Industrial Nitrocellulose From the Republic of Korea; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-805]

Industrial Nitrocellulose 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 by the respondent, Daesang

Corporation (Daesang) 1 the Department of Commerce (the

Department) is conducting an administrative review of the antidumping

duty order on industrial nitrocellulose from the Republic of Korea

(Korea). The review covers one manufacturer/exporter of the subject

merchandise to the United States during the period July 1, 1996 through

June 30, 1997. The review indicates the existence of dumping margins

during the review period.

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\1\ In its questionnaire response dated October 31, 1997,

Daesang was referred to as Miwon Co., Ltd. Daesang advised the

Department by letter dated December 5, 1997 that its name had been

changed.

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We have preliminarily determined that sales have been made below

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

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

Customs Service to assess antidumping duties based on the difference

between United States price (U.S. price) and NV.

Interested parties are invited to comment on these preliminary

results. Parties who submit argument are requested to submit with each

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

argument.

EFFECTIVE DATE: July 10, 1998.

FOR FURTHER INFORMATION CONTACT: Elfi Blum or Maureen Flannery, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.

20230; telephone: (202) 482-0197 or 482-3020, respectively.

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 19 CFR

Part 351 (62FR 27296, May 19, 1997).

SUPPLEMENTARY INFORMATION:

Background

On July 10, 1990, the Department published in the Federal Register

(55 FR 28267) the antidumping order on industrial nitrocellulose (INC)

from Korea. On July 2, 1997, the Department published in the Federal

Register (62 FR 38973) a notice of opportunity to request an

administrative review of this antidumping duty order. On July 31, 1997,

in accordance with 19 CFR 351.213, one exporter of the subject

merchandise to the United States, Daesang, requested that the

Department conduct an administrative review of its exports of subject

merchandise to the United States. We published a notice of initiation

of this administrative review on September 25, 1997 (62 FR 50292),

covering the period July 1, 1996 through June 30, 1997.

Scope of Review

Imports covered by this review are shipments of INC from Korea. INC

is a dry, white amorphous synthetic chemical with a nitrogen content

between 10.8 and 12.2 percent, and is produced from the reaction of

cellulose with nitric acid. INC is used as a film-former in coatings,

lacquers, furniture finishes, and printing inks. The scope of this

order does not include explosive grade nitrocellulose, which has a

nitrogen content of greater than 12.2 percent.

INC is currently classified under Harmonized Tariff System (HTS)

subheading 3912.20.00. While the HTS item number is provided for

convenience and Customs purposes, the written description remains

dispositive as to the scope of the product coverage. The review period

is July 1, 1996 through June 30, 1997.

Verification

As provided in section 782(i) of the Act, we conducted a U.S.

verification of the questionnaire responses submitted by Daesang

Corporation, concerning its U.S. affiliate, Daesang America. We used

standard verification procedures, including the examination of relevant

accounting, sales, and other financial records, and the selection of

original documentation containing relevant information. Our

verification results are outlined in the public version of the

verification report.

United States Price

In calculating the United States Price (USP), we used export price

(EP), in accordance with section 772 (a) and (c) of the Act, because

Daesang's sales to the first unaffiliated purchaser occurred before

importation into the United States, and because constructed export

price (CEP) methodology was not otherwise indicated. We based EP on the

packed prices to the first unaffiliated purchaser in the United States.

We made deductions from the starting price, where appropriate, for

foreign inland freight, foreign brokerage and handling, ocean freight,

marine insurance, U.S. customs brokerage and U.S. duties. We also added

an amount for duty drawback. No other adjustments were claimed or

allowed.

Normal Value

In calculating NV, we used home market prices to unaffiliated

purchasers, as defined in section 773 of the Act. 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 Daesang's

volume of home market sales of the subject merchandise to the volume of

U.S. sales of the subject merchandise, in accordance with section

773(a)(1)(C) of the Act. Because Daesang's volume of home market sales

of the subject merchandise was greater than five percent of its volume

of U.S. sales of the subject merchandise, we determined that the home

market provides a viable basis for calculating NV for Daesang.

[[Page 37330]]

We based NV on the gross unit price, and made deductions, where

appropriate, for inland freight from the plant to the warehouse, inland

freight from the plant or warehouse to the customer, presale

warehousing expenses, handling charges, and commissions. We made a

circumstance-of-sale adjustment, where appropriate, by deducting home

market direct selling expenses and adding U.S. direct selling expenses.

We also made adjustments, where applicable, for U.S. indirect selling

expenses to offset home market commissions.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (LOT) as the EP transaction. The NV LOT is that

of the starting-price sales in the comparison market or, when NV is

based on constructed value, that of the sales from which we derive

selling, general and administrative expenses and profit. For EP, the

U.S. LOT is also the level of the starting-price sale, which is usually

from exporter to importer. For CEP, it is the level of the constructed

sale from the exporter to the importer.

To determine whether NV sales are at a different LOT than EP or

CEP, we examine stages in the marketing process and selling functions

along the chain of distribution between the producer and the

unaffiliated customer. If the comparison-market sales are at a

different LOT, and the difference affects price comparability, as

manifested in a pattern of consistent price differences between the

sales on which NV is based and comparison-market sales at the LOT of

the export transaction, we make a LOT adjustment under section

773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is

more remote from the factory than the CEP level and there is no basis

for determining whether the difference in the levels NV and CEP affects

price comparability, we adjust NV under section 773(a)(7)(B) of the Act

(the CEP offset provision). See Notice of Final Determination of Sales

at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From

South Africa, 62 FR 61731, 61732 (November 19, 1997).

Daesang did not claim a LOT adjustment; however, we requested

information concerning Daesang's distribution system, including classes

of customers, selling functions, and selling expenses, to determine

whether such an adjustment was necessary. Daesang reported that all

sales to the United States during the Period of Review (POR) were to

distributors, and sales in the comparison market, the home market in

this case, were to end-users or distributors. Daesang claimed that

there were no differences in selling functions or selling expenses

between sales in the home market and sales in the United States, nor

did we find any such difference. Therefore, we preliminarily determine

that sales in the home market and sales in the United States are at the

same LOT, and that no adjustment is warranted.

Preliminary Results of the Review

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

following margin exists for the period July 1, 1996 through June 30,

1997:

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Margin

Manufacturer/Exporter (percent)

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Daesang Corporation......................................... 8.72

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Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice in accordance with 19 CFR

351.224. Any interested party may request a hearing within 30 days of

publication in accordance with 19 CFR 351.310. Any hearing, if

requested, will be held 44 days after the 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 in

accordance with 19 CFR 351.309. Rebuttal briefs, which must be limited

to issues raised in the case briefs, may be filed within five days

after the time limit for filing case briefs. See 19 CFR 351.309.

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. 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, not later than 120 days

after the date of publication of this notice.

Upon issuance of the final results of review, the Department shall

determine, and the Customs Service shall assess, antidumping duties on

all appropriate entries. We have calculated importer-specific ad

valorem duty assessment rates based on the ratio of the total amount of

dumping margins calculated for the examined sales made during the POR

to the total customs value of the sales used to calculate those duties.

These rates will be assessed uniformly on all entries of each

particular importer made during the POR. (This is equivalent to

dividing the total amount of antidumping duties, which are calculated

by taking the difference between statutory NV and statutory EP, by the

total statutory EP value of the sales compared, and adjusting the

result by the average difference between EP and customs value for all

merchandise during the POR.)

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

assessment of antidumping duties on entries of merchandise covered by

the determination and for future deposits of estimated duties. Upon

completion of this review, the Department will issue appraisement

instructions directly to the U.S. Customs Service.

Furthermore, the following deposit requirements will be effective

upon publication of the final results of this administrative review for

all shipments of INC from Korea entered, or withdrawn from warehouse,

for consumption on or after the publication date, as provided for by

section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Daesang

will be the rate established in the final results of this 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, a prior review, or the original less-than-fair-

value 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) for all other producers and/or

exporters of this merchandise, the cash deposit rate shall be the rate

established in the investigation of sales at less than fair value,

which is 66.3 percent. See 55 FR 28267 (May 22, 1990).

These deposit rates, 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 section 19 CFR 351.402(f) of the Department's

regulations 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 the subsequent assessment of double antidumping

duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213,

351.221.

[[Page 37331]]

Dated: June 30, 1998.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-18443 Filed 7-9-98; 8:45 am]

BILLING CODE 3510-DS-P