

recycling. Petitioners also argue that

both virgin resin and recycled resin

contain the same basic chemicals in the

same quantities, and that recycled resin

is a nearly ‘‘one for one’’ substitute for

virgin resin. Petitioners assert that the

differences between virgin resin and

recycled resin are ‘‘minimal.’’ While

limits exist on the amount of recycled

resin that can be used in PET film

production, petitioners note that in

many instances recycled resin accounts

for more than 50 percent of the raw

material inputs. Petitioners further note

that the bill of materials (‘‘recipes’’) for

PET films can be adjusted to tolerate a

greater or lesser volume of recycled

resin, and that producers can adjust the

molecular weight of virgin chip (VC) to

accommodate varying usage of recycled

resin. Petitioners also assert that

producers can modify the production

process to minimize problems related to

discoloration caused by using recycled

resin.

Petitioners contend that, in general,

the methodologies used by Cheil and

SKC to value recycled resin do not

reflect the actual cost of that material.

Petitioners assert that the Statement of
35178 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

Administrative Action (SAA),

Congressional Reports on the Uruguay

Round Agreements Act, and the Court of

Appeals for the Federal Circuit (CAFC)

decision in Ipsco Inc. v. the United

States, 965 F. 2d 1056, 1059–1061 (Fed.

Cir. 1992) (Ipsco Appeal), preclude the

Department from using cost calculations

which substitute assigned values for

actual costs. Even if the methodologies

employed by Cheil and SKC to account

for recycled film are consisted with

Korean Generally Accepted Accounting

Principles (GAAP), petitioners argue

that Cheil’s and SKC’s methodologies

are unacceptable because they fail to

reasonably reflect the costs associated

with recycled material. Petitioners

contend that the Department has

accepted from Cheil and SKC different,

contradictory accounting treatments of

the cost of RC.

Cheil: Specifically with regard to

Cheil, petitioners assert that the number

of sales used by Cheil to establish the

net realizable value (NRV) of recycled

resin is too small to be representative of

the actual cost of the material.

Petitioners further argue that the

customers who purchase resin from

Cheil are using the resin in a less

demanding process. These customers,

petitioners assert, do not require

recycled resin of the same quality as

PET film producers. Petitioners argue

that there is no indication that the

grades of PET film sold by Cheil on the

open market are the same as that which

Cheil uses internally.

Petitioners contend that most PET

films can be made within a broad range

of virgin resin/recycled resin ratios.

petitioners argue that given the

flexibility to increase or reduce the

usage of recycled resin, Cheil’s decision

to sell a small amount of PET resin at

a price that is much lower than the price

of virgin resin makes little economic

sense. Petitioners suggest that Cheil’s

rationale for selling a small amount of

recycled chip on the open market could

be to establish an artificially low value

for the recycled chip used in PET film

exports to the United States.

In response, Cheil argues that the

appropriate accounting treatment for

valuing its recycled resin (pellets) is the

NRV that Cheil assigns to these pellets.

Cheil notes that the NRV methodology

is consistent with both Korean and U.S.

GAAP. Cheil contends that

Departmental review, analysis, and

verification of the cost data submitted

by Cheil uncovered no evidence that

Cheil’s NRV methodology is

manipulative, or that Cheil substituted

increasing quantities of pellets for VCs

in an attempt to minimize its dumping

liability.

Cheil contends that the NRV

established for recycled pellet

represents a market price for that

merchandise. Cheil argues that the

Department has no basis to exclude

these sales because such sales are ‘‘too

small’’ to constitute a valid market.

Cheil further contends that its NRV

methodology was in place before the

onset of the Department’s less-than-fairvalue (LTFV) investigation in 1991, and

that the Department accepted and used

that methodology during the fair value

investigation and the first

administrative review. Cheil also argues

that precedent obligates the Department

to accept Cheil’s practice of valuing RC

at its NRV. Cheil cites to thirteen

separate cases in which NRV

methodologies have been applied.

Moreover, Cheil argues that the Court of

International Trade (CIT) has approved

the use of NRV for valuing by-products

in Asociacion Colombiana de

Exportadores de Flores v. United States,

704 F. Supp. 1114, 1125 (CIT 1989).

Cheil contends that there is nothing on

the record that distinguishes the instant

facts from the numerous other cases in

which the Department has used an NRV

methodology to value by-products.

Cheil also asserts that VCs and the

resin it recycles as pellets are not

physically one-for-one substitutes, and,

thus, its practice of valuing pellets at an

NRV below that of VC is economically

sound. Cheil argues that pellets and VCs

have different molecular structures and

chemical compositions. Cheil contends

that a mixture of pellet and VC can

create blending problems. Because of

differences in the molecular structure of

pellets and VCs, Cheil contends that

VCs and pellets melt at different

temperatures. Cheil also claims that

additional production problems (such as

contamination) will result if too many

pellets are employed in the production

process.

Cheil argues that waste film

production has a direct costs impact on

PET film through lower yields, and that

higher pellet usage increases fabrication

costs. Cheil contends that the

Department has no basis to assume that

historical production yields would

remain constant if the production

process utilizes 100 percent VCs. Based

on these factors, Cheil argues that

pellets should be assigned a lower cost

than VCs.

Cheil contends that, contrary to

petitioners’ assertion, its usage of VC

relative to pellets has actually increased

from the second to the third review.

Cheil asserts that the true value of

pellets (because of the lack of

substitutability between VC and pellet)

is actually lower than their NRV.

Cheil argues that the NRVs that it

assigned to pellets reflect the same set

of assumptions and market behavior as

the NRVs that it assigned to off-grade

chip production. Cheil thus concludes

that if the Department decides to back

out the NRVs at the virgin and chip

level, it must also back out the NRVs at

the chip production cost level.

Cheil further contends that any

methodology which assigns an equal

value to VCs and RCs would not

properly account for the valuation of

beginning and ending inventory. Cheil

contends that this is because VCs and

recycled pellets would be valued

according to one cost methodology,

while period-of-review costs would be

valued according to a completely

different methodology.

SKC: With regard to SKC, petitioners

contend that its methodology for costing

recycled resin is economically

unreasonable and was concocted

especially for the Department’s fair

value investigation. Petitioners assert

that prior to the fair value investigation

of this case, SKC calculated an average

materials cost without distinguishing

between virgin and recycled resin.

Petitioners assert that the methodology

used by SKC in these reviews ignores

the costs of the material content of the

recycled resin. Petitioners argue that the

true cost of the recycled resin is much

higher than the value assigned to it by

SKC.

Petitioners argue that SKC’s normal

method of accounting for recycled resin

correctly accounts for the processing

costs (i.e., labor, overhead, etc.) of

recycling, but fails to address the cost of

the chemicals which are reclaimed as

the recycled resin. Petitioners maintain

that SKC must recognize the presence of

valuable PET resin in the chips that SKC

recycles. By omitting material costs in

determining the cost of RC, petitioners

assert that SKC understates the cost of

films that use a higher proportion of

recycled materials.

In response, SKC maintains that its

cost accounting methodology does not

exclude the cost of the raw materials of

recycled resin from PET film cost of

production (COP). SKC argues that the

PET film production process is a closed

cycle, and that all costs are fully

accounted for in the system. SKC

explains that both VCs and RCs are

released into the production line to form

PET film as follows: at the end of the

film production line scrap film is

recovered; the recovered scrap is then

reprocessed to produce recycled resin,

and the recycled material is then used

together with VC to produce more PET

film, a portion of which will again be

reclaimed. According to SKC raw
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35179

materials (ethylene glycol (EG) and

dimethyl terephthalate (DMT) or

terephthalic acid (TPA)) are used

exclusively for the production of VC;

the recycled material is produced

entirely from scrap film without input

of additional raw materials. In other

words, all recycled resin is produced

from VCs that were released into the

film production line during a previous

production cycle. SKC states that it does

not take a credit for the scrap which it

recycles. Therefore, SKC argues that the

finished film bears the cost of all raw

materials consumed in the film

production process, including the cost

of raw materials that are later reclaimed

to produce RCs.

SKC argues that the Department

should continue to value recycled resin

according to the methodology employed

by SKC in its internal cost accounting

system. SKC contends that its cost

methodology is reasonable and

consistent with accepted accounting

concepts. SKC contends that recycled

resin has a ‘‘lower intrinsic viscosity,

lower molecular weight, and increased

discoloration’’ than do VCs. SKC notes

that the Department determined that

there is no evidence on the record

suggesting that SKC has manipulated its

chip blends to alter production costs.

Finally, SKC asserts that its blending

ratios have been stable over time.

Department’s Position: We believe

that Cheil’s and SKC’s methods of

accounting for their recycled raw

materials are reasonable and have relied

on them for these final determinations.

The legislative history of section 773(b)

states that ‘‘in determining whether

merchandise has been sold at less than

cost [the Department] will employ

accounting principles generally

accepted in the home market of the

country of exportation if [the

Department] is satisfied that such

principles reasonably reflect the

variable and fixed costs of producing

the merchandise.’’ H.R. Rep. No. 571,

93d Cong., 1st Sess. 71 (1973) (emphasis

added). The CIT has upheld the

Department’s use of expenses recorded

in the company’s financial statements,

when those statements are prepared in

accordance with the home country’s

GAAP and do not significantly distort

the company’s actual costs. See, e.g.,

Leclede Steel Co. v. United States, Slip

Op. 94–160 at 22 (CIT 1994).

Accordingly, our practice is to adhere

to an individual firm’s recording of

costs, if we are satisfied that such

principles reasonably reflect the costs of

producing the subject merchandise, and

are in accordance with the GAAP of its

home country. See, e.g., Canned

Pineapple Fruit from Thailand: Final

Determination of Sales at Less Than

Fair Value (Canned Pineapple from

Thailand), 60 FR 29553, 29559 (June 5,

1995); Certain Stainless Steel Welded

Pipe from the Republic of Korea; Final

Determination of Sales at Less Than

Fair Value, 57 FR 53693, 53705

(November 12, 1992); and Furfuryl

Alcohol from South Africa: Final

Determination of Sales at Less Than

Fair Value, 60 FR 22550, 22556 (May 8,

1995) (‘‘The Department normally relies

on the respondent’s books and records

prepared in accordance with the home

country GAAP unless these accounting

principles do not reasonably reflect the

COP of the merchandise’’). Normal

accounting practices provide an

objective standard by which to measure

costs, while allowing respondents a

predictable basis on which to compute

those costs. However, in those instances

where it is determined that normal

accounting practices result in an

unreasonable allocation of production

costs, the Department will make certain

adjustments or may use alternative

methodologies that more accurately

capture the costs incurred. See, e.g.,

New Minivans from Japan; Final

Determination of Sales at Less Than

Fair Value, 57 FR 21937, 21952 (May

26, 1992).

In the instant proceeding, therefore,

the Department examined whether the

respondents’ normal recycled resin

accounting methodology results in costs

of producing the subject merchandise

(finished PET film) that reasonably

reflect its cost of production. Notably,

we found that a characteristic of the PET

film production process is that a

substantial amount of film becomes

unusable during production. The PET

film production process generally takes

place in two stages. In the first stage, a

mixture of basic chemicals and special

additives are used to crate VCs. Both

Cheil and SKC produce several different

types of VCs, each from a specific

chemical recipe designed to promote

certain physical attributes in the

finished PET film product.

In the second production stage, one or

more VC types are measured and mixed

with recycled material. The mixture of

VC and recycled material is then

melted. The molten polymer is extruded

onto a chilled casting drum, where it

spreads into a continuous polymer film.

From the casting drum the film passes

through a series of stretching machines.

As the finished film cools, it is wound

onto a master roll. The master rolls of

finished film undergo quality inspection

for various physical characteristics.

Films that fail this inspection are either

sold as off-quality PET film or recycled.

As previously stated, the PET film

manufacturing process and finished film

quality standards are such that

substantial quantities of recyclable

waste film are generated. This film is

recycled as a raw material input to the

production process for PET film. Each

type of PET film has a maximum

amount of recycled materials that can be

added while still allowing the film to

meet its quality requirements. We note

that the respondents use different

processes for recycling the waste film

and different methods of accounting for

the recycled materials. (See recycled

raw materials accounting memorandum,

August 17, 1995). However, each

company’s method is similar in that

they assign significantly less cost to the

recycled material than they do to the

original VC.

Under its normal cost accounting

system, SKC attributes to its recycled

film only the costs related to recycling.

SKC assigns no costs to the waste film

used in the recycling process. Thus,

SKC records as the cost of recycled

material, only the labor and overhead

costs incurred for shredding the film

and reprocessing it.

Cheil recycled film is treated as a byproduct of the film production process

and valued at its NRV. Cheil’s NRV

represents the revenues received (less

disposal costs) for recycled material

sold as filler for mattresses and toys.

Cheil deducts the pellets’ NRV from the

cost of producing the good PET film

output.

On March 20, 1996, the CIT issued its

decision in the appeal of the underlying

investigation in this proceeding, E.I.

Dupont de Nemours & Co., et al. versus

United States, Slip. Op. 96–56, Court

No. 91–07–00487 (March 20, 1996)

(Dupont II). The CIT’s decision

recognized the above facts with respect

to the production of PET film and each

respondent’s accounting for recycled

materials. In light of those facts, the CIT

found that:

[petitioners’] argument that pellets should

be costed like virgin chip because they are

functionally equivalent defies common sense

and arithmetic logic. The reason that PET

film production utilizes recycled material is

that it is cheaper to recycle scrap film than

to manufacture virgin chip; this being the

case, assigning pellets the cost of virgin chip

would overstate the actual costs of PET film

production. Dupont II, at 9.

The CIT further noted that the record

did not support the allegation that Cheil

manipulated the usage rate of pellet in

order to shift costs away from PET film

exported to the United States.

The CIT also rejected petitioners’

arguments concerning SKC’s accounting

practices. The Court noted that the
35180 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

reason SKC uses a ‘‘zero value’’ for the

material cost of RC is that ‘‘SKC did not

subtract the value of pellets resulting

from PET film production runs from the

accounting cost of producing PET film;

therefore, there was no basis for adding

any pellet value back into the

accounting cost of PET film

manufactured with pellet material

input.’’ Dupont II, at 10. While the CIT

determined that the Department’s

refusal to address SKC’s methodology

for valuing pellet was proper under the

scope of the remand, it indicated that

even if such instructions ‘‘had been part

of the remand order, SKC’s methodology

is reasonable and fully accounts for the

value of’’ its recycled resin. Dupont II,

at 11.

In this review, we continue to find

that Cheil and SKC have reasonably

valued RC. We determined that

although differing in approach, both

methodologies reasonably capture the

cost of producing PET film. As

previously noted, every PET film

production run uses both virgin chip

and recycled material. The scrap film

resulting from each production run is

recycled into subsequent production

passes. Each respondent’s method of

accounting for the recycled material is

used in the normal course of business

and is GAAP-consistent.

We examined Cheil’s and SKC’s books

and records and found that each

company relies on its recycled resin

methodology in the normal course of

business and has done so for at least the

last several years. We further found that

each respondent’s allocation

methodology is consistent with GAAP

practiced in Korea.

We disagree with petitioners’

argument that the cost basis for recycled

materials should be the purchase price

of the raw material. The record in this

case demonstrates that recycled resin is

not the functional equivalent of VC,

since the production process degrades

the chemicals and introduces

contaminants into the process. Thus,

while recycled material can be used in

place of VC within certain limits,

recycled resin and VC are not

completely equivalent.

We also do not accept petitioners’

contention that SKC’s methodology is

economically unreasonable. SKC’s

methodology fully accounts for all costs

because each type of film is charged

with the cost of the material consumed

in its production (as well as the material

which will be reused in later production

runs). Thus, all production costs are

fully charged to the subject

merchandise.

We also disagree with petitioners’

arguments that Cheil’s NRV should be

disallowed because it is not

representative of a market value. Despite

the fact that Cheil’s recycled film

purchasers use the pellets in less

demanding processes, there is no

evidence that these transactions do not

represent a fair valuation for this

material. Moreover, we note that a

petitioner also makes sales of recycled

film chips or pellets to manufacturers of

pillows and carpet. This company

indicated that it sells the recycled chip

at a price significantly less than the cost

to manufacture VC. In addition, the

company explained that it had recently

adopted a costing methodology based on

the relative sales value of RC that is

similar to that used by Cheil. (See plant

tour memorandum, April 5, 1995.)

Comment 2: Petitioners contend that

Cheil and SKC have understated their

costs and overstated their U.S. selling

prices by misrepresenting the quantities

of film that they produce and sell, and

that the quantity of films actually

shipped are not the quantities of film

actually billed. Petitioners assert that

since producers will be penalized if

they include too little film on a roll,

producers will generally include more

film on a roll than they actually invoice.

Petitioners assert that exhibits collected

as part of the verifications for the

second and third reviews of Cheil and

SKC support their assertion that SKC

and Cheil are providing more film on a

roll than they have actually reported to

the Department. Petitioners additionally

contend that the verification exhibits

collected in these reviews provide

further evidence that reported costs are

incorrect because the sales and

production quantities used to derive

those costs and prices are either

‘‘conceptionally inappropriate’’ or

‘‘simply wrong.’’ Petitioners assert that

the production quantities reported by

Cheil fail to account for losses occurring

in the second slitting process.

Petitioners suggest that SKC’s shifting of

the reporting period form 1/1/93–12/31/

93 to 7/1/93–6/30/94 for the third

administrative review distorted the

valuation of RCs and scrap. Petitioners

assert that Cheil may have distorted its

costs through a similar shifting of the

reporting period.

SKC and Cheil contend that the

Department verified reported

production quantities. SKC and Cheil

assert that there is no evidence on the

record supporting petitioners’ assertion

that production quantities were

understated or that either company

shipped more film on a roll than was

reported in SKC’s or Cheil’s responses.

Department’s Position: We disagree

with petitioners because there is no

evidence on the record to support their

claim that either Cheil or SKC

understated their production quantities,

or that either company shipped more

PET film on a roll than the customer

ordered. During these verifications, we

traced reported production of PET film

to the PET film production records of

Cheil and SKC. Our trace of production

quantities for Cheil accounted for the

amount of film (sold exclusively to third

countries) that underwent second

slitting. (See Cheil July 28, 1995 second

review period verification report at page

5; Cheil January 26, 1996 third review

period verification report at page 3.) The

Department also verified the production

quantities reported by SKC. (See SKC

July 28, 1995 second review period

verification report at page 15; SKC

February 27, 1996 third review period

verification report at page 10.)

Moreover, we disagree with the

petitioners’ assertion that Cheil’s and

SKC’s valuation of RC and scrap was

distorted because they shifted the

reporting period. The Department

directed Cheil and SKC to report costs

for the third review period from July 1,

1993 through June 30, 1994, rather than

for the calendar year January 1, 1993

through December 31, 1993, so that the

period for reporting COP/CV

information would more closely

correspond to the time frame covered by

the third review. We have not allowed

either Cheil or SKC to manipulate to

their advantage the period for reporting

cost information.

Comment 3: Petitioners note that the

language used to determine whether

below-cost sales were made over an

extended period of time for Cheil and

Kolon fails to identify such sales of

merchandise that were sold in less than

three months of each period of review.

Petitioners contend that this

programming error exists for each of the

respondents included in these reviews.

Department’s Position: We agree. For

each of the respondents included in

these reviews, we have amended our

computer programs to exclude from

FMV below-cost sales that were sold in

less than three months of the PORs and

that made over an extended period of

time.

Comment 4: Petitioners contend that

the Department erred in adjusting

Cheil’s home market price for pre-sale

inland freight from its factory to its

warehouse. Petitioners contend that this

deduction contravenes Ad Hoc Comm.

of AZ–NM–TX–FL Producers of Gray

Portland Cement v. United States, 13

F.3d 398, 401 (Fed. Cir. 1994).

Cheil contends that Departmental

practice is to treat pre-sale inland freight

as a direct expense in instances where
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35181

products are channeled or customized

for certain buyers.

Department’s Position: We disagree

with petitioners. As noted in Canned

Pineapple Fruit from Thailand, in Ad

Hoc Committee, the Court ruled that the

Department could not use its inherent

authority to deduct home market presale movement expenses. Instead, we

will adjust for these expenses under the

circumstance-of-sale provision as long

as we determine that these expenses are

directly related to the sales under

investigation. The Department generally

treats pre-sale movement expenses as

direct where those expenses ‘‘involve

products channeled or customized’’ for

certain buyers (Id. at 29563). Because

Cheil knew the identity of its customer

and the product specifications of that

customer prior to the shipment of film

from the factory to the warehouse, we

have treated Cheil’s pre-sale inland

freight as a direct selling expense. This

is consistent with our position in past

segments of this proceeding. (See

Polyethylene Terephthalate Film, Sheet,

and Strip from the Republic of Korea;

Final Determination of Sales at Less

than Fair Value 56 FR 16300, 16303

(April 21, 1991) (Final Determination)).

Comment 5: Petitioners contend that

certain sales that Cheil has

characterized as ‘‘samples’’ were sold in

significant volume and should be

included in the Department’s

calculations. Petitioners contend that

Cheil’s failure to report these sales

mandates use of the best information

available for Cheil.

Cheil contends that the Department

verified that its zero-priced samples

were not commercially valued. Cheil

contends that the Department’s decision

to exclude there sales was consistent

with past Departmental practice.

Department’s Position: We do not

consider Cheil’s zero-priced samples to

be sales within the meaning of the

antidumping law. This is consistent

with the position taken in Granular

Polytetrafluoroethylene Resin from

Japan; Final Results of Antidumping

Duty Administrative Review (PTFE from

Japan) 58 FR 50343, 50345 (September

27, 1993), in which we did not include

zero-priced samples in our calculations

because the samples were used for

product evaluation purposes rather than

for commercial consumption.

During the PORs Cheil provided a

limited number of zero-priced samples

to the United States. Cheil provided full

documentation that the shipments were

not commercially valued, and were for

product evaluation purposes only.

Accordingly, we did not include these

zero-priced samples in our analysis.

Comment 6: Petitioners assert that

Cheil has failed to report related-party

commissions associated with its U.S.

sales. Petitioners assert that these

expenses are directly related to U.S.

price.

Cheil contends that the mark-up

between the price charged by Cheil to

its U.S. subsidiary and the price charged

by Cheil’s U.S. subsidiary to Cheil’s U.S.

customer is not a ‘‘commission.’’ Cheil

notes that a commission is ‘‘a sum or

percentage allowed to agents, sales

representatives, etc., for their services.’’

(See Timken Co. v. United States, 37

F.3d 1470, 1478 (Fed. Cir. 1994).) To

receive a commission, Cheil argues that

a commissionaire must make a sale on

another party’s behalf. Because there is

no evidence on the record suggesting

that Cheil’s U.S. subsidiary solicits sales

for Cheil, or engages in any activity to

generate sales on Cheil’s behalf, Cheil

argues that the mark-up between the

price charged by Cheil to its U.S.

subsidiary and the price charged by

Cheil’s U.S. subsidiary to Cheil’s U.S.

customer is not a ‘‘commission’’ within

the meaning of the antidumpting law.

Department’s Position: We agree with

Cheil. Because Cheil’s U.S. subsidiary

did not solicit sales for Cheil, we do not

consider the mark-up between the price

charged by Cheil to its U.S. subsidiary

and the price charged by Cheil to Cheil’s

U.S. customer to be a commission

within the meaning of the antidumping

law.

Comment 7: Petitioners assert that the

Department should use quality control

criteria values (QCCVs) rather than

product codes to match Cheil’s home

market and U.S. sales. Petitioners

contend that matching sales through

QCCVs would be less susceptible to

manipulation.

Cheil asserts that use of QCCVs

instead of product codes would result in

comparisons of home market

merchandise that is less similar to the

merchandise sold in the United States.

Department’s Position: We disagree

with petitioners. As noted in

Antifriction Bearings (Other than

Tapered Roller Bearings) and Parts

Thereof from France, et. al., 57 FR

28360, 28366, (June 24, 1992) our policy

is to ‘‘maintain a stable, normal and

predictable approach’’ with regards to

model match, and not to alter that

methodology unless compelling reasons

exist. In these reviews we have used the

same methodology for matching Cheil’s

home market sales that we employed in

the less than fair value (LTFV)

investigation and in the first review.

There is no evidence on the record to

suggest that use of product codes has

enabled Cheil to manipulate the

matching of home market sales.

Finally, we note that use of QCCVs

would in several instances result in the

matching of merchandise that is less

similar to the U.S. merchandise than

would the product codes submitted by

Cheil. In one instance this dissimilarity

would result in the comparison of a

product that is coated with a product

that is non-coated, and in another

instance this would result in

comparison of merchandise that is of

different chemical compositions.

Comment 8: Petitioners contend that

the Department should calculate the

credit period for Cheil’s U.S. sales from

the date of shipment from Cheil’s

factory to the U.S. customer rather than

from the date of export shipment from

Korea. Petitioners also assert that the

Department should require Cheil to

provide the actual date of payment for

those U.S. sales for which Cheil had not

received payment at the time that Cheil

prepared its U.S. response.

Cheil contends that the Department

should recalculate Cheil’s inventory

carrying cost expenses, if it decides to

recalculate the credit period from the

date of shipment from Cheil’s factory.

Department’s Position: In these final

results we have followed our normal

policy and calculated the U.S. credit

period beginning with the date that the

merchandise leaves the factory. (See

Antifriction Bearings (Other than

Tapered Roller Bearings) and Parts

Thereof from France, et. al., 60 FR

10900, 10916, (February 28, 1995).) We

have also recalculated Cheil’s inventory

carrying costs to avoid double counting

of Cheil’s credit expenses. Because we

noted no significant discrepancies

between payment term and the date that

Cheil actually received payment, we

used payment terms to calculate Cheil’s

U.S. credit expense for those U.S. sales

for which Cheil had not received

payment at the time that it prepared its

response.

Comment 9: Petitioners contend that

the Department should adjust U.S. sales

for advertising and promotion expenses

that Cheil incurred on its U.S. sales.

Cheil contends that it had no direct

advertising or sales promotion expenses

during the PORs.

Department’s Position: We disagree

with petitioners. In response to our

questionnaire and our request for

supplemental information, Cheil

indicated that it had no direct

promotion or advertising expenses

during the periods of review, and there

is no contrary evidence on the record.

Since all of Cheil’s sales were PP

transactions and there were no

commissions incurred for home market
35182 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

sales, the issue of whether Cheil had

indirect advertising or sales promotion

expenses is moot because in PP

transactions we do not adjust for

indirect selling expenses, absent

commissions in the other market.

Comment 10: SKC contends that the

Department’s reallocation of its

manufacturing costs between A- and Bgrade film is contrary to Department

practice and unreasonably overstates

SKC’s B- grade film costs. SKC asserts

that B-grade film cannot be used by its

normal PET film customers, and should

not bear the same cost as A-grade film.

SKC contends that the Department’s

allocation of cost to B-grade film should

reflect the economic value of the

products manufactured. SKC argues that

B-grade film is a by-product of PET film

rather than a co-product, and that Bgrade film is an unavoidable

consequence of manufacturing A-grade

film. SKC contends that it seeks to

minimize the production of B-grade

film, and that B-grade film does not

undergo significant processing prior to

sale. SKC asserts that sales of B-grade

film constitute a small (less than 10

percent) and declining portion of its

PET film revenues.

SKC notes that in Canned Pineapple

from Thailand, The Department did not

use physical measures to allocate joint

products but rather used an allocation

methodology that recognized the

significantly different economic values

of the products. Based on the

dissimilarity of A-grade and B-grade

film, SKC contends that the

Department’s joint allocation of costs

between these two products is

economically unreasonable.

SKC further asserts that it valued Bgrade film in accordance with its

longstanding practice. SKC contends

that the Department has consistently

rejected the use of physical allocation

methodologies in cases where the one

joint product has a significantly lower

economic value than the other product.

SKC cites to Elemental Sulphur from

Canada: Final Results of Antidumping

Finding Administrative Review, 61 FR

8239, 8241–8243 (March 4, 1996)

(Sulphur), and Oil Country Tubular

Goods from Argentina, Final

Determination of Sales at Less than Fair

Value, 60 FR 33539, 33547 (June 28,

1995), as two such cases where the

Department did not use physical

measures to allocate costs. SKC

contends that the Department’s general

practice is to use a company’s normal

accounting system unless that system

results in an unreasonable allocation of

costs. SKC further argues that the

Department’s methodology of allocating

yield losses equally between A-grade

and B-grade film produces absurd

results because the methodology

allocates expenses associated with one

type of scrap to another part of scrap.

SKC also contends that the physical

defects inherent in B-grade film compel

SKC to (1) sell B-grade film for non-PET

film applications, and (2) assign B-grade

film a lower value than A-grade film.

SKC asserts that the Department’s

decision to allocate yield losses equally

between A-grade and B-grade film

conflicts with the model-match and cost

test methodologies employed in these

reviews. SKC notes that for modelmatch purposes, the Department

restricted comparisons of U.S. B-grade

film to home market sales of B-grade

film. SKC asserts that the Department

cannot ignore differences between Agrade and B-grade film for purposes of

its cost analysis.

Finally, SKC asserts that the

Department should accept its cost

methodology even if the Department

determines that B-grade film is a coproduct rather than a by-product of Agrade film. SKC asserts that its cost

system is consistent with the Ipsco

Appeal decision, since, unlike Ipsco,

SKC does not rely upon sales value to

allocate costs. SKC asserts that this is

consistent with the methodology

employed by the Department in

Polyvinyl Alcohol from Taiwan, 61 FR

14064 (March 29, 1996). (See

Memorandum to Chris Marsh from Art

Stein, September 27, 1995.)

Petitioners argue that the Department

was correct in equalizing the yield loss

that SKC experienced between A-grade

and B-grade films. Petitioners contend

that allocating all yield loss to A-grade

film would result in a misallocation of

SKC’s costs, an improper use of belowcost sales in the Department’s margin

calculations, and an understatement of

margins for SKC’s sales of slitted Bgrade film.

Petitioners point out that in various

submissions filed in the course of the

initial investigation, respondents as a

group (including SKC) stated that the

essential facts in the administrative

proceedings underlying the Ipsco

Appeal are indistinguishable from the

facts in this case.

Petitioners contend that the

Department’s reallocation reflects the

mandate of the Ipsco Appeal, and also

the realities of PET film production.

Petitioners explain that from a batch of

resin, a single production run will

generate a given amount of A-grade film

and a given amount of B-grade film.

Regardless of the quality of film, the

actual costs of producing a run of film

are borne equally. Petitioners maintain

that it takes the same volume of raw

materials and the same processing effort

to make A-grade film as B-grade film.

Petitioners argue that the fact that the

Ipsco Appeal involved oil country

tubular goods instead of PET film is

irrelevant. Petitioners maintain that Bgrade PET film is not a by-product of the

PET film production process, but is PET

film. B-grade PET film is used in PET

film applications, and is generated from

the same production run as A-grade film

using the same materials and processes.

Petitioners therefore conclude that

SKC’s A-grade and B-grade film must

bear the same costs.

Department’s Position: We believe

that A-grade and B-grade PET film have

identical production costs and we have

relied on equal costing for this final

determination. The CIT’s decision in the

remand of the underlying investigation

(Dupont II) affirmed the Department’s

remand calculation of the cost of

production for prime and off-grade film

(i.e., A-grade and B-grade film). Dupont

II, at 6–7. The CIT determined that our

recalculation of Cheil’s and SKC’s

production costs was reasonable. As we

explained in the remand, we

recalculated the cost of off-grade film to

reflect actual costs by allocating

production costs based on actual

production quantities.

Moreover, our use of an equal costing

methodology in this proceeding is based

on substantial evidence and is otherwise

in accordance with law. In the instant

reviews, the A-grade and B-grade film

undergo an identical production

process, involving an equal amount of

material and fabrication expenses. The

only difference in the resulting A- and

B-grade film is that at the end of the

manufacturing process a quality

inspection is performed during which

some of the film is classified as high

quality A-grade product, while other

film is classified as lower quality Bgrade film. The identification of

different grades of merchandise does not

transform the manufacturing process

into a joint production process which

would require the allocation of costs.

SKC mischaracterizes the continuous

production process of PET film as joint

processing. A joint production process

occurs when ‘‘two or more products

result simultaneously from the use of

one raw material as production takes

place.’’ (See Management Accountants’

Handbook, Keeler, et. al., Fourth Edition

at 11:1.) The essential point of a joint

production process is that ‘‘the raw

material, labor, and overhead costs prior

to the initial split-off can be allocated to

the final product only in some arbitrary,

although necessary, manner,’’ Id. In this

case, the costs attributable to PET film

yield losses can clearly be allocated to
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35183

the production of specific types of PET

film.

SKC argues incorrectly that its

method of accounting for lesser quality

product is consistent with the Ipsco

Appeal. Ipsco Appeal involved the

Department’s use of an appropriate

methodology for allocating costs

between two grades of steel pipe. These

two grades of steel pipe were

distinguished on the basis of quality.

Ipsco Appeal, 965 F.2d at 1058. The

same production inputs for materials,

labor, and overhead went into the

manufacturing lot that yielded both

grades of pipe. Id. Given these facts, in

our final determination we allocated

production costs equally between those

two grades of pipe. We reasoned that

because they were produced at the same

time, on the same production lines, and

following the identical manufacturing

process, the two grades of pipe in fact

had identical production costs. Id.

SKC’s reliance on Sulphur, Canned

Pineapple Fruit from Thailand, and

Polyvinyl Alcohol from Taiwan is

misplaced. Those cases relate primarily

to by-product/co-product costing

methodologies. In none of the cases

cited by SKC were both products within

the scope of the same antidumping

order. The PET film production process

produces two finished products, both of

which are salable, and both of which are

PET film products. B-grade PET film

(like A-grade film) is sold as PET film

and consumed as PET film. By contrast,

the resulting joint products or byproducts in the cases cited by SKC were

of a different class or kind of

merchandise than the products that the

manufacturer set out to produce.

Pineapple shells, cores, and ends are

made into pineapple juice. Natural gas

is not of the same class or kind as

elemental sulphur, nor are polyvinyl

alcohol and methyl acetate. Moreover,

we note that in the ordinary course of

business SKC treats methanol, and not

B-grade film, as the by-product of the

PET film production process.

Accounting literature identifies byproducts as separate and distinct

products, not grades of the same

product. Unlike the chemical reaction

that occurs in the production of

polyvinyl alcohol resulting in the byproduct methyl acetate, B-grade film is

not a by-product. Theoretically the

production of B-grade film is avoidable

since the PET film manufacturing

process need not result in poor quality

product.

Finally, SKC’s argument that

matching A- and B-grade film to

identical merchandise necessitates that

each of these models have a unique cost

is without merit. Two products that are

not ‘‘identical’’ for model-match

purposes may indeed have the same

costs. For purposes of determining COP/

CV, however, we must account for all of

the costs associated with the production

of the merchandise.

Comment 11: Petitioners contend that

SKC understated the cost of extending

credit to Anacomp on its U.S. sales.

Petitioners contend that the credit terms

offered to Anacomp by SKC do not

constitute a normal extension of credit

between buyer and seller, but rather

involve an ‘‘incentive to finance

Anacomp’s film purchases at below

market rates.’’ Further, petitioners argue

that the antidumping statute does not

contemplate a circumstance-of-sale

adjustment to U.S. price for interest

payments that offset credit risk. Finally,

petitioners argue that if the Department

accepts the Anacomp payments as

interest income, it should ‘‘impute

SKC’s interest expense’’ using an

interest rate that is the ‘‘equivalent of

the market rate sales to Anacomp.’’

SKC contends that petitioners have

offered no grounds for reversing the

Department’s previous decision to offset

interest income against SKC’s imputed

credit expense.

Department’s Position: We disagree

with petitioners because, as noted in the

first review of this order, ‘‘* * * failure

to adjust for SKC’s interest income

received from Anacomp would overstate

SKC’s U.S. credit expense, and distort

our dumping analysis.’’ (See

Polyethylene Terephthalate Film, Sheet,

and Strip from the Republic of Korea,

Final Results of Antidumping

Administrative Review (Final Results of

the First Review), 60 FR 42835, 42838

(August 17, 1995). During our

verification of SKC we determined that

SKC and Anacomp adhered to all of the

terms of the ‘‘Master Supply

Agreement’’ which governed the

payment of interest income to SKC. We

also verified the amount of interest

income received by SKC. Accordingly,

in these final results we have continued

to make an offset for interest income as

we did in the preliminary results of this

review.

Comment 12: Petitioners note that

Kolon Industries (Kolon) did not

include home market sales of scrap film

in its sales listing because ‘‘this scrap is

not PET film.’’ Petitioners contend that

Kolon has failed to substantiate its claim

that these scrap sales were not of PET

film.

Kolon asserts that the scrap material

is not PET film. Kolon contends that the

material consists of (1) molten PET

material that is deposited in the filters

of the extruder before the molten PET

material is extruded onto the cooling

drum and formed into sheet and film,

and (2) shredded trimmings from the

film production process. Because the

scrap material is not PET film, Kolon

argues that it is not within the scope of

the order.

Department’s Position: We agree with

Kolon. Because the scope of the

antidumping order is limited to PET

‘‘film, sheet and strip,’’ and this material

is not PET film, we have not included

these scrap sales in our calculations.

Comment 13: Petitioners contend that

the Department should include Kolon’s

U.S. sample sales in its margin

calculations. Petitioners contend that

while the Department has the authority

to omit zero-price samples if the

samples were not used for commercial

consumption, that exception does not

apply for Kolon since those sales were

consumed commercially. Petitioners

note that the Department included

Kolon’s zero-price samples in its

calculations for the first review.

Kolon contends that the Department

should exclude these zero-price samples

from its analysis. Kolon notes that in

PTFE from Japan, the Department

excluded such transactions even though

the merchandise was not returned to the

manufacturer. Kolon contends that the

Department’s decision to include zeroprice sales in its first period analysis

was based upon ‘‘the incorrect belief

that there is no evidence on the record

that Kolon’s U.S. sample sales are

destroyed or rendered unusable.’’ Kolon

contends that the nature of PET film

requires the tester to unwind the film,

and to usually coat the film, stamp it, or

use it on a machine. Kolon contends

that such testing, by its nature, renders

the PET film unusable.

Department’s Position: As noted in

response to Comment 5, in PTFE from

Japan we determined that zero-priced

transactions were not ‘‘sales’’ within the

meaning of the antidumping law

because the zero-priced samples were

used for product evaluation purposes

rather than commercial consumption. In

the Final Results of the First Review, we

indicated that PTFE from Japan was not

applicable because there was no

evidence on the record that Kolon’s U.S.

samples were destroyed or rendered

unusable. (See Final Results of First

Review, at 42841.)

However, the record in these reviews

demonstrates that Kolon provided the

zero-priced samples for product

evaluation and testing purposes rather

than commercial consumption. Kolon

stated that its one shipment of zeropriced samples during the third review

was used for product testing. Moreover,

we find that record evidence shows that

like PTFE resin, the nature of PET film
35184 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

is such that once it has been tested, it

cannot be re-used. Therefore, consistent

with PTFE from Japan, we did not

include Kolon’s zero priced samples in

our analysis.

Comment 14: Petitioners contend that

Kolon incorrectly used home market

adjustments applicable to other reviews

in compiling its second and third

review responses. Petitioners contend

that such a methodology results in

inconsistencies.

Kolon contends that it did not revise

sales data that it had reported in

previous questionnaires in order to

avoid inconsistencies from one review

to the next.

Department’s Position: We disagree

with petitioners. It is the Department’s

longstanding practice to base USP and

FMV price comparisons on reasonably

contemporaneous sales of similar

merchandise. (See Certain Forged Steel

Crankshafts from the United Kingdom,

56 FR 5975, 5976 (February 14, 1991).)

In compliance with our instructions,

during the second review Kolon

reported data for its sales for the period

from December 1991 through July 1993.

For the third review, in order to ensure

contemporaneous matches, we

requested data on sales for the period

December 1992 through July 1994.

Kolon complied with our request and

did not make any revisions to the sales

and adjustment data that is had

previously reported in prior reviews.

Because revising these data previously

submitted would result in

inconsistencies for identical sales, we

determine that Kolon’s approach is a

reasonable methodology to avoid such

inconsistencies.

Comment 15: Petitioners content that

Kolon has incorrectly omitted labor and

overhead expenses from its calculation

of home market packing expenses.

Petitioners contend that this error

results in an understatement of FMV.

Kolon contends that its cost

accounting system does not permit it to

retrieve the labor and overhead costs

attributable to packing.

Department’s Position: We disagree

with the petitioners. In Kolon’s cost

accounting system, because packing and

labor costs for PET film are recorded in

a single cost center, Kolon cannot

separate the specific amount of labor

and overhead expenses that are

attributable to packing from the labor

and overhead expenses that are

attributable to the production of PET

film. Moreover, since the merchandise

that Kolon sold in the home market and

the United States is identical, the labor

and overhead expenses attributable to

packing (were Kolon able to isolate

them) would have no effect upon the

calculations.

Comment 16: Petitioners contend that

expenses associated with replacing

defective film for Kolon’s home market

customers do not qualify as indirect

selling expenses. Furthermore, rather

than directly-related selling expenses,

petitioners argue that these replacement

shipments should be included in

Kolon’s home market sales listing.

Kolon argues that, consistent with

past practice, the Department properly

treated the costs associated with

defective film as indirect selling

expenses.

Kolon contents that it reported the

movement expenses incurred on its ESP

transactions with as much specificity as

possible.

Department’s Position: We disagree

with the petitioners. The cost of

replacing defective film is properly

classified as a warranty cost rather than

as new sale since these expenses are

associated with replacing defective

merchandise that had previously been

sold. Kolon’s accounting records do not

separately record the costs for replacing

defective film. Because the warranty

expenses can not be isolated to specific

sales, Kolon properly treated these

expenses as indirect selling expenses.

(See, e.g., Color Television Receivers

from Korea; Final Results of

Antidumping Duty Administrative

Review, 51 FR 41365, 41377 (November

14, 1986).)

Comment 17: Petitioners argue that

Kolon should be required to report

Korean inland freight on a transactionspecific basis where Kolon’s accounting

records would permit such reporting.

Petitioners contend that for certain

exporter’s sales price (ESP) transactions,

Kolon could provide transactionspecific movement expenses.

Kolon contents that it reported the

movement expenses incurred on its ESP

transactions with as much specificity as

possible.

Department’s Position: We disagree

with the petitioners. We accept Kolon’s

approach of allocating movement

expenses as reasonable. Generally, the

Department will accept a party’s

alternative methodology for allocating

expenses if the party’s normal

accounting records do not permit it to

provide data in the format requested

and the party provides data in a manner

that approaches the Department’s

preferred methodology as close as its

records will allow. We have stated that

we will allow this alternative

methodology as long as we determine

that it is reasonable. (See Antifriction

Bearings (Other than Tapered Roller

Bearings) and Parts Thereof from the

Federal Republic of Germany, 56 FR

31692, 31715 (July 11, 1991). In

calculating its U.S. movement expenses

Kolon did not use a single average

expense for inland freight. Kolon

attempted to match each ESP sale to the

particular entry. Since ESP merchandise

was sold from inventory, however,

Kolon could not normally tie a

particular ESP sale to an individual

entry. Therefore, Kolon allocated

movement expenses to the particular

group of entries on which that

merchandise could have entered. We

verified Kolon’s data and have no

evidence that Kolon’s methodology is

unreasonable.

Comment 18: Petitioners argue that to

the extent that the lower U.S. interest

rate was available to the borrower, the

Department should use that rate to

calculate Kolon’s home market credit

expense. Petitioners assert that the

Department should follow the precedent

established in LMI La Metalli

Industriale, S.p.A. v. United States, 912

F.2d 455 (Fed. Cir. 1990), (LMI) wherein

the Department applied the lowest rate

available to the borrower to calculate

U.S. and home market interest expenses.

Kolon contends that U.S. dollar

interest rates only measure the time

value of money for dollars. Kolon argues

that the U.S. interest rate cannot be used

to determine the opportunity cost of a

delayed payment in another currency,

such as Korean won.

Department’s Position: We disagree

with the petitioners. We have used

Kolon’s calculation of U.S. and Home

market credit expenses in these final

results because Kolon’s calculation of

credit expenses is consistent with

‘reasonable business behavior’ and

because we find that Kolon’s actual

borrowing experience is the best

indicator of Kolon’s cost of extending

credit. LMI requires us to use ‘usual and

reasonable business behavior’ to

calculate credit expenses. Kolon based

its calculation of both home market and

U.S. credit expenses on its actual

borrowings in the home market and the

United States. In the home market,

Kolon used the interest expenses

incurred in Korea to represent its

interest expense. In the United States,

Kolon used the interest rate charged on

borrowings by its U.S. subsidiary

because the U.S. subsidiary was the

entity that bore the cost of delayed

payment from the customer.

Comment 19: Petitioners argue that

Kolon should be required to provide

customer- or transaction-specific U.S.

rebates where such information is

available in Kolon’s accounting records.

Petitioners contend that the Department

should apply second-tier best
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35185

information available to those sales for

which Kolon has reported rebates, but

did not quantify the rebate on a

transaction- or customer-specific basis.

Kolon contends that it did not provide

transaction-specific rebates because

such a methodology would not capture

rebates that were granted after the

preparation of the response. Kolon

contends that its methodology of

dividing total rebate expense during the

POR by total PET film sales is not

distortive, and was adopted so that

Kolon would not understate its rebate

expense.

Department’s Position: We agree with

petitioners that our normal policy is to

calculate discounts or rebates on a

transaction- or customer-specific basis.

(See Antifriction Bearings (Other than

Tapered Roller Bearings) and Parts

Thereof from France, et. al., 58 FR

39729, 39762 (July 26, 1993). In

reporting its rebate expense for the first

review of this order, however, Kolon

discovered that a number of rebates

were paid several months after Kolon

filed its questionnaire response for that

review. To avoid understating its rebate

expenses in these reviews, Kolon

divided the total rebate amount granted

on PET film sold during the POR by the

total U.S. sales of PET film during the

period. Because we did not ask Kolon to

provide customer-specific rebates, and

because there is no evidence on the

record suggesting that Kolon’s allocation

of rebates is manipulative, we have used

Kolon’s calculation of rebate expense in

these reviews.

Comment 20: Petitioners contend that

the Department should make an

adjustment to PP for post-sale

warehousing expenses incurred on

Kolon’s PP sales.

Kolon contends that the Department’s

normal practice is to treat post-sale

warehousing expense as direct only if

the expense can be tied to particular

sales. Kolon asserts that in this case, the

after-sale expense does not vary with

specific sales. Consistent with past

practice, Kolon argues that the

Department should treat these

warehousing expenses as indirect.

Department’s Position: We disagree

with the petitioners. During the PORs

Kolon maintained a warehouse as its

Korean factory. The expenses associated

with maintaining that warehouse were

fixed and did not vary with individual

sales. Accordingly, we properly treated

these expenses as indirect selling

expenses. See Professional Electric

Cutting Tools and Professional Electric

Standing/Grinding Tools from Japan:

Final Determination of Sales at Less

Than Fair Value, 58 FR 30144, 30147–

30148 (May 26, 1993).

Comment 21: Petitioners contend that

in its margin calculations the

Department overstated the value of STS

Corporation’s (STC) further-processed

sales by using the wrong variable to

represent the quantity sold.

Department’s Position: We agree and

have adjusted our calculations

accordingly.

Comment 22: Cheil contends that the

Department should use the transfer

price paid to a related supplier to

represent the material cost of EG in the

Department’s second record period

calculations. Cheil contends that

Departmental practice is to accept

transfer prices where direct or indirect

ownership is less than 50 percent

between buyer and seller. Cheil notes

that the equity interest between Cheil

and its supplier of EG was much less

than 50 percent, and asserts that there

is no evidence that Cheil had control

over its suppliers.

Petitioners claim that the Department

was correct in its determination that

Cheil is related to one of its suppliers of

EG and that the Department correctly

adjusted Cheil’s COP/CV calculations to

reflect its supplier’s cost of producing

EG.

Department’s Position: We agree with

petitioners that Cheil is related to one of

its suppliers of EG. Section 773(e)(4)(F)

of the Tariff Act of 1930, as amended,

defines ‘‘related parties’’ as ‘‘two or

more persons directly or indirectly

controlling, controlled by, or under

common control with, any person’’

(emphasis added). Cheil has stated that

it was a member of the Samsung Group,

which is a group of companies under

common management control. (See

Cheil September 27, 1993 Questionnaire

Response at Exhibit 1, E.I. Dupont de

Nemours, et. al. v. United States, 841 F.

Supp. 1237, 1247–48 (CIT 1993).) The

Samsung Group owns more than 50

percent of Cheil’s supplier of EG. By

virtue of these relationships, we

consider that both Cheil and its supplier

are under common control by the

Samsung Group. Therefore, they are

related parties within the meaning of

§ 773(e)(4)(F).

Based on this relationship, we tested

the transactions between Cheil and its

related supplier of EG. During

verification we collected a schedule that

reported the production costs of the

related supplier. The schedule indicated

that the product cost of EG exceeded the

average price paid by Cheil. (See

Memorandum to Chris Marsh from Art

Stein, p.3, September 7, 1995.)

Accordingly, consistent with our

general practice, we relied on the

supplier’s cost as the value for EG in

PET film production.

Comment 23: Cheil contends that the

Department should subtract its shortterm interest income from its interest

expense to derive Cheil’s net interest

expense. Cheil asserts that the record

indicates that its interest income was

clearly short-term in nature. Cheil

contends that the methodology which it

employed in these reviews to derive net

interest expense is identical to that

which was accepted by the Department

in the fair value investigation and the

first review of this case. Cheil contends

that the Department may not depart

from its established practice without

explaining its basis for so long. Finally,

Cheil asserts that there is no statutory or

regulatory basis for denying interest

income as an offset to interest expense

because that interest income is

restricted.

Petitioners claim that the Department

correctly denied Cheil’s claimed shortterm interest income offset because the

income generating assets were pledged

as collateral for loans. Petitioners note

that the Department’s standard

questionnaire allows the respondent to

reduce its interest expense by any

interest income earned on short-term

investments of its working capital.

Petitioner contends that the assets that

were collateralized have, in effect, been

transformed from short-term to longterm assets.

Department’s Position: We have

disallowed Cheil’s claimed offset of

short-term interest income against

interest expense. We allow an offset for

interest expense only with interest

income from short-term investments.

(See Certain Corrosion-Resistant Carbon

Steel Flat Products and Certain Cut-toLength Carbon Steel Plat from Canada,

61 FR 13815, 13819 (March 28, 1996).)

While this interest income was

classified as ‘‘short-term’’ in Cheil’s

financial statements, the financial

statements indicate that the assets are

‘‘pledged for collateral for borrowings,’’

and ‘‘are restricted as to use and are not

subject to immediate withdrawal.’’ (See

notes (3) and (5) to Cheil’s 1992 audited

financial statements, Section A

Questionnaire Response, September 27,

1993). Because these assets are not

readily available to Cheil, we consider

it inappropriate to treat them as shortterm investments of working capital.

Comment 24: Cheil, Kolon, and STC

contend that the Department should

make a tax-neutral adjustment to U.S.

price for home market taxes which were

forgiven by virtue of export of the

product to the United States.

Department’s Position: We agree. In

light of the CAFC’s decision in Federal

Mogul Corp. v. United States, 63 F. 3d

1572 (Fed. Cir. 1995) the Department
35186 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

has changed its treatment of home

market consumption taxes. Where

merchandise exported to the United

States is exempt from the consumption

tax, the Department will add to the U.S.

price the absolute amount of such taxes

charged on the comparison sales in the

home market. We have adjusted our

calculations accordingly.

Comment 25: Cheil contends that the

Department should include indirect

selling expenses in its calculation of

COP.

Department’s Position: We agree.

Since indirect selling expenses were

included in the price compared to COP,

we have included indirect selling

expenses in our calculation of COP.

Comment 26: Cheil contends that the

Department should include duty

drawback in the home market price that

is compared to COP.

Department’s Position: We agree. Duty

drawback was applicable to Cheil’s local

export sales. Accordingly, when

comparing the home market price to

COP, we have included the duty

drawback incurred on Cheil’s ‘‘local

export’’ sales.

Comment 27: Cheil contends that in

calculating profit the Department

should not use net price rather than

gross price.

Department’s Position: We agree.

Because profit represents the arithmetic

difference between sales revenue and

the expenses incurred in realizing that

revenue, we have used Cheil’s home

market price net of adjustments to

calculate home market profit.

Comment 28: Cheil contends that in

its second review period calculations,

the Department used an incorrect

amount for differences in merchandise

(difmer). Cheil further contends that the

Department erroneously added rather

than subtracted difmer from FMV in the

second review period. Finally, Cheil

contends that since its difmer claim is

denominated in Korean won, the

Department should convert difmer into

U.S. dollars prior to adding this amount

to an FMV stated in dollars.

Department’s Position: We agree and

have adjusted our calculations

accordingly.

Comment 29: Cheil contends that the

Department should exclude direct

selling expenses from its CV

calculations because they are comprised

exclusively of movement expenses.

Department’s Position: We agree and

have excluded these expenses from our

calculation of CV.

Comment 30: Cheil and SKC contend

that the Department double-counted

packing in its CV calculations.

Department’s Position: We agree and

have revised our CV calculations to

eliminate the double-counting of

packing expenses.

Comment 31: Cheil, SKC, and STC

contend that for U.S. sales which were

compared to CV, the Department should

make an addition to U.S. price for duty

drawback. Cheil, SKC, and STC contend

that this adjustment is necessary

because they included these duties in

the cost of manufacture (COM)

component of CV.

Department’s Position: We agree.

Because Cheil, SKC, and STC included

import duties in their calculation of

COM, we have made an addition to U.S.

price in these final results for duty

drawback.

Comment 32: Kolon contends that for

comparisons to CV, home market

inventory carrying costs would be

included in the pool of indirect selling

expenses.

Department’s Position: We agree. In

these final results we included

inventory carrying costs in the pool of

indirect selling expenses.

Comment 33: SLC argues that the

Department should accept the price

charged to SKC by its related supplier

of DMT and TPA. SKC notes that the

equity interest between SKC and its

supplier of DMT and TPA was much

less than 50 percent, and asserts that

there is no evidence that SKC has

control over its supplier. SKC asserts

that it demonstrated that its purchases

of DMT and TPA were at arms-length.

SKC also asserts that it purchased DMT

and TPA at ‘‘market prices.’’ SKC

further contends that a proper analysis

of the cost of producing DMT and TPA

provides no evidence that prices for

these materials were below cost.

Petitioners contend that the

Department correctly adjusted SKC’s

COP/CV calculations to reflect the

supplier’s cost of producing DMT and

TPA. Petitioners contend that SKC and

its supplier are related within the

meaning of the antidumping law

because an equity relationship exists

between SKC and that supplier.

Department’s Position: We agree with

petitioners that SKC is related to one of

its suppliers of DMT and TPA. During

the PORS, SKC owned more than a 5

percent interest in its supplier. (See SKC

October 12, 1993 questionnaire response

at § VIII at 18, and SKC October 11, 1994

questionnaire response § VIII at 21.)

Thus, pursuant to § 773(e)(4)(E) of the

statute, these parties are related.

Based on this relationship, we tested

the transactions between SKC and its

related supplier. Analysis of these

prices indicated that the transfer price

between SKC and its supplier was less

than the supplier’s cost of producing

DMT and TPA. During our verification

of SKC, we met with the supplier, who

furnished us with a copy of the detailed

inventory statement from its financial

statement. The inventory statement

listed the total and per-unit cost of

goods sold in the supplier’s finished

inventory.

SKC’s supplier suggested that selling,

general and administrative expenses,

and interest expense should be based on

the cost of goods sold (COGS) from the

supplier’s income statement. We

calculated the full cost of producing

DMT and TPA based on that

methodology. We then compared these

costs to the average monthly transfer

prices reported on attachments 4 and 5

of SKC’s March 13, 1995 submission,

and determined that the supplier’s cost

for TPA exceeded the average transfer

price charged to SKC. We also

determined that the supplier’s cost for

DMT exceeded the average transfer

price charged to SKC. (See

Memorandum to Chris Marsh from Paul

McEnrue, August 18, 1995, at page 3.)

Accordingly, consistent with our

general practice, we relied on the

supplier’s cost as the value for TPA and

DMT purchased from related suppliers.

Comment 34: SKC asserts that if the

Department does not use the prices

charged to SKC from a related supplier,

the Department should ensure that it

relies upon a reasonable estimate of the

supplier’s cost. SKC argues that the

Department used an erroneous rate for

SG&A expenses in its analysis of the

cost of producing DMT and TPA. SKC

also asserts that the Department in its

third review calculations erroneously

compared the prices for DMT and TPA

charged by all of its suppliers for these

materials, rather than the prices paid by

SKC to its related suppler.

Petitioners argue that the calculation

methodology reflects a reasonable and

proper exercise of the Department’s

discretion. Petitioners note that the

methodology was proposed by SKC’s

related supplier in the second review.

Petitioners maintain that SKC, unhappy

with the results, proffered an alternative

methodology in the third review to

achieve more favorable results.

Petitioners argue that the Department

should reject SKC’s request for changes

since it failed to substantiate why a

change in mehtodology would be

appropriate.

Department’s Position: For the third

review we changed the SG&A rate used

in our analysis of SKC’s cost of DMT

and TPA. Prior to verification, we

requested supplemental information for

the third review. Specifically; we asked

SKC to document that its purchases of

major inputs were at arm’s length. Based

on the information provided by SKC,
Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35187

and for the reasons noted in response to

Comment 33, we have revised our

calculations of the supplier’s cost of

producing DMT and TPA for the third

review period.

SKC also attempted to supply this

information for the second review

period. The information, however, was

provided outside the time constraints of

19 CFR 353.31(a)(1)(ii), and was not

provided in response to our request.

Therefore, we did not use this untimely

and unverified information in our

second review period calculations.

Comment 35: SKC contends that if the

Department does adjust RC costs, it

should calculate a uniform cost for VCs

and for RCs. SKC asserts that such an

approach would be preferable to

calculating the cost of RC as the full cost

of the scrap film plus the cost of

recycling.

Department’s Position: As noted in

our response to Comment 1, because we

did not adjust RC costs, this issue is

moot.

Comment 36: For the third review

SKC argues that the Department should

adjust its COM for certain period costs.

SKC asserts that these period costs

could not be determined until the end

of its fiscal year. SKC assets that

correction of these period costs is

necessary in order to ensure that the

Department’s cost calculations reflect

the most complete and accurate data

available.

Department’s Position: We agree, and

for the final results of the third review

we have adjusted the COM of all

products to reflect the final, audited cost

results.

Comment 37: SKC asserts that for the

second that third reviews, the

Department erroneously used CV for all

U.S. sales that had sufficient home

market comparisons. SKC asserts this

error resulted from the Department’s

erroneous reading of SKC’s product

concordance.

Department’s Position: We agree with

SKC that we misread its product

concordance in our preliminary results.

In these final results we amended our

calculations to match U.S. sales with

home market sales of identical

merchandise according to the

concordance data provided by SKC.

Comment 38: SKC asserts that due to

a spreadsheet formula error, the

Department overstated the COM for

products SM30/12 and SS01/12 in the

second review.

Department’s Position: We agree, and

for the final results of the second review

we have recalculated the COMs of these

products.

Comment 39: SKC asserts that in these

reviews the Department erroneously

overstated home market profit by failing

to include selling expenses in COP.

Department’s Position: We agree. In

these final results we have included

SKC’s selling expenses in our

calculation of home market profit.

Comment 40: SKC contends that the

Department erroneously included

inventory carrying costs in CV for

purchase price (PP) sales.

Department’s Position: We agree with

SKC that inventory carrying costs

should be excluded from CV for

comparisons with PP sales, and we have

amended our calculations accordingly.

Comment 41: SKC asserts that the

Department overstated CV financing

expenses in these reviews by not

including notes receivable in the

calculation of the financing expense

offset.

Department’s Position: We agree and

have added notes receivable in the offset

used to calculate net finacning expenses

for CV.

Comment 42. SKC asserts that for the

third administrative review the

Department erroneously used COMs for

the second review for products SS01/12

and SS01/15.

Department’s Position: We agree and

have amended these final results

accordingly.

Comment 43: STC asserts that the

Department should exclude aberrant

U.S. sales of obsolete merchandise from

its margin analysis. STC contends that

the CIT determined in American

Permac, Inc. v. the United States, 783 F.

Supp. 1421 (CIT 1992) that the

Department had the discretion to

exclude such U.S. sales.

Department’s Position: We disagree

with STC. As noted in the Final Results

of the First Review, there is no provision

in the statute for the exclusion of U.S.

sales based upon those U.S. sales being

‘‘aberrant’’ or outside the ordinary

course of trade (See Final Results of

First Review, (42842).) Therefore, we

have included these sales in our

calculations.

Comment 44: STC asserts that if the

Department includes sales of obsolete

merchandise in its margin calculations

for the third review, it should compare

them to comparable home market sales,

even if such sales were below cost. STC

asserts that the legislative history of the

sales-below-cost provision and the SAA

accompanying the Uruguay Round

support the use of below-cost sales of

obsolete merchandise in the calculation

of FMV.

Department’s Position: We disagree

with STC. As explained in our

preliminary determination, all

comparable home market sales were

excluded because they were below cost.

Section 773(b) of the Act explicitly

mandates the exclusion of below cost

sales if such sales have been made in

substantial quantities over an extended

period of time and are not at prices

which permit recovery of all costs

within a reasonable period of time in

the normal course of trade. Because the

language of the statute unambiguously

requires the exclusion of all below cost

sales that have satisfied the listed

criteria, it is unnecessary to resort to the

legislative history for further guidance.

See Davis v. Michigan Dep’t. of

Treasury, 489 U.S. 803, 808, n.3 (1989)

(‘‘Legislative history is irrelevant to the

interpretation of an unambiguous

statute.’’).

Moreover, it is a primary tenet of

statutory construction that, if possible,

legislative history must be read to be

consistent with the meaning of a clear

statutory mandate. See Sutherland Stat.

Const. § 48.06 (5th ed. 1992). Therefore,

the references to obsolete and end-ofmodel year merchandise in the

legislative history of the COP provision

merely provide examples of instances

when below cost sales may not satisfy

the statute’s criteria of being made in

substantial quantities over an extended

period of time and at prices which

permit recovery of costs.

Therefore, because we determined

that STC’s below-cost sales satisfied the

statutory criteria for exclusion, we

complied with the clear statutory

mandate to disregard STC’s below cost

sales, including these sales of obsolete

merchandise. When necessary, we have

used CV, in accordance with section

773(b).

Comment 45: STC contends that the

Department should correct its

calculation of profit for value-added

sales by adjusting for movement

expenses.

Department’s Position: We agree and

have adjusted our calculations

accordingly.

Comment 46: STC contends that for

third period ESP sales compared to CV,

the Department should include

inventory carrying costs in the pool of

indirect selling expenses.

Department’s Position: We agree that

inventory carrying costs should be

included in the pool of indirect selling

expenses for the calculation of CV when

used as the comparison for ESP sales.

We have adjusted our calculations

accordingly.

Final Results of Review and Revocation

in Part

Upon review of the comments

submitted, the Department has

determined that the following margins

exist for the periods indicated:
35188 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

1Allied Tube & Conduit and Wheatland Tube

Company.

2 Including Borusan Birlesik Boru Fabrikalar A.S.,

Kartal Boru Sanayi ve Ticaret A.S., and Borusan

Ihracat Ithalat ve Dagitim A.S.

Company Period Margin

(percent)

Cheil .......................... 92–93 0

Cheil .......................... 93–94 0.01

Kolon ......................... 92–93 0.11

Kolon ......................... 92–93 0.12

SKC ........................... 92–93 5.89

SKC ........................... 93–94 0.52

STC ........................... 92–93 0.47

STC ........................... 93–94 0.93

Based upon the information

submitted by Cheil during these reviews

and the first administrative review, we

further determine that Cheil has met the

requirements for revocation set forth in

§ 353.25(a)(2) and § 353.25(b) of the

Department’s regulations. Cheil has

demonstrated three consecutive years of

sales at not less than fair value and has

submitted the certifications required

under 19 CFR 353.25(b)(1). The

Department conducted a verification of

Cheil as required under 19 CFR

353.25(c)(2)(ii).

On the basis of no sales at less than

FMV for a period of three consecutive

years, and the lack of any indication

that such sales are likely, the

Department concludes that Cheil is not

likely to sell the merchandise at less

than FMV in the future. Therefore, the

Department is revoking the order with

respect to Cheil.

The Customs Service shall assess

antidumping duties on all appropriate

entries. Individual differences between

USP and FMV may vary from the

percentages stated above. The

Department will issue appraisement

instructions concerning each

respondent directly to the U.S. Customs

Service.

Furthermore, the following deposit

requirements will be effective for all

shipments of the subject merchandise,

entered, or withdrawn from warehouse,

for consumption on or after the

publication date of these final results of

administrative review, as provided for

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

the cash deposit rate for the reviewed

firms will be the rates outlined above for

the third review period except for Cheil

and Kolon; because Kolon’s weightedaverage margin is de minimis, its cash

deposit rate will be zero percent;

because we are revoking Cheil, no cash

deposit will be required for Cheil; (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 in the original LTFV

investigation, but the manufacturer is,

the cash deposit rate will be the rate

established for the most recent period

for the manufacturer of the

merchandise; and (4) if neither the

exporter nor the manufacturer is a firm

covered in this or any previous review

conducted by the Department, the cash

deposit rate will be 4.82 percent, the allothers rate established in the LTFV

investigation.

These deposit requirements shall

remain in effect until publication of the

final results of the next administrative

review.

This notice serves as the 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 these review periods.

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 a reminder

to parties subject to administrative

protective order (APO) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34(d). Timely written

notification or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of the APO is a

sanctionable violation.

This administrative review and notice

are in accordance with section 751(a)(1)

of the Tariff Act (19 U.S.C. 1675(a)(1))

and 19 CFR 353.22.

Dated: June 26, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 96–17159 Filed 7–3–96; 8:45 am]

BILLING CODE 3510–DS–M

[A–489–501]

Notice of Preliminary Results of

Antidumping Duty Administrative

Review: Certain Welded Carbon Steel

Pipe and Tube From Turkey

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

SUMMARY: The Department of Commerce

(the Department) is conducting an

administrative review of the

antidumping duty order on certain

welded carbon steel pipe and tube from

Turkey in response to a request by the

petitioners.1 This review covers

shipments of this merchandise to the

United States during the period May 1,

1994, through April 30, 1995.

We have preliminarily determined

that sales have been made below normal

value (NV). If these preliminary results

are adopted in our final results, we will

instruct U.S. Customs to assess

antidumping duties equal to the

differences between the United States

price and NV.

Interested parties are invited to

comment on the preliminary results.

Parties who submit arguments are

requested to submit with each

argument: (1) A statement of the issue;

and (2) a brief summary of the

argument.

EFFECTIVE DATE: July 5, 1996.

FOR FURTHER INFORMATION CONTACT:

Jennifer Stagner or Magd Zalok, Office

of Antidumping Investigations, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

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

telephone: (202) 482–1673 or (202) 482–

4162, respectively.

SUPPLEMENTARY INFORMATION:

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’s regulations are to the

current regulations, as amended by the

interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

Background

On May 10, 1995 (60 FR 24831), the

Department published in the Federal

Register a notice of ‘‘Opportunity to

Request an Administrative Review’’ of

the antidumping duty order on Certain

Welded Carbon Steel Pipe and Tube

from Turkey covering the period May 1,

1994, through April 30, 1995 (58 FR

53709). In accordance with 19 CFR

353.22(a)(1), in May 1995, the

petitioners requested a review of the

following producers and exporters of

certain welded carbon steel pipe and

tube: (1) The Borusan Group 2 (Borusan);

(2) Mannesmann-Sumerbank Boru

Industrisi T.A.S. (Mannesmann); (3)

Yucelboru Ihracat, Ithalat ve Pazarlama

A.S./Cayirova Boru Sanayi ve Ticaret

A.S. (Yucelboru); and (4) Erbosan