[Federal Register Volume 64, Number 82 (Thursday, April 29, 1999)]
[Notices]
[Pages 23053-23056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10770]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-839, A-583-833]
Initiation of Antidumping Duty Investigations: Certain Polyester
Staple Fiber From the Republic of Korea and Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 29, 1999.
FOR FURTHER INFORMATION CONTACT: Cynthia Thirumalai and Marian Wells,
Import Administration, International Trade Administration, U.S.
Department of Commerce, Room 3099, 14th Street and Constitution Avenue,
N.W., Washington, D.C. 20230; telephone: (202) 482-4087 and (202) 482-
6309, respectively.
Initiation of Investigations
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 as amended (``the
Act'') by the Uruguay Round Agreements Act (``URAA''). In addition,
unless otherwise indicated, all citations to the Department's
regulations are to the provisions codified at 19 CFR part 351 (1998).
The Petition
On April 2, 1999, the Department of Commerce (``the Department'')
received a petition filed in proper form by E.I. DuPont de Nemours,
Inc.; NanYa Plastics Corporation, America; Arteva Specialities
S.a.r.l., d/b/a KoSa; Wellman, Inc.; and Intercontinental Polymers,
Inc., hereinafter collectively referred to as ``the petitioners.''
(However, NanYa Plastics Corporation, America is not a petitioner in
the Taiwan case.)
In accordance with section 732(b) of the Act, the petitioners
allege that imports of certain polyester staple fiber (``polyester
fiber'') from the Republic of Korea (``Korea'') and Taiwan are being,
or are likely to be, sold in the United States at less than fair value
within the meaning of section 731 of the Act, and that such imports are
both materially injuring and threatening further material injury to an
industry in the United States.
The Department finds that the petitioners filed this petition on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(C) of the Act and they have demonstrated that
they account for at least 25 percent of the total production of the
domestic like product and more than 50 percent of the production of the
domestic like product produced by that portion of the industry
expressing support for, or opposition to, the petition (see
``Determination of Industry Support for the Petition'' section, below).
Scope of the Investigations
For purposes of these investigations, the product covered is
certain polyester staple fiber. Certain polyester staple fiber is
defined as synthetic staple fibers, not carded, combed or otherwise
processed for spinning, of polyesters measuring 3.3 decitex (3 denier,
inclusive) or more in diameter. This merchandise is cut-to-lengths
varying from one inch (25 mm) to five inches (127 mm). The merchandise
subject to these investigations may be coated, usually with a silicon
or other finish, or not coated. Certain polyester staple fiber is
generally used as stuffing in sleeping bags, mattresses, ski jackets,
comforters, cushions, pillows, and furniture. Merchandise of less than
3.3 decitex (less than 3 denier) classified under the Harmonized Tariff
Schedule of the United States (``HTSUS'') at subheading 5503.20.00.20
is specifically excluded from these investigations. Also specifically
excluded from these investigations are polyester staple fibers of 10 to
18 denier that are cut-to-lengths of 6 to 8 inches (fibers used in the
manufacture of carpeting).
The merchandise subject to these investigations is classified in
the HTSUS at subheadings 5503.20.00.40 and 5503.20.00.60. Although the
HTSUS subheadings are provided for convenience and customs purposes,
the written description of the merchandise under investigation is
dispositive.
During our review of the petition, we discussed the scope with the
petitioners to ensure that the scope language accurately reflects the
product for which they are seeking relief. Moreover, as discussed in
the preamble to the Department's regulations (62 FR 27323), we are
setting aside a period for parties to raise issues regarding product
coverage. The Department encourages all parties to submit such comments
by May 12, 1999. Comments should be addressed to Import
Administration's
[[Page 23054]]
Central Records Unit at Room 1870, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230. The
period of scope consultations is intended to provide the Department
with ample opportunity to consider all comments and consult with
parties prior to the issuance of our preliminary determinations.
Determination of Industry Support for the Petition
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) At least
25 percent of the total production of the domestic like product; and
(2) more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the petition.
Section 771(4)(A) of the Act defines the ``industry'' as: ``the
producers as a whole of a domestic like product.'' Thus, to determine
whether the petition has the requisite industry support, the statute
directs the Department to look to producers and workers who account for
production of the domestic like product. The International Trade
Commission (``ITC''), which is responsible for determining whether
``the domestic industry'' has been injured, must also determine what
constitutes a domestic like product in order to define the industry.
While both the Department and the ITC must apply the same statutory
definition regarding the domestic like product, they do so for
different purposes and pursuant to separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to the law.\1\ Section 771(10) of the Act
defines the domestic like product as ``a product which is like, or in
the absence of like, most similar in characteristics and uses with, the
article subject to an investigation under this subtitle.'' Thus, the
reference point from which the domestic like product analysis begins is
``the article subject to an investigation,'' i.e., the class or kind of
merchandise to be investigated, which normally will be the scope as
defined in the petition.
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\1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass from Japan: Final Determination; Rescission of
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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The domestic like product referred to in the petition is the single
domestic like product defined in the ``Scope of Investigations''
section, above. The Department has no basis on the record to find this
definition of the domestic like product to be inaccurate. The
Department, therefore, has adopted this domestic like product
definition.
In this case, the Department has determined that the petition and
supplemental information contained adequate evidence of sufficient
industry support; therefore, polling was not necessary. See Initiation
Checklists dated April 22, 1999 (public versions on file in the Central
Records Unit of the Department of Commerce, Room B-099). To the best of
the Department's knowledge, the producers who support the petition
account for more than 50 percent of the production of the domestic like
product. Additionally, no person who would qualify as an interested
party pursuant to section 771(b)(A), (C), (D), (E) or (F) of the Act
has expressed opposition on the record to the petition. Accordingly,
the Department determines that this petition is filed on behalf of the
domestic industry within the meaning of section 732(b)(1) of the Act.
Export Price and Normal Value
The following is a description of the allegations of sales at less
than fair value upon which our decision to initiate these
investigations is based. Should the need arise to use any of this
information in our preliminary or final determinations for purposes of
facts available under section 776 of the Act, we may re-examine the
information and revise the margin calculations, if appropriate.
Korea
The petitioners identified Daehan Synthetic Fiber Co., Ltd. (also
known as Tae Kweng); Kohap, Ltd.; Saehan Industries, Inc.; Sam Yang
Co.; and SK Chemicals as producers and exporters of polyester fiber to
the United States. The petitioners have based U.S. price on export
price (``EP'') because information obtained by the petitioners
indicates that Korean producers sold polyester fiber to unaffiliated
importers in the United States. As a basis for its EP calculation, the
petitioners have used multiple offers for sale of the subject
merchandise to unaffiliated purchasers in the United States between
December 1998 and February 1999. The terms of some of these sales
offers were FOB whereas other sales were offered on a delivered basis.
Where applicable, the petitioners calculated a net U.S. price by
subtracting the estimated cost of foreign inland freight to the port of
export, using information obtained through foreign market research.
Where applicable, the petitioners then subtracted ocean freight
expenses, which were calculated as the difference between the CIF and
the U.S. customs values reported in the U.S. import statistics for
January through December 1998, and estimated U.S. inland freight costs.
U.S. import duties were estimated by the petitioners using the HTSUS
schedule and then subtracted from the prices. Where applicable, the
petitioners also subtracted amounts for U.S. merchandise processing
fees and U.S. harbor maintenance fees in accordance with section
772(c)(2)(A) of the Act. (The Department corrected the petitioners'
calculations of U.S. import duties, U.S. merchandise processing fees,
and U.S. harbor maintenance fees.) Finally, the petitioners calculated
imputed credit expenses based on average payment terms of 60 days and
the average U.S. prime lending rate for December 1998, as published in
the International Financial Statistics, and added this amount to normal
value (``NV'').
The petitioners obtained gross unit prices and multiple offers for
sale in Korea during the period contemporaneous with the U.S. sales
offers for products which were either identical or similar to those
sold to the United States. The petitioners used the market research
information which indicated that the volume of home market sales is
sufficient to form a basis for normal value. Since the home market
prices and offers for sale were based on delivered terms, the
petitioners subtracted the estimated transportation costs to home
market customers. Next, the petitioners deducted a discount offered to
Korean customers who pay cash. The resulting home market net prices
were then converted from kilograms to pounds and to U.S. dollar prices
using the official exchange rate in effect for the month of the
comparison U.S. sale. Lastly, the petitioners added the imputed credit
expenses incurred in the U.S. market (see above). The petitioners did
not adjust for packing because they assumed that packing costs were the
same for the home market and for U.S. sales.
Taiwan
The petitioners identified Far Eastern Textile Ltd. (``Far
Eastern''); Nan Ya Plastics Corporation; Shinkong Synthetic Fibers
Corp.; and Tuntex Distinct Corp. as producers and
[[Page 23055]]
exporters of polyester fiber to the United States. The petitioners have
based U.S. price on export price (``EP'') because information obtained
by the petitioners indicates that Taiwanese producers sold polyester
fiber to unaffiliated importers in the United States. As a basis for
its EP calculation, the petitioners have used multiple offers for sale
of the subject merchandise to unaffiliated purchasers in the United
States between December 1998 and February 1999. The terms of some of
these sales offers were FOB Taiwan whereas other sales were offered on
a delivered basis. The petitioners calculated net U.S. prices by
subtracting estimated costs incurred to transport polyester fiber from
the port of export to the U.S. port, and from the U.S. port to the
customer's location in the U.S., where applicable. No adjustment for
transportation costs from the factory to the port of export were made
because this information was not available to the petitioners. The
petitioners deducted international freight and insurance costs which
were calculated as the difference between the CIF and the U.S. customs
values reported in the U.S. import statistics for January through
December 1998. The petitioners also subtracted U.S. import duties, U.S.
harbor maintenance fees, and U.S. merchandise processing fees, where
applicable. (The Department corrected the petitioners' calculations of
U.S. import duties, U.S. harbor maintenance fees, and U.S. merchandise
processing fees.) The petitioners calculated imputed credit expenses
based on average payment terms reported in the market research report
and the average U.S. prime lending rate for the month of the U.S. sales
as published in the International Financial Statistics. The petitioners
adjusted for the difference in imputed credit expenses by subtracting
home market credit expenses and by adding U.S. imputed credit expenses
to the home market prices found through foreign market research.
With respect to NV, the petitioners provided information on sales
prices in Taiwan and constructed value (``CV'') for one type of
polyester staple fiber. The petitioners received prices for actual
recent sales or offers for sale to unaffiliated customers in Taiwan by
the four Taiwanese companies which produce subject merchandise. The
petitioners used market research information which indicated that the
volume of home market sales is sufficient to form a basis for normal
value. Since the home market prices were inclusive of delivery charges,
the petitioners subtracted estimated delivery costs. The petitioners
used average inland freight costs incurred to deliver in the U.S. as a
proxy for delivery costs. We accepted this proxy because this
information was reasonably available to the petitioners and this is a
conservative methodology since average delivery distances are greater
in the U.S. and delivery costs are determined by weight and distance.
The petitioners did not adjust for packing because they assumed that
packing costs were the same for the home market and for U.S. sales. The
petitioners converted home market prices and quantities to U.S. dollars
and to pounds, respectively.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of polyester fiber from Korea and Taiwan are
being, or are likely to be, sold at less than fair value. Based on a
comparison of EP to home market prices, the petitioners' calculated
dumping margins range from 48.14 to 84.03 percent for Korea and from
8.03 to 23.62 percent for Taiwan. In addition, for Taiwan, the
estimated dumping margin based on a comparison of EP to CV is 70.70
percent.
Allegation of Sales Below Cost in Taiwan
Pursuant to section 773(b) of the Act, the petitioners alleged that
home market sales of the foreign like product in Taiwan were made at
prices below the cost of production (``COP'') and requested that the
Department initiate a country-wide investigation of sales below cost.
The petitioners calculated COP for six denier, non-conjugated and non-
silicon coated polyester fiber by using the CV for one company, Far
Eastern. According to the petitioners, six denier is one of the most
common denier categories and is, therefore, representative of the
foreign like product to be compared to subject merchandise sold in the
United States. In addition, petitioners selected Far Eastern because it
is the largest and, hence, probably the most efficient, producer of
polyester fiber in Taiwan and accounted for the largest share of
exports to the United States. Based on the foregoing, costs for Far
Eastern, according to petitioners, are representative of the costs of
other producers of polyester fiber.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacturing (``COM''), selling, general and administrative
expenses (``SG&A'') and packing. The petitioners used the product-
specific costs reported by a U.S. producer as a starting point to
calculate the COM. The petitioners made adjustments to the U.S.
producer's manufacturing cost to account for known differences in costs
between the United States and Taiwan. To calculate SG&A, the
petitioners took the ratio of SG&A to the costs of sales from Far
Eastern's 1997 audited financial statements and applied this ratio to
the calculated COM. In accordance with section 773(e) of the Act, the
petitioners added an amount for profit calculated from the 1997 audited
financial statements of Far Eastern. The petitioners then compared this
cost to Far Eastern's home market price for this product as reported in
the market research report and found that the home market price was
below the COP.
Allegations and Evidence of Material Injury and Causation
The petition alleges that the U.S. industry producing the domestic
like product is being materially injured, and is threatened with
material injury, by reason of the imports of the subject merchandise
sold at less than NV. The petitioners explained that the industry's
injured condition is evident in the declining trends in net operating
profits and income, net sales volumes and values, profit to sales
ratios, and capacity utilization. The allegations of injury and
causation are supported by relevant evidence including U.S. Customs
import data, lost sales, and pricing information. The Department
assessed the allegations and supporting evidence regarding material
injury and causation and determined that these allegations are
supported by accurate and adequate evidence and meet the statutory
requirements for initiation. See Initiation Checklists.
Initiation of Antidumping Investigations
Based upon our examination of the petition, we have found that the
petition meets the requirements of section 732 of the Act. Therefore,
we are initiating antidumping duty investigations to determine whether
imports of polyester fiber from Korea and Taiwan are being, or are
likely to be, sold in the United States at less than fair value. Unless
this deadline is extended, we will make our preliminary determinations
by September 9, 1999.
Initiation of Cost Investigations
Pursuant to section 773(b) of the Act, petitioners provided
information demonstrating reasonable grounds to believe or suspect that
sales in the home market of Taiwan were made at prices below the COP
and, accordingly, requested the Department to conduct a country-wide
sales-below-COP
[[Page 23056]]
investigation in connection with the requested antidumping
investigation in Taiwan. The Statement of Administrative Action
(``SAA''), accompanying the URAA, H.R. Doc. No. 103-316, vol. 1 at 833
(1994), states that an allegation of sales below COP need not be
specific to individual exporters or producers. The SAA also states that
``Commerce will consider allegations of below-cost sales in the
aggregate for a foreign country, just as Commerce currently considers
allegations of sales at less than fair value on a country-wide basis
for purposes of initiating an antidumping investigation.'' Id.
Further, the SAA provides that ``new section 773(b)(2)(A) retains
the current requirement that Commerce have `reasonable grounds to
believe or suspect' that below-cost sales have occurred before
initiating such an investigation.'' Reasonable grounds will ``exist
when an interested party provides specific factual information on costs
and prices, observed or constructed, indicating that sales in the
foreign market in question are at below-cost prices.'' Id. Based upon
the comparison of the price from the petition for the representative
foreign like product to its adjusted costs of production, in accordance
with section 773(b)(2)(A)(i) of the Act, we find the existence of
``reasonable grounds to believe or suspect'' that sales of the foreign
like product in Taiwan were made below COP. Accordingly, the Department
is initiating the requested country-wide cost investigation.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of the petition has been provided to the representatives
of the Governments of Korea and Taiwan. We will attempt to provide a
copy of the public version of the petition to the exporters named in
the petition.
International Trade Commission Notification
We have notified the ITC of our initiation of these investigations,
as required by section 732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine by May 17, 1999 whether there is a
reasonable indication that an industry in the United States is
materially injured, or is threatened with material injury by reason of
imports of polyester fiber from Korea and Taiwan. A negative ITC
determination will result in the investigation being terminated;
otherwise, these investigations will proceed according to statutory and
regulatory time limits.
This notice is published in accordance with section 777(i) of the
Act.
Dated: April 22, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-10770 Filed 4-28-99; 8:45 am]
BILLING CODE 3510-DS-P