Court Opinion

ID: 819568
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:39:54.845275+00
Date Added: 2024-06-11T12:38:55.602046
License: Public Domain

Slip Op. 99-144

           UNITED STATES COURT OF INTERNATIONAL TRADE

                 BEFORE: RICHARD W. GOLDBERG, JUDGE

LG SEMICON CO., LTD., and
LG SEMICON AMERICA, INC.,

                       Plaintiffs,
                                               PUBLIC VERSION
                 v.
                                               Court No. 98-10-03076
UNITED STATES,

                        Defendant,

                              and
MICRON TECHNOLOGY, INC.,

           Defendant-Intervenor.

                                             Dated: December 30, 1999

Kaye, Scholer, Fierman, Hays,& Handler, LLP (Michael P. House and
Raymond Paretzky) for plaintiffs LG Semicon Co., Ltd. and LG
Semicon America, Inc.

David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice; Kenneth S. Kessler,
Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Office of the Chief Counsel for
Import Administration, United States Department of Commerce
(Patrick V. Gallagher, Jr.), of counsel, for defendant.

Hale and Dorr, LLP (Gilbert B. Kaplan, Michael D. Esch, Paul W.
Jameson, and Cris R. Revaz) for defendant-intervenor Micron
Technology, Inc.
Court No. 98-10-03076                                     Page 2

                               OPINION

GOLDBERG, Judge: In this action, the Court reviews the United

States Department of Commerce’s (“Commerce”) Dynamic Random

Access Memory Semiconductors of One Megabit or Above From the

Republic of Korea: Final Results of Antidumping Duty

Administrative Review, Partial Rescission of Administrative

Review and Notice of Determination Not to Revoke Order, 63 Fed.

Reg. 50,867 (Sept. 23, 1998), as amended, 63 Fed. Reg. 56,906

(Oct. 23, 1998)(“Final Results”).    Plaintiffs LG Semicon Co.,

Ltd. and LG Semicon America, Inc. (collectively “LG Semicon”)

complain that in the Final Results Commerce applied a “knew or

should have known” standard to determine that third country sales

should be treated as U.S. sales for purposes of calculating a

dumping margin.   According to plaintiffs, the proper test should

be actual knowledge.    Plaintiffs also argue that regardless of

the standard applied, Commerce’s determination is not supported

by substantial evidence.

     The Court exercises jurisdiction to review this motion for

judgment upon the agency record pursuant to 28 U.S.C. §

1581(c)(1994).    The Court sustains Commerce’s Final Results.
Court No. 98-10-03076                                    Page 3

                                 I.
                             BACKGROUND

     On April 22, 1992, Micron Technology, Inc. (“Micron”), the

defendant-intervenor in the instant action, filed an antidumping

petition alleging that Dynamic Random Access Memory

Semiconductors (“DRAMs”) imported from Korea were being sold in

the United States at less than fair market value.   After an

investigation, Commerce published, on May 10, 1993, an

antidumping duty order covering such imports.    Antidumping Duty

Order and Amended Final Determination: Dynamic Random Access

Memory Semiconductors of One Megabit and Above from the Republic

of Korea, 58 Fed. Reg. 27,520 (May 10, 1993).

     In response to requests from both domestic and foreign

producers, Commerce initiated the fourth antidumping duty

administrative review of the order on July 19, 1997. Initiation

of Antidumping and Countervailing Duty Administration Reviews and

Request for Revocation in Part, 62 Fed. Reg. 33,394 (July 19,

1997).   The review covered the period May 1, 1996, through April

30, 1997.   Id.   On March 3, 1998, Commerce published its

preliminary results of the fourth review.    Dynamic Random Access

Memory Semiconductors of one Megabit or Above From the Republic

of Korea; Preliminary Results of Antidumping Duty Administrative
Court No. 98-10-03076                                      Page 4

Review and Notice of Intent not to Revoke Order, 63 Fed. Reg.

11,411 (Mar. 9, 1998)(“Preliminary Results”).

     In the Preliminary Results, Commerce “determined that a

number of sales LG [Semicon] had reported as being to a third

country were actually sales to the United States.”      Id. at

11,412.    As a result, Commerce used “both the reported and the

unreported sales to the United States” to calculate LG Semicon’s

dumping margin.    Id.   LG Semicon challenged the Preliminary

Results.   It claimed it had no knowledge that its third country

sales, which consisted of DRAMs sold to a foreign business, would

be exported to the United States.     See App. to Pls. LG Semicon

Co., Ltd. and LG Semicon America, Inc.’s Reply Br. in Supp. of

Pls.’ Mot. for J. upon the Agency R. (“Pls.’ App.”), at

Confidential Record (“C.R.”) 1935 (Case Br. of LG Semicon Co.,

Ltd. and LG Semicon America, Inc. (Apr. 28, 1998), 26-27).

     Nonetheless, Commerce maintained in the Final Results that

“a number of sales that LG reported as third-country sales were

actually [unreported] sales to the United States.” 63 Fed. Reg.

at 50,868.    It determined “that at the time LG made these sales

it knew, or should have known, that the DRAMs were destined for

consumption in the United States.”     Id.   Thus, in calculating LG

Semicon’s dumping margin of 9.28%, Commerce included LG Semicon’s
Court No. 98-10-03076                                     Page 5

sales to the foreign business.   See id.

                               II.
                        STANDARD OF REVIEW

     Commerce’s Final Results will be sustained if they are

supported by substantial evidence on the record and are otherwise

in accordance with the law.   See 19 U.S.C. § 1516a(b)(1)(B)

(1994).

     To determine whether Commerce’s interpretation of a statute

is in accordance with law, the Court applies the two-prong test

set forth in Chevron U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984).    Chevron first directs the

Court to determine “whether Congress has directly spoken to the

precise question at issue.”   Id. at 842.    The Court first looks

to the statute’s text to ascertain “Congress’s purpose and

intent.”   Timex V.I., Inc. v. United States, ___ Fed. Cir. (T)

 __, __, 157 F.3d 879, 881 (1998) (citing Chevron, 467 U.S. at

842-43 & n.9).   If the plain language of the statute is not

dispositive, the Court will then consider the statute’s

structure, canons of statutory interpretation, and legislative

history.   See id. at 882 (citing Dunn v. Commodity Futures

Trading Comm’n, 519 U.S. 465, 470-80   (1997)); Chevron 467 U.S.

at 859-63; Oshkosh Truck Corp. v. United States, 123 F.3d 1477,
Court No. 98-10-03076                                      Page 6

1481 (Fed. Cir. 1997)).   If Congress’s intent is unambiguous, the

Court must give it effect.   See id.

      If the statute is either silent or ambiguous on the question

at issue, however, “the question for the court is whether the

agency’s answer is based on a permissible construction of the

statute.”   Chevron, 467 U.S. at 843 (footnote omitted).    Thus,

the second prong of the Chevron test directs the Court to

consider the reasonableness of Commerce’s interpretation.      See

id.

      With respect to Commerce’s factual findings, the Court will

uphold the agency if its findings are supported by substantial

evidence.   “Substantial evidence is something more than a ‘mere

scintilla,’ and must be enough reasonably to support a

conclusion.”   Ceramica Regiomontana, S.A. v. United States, 10

CIT 399, 405, 636 F. Supp. 961, 966 (1986) (citations omitted),

aff’d, 5 Fed. Cir. (T) 77, 810 F.2d 1137 (1987).   In applying

this standard, courts must sustain Commerce’s factual

determinations so long as they are reasonable and supported by

the record as a whole, even if there is some evidence that

detracts from the agency’s conclusions.   See Atlantic Sugar, Ltd.

v. United States, 2 Fed. Cir. (T) 130, 137, 744 F.2d 1556, 1563

(1984).
Court No. 98-10-03076                                     Page 7

                                III.
                             DISCUSSION

     In the discussion below, the Court first examines whether

Commerce’s application of the “knew or should have known”

standard is in accordance with the law.    The Court then considers

whether Commerce’s finding that LG Semicon “knew or should have

known” the DRAMs sold to the foreign business were destined for

the United States is supported by substantial evidence.    The

Court finds in the affirmative on both questions.

A.   Commerce’s Application of the “Knew or Should Have Known”
     Standard is Consistent with Legislative Intent and Prior
     Practice.

     LG Semicon asserts that Commerce incorrectly classified the

DRAMs sold to the foreign business as “unreported U.S. sales” and

thus incorrectly included such sales in LG Semicon’s dumping

margin.   See Br. of Pls. LG Semicon Co., Ltd. and LG Semicon

America, Inc. in Supp. of Pls.’ Mot. for J. Upon the Agency R.

(“Pls.’ Br.”), at 2.    Specifically, LG Semicon challenges

Commerce’s finding that LG Semicon “knew or should have known”

the ultimate destination of the DRAMs. See id.    LG Semicon claims

that the U.S. antidumping statute, legislative history, holdings

of this court, and Commerce’s own administrative decisions do not
Court No. 98-10-03076                                        Page 8

support Commerce’s application of the “knew or should have known”

standard.    Id.   The Court does not agree.

     Under the U.S. antidumping statute, dumping margins are

determined by comparing export price to normal value. See 19

U.S.C. §§ 1675(a)(2), 1677a(a), 1677f-1(c)(1994).

            The term “export price” means the price at
            which the subject merchandise is first sold
            (or agreed to be sold) before the date of
            exportation [to the U.S.] by the producer or
            exporter of the subject merchandise outside of
            the United States to an unaffiliated purchaser
            in the United States or to an unaffiliated
            purchaser for exportation to the United
            States.

19 U.S.C. § 1677a(a)(emphasis added).    Thus, according to the

plain language of the statute, Commerce must base export price

not only on sales of the subject merchandise to unaffiliated

purchasers in the United States, but also on sales to

unaffiliated purchasers outside of the United States “for

exportation to the United States.”     Id.     Congress did not,

however, instruct Commerce how to determine if merchandise has

been sold “for exportation to the United States” in the text of

the statute itself.

     LG Semicon contends that Congress’s intent on this matter is

evident from legislative history and that Commerce’s application

of the “knew or should have known” standard is contrary to such
Court No. 98-10-03076                                     Page 9

intent.   See Pls.’ Br., at 16.    Commerce and Micron argue that

Commerce’s standard comports with legislative intent.     See Def.’s

Mem. in Opp’n to Pls.’ Mot. for J. Upon the Agency R. (“Def.’s

Br.”), at 18-19; Br. of Def.-Intervenor Micron Technology, Inc.

in Opp’n to Pls.’ Mot. for J. on the Agency R., (“Def.-

Intervenor’s Br.”), at 10-11.     The Court agrees.

     Commerce’s “knew or should have known standard” is plainly

consistent with Congressional intent. The definition of “purchase

price”1 in the Statement of Administrative Action (“SAA”)

accompanying the Trade Agreements Act of 1979, “makes clear that

if the producer knew or had reason to know the goods were for

sale to an unrelated U.S. buyer...the producer’s sales price will

be used as ‘purchase price’ to be compared with that producer’s

foreign market value.”    H.R. Doc. No. 96-153, at 411

(1979)(emphasis added).   And the SSA was expressly approved by

Congress.   See 19 U.S.C. § 2503(a) (1994) (“Congress approves the

     1
      The terminology originally used was “purchase price.”
Congress later changed the term to “export price.” See 19 U.S.C.
§ 1677a(a). Congress made clear, however, that the two terms are
coextensive. See The Uruguay Round Agreement Act, Statement of
Administrative Action, H.R. Doc. 103-316, at 822-23 (1994)
(“Notwithstanding the change in terminology, no change is
intended in the circumstances under which export price (formerly
‘purchase price’) versus construed export price (formerly
‘exporters sales price’) are used.”).
Court No. 98-10-03076                                   Page 10

trade agreements...submitted to the Congress on June 19, 1979,

and the statements of administrative action proposed to implement

such trade agreements submitted to the Congress on that date.”).

     LG Semicon also argues that Commerce’s “knew or should have

known” standard is impermissible because it is contrary to

Commerce’s prior consistent practice.   See, e.g., M.M. & P.

Maritime Advancement, Training, Educ. & Safety Program v.

Department of Commerce, 2 Fed. Cir. (T) 36, 43-44, 729 F.2d 748,

755 (1984) (Commerce is obligated to follow a consistent practice

unless it supplies adequate explanation).   LG Semicon maintains

that Commerce’s consistent practice has been to apply an actual

knowledge standard when evaluating whether third-party sales were

“for” exportation to the United States. Pls.’ Br., at 16-25.   The

Court disagrees with this contention.

     In its briefs, LG Semicon identifies several determinations

and cases that contain poorly crafted passages and language

choices which tend to cloud the standard utilized by Commerce.

See, e.g., INA Walzlager Schaeffler KG v. United States, 21 CIT

__, 957 F. Supp. 251 (1997); Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, From the People’s Republic of

China; Final Results of Antidumping Duty Administrative Reviews,

61 Fed. Reg. 65,527, 65,539 (Dec. 13, 1996).   An examination of
Court No. 98-10-03076                                   Page 11

these determinations and cases, however, together with other

Commerce determinations and judicial opinions, demonstrates that

Commerce’s application of the “knew or should have known”

standard is consistent with the prior practice of the agency.2

     First, Commerce has consistently applied the “knew or should

have known” standard in prior determinations.   For example, in

Certain Pasta from Italy: Termination of New Shipper Antidumping

Administrative Review, 62 Fed. Reg. 66,602 (Dec. 19, 1997),

     2
       For example, LG Semicon cites NSK Ltd. v. United States,
21 CIT__, 969 F. Supp. 34 (1997), for the proposition that
Commerce utilizes a “knowledge” test which evaluates only actual
knowledge. LG Semicon bases this contention, in part, on the
legislative history cited by NSK which states that “if a producer
knew that the merchandise was intended for sale to an unrelated
purchaser in the United States..., the producer’s sale prices to
an unrelated middleman will be used as the purchase price.” 969
F.Supp., at 60 (citing S.Rep. No. 96-249, at 94 (1979), reprinted
in U.S.C.C.A.N. 381, 480 (emphasis added).
     But the NSK court also cited, in the same string citation no
less, H.R. No. 96-153, at 411, which states that, “[t]he
definition makes clear that if the producer knew or had reason to
know the goods were for sale to an unrelated U.S. buyer,...the
producer’s sales price will be used as ‘purchase price’.”
(emphasis added).
     Likewise, LG Semicon is misled by the INA decision. See 957
F. Supp. at 263. Unfortunately, INA is susceptible to
misinterpretation due to its somewhat nebulous distinction
between Section 1677a(b) and Section 1677b(a). See id. LG
Semicon contends that INA makes a distinction based on the
statutory provisions’ different requirements for actual and
imputed knowledge. See Pls.’ Br., at 20-21. The distinction INA
actually makes between the two statutory provisions, however, is
one between general and specific knowledge. See INA, 957 F.
Supp., at 263-65 & n.3.
Court No. 98-10-03076                                      Page 12

Commerce concluded that the sales of a pasta product in the

United States should have been assigned to the pasta’s Italian

producer, not the unaffiliated U.S. trading company.   See id. at

66,602-03. Commerce stated that “certain proprietary information

on the record concerning the nature of the relationship between

the parties involved in this review demonstrate that the producer

knew or had reason to know that the pasta it sold...was destined

for the United States.” Id. (emphasis added); accord Television

Receivers, Monochrome and Color, From Japan; Final Results of

Antidumping Duty Administrative Review, 58 Fed. Reg. 11,211,

11,216 (Feb. 24, 1993); Natural Bristle Paint Brushes and Brush

Heads From the People’s Republic of China; Final Results of

Antidumping Duty Administrative Review, 55 Fed. Reg. 42,599,

42,599-61 (Oct. 22, 1990).

     Moreover, Commerce’s use of the “knew or should have known”

standard was recognized and upheld by this court and the Federal

Circuit in Yue Pak, Ltd. v. United States, 20 CIT 495 (1996),

 aff’d, No. 96-1398, 1997 WL 130319 (Fed. Cir. Mar. 21,

1997)(unpublished).   In reviewing Commerce’s practice this court

found that

          Commerce    interprets    the   phrase    “for
          exportation to the United States” to mean that
          the reseller or manufacturer from whom the
Court No. 98-10-03076                                     Page 13

          merchandise was purchased knew or should have
          known at the time of the sale that the
          merchandise was being exported to the United
          States.

Yue Pak, 20 CIT at 498 (emphasis added)3.   Further, the court

sustained Commerce’s determination because the evidence was

“adequate to support Commerce’s conclusion that Plaintiff’s

suppliers knew or should have known of the U.S. destination of

the merchandise.”   See id. at 503 (emphasis added).

     In conclusion, Commerce’s application of the “knew or should

have known” standard is in conformance with legislative history,

is a consistent practice of the agency, and has been previously

sustained by this court.   Thus, the Court finds Commerce’s Final

Results to be in accordance with the law.

     3
      The Court acknowledges that the Yue Pak Court cites two
cases that do not seem to explicitly support this proposition.
See Yue Pak, 20 CIT 498 (citing Sandvik AB v. U.S., 13 CIT 738,
721 F. Supp. 1322, aff’d, 904 F.2d 46 (Fed. Cir. 1990); Peer
Bearing Co. v. U.S., 16 CIT 799, 803-804, 800 F. Supp. 959, 964
(1992)); Pls.’ Br., at 24. Nonetheless, the Court defers to the
Yue Pak court’s decision, and the Federal Circuit’s affirmation
thereof, and finds that the cases cited at least tangentially
support the proposition. See id. This deference is especially
appropriate in light of numerous other Commerce determinations
that consistently apply the “knew or should have known” standard.
Court No. 98-10-03076                                    Page 14

B.   Commerce’s Determination that LG Semicon Knew or Should Have
     Known That DRAMs it Sold to the Foreign Business Were
     Destined for Export to the United States is Supported by
     Substantial Evidence.

     LG Semicon next argues that Commerce’s determination is not

supported by substantial evidence under either the “actual

knowledge” standard urged by LG Semicon or the “knew or should

have known” standard used by Commerce.   See Pls.’ Br., at 25-43.

     The administrative record as a whole, however, supports

Commerce’s finding that LG Semicon knew or should have known the

DRAMs sold to the foreign business were destined for export to

the United States.   Commerce determined that LG Semicon knew or

should have known its DRAMs were destined for export to the

United States for a number of reasons.   See Def.’s Br., at 24-37.

The Court will address the most compelling reasons here.   First,

the volume of DRAMs LG Semicon sold to the foreign business was

disproportionate to the foreign business’ production capacity and

the corresponding market capacity.   Second, the foreign business

bears the indices of a maquiladora, a common mechanism for

exportation of goods from Mexico to the United States.   And

finally, LG Semicon monitored the U.S. DRAMs market closely and

would have been aware of sales of its product in the United

States by an external source.
Court No. 98-10-03076                                      Page 15

       The strongest evidence on the record is the volume of sales

LG Semicon made to the foreign business during the period of

review (“POR”) in comparison to the size of the foreign business’

operations and the relevant non-U.S. market. See 63 Fed. Reg. at

50,876-77; Pls.’ App., at CR 2023 (Mem. of 09/08/98 from John

Conniff to Holly Kuga (“Unreported Sales Mem.")).    This evidence

supports Commerce’s conclusion that given the number of DRAMs it

sold to the foreign business, LG Semicon knew or should have

known that the foreign business could not process those DRAMs;

and that neither the Mexican nor Latin American market could

absorb the DRAMs.

       The sales statistics as evidence is persuasive.    LG Semicon

sold a large number of DRAMs to the foreign business during the

POR.    See App. to Def.-Intervenor Micron Technology, Inc.’s Br.

in Opp’n to Pls.’ Mot. for J. on the Agency R. (“Def.-

Intervenor’s App.”), at CR 1902 (Letter of 04/22/99 from Michael

Kaplan, et al. to LaRussa, (“LaRussa Letter”), 15).      Put in

perspective, LG Semicon’s sales of DRAMs to the foreign business

during the POR were nearly three times LG Semicon’s aggregate

sales in the United States -- the largest market for DRAMs in the

world -- during the same period.    See id.   Significantly, in a
Court No. 98-10-03076                                     Page 16

short span of time, the foreign business became the world’s

largest customer of LG Semicon’s American operation.     See Id.

And, LG Semicon was allegedly only one of the many companies that

supplied DRAMs to the foreign business. See Pls.’ App., at CR

1860 (Mem. of 01/14/98 from Brian C. Smith and Rebecca Woodings

to Louis Apple, 6.).

     The sales statistics are particularly significant because of

the size and limited production capabilities of the foreign

business.   By LG Semicon’s own account, the foreign business

utilized few production lines with few production workers.      See

Def.-Intervenor’s App., at CR 1853 (Letter of 03/24/98 from Kaye,

Scholer, Fierman, Hayes & Handler LLP to the Secretary of

Commerce (“Kaye, Scholer Letter of 03/24/98"), App. 1, Decl. of

Robert Simon, LG Sales Dir. for the Southwestern Area (“Simon

Decl.”), ¶ 4).

     Moreover, the relevant foreign markets that might have been

able to absorb the DRAMs LG Semicon sold to the foreign business

were limited.    See Unreported Sales Mem., 6.   The Mexican market

for integrated circuits, of which only a portion is attributed to

DRAMs, is approximately $200 million a year. See id.     The entire

Latin American market for integrated circuits is $400 million.
Court No. 98-10-03076                                     Page 17

See id.   Because LG Semicon’s sales to the foreign business were

substantial, those sales alone accounted for a large part of both

the Mexican and Latin American markets for integrated circuits.

     In short, LG Semicon sold a disporportionate number of DRAMs

to a limited assembly facility within a limited market.    This

evidence reasonably supports Commerce’s conclusion that LG

Semicon knew or should have known that the DRAMs it sold to the

foreign business most likely could not be processed by that

entity or absorbed by the Mexican or Latin American markets, and

instead were destined for export to the United States.    This

conclusion is especially sound when LG Semicon’s self-proclaimed

“intimate knowledge” of the foreign business and DRAM market is

taken into account.     See Simon Decl., ¶ 4; Kaye, Scholer Letter

of 03/24/98, at App. 2, Decl. of Daniel Lee, Gen. Manager of

Sales for LG Semicon America, Inc. (“Lee Declaration”), ¶ 3-7;

Def.’s App. for Def.’s Mem. in Opp’n to Pls.’ Mot. for J. upon

the Agency R. (“Def.’s App.”), at Ex. 2 (Mem. of 07/17/98 from

Tom Futtner & John Conniff to Holly Kuga(“Commerce Mem. of

07/17/98"), 3).

     As additional support for its determination, Commerce

asserts that the foreign business is a maquiladora.     See Def.’s
Court No. 98-10-03076                                   Page 18

Br., at 29-30. A maquiladora is defined in the administrative

record as “a Mexican corporation operating under a special

customs regime which allows the corporation to temporarily import

into Mexico duty-free, raw material, equipment, machinery,

replacement parts, and other items needed for the assembly or

manufacture of finished goods for subsequent export.”   See

LaRussa Letter, Attach. 3, NAFTA FAQs About Maquiladoras.     In

Commerce’s view, the foreign business’ status as a maquiladora

should have alerted LG Semicon to the likelihood that its DRAMs

would be exported to the United States.   See Def’s. Br., at 29-

30.   As evidence that the foreign business is a maquiladora,

Commerce cites the facility’s proximity to the U.S. border,4 its

assembly of electronics (an industry that dominates maquiladora

trade),5 and the numerous importation documents which identify the

      4
      The record contains information demonstrating that in
1996, 80% of goods exported by maquiladoras were exported to the
United States. See LaRussa Letter, Attach. 5, Camila Castellanos,
Maquiladora Industry Spurs Development, Novedas Editores, S.A. de
C.V.
      5
      See LaRussa Letter, Attach. 5, Maquiladoras-Recent Trends
and Growth (“The largest concentration of maquiladoras is in
electronics, textiles, and autoparts and accessories.”).
Court No. 98-10-03076                                     Page 19

foreign business as a maquiladora.6

     Notably, LG Semicon does not deny that the foreign business

is a maquiladora, but instead claims that even if the facility is

a maquiladora, this does not establish that the DRAMs sold to the

foreign business were destined to be exported to the United

States.   See Pls.’ Br., at 36-37.    It is true that the foreign

business’ probable status as a maquiladora is not dispositive to

this inquiry.    It does, however, lend further support to

Commerce’s finding that LG Semicon knew or should have known the

DRAMs it sold to the foreign business would be exported to the

United States.    Specifically, Commerce could reasonably infer

from the foreign business’ probable maquiladora status, together

with the other evidence, that LG Semicon knew or should have

known the foreign business could not use all the DRAMs it bought

from LG Semicon to manufacture a domestically marketable product.

Commerce could also infer that LG Semicon knew or should have

known that the surplus DRAMs would likely be exported to the

     6
      See Kaye, Scholer Letter of 03/24/98, Attach. 5, decl. of
Chris Chun, Ex. A. Exhibit A contains seventy-six customs
documents listing the exporter as LG Semicon and the importer as
the foreign business. See id. Each document classifies the
foreign business as operating as a maquiladora. See id.
Court No. 98-10-03076                                     Page 20

United States through the foreign business’ existing maquiladora

mechanism.

     Lastly, there is substantial evidence supporting Commerce’s

assertion that LG Semicon knew or should have known of the

importation of the DRAMs it sold to the foreign business because

LG Semicon would have been alerted to the presence of substantial

numbers of new LG Semicon DRAMs in the U.S. market.     See Def’s.

Br., at 36; Def.-Intervenor.’s Br., at 43-44.    LG Semicon’s

direct sales to the U.S. market during the POR were minimal.       See

LaRussa Letter, 15.   The administrative record demonstrates that

a substantial number of LG Semicon’s DRAMs were exported by the

foreign business to the United States.     See Unreported Sales

Mem., 2.   Importantly, the value of documented exports, alone,

was approximately equal to the value of DRAMs sold by LG Semicon

in the United States during the POR.     See LaRussa Letter, 15.

Moreover, there is no evidence that the LG Semicon DRAMs exported

by the foreign business were entered into the United States as

components of other products.   Given these facts, as well as the

sworn affidavits from Micron and LG Semicon employees attesting

to substantial knowledge of the daily fluctuations of the U.S.
Court No. 98-10-03076                                   Page 21

DRAMs market,7 it is unlikely that LG Semicon was not aware that a

substantial number of new LG Semicon DRAMs were placed on the

U.S. market.   Together with other supporting evidence, this

reasonably supports Commerce’s conclusion that LG Semicon knew or

should have known that its continuing sales to the foreign

business were being exported to the United States.

     In summary, the Court finds substantial evidence to sustain

Commerce’s Final Results.   Together, the volume of DRAMs LG

Semicon sold to the foreign business compared to the foreign

business’ production capacity and corresponding market capacity,

the foreign business’ probable status as a maquiladora, and LG

Semicon’s awareness of the U.S. DRAMs market, support Commerce’s

determination.

     7
      See Simon Decl.; LaRussa Letter,   Ex. 4, aff. of Joseph
D’Esopo, ¶ 2.
Court No. 98-10-03076                                   Page 22

                                IV.
                            CONCLUSION

     For all of the foregoing reasons, the Court sustains

Commerce’s Final Results.   A separate order will be entered

accordingly.

                               ___________________
                               Richard W. Goldberg
                                       JUDGE
Date: December 30, 1999
      New York, New York