Sweaters Wholly or in Chief Weight of Man-Made Fiber From Korea; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-580-806]

Sweaters Wholly or in Chief Weight of Man-Made Fiber From Korea;

Preliminary Results of Antidumping Duty Administrative Review

AGENCY: International Trade Administration/Import Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Review.

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SUMMARY: In response to a request by members of the domestic industry,

the Department of Commerce is conducting an administrative review of

the antidumping duty order on sweaters wholly or in chief weight of

man-made fiber from Korea. The review covers six manufacturers/

exporters of this merchandise to the United States and the period

September 1, 1991 through August 31, 1992. As a result of this review,

we have preliminarily determined to assess antidumping duties equal to

the difference between United States price and foreign market value.

Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: May 17, 1994.

FOR FURTHER INFORMATION CONTACT: Rebecca Collins, Nooshen Amiri, Donald

Little, or G. Leon McNeill, Office of Antidumping Compliance,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW., Washington, DC 20230; telephone:

(202) 482-4733.

SUPPLEMENTARY INFORMATION:

Background

On September 24, 1990, the Department of Commerce (the Department)

published in the Federal Register (55 FR 39036) the antidumping duty

order on sweaters wholly or in chief weight of man-made fiber (MMF

sweaters) from Korea. On September 30, 1992, the petitioner, the

National Knitwear & Sportswear Association, and the Emergency Ad Hoc

Committee of Man-Made Fiber Sweater Producers and its individual member

producers, requested that we conduct an administrative review, in

accordance with 19 CFR 353.22(a). We published the notice of initiation

of the antidumping duty administrative review on October 22, 1992 (57

FR 48201), covering the period September 1, 1991 through August 31,

1992. The Department has now conducted the review in accordance with

section 751 of the Tariff Act of 1930, as amended (the Tariff Act).

Scope of the Review

Imports covered by this review are shipments of MMF sweaters from

Korea. MMF sweaters are defined as garments for outerwear that are

knitted or crocheted, in a variety of forms including jacket, vest,

cardigan with button or zipper front, or pullover, usually having

ribbing around the neck, bottom, and cuffs on the sleeves (if any),

encompassing garments of various lengths, wholly or in chief weight of

man-made fiber. The term ``in chief weight of man-made fiber'' includes

sweaters where the man-made fiber material predominates by weight over

each other single textile material. This term excludes sweaters 23

percent or more by weight of wool. It includes men's, women's, boys',

or girls' sweaters, as defined above, but does not include sweaters for

infants 24 months of age or younger. It includes all sweaters as

defined above, regardless of the number of stitches per centimeter,

provided that, with regard to sweaters having more than nine stitches

per two linear centimeters horizontally, it includes only those with a

knit-on rib at the bottom.

Garments which extend below mid-thigh or cardigans that contain a

sherpa lining or heavy-weight fiberfill lining, including quilted

linings, used to provide extra warmth to the wearer, are not considered

sweaters and are excluded from the scope of the review. Also

specifically excluded from the scope are sweaters assembled in Guam

that are produced from knit-to-shape component parts knit in and

imported from Korea and entering under Harmonized Tariff Schedule (HTS)

item number 9902.61.

The subject merchandise is currently classifiable under HTS item

numbers 6110.30.30.10, 6110.30.30.15, 6110.30.30.20, 6110.30.30.25,

6103.23.00.70, 6103.29.10.40, 6103.29.20.62, 6104.23.00.40,

6104.29.10.60, 6104.29.20.60, 6110.30.10.10, 6110.30.10.20,

6110.30.20.10, and 6110.30.20.20. This merchandise may also enter under

HTS item numbers 6110.30.30.50 and 6110.30.30.55. The HTS item numbers

are provided for convenience and Customs purposes only. The written

description remains dispositive.

This review covers six manufacturers/exporters of the subject

merchandise from Korea, Chunji Industrial Company, Ltd. and its related

company, Sungwha Garment Company, Ltd. (collectively, Chunji), Hanil

Synthetic Fiber Industrial Company, Ltd. (Hanil), Jo Woo Company Ltd.

(Jo Woo), Shinwon Corporation (Shinwon), Young Woo & Company, Ltd.

(Young Woo), and Yurim Company, Ltd. (Yurim), and the period September

1, 1991 through August 31, 1992.

United States Price

The Department used purchase price (PP), as defined in section 772

of the Tariff Act, in calculating United States price (U.S. price). PP

was based on the packed, f.o.b. price to the first unrelated purchasers

in the United States. We made deductions, where appropriate, for

foreign inland freight, foreign brokerage and handling, U.S. duty,

marine insurance, demurrage, wharfage, and containerization charges. We

also made an addition for import duties which were rebated on imported

materials used to produce subsequently exported merchandise.

No other adjustments were claimed or allowed.

Hanil, Jo Woo, Shinwon and Young Woo did not include their U.S.

sample sales and resales in their U.S. sales databases, nor did they

include expense and cost data for these sample sales and resales. For

these U.S. sales, we have used the best information available (BIA).

Since record evidence does not support the proposition that it would

have been impossible for each company to report expense and cost data

for these sales, we have used an uncooperative rate as BIA. The

uncooperative rate used is (1) the highest of the rates found for any

firm in the less-than-fair-value (LTFV) investigation or in prior

administrative reviews, or (2) the highest rate found in this review

for any firm. See Final Results of Antidumping Duty Administrative

Reviews and Revocation in Part of an Antidumping Duty Order;

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof from France, Germany, Italy, Japan, Romania, Singapore, Sweden,

Thailand and the United Kingdom (59 FR 39729, July 26, 1993).

Foreign Market Value

In order to determine whether there were sufficient sales of MMF

sweaters in the home market to serve as a viable basis for calculating

foreign market value (FMV), we compared the volume of home market sales

to the volume of third country sales in accordance with section

773(a)(1)(B) of the Tariff Act. All respondents had insufficient home

market sales of the subject merchandise during the period of review.

Therefore, in accordance with 19 CFR 353.48(a), we used third-country

sales or constructed value (CV) as the basis for calculating FMV.

During the LTFV investigation and the first administrative review

of this case, the Department found that Chunji, Hanil, Shinwon, Young

Woo, and Yurim had made third-country sales of subject merchandise at

prices which were below the cost of production. Accordingly, for this

review, we initiated an investigation of possible third-country sales

below the cost of production for these companies.

As a result of our investigations, we found below-cost sales for

Chunji, Hanil, Shinwon, Young Woo, and Yurim. When between 10 and 90

percent of the sales of a particular model were determined to be below

the cost of production, and below-cost sales were made over an extended

period of time, we excluded those sales from our calculation of FMV.

When more than 90 percent of the sales of a particular model were made

below cost and below-cost sales were made over an extended period of

time, we excluded all sales of that model from our calculation of FMV.

When less than 10 percent of the home market sales of a particular

model were made at prices below the cost of production, we did not

disregard any sales of that model.

To determine if sales below cost had been made over an extended

period of time, we compared the number of months in which sales below

cost had occurred for a particular model to the number of months in

which the model was sold. If the model was sold in three or fewer

months, we did not find that below-cost sales were made over an

extended period of time unless there were sales below cost of that

model in each month. If a model was sold in more than three months, we

did not find that below-cost sales were made over an extended period of

time unless there were sales below cost in at least three of the months

in which the model was sold.

Since none of the respondents has submitted information indicating

that any of its sales below cost were at prices which would have

permitted ``recovery of all costs within a reasonable period of time in

the normal course of trade,'' within the meaning of section 773(b)(2)

of the Tariff Act, we were unable to conclude that the costs of

production of such sales were recovered within a reasonable period. As

a result, we disregarded below-cost sales when the conditions as

described above were met.

In determining such or most similar merchandise for these

preliminary results, when there was more than one equally similar

model, in accordance with our model matching criteria as set out in

Appendix V of our questionnaire, we used the pool of equally similar

third-country models, as long as the costs of those models were within

20 percent of the cost of the U.S. model. When there was more than one

equally similar above-cost model, we adjusted the FMV of each model for

differences in merchandise, and then weight averaged the results. If

any of these models were found to be below cost, we excluded them from

our analysis and used only the above-cost models. If there were not

sufficient sales of such or most similar merchandise made at or above

the cost of production, we used CV for calculating FMV.

Third-country price was based on the packed, f.o.b., c.i.f., or C&F

price to the first unrelated purchaser. We made adjustments, where

applicable, to the third-country price for foreign inland freight,

foreign brokerage and handling, bank charges, quota and Customs

clearance fee, wharfage and containerization, ocean freight, marine

insurance, credit expenses, warranties, commissions, differences in the

physical characteristics of the merchandise, and differences in

packing. We also added an amount for import duties which were rebated

on imported materials used to produce subsequently exported

merchandise. Since FMV was compared to PP, we added U.S. credit,

warranties, and commissions to FMV, as appropriate. When commissions

were paid on either the PP sale or the third-country sale but not on

the other, we made an adjustment to FMV for indirect selling expenses

in the one market to offset the commissions in the other market. See 19

CFR 353.56(b). That is, when there was a commission on the PP sale but

not on the third-country sale, we added the U.S. commission to FMV, and

subtracted third-country indirect selling expenses from FMV, up to the

amount of the U.S. commission. When there was a commission on the

third-country sale but not on the PP sale, we subtracted the third-

country commission from FMV, and added U.S. indirect selling expenses

to FMV, up to the amount of the third-country commission. When

commissions were paid in both markets, we deducted the third-country

commissions from FMV and added the U.S. commissions to FMV.

CV includes materials, fabrication, general expenses, profit, and

packing. We used: (1) Actual general expenses or the statutory minimum

of 10 percent of materials and fabrication, whichever was greater; (2)

actual profit or the statutory minimum of 8 percent of materials and

fabrication costs and general expenses, whichever was greater; and (3)

packing costs for merchandise exported to the United States. Where

appropriate, we made adjustments for differences in circumstances of

sale, in accordance with 19 CFR 353.56.

No other adjustments were claimed or allowed.

Hanil and Yurim did not provide cost of production data for third-

country models sold as sample sales or as resales. In these instances,

we excluded the third-country model from the cost-of-production test,

and, therefore, from the pool of third-country sales used to calculate

FMV. If a third-country model sold as a sample sale or a resale for

which cost of production data were not reported was selected as the

only most similar model for a U.S. model, we used CV as the basis of

FMV.

Chunji and Yurim included in their U.S. sales databases data on

their U.S. sample sales and resales and selected the most similar

third-country merchandise for these models, but did not provide CV data

for these U.S. models. Therefore, when there were no sales of such or

most similar merchandise made at or above the cost of production, or

such or most similar merchandise could not be found, the Department had

no data to use as the basis of FMV. For these U.S. sample sales and

resales, the Department used BIA. As BIA, we used an uncooperative

rate, as described above, since record evidence does not support the

proposition that it would have been impossible to provide these data.

Preliminary Results of Review

As a result of our review, we preliminarily determine that the

following margins exist:

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Margin

Manufacturer/exporter Period of review (percent)

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Chunji Industrial Company, Ltd and

Sungwha Garment Company, Ltd........ 09/01/91-08/31/92 2.75

Hanil Synthetic Fiber Ind. Co., Ltd.. 09/01/91-08/31/92 2.51

Jo Woo Company, Ltd.................. 09/01/91-08/31/92 4.12

Shinwon Corporation.................. 09/01/91-08/31/92 2.06

Young Woo & Company, Ltd............. 09/01/91-08/31/92 4.88

Yurim Company, Ltd................... 09/01/91-08/31/92 4.10

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Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held 44 days after the date of publication of this

notice, or the first workday thereafter. Interested parties may submit

case briefs within 30 days of the date of publication of this notice.

Rebuttal briefs, which must be limited to issues raised in the case

briefs, may be filed not later than 37 days after the date of

publication. See 19 CFR 353.38. The Department will publish a notice of

final results of this administrative review, which will include the

results of its analysis of issues raised in any such comments.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between U.S. price and FMV may vary from the percentages

stated above. The Department will issue appraisement instructions on

each exporter directly to the Customs Service.

Furthermore, the following deposit requirements will be effective

upon publication of the final results of this administrative review for

all shipments of MMF sweaters from Korea entered, or withdrawn from

warehouse, for consumption on or after the publication date, as

provided by section 751(a)(1) of the Tariff Act: (1) The cash deposit

rates for the reviewed companies will be those established in the final

results of this administrative review; (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 or the

LTFV investigation, but the manufacturer is, the cash deposit rate will

be the rate established for the most recent period for the manufacturer

of the merchandise; and (4) the cash deposit rate for all other

manufacturers or exporters will be the ``all others'' rate established

in the final notice of LTFV investigation of this case, in accordance

with the Court of International Trade's decisions in Floral Trade

Council v. United States, 822 F.Supp. 766 (1993), and Federal-Mogul

Corporation and the Torrington Company v. United States, 39 F.Supp. 864

(1993). The all others rate is 1.30 percent. These deposit

requirements, when imposed, shall remain in effect until publication of

the final results of the next administrative review.

Notification of Interested Parties

This notice serves as a preliminary reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and subsequent assessment

of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the return or destruction of proprietary information

disclosed under APO in accordance with 19 CFR 353.34(d). Timely written

notification of the return/destruction of APO materials or conversion

to judicial protective order is hereby requested. Failure to comply

with the regulations and the terms of an APO is a sanctionable

violation.

This 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: May 10, 1994.

Paul L. Joffe,

Deputy Assistant Secretary for Import Administration.

[FR Doc. 94-11965 Filed 5-16-94; 8:45 am]

BILLING CODE 3510-DS-P