Certain Stainless Steel Cooking Ware From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-580-601]

Certain Stainless Steel Cooking Ware From the Republic of Korea:

Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of Antidumping Duty

Administrative Review.

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SUMMARY: In response to a request from Farberware, Inc. (petitioner),

the Department of Commerce (the Department) is conducting an

administrative review of the antidumping duty order on certain

stainless steel cooking ware from the Republic of Korea. This notice of

preliminary results covers the period January 1, 1994 through December

31, 1994. This review covers one manufacturer/exporter, Daelim Trading

Company, Ltd. (Daelim). The review indicates the existence of dumping

margins during this period.

We have preliminarily determined that sales have been made below

the normal value (NV). If these preliminary results are adopted in our

final results of administrative review, we will instruct the U.S.

Customs Service (Customs) to assess antidumping duties equal to the

difference between the United States price (USP) and the NV. Interested

parties are invited to comment on these preliminary results. Parties

who submit argument in this proceeding are requested to submit with the

argument: (1) a statement of the issue; and (2) a brief summary of the

argument.

EFFECTIVE DATE: March 4, 1996.

FOR FURTHER INFORMATION CONTACT: Amy S. Wei or Zev Primor, Office of

Antidumping Compliance, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202)482-

5253.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations of the Tariff Act of

1930, as amended, (the Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Rounds Agreements Act (URAA).

Background

The Department published an antidumping duty order on certain

stainless steel cooking ware from the Republic of Korea on January 20,

1987 (52 FR 2139). The Department published a notice of ``Opportunity

To Request an Administrative Review'' of the antidumping duty order for

the 1994 review period on January 12, 1995 (60 FR 2941). On January 30,

1995, petitioner requested that the Department conduct an

administrative review of the antidumping duty order on certain

stainless steel cooking ware from the Republic of Korea for one

manufacturer/exporter, covering the period January 1, 1994 through

December 31, 1994. We initiated the review on February 15, 1995 (60 FR

8629).

The Department extended the time limits for the deadlines for the

preliminary and final results of review because of the additional time

required for the development of a new questionnaire that accorded with

the URAA. See Antidumping Duty Administrative Reviews; Time Limits, 60

FR 56141 (November 7, 1995). As a result of the federal government 28-

day total shutdown, these deadlines were further extended.

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

In addition, on September 11, 1995, petitioner requested that the

Department conduct an investigation to determine if Daelim made sales

at prices below its cost of production (COP) during the review period.

On October 19, 1995, based on petitioner's allegation and the totality

of evidence on record, the Department determined that there were

reasonable grounds to believe or suspect that Daelim made sales at

prices below its COP, in accordance with section 773 (b)(2)(A)(i) of

the Act, and initiated a COP investigation for Daelim, pursuant to

section 773(b)(1) of the Act. See Certain Stainless Steel Cooking Ware

from Korea--Home Market Sales Below Cost Allegation for Daelim Trading

Company, Ltd., October 19, 1995.

Scope of the Review

The products covered by this administrative review are certain

stainless steel cooking ware from the Republic of Korea. During the

review period, such merchandise was classifiable under Harmonized

Tariff Schedule (HTS) item number 7323.93.00. The products covered by

this order are skillets, frying pans, omelette pans, saucepans, double

boilers, stock pots, dutch ovens, casseroles, steamers, and other

stainless steel vessels, all for cooking on stove top burners, except

tea kettles and fish poachers. Excluded from the scope is stainless

steel kitchen ware. The HTS item number is provided for convenience and

Customs' purposes. The written description remains dispositive as to

the scope of product coverage.

The period of review (POR) is January 1, 1994 through December 31,

1994, covering one manufacturer/exporter, Daelim.

Use of Facts Available

A large portion of Daelim's home market sales were to an affiliated

reseller. Because an extremely small percentage of Daelim's total home

market sales were to unaffiliated customers, there is not a sufficient

factual basis to determine whether sales to the affiliated reseller

were made at arm's-length prices. See Television Receivers, Monochrome

and Color, from Japan; Final Results of Antidumping Duty Administrative

Review, 52 FR 8940, 8943 (March 20, 1987). Therefore, the Department

will request that Daelim provide the information on sales by its

affiliated reseller to the first unaffiliated customer for certain home

market models.

For purposes of the preliminary results, the Department has applied

a neutral facts available (FA) rate for the missing downstream sales

information, in accordance with section 776(a)(1) of the Act. For a

neutral FA rate, we applied the weighted-average margin calculated for

sales to the United States (U.S.) for which there were appropriate home

market sales for matching

[[Page 8254]]

purposes. If Daelim timely responds to our request for additional

information, we will examine Daelim's response and incorporate the

information provided in our analysis in the final results of

administrative review. If Daelim fails to provide the requested data,

we may evaluate the application of FA accordingly.

United States Price

In calculating USP for Daelim, we used export price, as defined in

section 772(a) of the Act, because the merchandise was sold to

unaffiliated U.S. purchasers prior to the date of importation. Daelim

reported that export price was based on the packed, FOB price to

unaffiliated purchasers in the United States. We made deductions for

brokerage and handling charges, inland freight from the plant, credit

expense, wharfage, container freight station (CFS) charges, and export

license recommendation fees, in accordance with section 772(c)(2)(A) of

the Act, because these expenses were incident to bringing the subject

merchandise from the original place of shipment in the exporting

country to the place of delivery in the United States. We increased USP

for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

In addition, because there is a concurrent countervailing duty order on

the subject merchandise, we increased USP by the amount of the

countervailing duty imposed on the subject merchandise to offset the

export subsidy, in accordance with section 772(c)(1)(C) of the Act.

No other adjustments to USP were claimed or allowed.

Normal Value

A. Viability

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared Daelim's volume of home market sales of the foreign like

product to the volume of U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(B) of the Act. Because Daelim's

aggregate volume of home market sales of the foreign like product was

greater than five percent of its aggregate volume of U.S. sales for the

subject merchandise, we determined that the home market provides a

viable basis for calculating NV for Daelim, pursuant to section

773(a)(1)(C) of the Act.

B. COP Test

As stated above in the Background section, the Department initiated

a cost investigation to determine whether Daelim made home market sales

during the POR at prices below its COP, as defined in section 773(b) of

the Act. We calculated COP based on the sum of the costs of materials

and fabrication employed in producing the foreign like product, plus

selling, general, and administrative expenses (SG&A), and the cost of

all expenses incidental to placing the foreign like product in

condition packed ready for shipment, in accordance with section

773(b)(3) of the Act. We relied on the home market sales and COP

information provided by Daelim in its questionnaire responses.

In accordance with section 773(b)(1) of the Act, in order to

determine whether to disregard home market sales made at prices below

the COP, we examined whether such sales were made in substantial

quantities within an extended period of time, and whether such sales

were made at prices which permit the recovery of all costs within a

reasonable period of time.

Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20

percent of home market sales of a given model are at prices less than

the COP, we do not disregard any below-cost sales of that model because

the below-cost sales were not made within an extended period of time in

``substantial quantities.'' Where 20 percent or more of home market

sales of a given model are at prices less than the COP, we find that

sales of that model were made within an extended period of time in

``substantial quantities,'' in accordance with section 773(b)(2)(B) of

the Act. Moreover, we determine whether the below-cost sales of a given

product are at prices which would not permit recovery of all costs

within a reasonable period of time, in accordance with section

773(b)(2)(D) of the Act. If we find that sales have been made within an

extended period of time in ``substantial quantities'' and were not at

prices which would permit recovery within a reasonable period of time,

we disregard the below-cost sales, in accordance with section 773(b)(1)

of the Act.

The results of our cost test indicated that within an extended

period of time, for certain home market models, more than 20 percent of

the home market sales were sold at below the COP prices, which would

not permit the recovery of all costs within a reasonable period of

time. Thus, we excluded these below-cost sales and used the remaining

above-cost sales as the basis of determining NV, in accordance with

section 773(b)(1). For those home market models for which there were no

above-cost sales, we compared export prices to constructed value (CV),

in accordance with section 773(b)(1).

C. Model Match

The Department determined that the model match methodology provided

by Daelim in its questionnaire response was too restrictive. Daelim's

methodology limited the selection of matches to essentially identical

merchandise. When there were no contemporaneous sales of this identical

merchandise, Daelim's methodology did not select acceptable similar

merchandise, but, instead, resorted to CV as the basis for NV.

Therefore, we revised Daelim's model match for the preliminary results

of review in order to search for the HM model which is most like or

most similar in characteristics and uses with each US model, pursuant

to section 771 (10) of the Act. First, from Daelim's one product

category, we established three foreign like product categories: (1)

Sauce pans and pots; (2) frying pans; and (3) other cooking ware, such

as steamers, covers, or boiler inserts. Second, we broadened Daelim's

model match criteria of capacity, gauge, and body style, and did not

use the parameters Daelim suggested. To perform the model match, we

first searched for the most similar home market model with regard to

capacity. If there were several home market models with identical

capacities, we then searched for the most similar home market model

with regard to gauge. We continued this process with regard to body

shape. If, as a result of this analysis, several home market models

were deemed equally similar, we chose the home market model which, when

compared to the U.S. model, had the lowest difference in variable costs

of manufacturing (difmer), provided the difmer did not exceed 20

percent of the total cost of manufacturing of the U.S. model.

Our model match resulted in several price-to-price comparisons

involving sales to the affiliated reseller, requiring downstream sales

information. For those U.S. models where no foreign like product was

found with a difmer of less than 20 percent or where the U.S. model

matched to a home market model which was found to be sold at below

cost, we resorted to CV as the basis of NV, in accordance with section

773(a)(4) of the Act.

D. Constructed Value

In accordance with section 773(e) of the Act, we calculated CV

based on Daelim's cost of materials and fabrication employed in

producing the subject merchandise, SG&A and profit incurred and

realized in connection

[[Page 8255]]

with the production and sale of the foreign like product, and U.S.

packing costs. We used the costs of materials, fabrication, and G&A as

reported in the CV portion of Daelim's questionnaire response. We used

the U.S. packing costs as reported in the U.S. sales portion of

Daelim's questionnaire response. We based selling expenses and profit

on the information reported in the home market sales portion of

Daelim's questionnaire response. See Certain Pasta from Italy; Notice

of Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination, 61 FR 1344, 1349 (January 19,

1996). For selling expenses, we used the average of above-cost per-unit

HM selling expenses weighted by the total quantity sold. For actual

profit, we first calculated the difference between the home market

sales value and home market COP, and divided the difference by the home

market COP. We then multiplied this percentage by the COP for each U.S.

model to derive an actual profit.

E. Price-to-Price Comparisons

For those price-to-price comparisons where we did not resort to CV

or the facts available, we based NV on the price which the foreign like

product is first sold for consumption in the exporting country, in the

usual commercial quantities and in the ordinary course of trade, and to

the extent practicable, at the same level of trade as the export price,

as defined by section 773(a)(1)(B)(i) of the Act. We reduced NV for

home market credit and advertising expenses, in accordance with section

773(a)(6)(C)(iii), due to differences in circumstances of sale. We also

reduced NV by packing costs incurred in the home market, in accordance

with section 773(a)(6)(B)(i). In addition, we increased NV for U.S.

packing costs, in accordance with section 773(a)(6)(A). We made further

adjustments to account for differences in physical characteristics of

the merchandise, in accordance with 19 CFR 353.57 of the Department's

regulations.

When NV was based on CV or home market sales, we adjusted for

commissions paid on U.S. sales. In accordance with 19 CFR 353.56(b)(1),

we offset these commissions with the weighted average of home market

indirect selling expenses, because no sales commissions were incurred

in the home market, up to the amount of the commissions paid on U.S.

sales. In addition, we increased NV by U.S. credit expenses, in

accordance with section 773(a)(6)(C)(iii) of the Act, because of

differences in the circumstances of sale. No other adjustments were

claimed or allowed.

Preliminary Results

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

following weighted-average dumping margin exists:

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Margin

Manufacturer/exporter Period (percent)

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Daelim Trading Co., Ltd................... 1/1/94-12/31/94 6.31

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Parties to this proceeding may request disclosure within five days

of publication of this notice and 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, or the first working day

thereafter. Interested parties may submit case briefs and/or written

comments no later than 30 days after the date of publication. Rebuttal

briefs and rebuttals to written comments, limited to issues raised in

such briefs or comments, may be filed no later than 37 days after the

date of publication. The Department will publish a notice of the final

results of the administrative review, which will include the results of

its analysis of issues raised in any such written comments or at the

hearing, within 180 days from the issuance of these preliminary

results.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between USP and NV may vary from the percentages stated above. The

Department will issue appraisement instructions directly to Customs.

The final results of this review shall be the basis for the assessment

of antidumping dumping duties on entries of merchandise covered by the

determination and for future deposits of estimated duties.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of these administrative reviews

for all shipments of certain stainless steel cooking ware from the

Republic of Korea entered, or withdrawn from warehouse, for consumption

on or after the publication date of the final results of these

administrative reviews, as provided by section 751(a)(1) of the Act:

(1) The cash deposit rate for Daelim will be the rate established in

the final results of administrative review; (2) for merchandise

exported by manufacturers or exporters not covered in these reviews but

covered in the original LTFV investigation or a previous review, the

cash deposit will continue to be the most recent rate published in the

final determination or final results for which the manufacturer or

exporter received a company-specific rate; (3) if the exporter is not a

firm covered in these reviews, or the original investigation, but the

manufacturer is, the cash deposit rate will be that established for the

manufacturer of the merchandise in the final results of these reviews,

or the LTFV investigation; and (4) if neither the exporter nor the

manufacturer is a firm covered in these or any previous reviews, the

cash deposit rate will be 8.10 percent, the ``all others'' rate

established in the LTFV investigation (52 FR 2139, January 20, 1987).

This notice serves as a preliminary reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the disposition 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 terms of an APO is a sanctionable violation.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26(b) 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.

These administrative reviews and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

Dated: February 28, 1996.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 96-4983 Filed 3-1-96; 8:45 am]

BILLING CODE 3510-DS-P