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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-812]

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

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review.

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SUMMARY: On March 9, 1998, the Department of Commerce (``the

Department'') published the preliminary results of its administrative

review of the antidumping duty order on dynamic random access memory

semiconductors of one megabit or above (``DRAMs'') from the Republic of

Korea (``Korea''). The review covers two manufacturers/exporters of the

subject merchandise to the United States and four third-country

resellers from Singapore, Malaysia, Canada, and Hong Kong for the

period May 1, 1996, through April 30, 1997. The two manufacturers/

exporters are Hyundai Electronics Industries, Co. (``Hyundai''), and LG

Semicon Co., Ltd. ( ``LG,'' formerly Goldstar Electronics Co., Ltd.).

The third-country resellers are Techgrow Limited (Hong Kong)

(``Techgrow''), Singapore Resources Pte. Ltd. (``Singapore''), NIE

Electronics Sdn. Bhd. (Malaysia) (``NIE''), and Vitel Electronics

Ottawa Office (Canada) (``Vitel''). With respect to the third-county

resellers, Vitel did not respond, Singapore and NIE stated that they

made no sales of the subject merchandise to the United States during

the period of review (``POR''), and Techgrow did not respond fully.

As a result of our analysis of the comments received, we have

changed the results from those presented in our preliminary results of

review.

EFFECTIVE DATE: September 23, 1998.

FOR FURTHER INFORMATION CONTACT: John Conniff or Thomas Futtner, AD/CVD

Enforcement Office 4, Import Administration, International Trade

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

Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-

1009 and (202) 482-3814, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise stated, all citations to 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 Round Agreements Act (``URAA''). In addition, unless

otherwise indicated, all references to the Department's regulations are

to 19 CFR 353 (1997).

Background

On March 9, 1998, the Department published in the Federal Register

(63 FR 11411) the preliminary results of its administrative review of

the antidumping duty order on DRAMs from Korea. In our preliminary

review results, we gave interested parties an opportunity to comment on

our application of facts available to certain unreported sales by LG.

On March 24, 1998, we received written comments from LG and petitioner,

Micron Technology Inc. (``Micron''). With respect to the unreported

sales, LG requested that the Department verify the accuracy of the

information and declarations regarding these transactions that LG

attached as exhibits to its March 24, 1998, submission. On May 6, 1998,

Micron and LG submitted rebuttal comments.

On April 1, 1998, Multi Industry Tech, Inc. (``MIT''), and Multi

Teck Computacion, S.A. de C.V. (``MTC'') (collectively ``MultiTech''),

entered an appearance as an interested party under section 771(9)(A) of

the Act and filed a request for an administrative protective order

(``APO''). On April 3, 1998, LG submitted comments opposing the entry

of appearance and MultiTech's request for an APO. On April 14, 1998,

the Department granted MultiTech an APO as an interested party. See

April 14, 1998, Memorandum from Ann Sebastian to Louis Apple, regarding

``Administrative Protective Order Application from Counsel for Multi

Industry Tech, Inc. and Multi Teck Computacion, S.A. de C.V. in the

Administrative Review of the Antidumping Duty Order on Dynamic Random

Access Memory Semiconductors of One Megabit and Above from Korea (A-

580-812) (5/1/96-4/30/97)'', contained in the official case file

located in the Central Records Unit, Room B099 of the main Commerce

Building (``CRU'').

We also gave interested parties an opportunity to comment on our

[[Page 50868]]

preliminary results. The petitioner, Hyundai, and LG submitted case

briefs on April 28, 1998, and rebuttal briefs on May 6, 1998. MultiTech

submitted a case brief on April 28, 1998.

On June 4-5, 1998, the Department held meetings at the headquarters

of LG's U.S. subsidiary, LG Semicon America, Inc. (``LGSA''), in San

Jose, California. At these meetings, the Department reviewed the

declarations and other information from LG's March 24, 1998,

submission. On July 17, 1998, we released our report on the June 4-5,

1998, meetings. We held both public and closed hearings on July 27,

1998. We have now completed this administrative review in accordance

with section 751(a) of the Act.

Scope of Review

Imports covered by the review are shipments of DRAMs of one megabit

or above from Korea. Included in the scope are assembled and

unassembled DRAMs of one megabit and above. Assembled DRAMs include all

package types. Unassembled DRAMs include processed wafers, uncut die,

and cut die. Processed wafers produced in Korea, but packaged or

assembled into memory modules in a third country, are included in the

scope; wafers produced in a third country and assembled or packaged in

Korea are not included in the scope.

The scope of this review includes memory modules. A memory module

is a collection of DRAMs, the sole function of which is memory. Modules

include single in-line processing modules (``SIPs''), single in-line

memory modules (``SIMMs''), or other collections of DRAMs, whether

unmounted or mounted on a circuit board. Modules that contain other

parts that are needed to support the function of memory are covered.

Only those modules which contain additional items which alter the

function of the module to something other than memory, such as video

graphics adapter (``VGA'') boards and cards, are not included in the

scope. The scope of this review also includes video random access

memory semiconductors (``VRAMS''), as well as any future packaging and

assembling of DRAMs; and, removable memory modules placed on

motherboards, with or without a central processing unit (``CPU''),

unless the importer of motherboards certifies with the Customs Service

that neither it nor a party related to it or under contract to it will

remove the modules from the motherboards after importation. The scope

of this review does not include DRAMs or memory modules that are

reimported for repair or replacement.

The DRAMS and modules subject to this review are currently

classifiable under subheadings 8471.50.0085, 8471.91.8085,

8542.11.0024, 8542.11.8026, 8542.13.8034, 8471.50.4000, 8473.30.1000,

8542.11.0026, 8542.11.8034, 8471.50.8095, 8473.30.4000, 8542.11.0034,

8542.13.8005, 8471.91.0090, 8473.30.8000, 8542.11.8001, 8542.13.8024,

8471.91.4000, 8542.11.0001, 8542.11.8024 and 8542.13.8026 of the

Harmonized Tariff Schedule of the United States (``HTSUS''). Although

the HTSUS subheadings are provided for convenience and customs

purposes, the Department's written description of the scope of this

review remains dispositive.

Partial Rescission of Review

Singapore and NIE stated that they made no sales of the subject

merchandise to the United States during the POR. Since we have been

able to confirm that neither company did, in fact, have shipments of

the subject merchandise during the POR, we are rescinding this

administrative review with regard to Singapore and NIE. In the

preliminary results of review, the Department discussed the possible

application of the All Others' duty deposit rate to these firms if

future shipments were to take place. However, we can not predict the

sales arrangements that these firms might make. The ``Final Review

Results'' section of this notice outlines, depending on the facts, how

the cash deposit decision will be made, should these firms start

shipping.

Determination Not To Revoke

LG and Hyundai submitted requests for revocation from the order

covering DRAMs from Korea pursuant to 19 CFR 353.25(a). Under the

Department's regulations, the Department may revoke an order, in part,

if the Secretary concludes that: (1) [o]ne or more producers or

resellers covered by the order have sold the merchandise at not less

than [normal] value for a period of at least three consecutive years;

(2) [i]t is not likely that those persons will in the future sell the

merchandise at less than normal value (``NV''); and (3) the producers

or resellers agree in writing to the immediate reinstatement of the

order, as long as any producer or reseller is subject to the order, if

the Secretary concludes that the producer or reseller, subsequent to

the revocation, sold the merchandise at less than NV. 19 CFR

353.25(a)(2). In this case, neither respondent meets the first

criterion for revocation. The Department has found that both, LG and

Hyundai, sold subject merchandise at not less than NV in the two prior

reviews under this order, but they did sell at less than NV during the

instant review period. Since neither respondent has met the first

criterion for revocation, i.e., zero or de-minimis margins for three

consecutive reviews, the Department need not reach a conclusion with

respect to the other criteria. Therefore, on this basis, we have

determined not to revoke the Korean DRAM antidumping duty order in part

with respect to Hyundai and LG. In light of this decision, interested

party comments on revocation are moot and will not be addressed further

in these final review results.

Fair Value Comparisons

Unless otherwise noted, to determine whether sales of subject

merchandise from Korea to the United States were made at less than fair

value, we compared the Constructed Export Price (``CEP'') to the NV, as

described in the ``Constructed Export Price'' and ``Normal Value''

sections of the preliminary results of review notice. See Dynamic

Random Access Memory Semiconductors (``DRAMs'') of One Megabit or Above

from the Republic of Korea, 63 FR 11411, March 9, 1998) (``Preliminary

Results'').

Facts Available

1. Application of Facts Available

Section 776(a)(2) of the Act provides that if any interested party:

(A) withholds information that has been requested by the Department;

(B) fails to provide such information in a timely manner or in the form

or manner requested; (C) significantly impedes an antidumping

investigation; or (D) provides such information but the information

cannot be verified, the Department shall use facts otherwise available

in making its determination.

Based on information obtained from the Customs Service, we have

determined that a number of sales that LG reported as third-country

sales were actually sales to the United States. Moreover, the

Department has 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. See the September 8, 1998 Memorandum

from Thomas Futtner and John Conniff to Holly Kuga regarding ``Dynamic

Random Access Memory Semiconductors (DRAMs) of One Megabit and Above

from the Republic of Korea--Whether to Include Certain Unreported Sales

in the Calculation of LG's Margin for the Final Results of the

[[Page 50869]]

96-97 Review'' (``LG Analysis Memo''). Thus, we have determined that LG

withheld information we requested and significantly impeded the

antidumping proceeding.

We have similarly determined that Techgrow, which submitted only a

partial response to our questionnaire, and which failed to provide the

information for sales by its affiliates, withheld information we

requested and significantly impeded this proceeding. See DOC Position

to Techgrow-Specific Comment 1.

Vitel, another respondent in this review, confirmed that it had

received the questionnaire, but it failed to submit a response. Thus,

Vitel failed to provide any information and thereby significantly

impeded this review.

Because LG and Techgrow failed to respond in full to our

questionnaire, and Vitel did not respond at all, pursuant to section

776(a) of the Act, we have applied facts otherwise available to

calculate their dumping margins.

2. Selection of Adverse Facts Available

Section 776(b) of the Act provides that, in selecting from the

facts available, adverse inferences may be used against a party that

failed to cooperate by not acting to the best of its ability to comply

with requests for information. See also Statement of Administrative

Action (``SAA'') accompanying the URAA, H.R. Doc. No. 316, 103d Cong.,

2d Sess. 870 (1994).

Section 776(b) states further that an adverse inference may include

reliance on information derived from the petition, the final

determination, the final results of prior reviews, or any other

information placed on the record. See also Id. at 868.

LG's decision to report as third-country sales a substantial number

of U.S. sales that it knew, or should have known, were U.S. sales,

indicates that LG failed to cooperate to the best of its ability. See

DOC Position to LG-Specific Comment 1. Similarly, Techgrow's failure to

provide information on sales by its affiliated party demonstrates that

Techgrow has failed to cooperate to the best of its ability in this

review. Finally, since Vitel provided no questionnaire response at all,

we have determined that this respondent also failed to cooperate to the

best of its ability in the instant review. Therefore, the Department

has determined that an adverse inference is warranted in selecting

among the facts otherwise available for LG, Techgrow, and Vitel, in

accordance with section 776(b) of the Act. Consequently, we have based

the margins for these three respondents on adverse facts available.

As adverse facts available for LG, we have calculated a dumping

margin based on both LG's reported and unreported sales to the United

States, the latter of which we were able to identify from U.S. Customs

Service data. Regarding the adjustments to LG's unreported sales, we

used as facts available the highest U.S. selling expenses from LG's

reported transactions involving identical products. Where there were no

reported transactions involving identical merchandise, we used the

highest U.S. selling expenses from LG's reported transactions involving

merchandise of the same density. With respect to fair value

comparisons, when there were no contemporaneous sales of identical or

similar merchandise sold in Korea, we compared these unreported sales

to constructed value (``CV''). When there was no quarterly cost data

reported during the same quarter as the date of sale of the unreported

transactions, we used the highest CV available from the remaining

quarters.

As adverse facts available for Techgrow and Vitel, we have assigned

the highest company-specific margin calculated in the history of this

proceeding, which is the rate calculated for LG in the instant review.

General Comments

Comment 1: Research and Development (``R&D'')

Hyundai argues that the Department overstated R&D expenses by

allocating a portion of the R&D expenses associated with non-memory

products to the CV of DRAMs. According to Hyundai, the antidumping

statute precludes the Department from attributing expenses relating to

non-subject merchandise (non-memory) to subject merchandise (memory,

i.e., DRAMs). In addition, Hyundai maintains that the preliminary

results deviate from the Department's long-standing practice of

calculating product-specific R&D. If the Department insists upon

calculating R&D in this manner, Hyundai argues that the Department must

justify its departure from prior practice, citing Micron Technology,

Inc. v. U.S., 893 F.Supp. 21 (CIT 1995) (``Micron Tech'').

Moreover, Hyundai disputes various statements made by the

Department's semiconductor expert with respect to cross-fertilization

issues and states that the record does not support the Department's

preliminary results. Hyundai claims that the allocation methodology

adopted by the Department in the preliminary results is mistakenly

based on an assumption that R&D expenditures for non-memory products

provide equal benefit to memory products. If any cross-fertilization of

R&D between memory and non-memory products exists, Hyundai argues, the

benefits flow from memory to non-memory and not in the other direction.

Hyundai asserts that the Department's methodology has the effect of

increasing its DRAM costs as Hyundai devotes more funds to non-memory

R&D. Hyundai maintains that cross-fertilization of memory and non-

memory R&D is extremely unlikely, given the fundamental differences in

product design, marketing, and production of these semiconductors.

Hyundai contends further that its organizational structure and

accounting records distinguish between R&D expenses for memory and non-

memory products. According to Hyundai, its R&D laboratories responsible

for memory and non-memory R&D have separate budgets, personnel, and

locations. Moreover, respondent asserts its laboratories conduct no

joint projects and compete for funding.

Hyundai argues further that the Department included production

costs related to the manufacturing of non-subject merchandise, such as

application-specific integrated circuits and other non-memory devices,

in its allocation of semiconductor R&D. According to Hyundai, these

chips are produced for specific customers in the company's ``system

IC'' lab and are then sold to the same specific customers. As such,

Hyundai claims that these are not R&D costs, but costs related to the

commercial production of non-memory chips for sale to specific

customers. It asserts that the Department must subtract these

``verified production costs'' from the total semiconductor R&D figure

used in the R&D allocation.

LG requests that the Department revise its allocation for R&D on

the basis of LG's verified, product-specific R&D expenses exclusive of

non-DRAM R&D. LG argues that its ``product-specific'' R&D expenses have

been properly quantified and verified by the Department. LG maintains

that it distinguishes DRAM R&D expenses from other products it

manufactures by tracking and segregating these R&D expenses into DRAM

and non-DRAM categories. Furthermore, LG states that it distinguishes

between product-development R&D (which includes R&D related to

technological improvement of the functionality of the product) and

product-line R&D (which includes R&D related to production-process

improvement). LG argues that the Department has not produced any

evidence supporting cross-fertilization between memory and non-memory

R&D

[[Page 50870]]

as required by the Court in Micron Tech. LG notes that this methodology

raises the R&D expenses for DRAMs, thereby overstating LG's DRAM cost

of production (``COP'').

In response to LG's and Hyundai's assertions, the petitioner states

that the Department allocated all semiconductor R&D properly over all

semiconductor production. The petitioner argues that there is already

sufficient evidence on the record to support the Department's

determination that, in the semiconductor industry, R&D relating to any

aspect of semiconductor production has a significant effect on the

production and sale of all semiconductor products. The petitioner cites

the three prior reviews under this order and the Notice of Final

Determination of Sales at Less Than Fair Value; Static Random Access

Memory Semiconductors From the Republic of Korea, 63 FR 8945 (February

23, 1993) (``SRAMs Final Determination''), where the Department placed

evidence in the record that cited examples of cross-fertilization and

included statements by both the Department's and respondent's

semiconductor experts.

Further, petitioner disputes Hyundai's contention that the

Department should exclude from total R&D expense that part of the

expense that the respondent contends represents commercial production

of non-subject merchandise. According to the petitioner, the Department

rejected this same contention in the SRAMs Final Determination by

noting that Hyundai had categorized these costs as R&D expenses in its

audited financial statements.

DOC Position. We disagree with Hyundai and LG and have allocated

all semiconductor R&D expenses over the total semiconductor cost of

goods sold. This allocation methodology is fully consistent with the

antidumping statute and the R&D calculations we have used throughout

the Korean DRAM and SRAM proceedings.

In the SRAMs Final Determination, we noted that, as a result of the

forward-looking nature of R&D activities, we could not predict every

instance where SRAM R&D may influence logic products or where logic R&D

may influence SRAM products. As a result, we asked Dr. Murzy Jhabvala,

a semiconductor device engineer at the National Aeronautics and Space

Administration with twenty-four years of experience, to state his views

regarding any potential overlap or cross-fertilization of R&D efforts

in the semiconductor industry. In fact, Dr. Jhabvala had identified in

another semiconductor proceeding before the Department areas where R&D

from one type of semiconductor product influenced another semiconductor

product. We have placed on the record of this review these statements

by Dr. Jhabvala, including a statement pertaining to DRAMs dated July

14, 1995. In this memorandum, entitled ``Cross Fertilization of

Research and Development Efforts in the Semiconductor Industry,'' Dr.

Jhabvala stated that ``it is reasonable and realistic to contend that

R&D from one area (e.g., bipolar) applies and benefits R&D efforts in

another area (e.g., MOS memory). In a statement prepared for the SRAMs

Final Determination, Dr. Jhabvala stated that:

SRAMs represent along with DRAMs the culmination of

semiconductor research and development. Both families of devices

have benefitted from the advances in photo lithographic techniques

to print the fine geometries (the state-of-the-art steppers)

required for the high density of transistors . . . In addition to

achieve higher access speeds bipolar (ECL or TTL) output amplifiers

are incorporated directly on chip with the CMOS SRAM memory array, a

process known as BiCMOS. Further efforts to improve speed have

resulted in the combination of the bipolar ECL technology with CMOS

technology with silicon on insulator (SOI) technology.

Clearly, three distinct areas of semiconductor technology are

converging to benefit the SRAM device performance. There are other

instances where previous technology and the efforts expended to

develop that technology occurs in the SRAM technology. Some examples

of these are the use of thin film transistors (TFTs) in SRAMs,

advanced metal interconnect systems, anisotropic etching and filling

techniques for trenching and planarization (CMP) and implant

technology for retrograde wells.

See September 8, 1997, Memorandum from Murzy Jhabvala to U.S.

Department of Commerce/Office of Antidumping Compliance, Attn: Tom

Futtner, regarding ``Cross Fertilization of Research and Development of

Semiconductor Memory Devices (``September 1997 Jhabvala Memo''), on

file in the CRU.

In accordance with the holding in the Micron Tech case, the

Department requested that Dr. Jhabvala participate in the verification

of Samsung's R&D expenses in the SRAMs case. After interviewing several

of Samsung's R&D engineers, Dr. Jhabvala concluded that ``the most

accurate and most consistent method to reflect the appropriate R&D

expense for any semiconductor device is to obtain a ratio by dividing

all semiconductor R&D by the cost to fabricate all semiconductors sold

in a given period.'' See Public Version of December 19, 1997,

Memorandum from Murzy Jhabvala to the File, regarding ``Examination of

Research and Development Expenses and Samsung Electronic Corporation

(SEC),'' on file in the CRU.

In the SRAMs Final Determination, we disagreed with Hyundai's

contention that we must follow Hyundai's normal accounting records

which categorize R&D expenses by project and product. We disagree with

similar contentions from LG and Hyundai in this review. As we have said

in the past, we are not bound by the way a company categorizes its

costs, R&D projects, or laboratory facilities. Moreover, the mere fact

that R&D projects for memory and non-memory products may be run in

different laboratories, that process and product research for memory

and non-memory products may be distinguished, and that each of the

respondents may account for these R&D projects separately their

respective books and records, does not address the core issue of cross-

fertilization in semiconductor R&D. The existence of cross-

fertilization in semiconductor R&D is the central theme of Dr.

Jhabvala's many statements to the Department. Dr. Jhabvala offers

various examples in those statements to illustrate that, regardless of

the accounting or laboratory arrangements, the research results or

developments in the processes and technologies used in the production

and development of one semiconductor family can be (and are) used in

the production and development of other semiconductor families. Dr.

Jhabvala goes so far as to say that it would be ``unrealistic to expect

researchers to work in complete technical isolation constantly

reinventing technology that might already exist.'' See ``September 1997

Jhabvala Memo''. Given this fact, we do not believe that the reported

expenses for DRAM R&D projects reasonably reflect the appropriate cost

of producing the subject merchandise. As a result, we have continued to

allocate all semiconductor R&D expenses over the total semiconductor

cost of goods sold, a methodology which does not overstate costs, but

which we believe more reasonably and accurately identifies the R&D

expenses attributable to subject merchandise.

This is not a change in the Department's approach to this issue. It

is the Department's long-standing practice where costs benefit more

than one product to allocate those costs to all the products which they

benefit. See, e.g., SRAMs Final Determination. We believe that this

methodology results in the calculation of product-specific costs and

that it is consistent with section 773(f)(1)(A) of the Act because we

have

[[Page 50871]]

determined that DRAM-specific R&D account entries do not by themselves

completely and reasonably reflect the costs associated with the

production and sale of subject merchandise.

Finally, we disagree with Hyundai that we included production costs

related to the manufacturing of non-subject merchandise in our

allocation of semiconductor R&D. The Department used Hyundai's verified

R&D expenses, which Hyundai itself provided to the Department. In

addition, while Hyundai argues that these expenses are production

costs, it has not provided any documentation or evidence to support

this claim. We note that Hyundai has categorized these ``costs'' as R&D

expenses in its audited financial statements. Furthermore, we note that

the ``costs'' to which Hyundai refers are not categorized in a manner

which would enable us to separate them from total project expenses. For

these reasons and consistent with the position taken in the SRAMs Final

Determination, we have made no adjustment for this claim in

establishing Hyundai's R&D expenses.

Comment 2: Depreciation

Petitioner maintains that the Department adjusted Hyundai's and

LG's depreciation expense correctly to account for special depreciation

despite the fact that these companies no longer adjust for special

depreciation in their internal accounting systems. However, petitioner

claims that the Department incorrectly failed to adjust Hyundai's and

LG's depreciation by not taking into account the changes respondents

made to the average useful lives (``AULs'') of their assets. Petitioner

argues that neither of these two changes in respondents' accounting

practices are systematic, rational, or justified since nothing changed

with respect to the equipment itself or its usage and that LG and

Hyundai were motivated by the need to show net profits instead of

losses. Petitioner contends that the Department did not explain why it

only adjusted for special depreciation and not for the change in AULs.

According to petitioner, there is no methodological or factual

justification for treating the two changes differently. In conclusion,

petitioner requests that the Department adjust the reported

depreciation amounts fully by denying both types of reporting changes

made by respondents.

LG states that the Department should not make any adjustments to

its reported depreciation expense since the statute mandates the use of

verified records if such records are kept in accordance with the

generally accepted accounting principles (``GAAP'') of the exporting

country and if such expenses reasonably reflect the costs associated

with the production and sale of subject merchandise. LG argues that an

adjustment is not warranted in this case since the reported expenses

reasonably reflect DRAM costs and were appropriately recorded in

accordance with Korean GAAP in its audited financial statement. LG

claims that it made a business decision not to take all available

depreciation charges allowed by Korean law. Further, LG argues that its

change in AUL and the decision not to take special depreciation

constitute changes in accounting estimates only, not accounting

principles.

Hyundai argues that the Department should not have adjusted the

company's depreciation expense and methodology. According to Hyundai,

the reported depreciation expense and methodology are fully consistent

with Korean GAAP. Specifically, Hyundai maintains that the auditor's

opinion attached to its financial statement demonstrates that all

elements of the financial statement, including depreciation, were

prepared in accordance with Korean GAAP. According to Hyundai, the

reported depreciation expense reasonably reflects the cost of producing

DRAMs.

Hyundai claims that, even though it took special depreciation

during previous segments of this antidumping proceeding, neither the

Department nor petitioner objected when Hyundai started to claim this

depreciation expense during those periods. Moreover, Hyundai asserts,

the Department verified and accepted those costs fully. Hyundai also

claims that there is no requirement in U.S. antidumping law that

companies take additional costs nor is there any requirement under

Korean GAAP that a company continue to take a tax benefit that it

claimed in a previous year. Hyundai argues that the depreciation

expense as recorded in its books and records is fully consistent with

the company's historical accounting methodology. Therefore, respondent

states, the Department should use Hyundai's reported expenses for

purposes of this antidumping review.

DOC Position. Section 773(f)(1)(A) of the Act states that costs

``shall normally be calculated based on the records of the exporter or

producer of the merchandise, if such records are kept in accordance

with the GAAP of the exporting country (or the producing country where

appropriate) and reasonably reflect the costs associated with

production and sale of the merchandise.'' Further, as explained in the

SAA, ``[t]he exporter or producer will be expected to demonstrate that

it has historically utilized such allocations, particularly with regard

to the establishment of appropriate amortization and depreciation

periods and allowances for capital expenditures and other development

costs'' (SAA at 834). The issue in this review is whether respondents

have demonstrated that their changes in depreciation accounting are

reasonable and consistent with the depreciation methodologies that

these companies have employed in the past.

With respect to special depreciation, both respondents elected to

claim this expense during the previous three review periods in this

proceeding. Respondents' decision not to claim special depreciation

represents a change in accounting method. In effect, by claiming

special depreciation over the last three years, respondents have been

depreciating their assets on an accelerated basis. The decision to stop

claiming the additional depreciation constitutes a decision to

depreciate assets on a non-accelerated basis. While respondents may

have a right under Korean law to forego this claim, they must explain,

consistent with the SAA, how these changes are consistent with the cost

methodologies and allocations the companies have utilized in the past.

Furthermore, to justify this change and ensure that the Department

receives systematic and rational product costing throughout an

antidumping proceeding, the respondent must explain the underlying

reasons for the change and provide information as to why this change in

method better reflects the actual costs incurred in producing the

merchandise under investigation or review. In this case, there is no

information on the record to justify this change.

In contrast, the AUL assumption both respondents used reflects

their historical experience in establishing the appropriate

depreciation periods. It is common practice within the semiconductor

industry to depreciate machinery and equipment using a three-to five-

year useful-life assumption. Respondents' change in the AUL does not

deviate from this three to five year band. In fact, for one respondent,

we noted that certain machinery and equipment tested at verification

were still in operation after five years. Furthermore, unlike

respondents' decision not to claim special depreciation, the change in

the AUL represents only a change in an accounting estimate. It does not

constitute a change in depreciation methodology.

Therefore, we have accepted the AUL adjustment claimed by

respondents, but

[[Page 50872]]

we have added special depreciation to respondents' reported COP.

Comment 3: Foreign-Exchange Loss

Petitioner argues that the Department properly included an

amortized portion of foreign-exchange translation losses related to

long-term debt as a component of financing costs in respondents' COP.

Petitioner also contends that the newly adopted Korean GAAP for

deferring foreign-exchange losses has not been applied on a consistent

and historical basis and the Department's past practice has been to

disregard Korea's local accounting standard that called for deferring

current-period foreign-exchange losses on long-term debt. Further,

petitioner maintains that foreign-exchange losses are closely tied to a

company's operations and to the higher cost of financing, including the

retirement of foreign-currency-denominated debt. According to

petitioner, this is no more hypothetical than is depreciation of a

capital asset or other costs for which the cash outlay may be made

during a different accounting period.

LG contends that its reported financial expenses are consistent

with Korean GAAP. LG argues that the Department's statutory mandate is

to calculate a respondent's actual costs for subject merchandise based

on the books and records of the company. LG maintains that the

application of U.S. GAAP in LG's circumstances would be distortive

because the company borrows mainly in foreign currencies, the loans are

mostly long term, and Korean exchange rates fluctuate significantly.

Hyundai maintains similarly that its treatment of unrealized

foreign-exchange translation losses is in accordance with Korean GAAP

and reasonably reflects its COP. Hyundai argues that Korean GAAP

provides for the recognition of such gains or losses when they are

actually incurred. Hyundai also asserts that unrealized long-term

foreign-currency translation losses do not represent an actual cost.

Hyundai maintains further that the Department was incorrect to include

the cost of unrealized foreign-exchange gains and losses in COP. If

such unrealized gains and losses continue to be included in COP,

Hyundai contends that the Department must apply the methodology it used

in the preliminary results of amortizing the unrealized gains and

losses over the average outstanding loan balances.

DOC Position. In this case, we have verified unrealized foreign-

exchange translation gains and losses for both respondents. The

translation gains and losses at issue are related to the cost of

acquiring debt. As the record indicates, these loans represent the

financing of new buildings and machinery. Consequently we consider

these costs related to production. Including these gains and losses in

the calculation of COP is, therefore, proper and consistent with our

position in previous cases where we have found that translation losses

represent an increase in the actual amount of cash needed by

respondents to retire their foreign-currency-denominated loan balances.

See Fresh Cut Roses from Ecuador: Final Determination of Sales at Less

than Fair Value, 24 FR 7019, 7039 (Feb. 6, 1995). For these final

results, therefore, and consistent with our practice in other cases, we

amortized deferred foreign-exchange translation gains and losses over

the average remaining life of the loans on a straight-line basis and

included the amortized portion in the net interest expense portion of

COP. See Certain Steel Concrete Reinforcing Bars From Turkey; Final

Determination of Sales at Less Than Fair Value, 62 FR 9737, 9743 (March

4, 1997).

Comment 4: Level of Trade (``LOT'')/CEP Offset

Petitioner disagrees with the Department's determination of LOT by

comparing an unadjusted NV to an adjusted CEP. Petitioner maintains

that, due to this improper comparison, the Department concluded

erroneously in its preliminary analysis that different LOTs existed in

both markets, resulting in a CEP-offset adjustment to NV for both

respondents. According to petitioner, a recent ruling by the Court of

International Trade (``CIT'') determined that the Department's CEP-

offset methodology is not in accordance with the antidumping statute.

In this ruling, petitioner asserts, the court stated that ``Commerce's

limited adjustment to price before LOT analysis contravenes the purpose

of the statute,'' citing Borden, Inc. v. United States, Slip Op. 98-36

(March 26, 1998) (``Borden''). Petitioner argues that, if the

Department conducted the LOT analysis in accordance with Borden, it

would not have made the adjustment to NV.

Hyundai contends that the Department should continue to determine

LOT by comparing NV to an adjusted CEP and, thus, continue to make a

CEP offset. Hyundai argues that the Department has rejected

petitioner's argument in the second (94/95) and third (95/96) reviews

of the order on Korean DRAMs and, most recently, in the SRAMs Final

Determination. Additionally, Hyundai requests that the Department not

apply the Borden case in this review since the decision was based on an

incorrect interpretation of the law. According to Hyundai, the court in

the Borden case misinterpreted the statute by ruling erroneously that

adjustments must be disregarded when defining the LOT of the CEP sale

for the purposes of the offset. Moreover, Hyundai also argues that the

record clearly supports Hyundai's request for a CEP offset since its

home market (``HM'') sales are made at a more advanced LOT and are not

comparable to its U.S. sales. In fact, according to Hyundai, there is

no LOT in the HM equal to the CEP level.

LG asserts that the Department made a CEP offset correctly. LG also

maintains that the Department should not apply the Borden case to the

instant review. According to LG, the court held mistakenly that the

Department's adjustments to CEP starting prices (by removing certain

expenses) are inconsistent with section 773(a)(7) of the Act. LG claims

that the court believed that such adjustments distort the LOT analysis

and that this ``pre-adjustment'' creates an automatic CEP offset in

addition to any CEP-offset or LOT adjustment made after a comparison of

adjusted CEP to HM price. LG contends that the Department's methodology

does not create a ``pre-adjustment'' and removes correctly from the

starting U.S. price only those expenses related to the resale

transaction between the U.S. affiliate and the unaffiliated U.S.

customer.

DOC Position. We disagree with petitioner. We note that the holding

in the Borden case is not final and conclusive. Moreover, both the

statute and the SAA clearly support analyzing the LOT of CEP sales at

the CEP level--that is, after expenses associated with economic

activities in the United States have been deducted pursuant to section

772(d) of the Act. The Department has clearly stated this in previous

cases. See, e.g., SRAMs Final Determination. As set forth in section

773(a)(1)(B)(i) of the Act and the SAA, to the extent practicable, the

Department will calculate NV based on sales at the same LOT as the U.S.

sale. See SAA at 829. The SAA makes clear that there cannot be two

different LOTs where the selling functions are the same. When the

Department is unable to find sales in the comparison market at the same

LOT as the U.S. sales, the Department may compare sales in the U.S. and

foreign markets at different LOTs.

In accordance with section 773(a)(7)(A) of the Act, if we compare a

U.S. sale at one LOT to NV sales at a different LOT, we will adjust the

NV to account for the difference in LOT if the

[[Page 50873]]

differences affect price comparability as evidenced by a pattern of

consistent price differences between sales at the different LOTs in the

market in which NV is determined. If, for CEP sales, the NV level is

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

for determining whether the difference in levels between NV and CEP

affects price comparability, we adjust NV under the CEP-offset

provision of the statute. 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 (November 19, 1997).

In order to determine whether a LOT adjustment or CEP offset was

warranted for LG or Hyundai in this review, we compared their CEP sales

to their HM sales in accordance with the principles discussed above.

For purposes of our analyses, we examined information regarding the

distribution systems in both the U.S. and Korean markets, including the

selling functions, classes of customer, and selling expenses for each

company. We found that respondents performed substantial selling

functions in their HM transactions, ranging from inventory maintenance

and warranty services to advertising and technical services. In

contrast, the services offered to the U.S. importer tended to relate

solely to the transfer of the merchandise from Korea to the U.S.

subsidiary. See September 8, 1998, Memorandum from John Conniff to Tom

Futtner, regarding ``Dynamic Random Access Memory Semiconductors

(DRAMs) from the Republic of Korea (A-580-812)--Final Results of Review

Level of Trade Analysis Memorandum--Hyundai Electronics, Co., Ltd'' and

September 8, 1998, Memorandum from John Conniff to Tom Futtner,

regarding ``Dynamic Random Access Memory Semiconductors (DRAMs) from

the Republic of Korea (A-580-812)--Final Results of Review Level of

Trade Analysis Memorandum--LG Semicon, Co., Ltd.''. Based on this

analysis, we determined that both respondents sold the comparison

merchandise during the period at a LOT in the HM which was different,

and more advanced, than the LOT of the CEP sales of subject merchandise

in the United States. As there is no HM LOT comparable to that of

respondents' sales to the United States, we do not have the data

necessary to make a LOT adjustment for either LG or Hyundai. Therefore,

we have made a CEP-offset adjustment to NV in our calculations for each

of these companies pursuant to section 773(a)(7)(B) of the Act.

Company-Specific Issues

A. Hyundai

Comment 1: Synchronous DRAMs (``SDRAMs'')

Petitioner alleges that Hyundai understated the cost of producing

memory modules. According to petitioner, these module costs include

placing the SDRAMs on the module and the cost of materials added to the

module. In support of its allegation, petitioner claims that Hyundai is

selling SDRAM modules at the same price as the price which it charges

for the aggregate number of individual SDRAMs on the module.

Hyundai states that the Department verified module-building costs

and found all costs were reported for this review period. Moreover,

Hyundai claims that petitioner's allegations concerning SDRAMs are

untimely and irrelevant. Hyundai argues that petitioner submitted two

invoices as source documentation for its allegation after the deadline

for the submission of factual information. Furthermore, these

allegations, Hyundai asserts, are irrelevant since they are related to

transactions which occurred after the POR.

DOC Position. We agree with Hyundai. Since the information on

SDRAMs was first submitted in petitioner's case brief, we have treated

the allegation as untimely within the meaning of 19 CFR 353.31(a)(2).

Assuming, arguendo, that the allegation was timely, we also consider

the claim irrelevant to this review since the two invoices that

petitioner submitted in its brief covered transactions which took place

outside the POR.

Comment 2: CV Profit on a Quarterly Basis

Hyundai notes that, for the purposes of the preliminary results,

the Department recognized that prices during the POR declined

significantly and used quarterly data in its sales-below-cost test.

However, Hyundai asserts, the Department did not calculate profit for

its CV calculations on a quarterly basis. Hyundai argues further that

declining prices, in turn, affect the profit rates it earned on sales

during the POR. Since antidumping comparisons are based on matching

comparable products during a comparable period, Hyundai contends that

the Department should also apply the appropriate quarterly profit rates

in the calculation of CV.

Petitioner states that the Department calculated an annual average

rate of profit properly based on Hyundai's full-year HM sales made in

the ordinary course of trade. According to petitioner, the annual

profit rate is appropriate since it reflects not only quarterly costs

of manufacture (as reflected in the quarterly CV calculation), but also

annual costs, such as General and administrative (``G&A'') expenses.

Petitioner contends that these expenses are often non-recurring and

must be calculated on an annual basis to ensure that all such costs are

captured in calculating COP. Moreover, petitioner claims that Hyundai's

arguments are inconsistent since they fail to address the Department's

use of annual amounts for selling expenses as well as for G&A expenses.

DOC Position. We agree with the petitioner. The Department applies

the average profit rate for the POR even when the cost calculation

period is less than a year. See, e.g., SRAMs Final Determination and

Certain Fresh Cut Flowers From Colombia; Final Results and Partial

Rescission of Antidumping Duty Administrative Review, 62 FR 53287,

53295 (Oct. 14, 1997). We disagree with Hyundai that the use of annual

profit distorts the analysis. First, a difference between the quarterly

profits and the annual average profit does not automatically mean that

a distortion exists. In fact, there is no evidence on the record that

indicates such a distortion. Second, profit is not solely based on

prices, but is a function of the relationship between price and cost.

Third, the use of annual profit mitigates fluctuations in profits and,

therefore, represents a truer picture of profit. As petitioner states,

the annual profit rate is appropriate since it reflects not only

quarterly costs of manufacture, but also annual costs, such as G&A

expenses, which are often non-recurring and must be calculated on an

annual basis. Therefore, for the purposes of these final review

results, we have continued to calculate the average profit rate on an

annual basis.

Comment 3: Whether the NV of Further-Manufactured Models Should be

Based on CV

Hyundai argues that the Department erred in comparing the prices of

further-manufactured mixed modules to CV. For these mixed modules,

Hyundai asserts that the Department must instead compare the U.S. price

of the two DRAMs which were imported into the United States and then

incorporated into the module to the HM price of the comparable DRAMs.

As maintained by Hyundai, this preference for a price-to-price

comparison has been most recently affirmed by the Court of Appeals for

the Federal Circuit in

[[Page 50874]]

Cemex S.A. v. United States, 133 F.3d 897 (Fed.Cir.1998) (``Cemex''),

which noted that, when HM sales of identical merchandise are

unavailable, the statute requires that NV be based on non-identical,

but similar merchandise, rather than CV.

DOC Position. We agree with Hyundai. The Act and the Department's

regulations set forth a preference for basing NV on the price of the

foreign like product and for making price-to-price comparisons,

whenever possible. See section 773(a)(1)(A) of the Act and 19 CFR

353.46(a). Therefore, for further-manufactured mixed-memory modules,

because there were HM sales of merchandise comparable to the

merchandise imported into the United States, we agree with Hyundai in

this review that, rather than resorting to CV, we should have compared

the U.S. price of the imported product (i.e., DRAMs) to the weighted-

average price of the comparison product sold in the HM. We have made

this correction in the final results. See September 8, 1998, Memorandum

from John Conniff to Thomas F. Futtner regarding ``Dynamic Random

Access Memory Semiconductors (DRAMS) from the Republic of Korea (A-580-

812)--Final Results of Review Analysis Memorandum-Hyundai Electronics,

Inc.'' (``Hyundai Analysis Memo'').

Comment 4: Incorrect Coding

Hyundai argues that the Department used incorrect coding in its

computer program when segregating the HM sales data into quarterly

data.

DOC position. We agree with Hyundai. We corrected the coding in the

programming language that identifies the quarter for HM sales for these

final review results to ensure that our calculations reflect Hyundai's

information correctly.

Comment 5: Identifying All Comparable HM Sales Before Using CV

Hyundai argues that its concordance database does not implement the

Cemex decision since it was submitted prior to the issuance of this

decision. Hyundai submitted new concordance programming which, it

argues, implements the Cemex decision. If the Department uses this

database, Hyundai explains that the program will allow the Department

to identify the appropriate product comparisons if the first-choice

comparison fails the cost test.

Petitioner states that the Department implemented the Cemex case in

the preliminary review results. If, however, the Department accepts

Hyundai's changes, petitioner asserts that the Department should

incorporate a difference-in-merchandise (``DIFMER'') adjustment in the

foreign unit price (``FUPDOL'') statement for the comparisons of

similar merchandise, since, according to petitioner, Hyundai did not

include this adjustment in the program it used for the concordance

database.

DOC position. We agree with Hyundai. As a result, we have

incorporated Hyundai's concordance language in our calculations these

final review results. We also adopted petitioner's corrections

regarding the DIFMER adjustment in the foreign unit price statement for

comparisons of similar merchandise.

Comment 6: Net Price Used in the Sales-Below-Cost Test

Hyundai claims the Department computed the net price that was used

in the sales-below-cost test incorrectly. As an example, Hyundai

asserts that the Department compared a price net of selling expenses

and packing to a cost that included these expenses.

Petitioner agrees with Hyundai that prices net of selling expenses

and packing were compared to costs that included these expenses.

DOC Position. We agree with Hyundai and petitioner. We have made

the appropriate changes to our calculations for these final review

results to ensure an apples-to-apples comparison of prices and costs.

Comment 7: Understated CEP Offset

Hyundai states that the Department made several errors in its

calculations regarding the CEP offset for sales it compared to CV.

According to Hyundai, the Department understated HM indirect selling

expenses because (1) inventory carrying costs were not included in the

pool of indirect expenses, and (2) the U.S. side of the offset was

based on module expenses but HM indirect expenses were based on a

single chip.

DOC Position. We agree with Hyundai. We have made the appropriate

changes to our calculations to include inventory carrying costs in HM

indirect selling expenses and to ensure that U.S. offset expenses are

consistent with the HM indirect selling expenses that we used in our

comparisons (i.e., module-to-module, chip-to-chip).

Comment 8: Programming Code

Hyundai alleges that the Department's computer program included

code from the previous review period that is not relevant to the

current POR and requests that the Department delete the inappropriate

language.

DOC Position. We agree with Hyundai and have deleted the

inappropriate language.

Comment 9: CV Included Imputed Credit and Inventory Credit Carrying

Costs for CEP and Further-Manufactured Sales

Hyundai argues that the Department included imputed credit

(``CREDITCV'') and inventory carrying expenses (``INVCARCH'')

incorrectly in the calculation of CV. These expenses should be replaced

with the non-imputed selling expenses, DSELCV and ISELCV.

Petitioner agrees that DSELCV and ISELCV should be included in the

CV calculation.

DOC position. We agree with both Hyundai and the petitioner. We

have corrected our calculations by removing the imputed expenses,

CREDITCV and INVCARCH, and adding the actual expenses, DSELCV and

ISELCV.

Comment 10: CEP-Profit Calculation

Hyundai asserts that the Department made two mistakes in its

calculation of CEP profit. First, it contends that the Department

excluded below-cost sales in the HM in its calculation of HM profit.

Second, it states that the Department mistakenly included expenses

pertaining to economic activity in Korea in its calculation of CEP

selling expenses used to calculate CEP profit.

Petitioner argues that the expenses in question, while incurred in

Korea, were associated with economic activities in the United States.

Therefore, petitioner contends, the Department must deduct these

expenses from U.S. prices in the calculation of CEP profit.

DOC Position. We agree, in part, with both parties. The SAA states

that ``under new section 772(d), CEP will be calculated by reducing the

price of the first sale to an unaffiliated customer in the United

States by the amount of the following expenses, and profit, associated

with economic activities occurring in the United States.'' See SAA at

823. The expenses in question, banking fees and other direct selling

expenses, are associated with economic activities occurring in the

United States and were reported as such in Hyundai's Section C

questionnaire response. Therefore, we have deducted these expenses from

CEP.

However, we agree with Hyundai that we excluded below-cost sales in

the HM incorrectly from the calculation of the HM-profit portion of the

CEP-profit calculation. Section 772(f) of the Act requires the

Department to use ``total actual profit'' in calculating the CEP-

[[Page 50875]]

profit deduction. Since the calculation of both total actual profit and

total expenses includes sales (whether above or below cost) that are

made at a profit or at a loss, the calculation must include below-cost

sales in order to reflect actual profit. We have corrected our

calculations to account for this.

Comment 11: Net U.S. Price Calculation for Further-Manufactured Modules

Hyundai maintains that the Department erred in its calculation of

net U.S. price for further-manufactured modules by deducting all

selling expenses for chips in the module rather than deducting only the

direct selling expenses associated with economic activities occurring

in the United States.

DOC Position. We agree with Hyundai. In our calculation of net U.S.

price for further-manufactured modules, we inadvertently deducted all

selling expenses for chips in the module rather than eliminating only

the direct selling expenses related to U.S. economic activity. We have

made the appropriate changes to our calculations to accomplish the

correct adjustment for these final review results.

Comment 12: Cost-Recovery Test

According to petitioner, the Department conducted the annual cost

test using the unrevised figure for the total cost of manufacturing

(TOTCOM). Petitioner argues that this figure did not include selling

expenses, G&A expenses, and interest expenses, and it did not reflect

the revisions the Department made to the cost data, in accordance with

the February 27, 1998, Memorandum to the File from Justin Jee regarding

``COP and CV Adjustment Calculations.''

DOC Position. We agree and have made the appropriate changes to our

calculations to ensure that we conducted the cost test properly.

B. LG

Comment 1: Application of Adverse Facts Available to LG ``Unreported

Sales''

LG contends that the Department's decision to apply adverse facts

available to its margin calculation based on the belief that LG did not

report all its U.S. sales is not warranted by the facts or permissible

under the law. According to LG, it had no involvement in, or knowledge

of, the diversion of its shipments (i.e., ``unreported sales'') into

the United States. LG claims that it took numerous precautions to

ensure that third-country sales did not enter the U.S. market. Also, LG

states that it believed, at the time of the sale, that all shipments

reached their appropriate destinations. As a result, LG maintains that

the Department must exclude these sales from its U.S. sales database.

Citing a sale that LG refused because it was being shipped to the

United States, LG argues that it was vigilant about ensuring that its

sales to third-countries were not re-exported or diverted to the United

States. With respect to the concerned third-country purchaser, LG

asserts that it conditioned its agreement to conduct business with this

party on the basis of the purchaser's explicit pledge not to sell LG's

DRAMs in the United States. In addition, LGSA officials inspected the

purchaser's third-country production facility to confirm that it would

consume the LG's DRAMs being acquired and advised the purchaser that it

would need to provide documentation that the DRAMs were delivered and

consumed in the third country. The documentation LG ultimately required

was contemporaneous and included the following: (1) trucking company

receipts substantiating the third-country destination of every LG

shipment; (2) certification that all DRAMs shipped to the purchaser

would not be sold in the customs territory of the United States; and

(3) third-country customs entry forms corroborating that all of LG's

shipments actually reached the third-country. LG argues that, taken

together, the facts show that LG believed reasonably that all of its

DRAMs were being received in the third country by the purchaser and

that LG was the unsuspecting victim of an elaborate scheme of Customs

fraud, a scheme that LG says should be attributed to the third-country

purchaser.

LG further argues that it would have been virtually impossible for

it to have discovered that any diverted goods were entering the United

States. LG notes that the very nature of DRAMs (e.g., small in size,

constantly in demand, and capable of being sold and resold quickly in

large numbers) encourages diversion schemes. Moreover, LG claims that

the DRAMs would have been sold to brokers/distributors. As this is a

sizable market, LG observes that it is not surprising that LG did not

become aware of the diversions. The company also claims that the

Department found no discrepancies in LG's questionnaire response during

verification.

LG further argues that, under the law, the Department had no

justification for assigning facts available on the basis of the

unreported sales since LG had no knowledge of the diversion of these

sales. LG states that the Department and the courts under section

772(a) of the Act have held that a producer's sales to a customer

outside the United States may be treated as U.S. sales by that

producer, rather than as U.S. sales by the reseller, only if the

producer had knowledge at the time of the purchase that the sales were

for importation into the United States. LG compares the diverted sales

in the instant review to the pirated sales the Department excluded from

its analyses in Certain Cut-to-Length Carbon Steel Plate from Ukraine;

Final Determination of Sales at Less Than Fair Value, 62 FR 61754

(November 19, 1997) (``Plate from Ukraine'').

In addition, LG argues that it became aware of the diversion scheme

only when the Department informed LG of unreported sales after the

preliminary results of review were issued. LG cites similar cases where

the respondent gained knowledge of the final destination of the

merchandise at the time the merchandise was shipped, not when it had

been sold. See Final Determination of Sales at Less Than Fair Value:

Pure Magnesium from the Russian Federation, 60 FR 16440 (March 30,

1995) (``Pure Magnesium from Russia''). The Department excluded these

sales from respondent's database.

LG claims that the Department must find that it had actual

knowledge that the ``unreported sales'' were for importation into the

United States. If actual knowledge is absent, then the Department

cannot treat such sales as U.S. sales of the supplier. LG also asserts

that the circumstances surrounding these sales (e.g., in-bond shipment

outside the U.S. Customs territory) do not support the conclusion that

it should have known that the sales were destined for importation into

the United States. LG states that these circumstances are in direct

contrast to those in the Notice of Final Determination of Sales at Less

Than Fair Value: Persulfates from the People's Republic of China, 62 FR

27222 (May 19, 1997) (``Persulfates from China'').

Finally, LG argues that the Department may not apply adverse facts

available against LG by considering LG to be the exporter of the

``diverted shipments'' just because the Department concludes that the

documentation and testimony submitted by LG do not definitively resolve

the circumstances surrounding these transactions and the question of

liability for these shipments.

Petitioner strongly supports the Department's preliminary decision

to use facts available for LG's unreported U.S. sales. Petitioner

states that LG had knowledge, or should have had knowledge, that the

unreported sales were destined for the United States.

[[Page 50876]]

According to petitioner, this is just one of many schemes that LG

employed during the POR to produce zero dumping margins when the

company actually was selling at less than NV.

Regarding these transactions, petitioner argues that LG sold DRAMs

to a U.S. company, ostensibly for sale to a third-country facility. The

U.S. parent company of the customer placed the orders, sent the

purchase orders, and paid for the merchandise. In contrast to other

customers where LG shipped the merchandise to third-country markets

directly, this customer, through its broker, took control of LG's DRAMs

in the United States. Petitioner notes that instead of requiring in-

bond evidence that the merchandise was not imported into the United

States for consumption, LG requested documentation to demonstrate that

the merchandise had been delivered. Consequently, the last thing that

LG knew was that it was shipping DRAMs to the United States. Citing

Persulfates from China, petitioner asserts that the fact that the

merchandise was exported later is immaterial. ``Where there is a direct

sale to an unaffiliated purchaser in the United States, there is no

issue of knowledge'' See 62 FR 27234. Thus, petitioner argues, under

the Department's precedent, LG's sales to this purchaser constitute

U.S. sales. Even if they are not deemed direct sales, petitioner

maintains that LG knew, or should have known, that this merchandise was

destined for the United States and that all such sales should be

included in the Department's dumping analysis. Petitioner additionally

notes that earlier sales made three months before the POR should also

be included in the transactions the Department considers since the

Department did not have knowledge of this diversion before the third

review.

Petitioner further contends that LG's claims are inconsistent.

Petitioner notes that LG was selling merchandise to a customer that

could be expected to ship the vast majority of its merchandise back to

the United States. Petitioner maintains that through its sales network,

LG would have detected, or would have been alerted to, sales of its own

merchandise in the U.S. market. According to petitioner, it is

inexplicable that LG did not check further into this purchaser

considering the fact that it was a relatively small company with

limited credit making substantial purchases, in cash, before the goods

were delivered. Moreover, petitioner argues that the claims that the

DRAMs would be used to refurbish old computers are dubious. Petitioner

further notes that LG's documentation requirements did not start until

months after the sales in question had commenced. In addition, LG's

denial of prior knowledge of the principal and other entities involved

with these unreported sales does not correspond with the numerous links

between LG and those parties. As a result, petitioner claims that LG's

presentation of the facts contains too many internal contradictions to

be accepted as plausible. Petitioner asserts that, taken together, the

facts do not suggest reasonable efforts by a company to ensure that

subject merchandise does not enter the United States for consumption,

but point to LG as a ``knowing participant'' in these transactions.

Petitioner claims that this record is consistent with information

supplied by one of petitioner's employees who described situations in

which petitioner's customers have been approached by LG representatives

directing them to purchase LG DRAMs in third-countries where LG can

offer lower prices than in the U.S. market. Petitioner maintains that

these statements make it clear that LG did not care what specific

customers did with the merchandise. As a consequence, petitioner

dismisses LG's contention that it directed its customers outside the

Customs territory of the United States not to resell subject

merchandise to the United States and argues that any imports of LG's

DRAMs from certain third countries should be deemed to have been sold

by LG with the knowledge that the merchandise was destined for the

United States.

Regarding LG's verification, petitioner states that the Department

simply verified the prices paid to LG. Petitioner notes that the

Department's verification report limits the basis of its conclusions

that it found no evidence of U.S. sales made through intermediaries to

the specific documentation that LG made available to the Department at

that time.

In responding to LG's comments, petitioner emphasizes that the

Department and the courts have recognized that, absent an admission by

the respondent, evidence of actual knowledge may be difficult to

obtain. Citing to INA Walzlager Schaeffler KG v. United States, 957 F.

Supp. 251 (CIT 1997) (``INA 1997''), petitioner states that the court

acknowledged that even if respondent denies knowledge of the

destination of its sales, the Department may rely on extrinsic sources

to determine whether to impute such knowledge. Petitioner argues that,

in contrast to LG's self-serving denials, there is substantial evidence

on the record that LG knew, or had reason to know, that the sales in

question were destined for the United States. Moreover, the claim that

LG would not have noticed the large volume of ``diverted sales'' does

not comport with market reality. Finally, petitioner notes that

consistent with its allegations, the Department found the sales in

question to be made at substantially dumped prices.

DOC Position. We agree with petitioner. A full discussion of our

final conclusion, which requires references to proprietary information,

is included in the LG Analysis Memorandum contained in the official

file for this case. Generally, however, we have found that the record

evidence concerning unreported sales supports the conclusion that LG

knew, or should have known, that at the time it sold the subject DRAMs,

the merchandise was destined for consumption in the United States.

With respect to knowledge, we do not agree with LG's contention

that the Department may not assign a facts available rate on the basis

of the unreported sales since LG had no actual knowledge of the

diversion of these sales. Numerous court decisions, including those by

the U.S. Court of Appeals for the Federal Circuit, have held that the

appropriate standard for making this decision is ``knew or should have

known at the time of the sale that the merchandise was being exported

for the United States.'' Yue Pak, Ltd. v. United States, Slip Op. 96-65

at 9 (CIT), aff'd. 1997 U.S. App. LEXIS 5425 (Fed. Cir. 1997). See also

Peer Bearing Co. v. United States, 800 F. Supp. 959, 964 (CIT 1992).

These holdings confirm the correctness of the Department's consistent

practice in this regard. See, e.g., Certain Pasta From Italy:

Termination of New Shipper Antidumping Duty Administrative Review, 62

FR 66602 (1997); Notice of Final Determination of Sales at Less Than

Fair Value: Manganese Sulfate From the People's Republic of China, 60

FR 51255 (1995). While the statute does not indicate the degree of

knowledge necessary to find that the producer knew the destination of

the merchandise, the courts have stated that even if a respondent

denies knowledge of the destination of its sales, the Department may

review all facets of a transaction, and based on extrinsic source data,

determine that it is appropriate to impute knowledge in a given case.

See INA 1997, 957 F. Supp. at 265.

In the matter of these unreported sales, we note that LG

essentially dealt with a U.S. company. When shipping

[[Page 50877]]

the merchandise, LG took no steps itself to ensure that when the

merchandise was delivered to the United States, it was subsequently

placed under Customs bond and transported to a third country, clearing

Customs upon export from the United States. What the record shows is

that LG sold an enormous amount of DRAMs to a very small company and

turned the merchandise over to the customer in the United States.

Consequently, in contrast to such cases as Plate from Ukraine and Pure

Magnesium from Russia, LG only knew for certain that it was shipping

DRAMs into the United States.

Moreover, this is not a situation where an exporter sells and ships

a relatively small amount of subject merchandise to a third country and

then, sometime much later, the customer reexports the merchandise to

the United States. In this case, we are confronted with a staggering

amount of merchandise that is being shipped by LG directly to the

United States. The merchandise is subsequently being entered for

consumption into the United States within days, if not hours, of it

leaving the possession of LG.

The relative size and nature of the purchaser's operations and the

quantity of acquisitions it made are germane to this case in several

respects. The amount of purchases this customer made are not modest. In

fact, the entered value of these transactions was quite large. However,

based on LG's description of the purchaser's operations, it is clear

that this party was not equipped to absorb such a vast amount of DRAMs.

In particular, LG should have known that the purchaser was buying more

DRAMs than it reasonably could consume in the manufacture of modules or

the refurbishment of computers and printers. Furthermore, the amounts

the customer purchased were so enormous they had to appear inconsistent

with the size of the third-country DRAM markets in question. Moreover,

as petitioner points out, this customer could be expected to sell the

vast majority of its merchandise to the United States. Consequently,

not only was it reasonable to assume that this firm would sell some or

all the subject merchandise that it purchased, but that it would sell

the merchandise to the United States.

In summary, based on the nature and characteristics of these

transactions, we conclude that LG knew, or should have known, that the

merchandise was destined for the United States. Considering the above,

and as more fully described in the above-mentioned agency memorandum,

the Department has decided to include the unreported sales during the

POR in the analysis conducted of LG's sales for these final review

results. See the Facts Available section of this notice for a

discussion of the facts available that were applied in the case of LG.

Concerning the other evasion allegations that petitioner has made

with respect to LG, we have determined that the information is not

sufficient to warrant further action during this POR.

Comment 2: Identifying All Comparable HM Sales Before Using Constructed

Value

LG argues that the Department did not implement the Cemex decision

properly in its calculations for the preliminary review results.

Therefore, LG submitted programming language that would allow the

Department to use its concordance database in accordance with the Cemex

decision.

Petitioner states that no programming changes are necessary.

DOC Position. We agree with LG and have corrected our calculations

for these final review results so that we use the appropriate product

comparisons if the first-choice comparison product fails the cost test.

Comment 3: HM Indirect Selling Expenses

LG contends that the Department did not take HM indirect selling

expenses (``DINDIRSU'') into account for U.S. sales in the calculation

of overall profit for the CEP-profit adjustment.

DOC Position. We agree and have corrected our calculations to

include HM indirect selling expenses in the calculation of the CEP-

profit adjustment for these final review results.

Comment 4: Credit Expenses and Inventory Carrying Costs

LG asserts that the Department added imputed credit expenses

(``CREDITCV'') and inventory carrying costs (``INVCARCV'') erroneously

in the calculation of CV, contending that these variables should be

deducted from CV, rather than added to CV, to offset for imputed

expenses that are deducted from the U.S. price to which CV is compared.

Petitioner says LG is mistaken when it argues that imputed selling

expenses should not be included in revised total CV. Because the

Department had already deducted these expenses, the petitioner contends

that imputed expenses are no longer built into CV and, therefore,

imputed expenses cannot be removed from CV when they were not

originally included in CV.

DOC Position. We agree with LG and have corrected our calculations

to eliminate the inclusion of imputed selling expenses in CV. We also

agree with LG that we should continue to deduct these expenses from CV

when comparing it to U.S. price to offset for imputed expenses that are

deducted from the U.S. price to which CV is compared.

Comment 5: CEP-Offset Adjustment for CV Comparisons

LG maintains that, for CV comparisons, the Department inadvertently

set the HM indirect selling expenses that are used in the CEP offset

equal to zero. These expenses are represented by the variables ISELCV

and INVCARCV.

Petitioner argues that the Department should not deduct INVCARCV

from CV since they were not included in CV.

DOC Position. We agree with LG and have adjusted our calculations

accordingly. See also DOC Position to LG-Specific Comment 4 regarding

the CV deductions.

Comment 6: Packing

LG states that the Department double counted U.S. packing cost in

the calculation of CV. LG also argues that the Department used U.S.

repacking cost twice in the margin calculation.

DOC Position. We agree with LG and have changed our calculations to

account for the double-counting of packing and repacking.

Comment 7: CV Selling Expenses Based on Density

LG argues that the Department should calculate CV selling expenses

based on density since higher-density products such as modules have a

relatively higher sales value and should carry a proportionately higher

share of selling expenses.

DOC Position. We do not agree with LG that we should have

calculated selling expenses for CV based on density. The selling

expenses in CV are not allocated on a model-, category-, or, in this

case, density-specific basis. For this cost factor, it is the

Department's practice to use the average selling expenses of the

foreign like product sold in the selected comparison market. The

foreign like product in this instance encompasses all DRAMs subject to

the order, not specific densities of DRAMs. As we stated in the final

results of the prior review, in this case we base the calculation of

average selling expenses on the quantity of foreign like product sold.

See Dynamic Random Access Memory Semiconductors of One Megabit or Above

from the Republic of

[[Page 50878]]

Korea: Final Results of Antidumping Duty Administrative Reviews and

Notice of Intent Not to Revoke Order, 62 FR 39809 (July 24, 1997).

Therefore, for these final review results, the Department has

calculated the selling expenses for CV based on the number of units of

subject merchandise sold in the HM.

Comment 8: CV-Profit Rate

Petitioner argues that the Department erred when it calculated CV

profit on a different basis than that to which it applied CV profit.

According to petitioner, the HM net prices the Department compared to

COP to establish CV profit included all selling and packing expenses,

but the Department applied this profit figure to costs which did not

include selling and packing expenses.

LG disputes petitioner's allegation that the Department should

apply the CV-profit rate to a COP that includes selling expenses and

packing.

DOC Position. We agree with petitioner. For these final review

results, we have corrected our calculations to ensure that we calculate

and apply the CV-profit rate on a consistent basis.

Comment 9: Duty Drawback

Petitioner argues that, in calculating CEP profit, the Department

should have subtracted duty drawback, not added it to, from movement

expenses.

LG maintains that, with respect to the CEP-profit calculation, the

Department should have added duty drawback to total revenue, not

subtract it from movement expenses.

DOC Position. We agree with LG. Duty drawback is an adjustment to

revenue, not an expense. Consequently, it is not relevant to the

movement expenses. For the CEP-profit calculation in these final review

results, we have added duty drawback to revenue.

Comment 10: Margin Calculation for the Diverted Third-country Sales

LG states that the Department should correct a number of errors it

made in the third-country ``diverted'' sales margin calculation. First,

LG argues that the Department should correct the following errors

regarding invoices: (1) use price information from the altered

invoices; (2) delete a duplicate invoice; (3) delete an invoice without

a proper corresponding entry summary (i.e., outside the POR); and (4)

correct typographic errors in quantities and dates. Second, LG also

argues that the Department did not assign proper control numbers based

on the product code in its calculations. Third, LG argues that the

Department's program failed to assign cost data to the diverted third-

country sales. Fourth, LG asserts that the Department did not identify

proper comparison products for the diverted third-country sales. Fifth,

LG states that the Department should have assigned weighted-average

selling expenses based on control numbers, not product-code numbers.

Finally, LG claims that, if there are no CEP sales of the identical

control number, then the Department must assign selling expenses and

costs based on the next most similar product.

Petitioner argues that the Department should apply adverse facts

available to the diverted third-country sales. Petitioner also argues

that the U.S. sales of the non-responding company, Techgrow, should be

included in the pool of LG's sales the Department uses to calculate the

margin. If, however, the Department uses the same margin calculation

methodology that it used in the preliminary review results, then

petitioner urges the use of the average selling expenses for all

reported sales to establish the selling expenses of the unreported

sales when the sale of identical products have not been reported.

Finally, petitioner argues that the Department should use the unit

prices actually paid to LGSA and not the gross unit prices listed in

the LGSA invoices attached to Customs entry summaries. Since the former

represent the amount ultimately paid, the petitioner contends that they

are best evidence of the actual sales price.

DOC Position. We agree with petitioner that we should use the unit

prices actually paid to LGSA, not the gross unit prices listed in the

LGSA invoices attached to the Customs entry summaries we received. The

invoices attached to the Customs entry summaries do not reflect the

total price adjustments that LG credited to the customers account for

these unreported sales. We also agree, in part, with certain

corrections that LG asked us to make. We deleted any duplicate invoices

and any invoices that were dated outside the POR, and we corrected any

typographical errors in the quantity and date fields of the unreported

sales. We also assigned cost data to all unreported sales and made

corrections to our calculations to ensure that we used proper

comparison models for all unreported sales. However, regarding facts

available, we did not assign weighted-average selling expenses to the

unreported sales based on control number as LG suggested. Because some

of the unreported sales involved product codes that had not been part

of LG's questionnaire response, we did not have control numbers for

these transactions. As we are applying adverse facts available to LG's

unreported sales, we used instead the highest reported selling expenses

from reported transactions involving identical products. Where there

were no reported transactions involving identical merchandise, we used

the highest U.S. selling expenses from sales that LG reported of the

same density. Where we used CV and no quarterly cost data was available

for the quarter in which the unreported sale took place, we used the

highest CV from the remaining available quarters. See LG Analysis Memo.

Regarding Techgrow, we disagree with petitioner's argument that

Techgrow's U.S. sales should be included in the pool of LG's sales used

to calculate LG's margin because there is no information on the record

of this review to support petitioner's contention. Therefore, we have

not included Techgrow's sales in LG's margin calculation.

C. MultiTech

Comment 1: Automatic-Assessment Rate

MultiTech states that, if LG neither knew nor should have known

that the destination of the unreported sales was the United States,

then the Department must attribute the sales of such merchandise to an

independent third-country reseller. Additionally, MultiTech argues that

the Department cannot conduct a review of the independent third-country

reseller's sales since a review was not timely requested. In the

absence of a request for review, the Department, according to

MultiTech, must liquidate all entries of the merchandise attributed to

the third-country reseller and assess the antidumping duties on the

basis of the amount equal to the cash deposited at the time of entry as

required under the automatic-assessment provision in section 353.22 of

the Department's regulations. Therefore, MultiTech maintains that the

appropriate antidumping duty rate for the third-country reseller is

LG's cash deposit rate of zero percent established during the third

POR.

As noted above, LG states that it had no involvement in, or

knowledge of, an evasion of the antidumping law. In addition, LG argues

that the Department is not permitted to treat any diverted shipments as

U.S. sales by LG. However, LG contends, the Department has lawful

discretion to assess appropriate antidumping duties against the party

that imported the goods into the United States. LG maintains that any

antidumping duties which are due on

[[Page 50879]]

these sales must be assessed based on the actual exporter of the

subject merchandise and the antidumping duties must be collected by the

U.S. Customs Service from the actual importer.

Petitioner contends that it requested an administrative review of

all subject merchandise produced by LG and either entered in, sold in,

or sold to the United States during the period under review. With

respect to such entries and sales, petitioner argues that the

automatic-assessment provision is inapplicable because this provision

is only applicable to merchandise not covered by the request.

Petitioner notes that the Department's practice in previous DRAM

reviews has been to apply the producer's dumping margin to all entries

of merchandise produced by that company. As such, in these reviews

petitioner contends the Department will instruct Customs to assess

antidumping duties on DRAMs from Korea on the basis of the producer of

the merchandise. According to the petitioner, the Department did not

limit those instructions to entries that were exported to the United

States by or on behalf of the producer or an affiliate, nor were the

instructions dependent on a finding that a shipment to the United

States through an unaffiliated reseller was made pursuant to a sale

from the producer with knowledge that the goods were destined for the

United States. Petitioner also notes that the Department has issued

broad instructions to Customs which require the assessment of

antidumping duties on Korean DRAMs manufactured by Korean producers,

but imported from fifteen other countries, without regard to identity

of the exporter or reseller.

DOC Position. This issue is moot since we have attributed the sales

in question to LG. See also DOC Position to LG-specific Comment 1

regarding LG's claims.

D. Techgrow

Petitioner states that Techgrow has significantly impeded this

review. Petitioner asserts that Techgrow's failure to cooperate and

submit a verifiable questionnaire response warrants an adverse

inference. Petitioner notes that the Department requested that Techgrow

supplement its response by reporting sales made from its U.S.

affiliate, but the U.S. affiliate declined to respond, and,

subsequently, Techgrow withdrew from further participation in this

review. Moreover, petitioner contends, the Department has rewarded

Techgrow for non-participation by assigning Techgrow a rate of 12.64

percent, the same rate as assigned to Hyundai. As argued by petitioner,

this rate is lower than the rate Techgrow would have received had it

cooperated with the Department.

Petitioner alleges that Techgrow's sales in the HM were made at

prices below LG's COP. As part of this allegation, petitioner

calculated a margin based on (1) a comparison of Techgrow's HM prices

to LG's COP, and (2) a comparison of Techgrow's NV to Techgrow's sales

to its U.S. affiliate. The petitioner states that the margin it

calculated was substantially higher than the 12.64 percent the

Department assigned to Techgrow in the preliminary results. Petitioner

also contends that, if Techgrow had cooperated in this review, even

with adjustments for both CEP and NV, the margin would have been far

greater than 12.64 percent. Therefore, petitioner recommends that, as

facts available, Techgrow must be assigned the margin that results from

a comparison of NV based on CV with Techgrow's reported U.S. sales

prices. Petitioner states that this information must be considered

fully corroborated since it consists of LG cost data that has been

subject to verification and U.S. sales data submitted by Techgrow. In

its arguments on behalf of these calculated margins, petitioner cites

the SAA (at 870) which states:

In conformity with the Antidumping Agreement and current

practice, new section 776(b) permits Commerce and the Commission to

draw an adverse inference where a party has not cooperated in a

proceeding * * * Commerce and the Commission may employ adverse

inferences about the missing information to insure that the party

does not obtain a more favorable result by failing to cooperate than

if it had cooperated fully. In employing adverse inferences, one

factor the agencies will consider is the extent to which a party may

benefit from its own lack of cooperation. Information used to make

an adverse inference may include such sources as the petition, other

information placed on the record, or determinations in a prior

proceeding regarding the subject merchandise.

Petitioner also cites Krupp Stahl A.G. v. United States, 822 F.

Supp. 789, 793 (CIT 1993) for the proposition that the Department may

depart from its standard facts-available methodology on a case-by-case

basis as the circumstances warrant. Petitioner also cites Silicon Metal

From Argentina; Final Results of Antidumping Duty Administrative

Review, 58 FR 65336, 65338 (December 14, 1993) as an example of a case

where the Department used CV information developed by petitioner and

applied it to respondent's sales information to derive respondent's

dumping margin. In this case, the Department stated:

* * * The primary purpose of the BIA rule is to induce

respondents to provide the Department with timely, complete, and

accurate factual information, so that the agency can achieve the

fundamental purpose of the Tariff Act, namely, ``determining current

[dumping] margins as accurately as possible''* * * A secondary

purpose is to ensure that the antidumping duties assessed are not

less than the actual amounts might have been, had we received full

and accurate information.

DOC Position. We agree with the petitioner, in part. Techgrow's

refusal to participate further in this review significantly impeded a

determination under the antidumping statute. Moreover, as we explained

earlier in this notice, we have assigned an adverse facts-available

rate to Techgrow. See section entitled ``Application of Facts

Available''. However, we disagree with petitioner's assertion that, as

a result, Techgrow obtained a more favorable rate than it would have

received had it cooperated fully.

Petitioner's calculations are based on assumptions and

substantially incomplete data. Techgrow's response, for example, did

not contain information pertaining to its sales to unaffiliated

purchasers in the United States. Therefore, petitioner's calculations

are based on transfer prices between Techgrow and its U.S. affiliate,

figures which are not relevant to the calculation of a dumping margin.

Moreover, the rate Techgrow received is clearly adverse when considered

in the context of this proceeding. As mentioned earlier, we have

assigned Techgrow the highest company-specific margin calculated in the

history of this proceeding. Consequently we have continued to apply

LG's rate as facts available to Techgrow for these final review

results.

Final Results of Review

As a result of this review, we have determined that the following

margins exist for the period May 1, 1996 through April 30, 1997:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

Hyundai Electronics Industries, Co......................... 3.95

LG Semicon Co., Ltd........................................ 9.28

Techgrow Limited........................................... 9.28

Vitel Electronics.......................................... 9.28

------------------------------------------------------------------------

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between U.S. price and NV may vary from the

[[Page 50880]]

percentages stated above. The Department will issue appraisement

instructions directly to the Customs Service. These final results of

review shall be the basis for the assessment of antidumping duties on

entries of merchandise covered by this review. For duty-assessment

purposes, we calculated an importer-specific assessment rate by

aggregating the dumping margins calculated for all U.S. sales to each

importer and dividing this amount by the total value of subject

merchandise entered during the POR for each importer.

Furthermore, the following deposit requirements will be effective

upon publication of this notice of final results of review for all

shipments of DRAMs from Korea entered, or withdrawn from warehouse, for

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

section 751(a) of the Act: (1) for the companies named above, the cash

deposit rate will be the rate listed above (2) for merchandise exported

by manufacturers or exporters not covered in this review but covered in

a previous segment of this proceeding, the cash deposit rate will

continue to be the company-specific rate published in the most recent

final results which covered that manufacturer or exporter; (3) if the

exporter is not a firm covered in this review or in any previous

segment of this proceeding, but the manufacturer is, the cash deposit

rate will be that established for the manufacturer of the merchandise

in these final results of review or in the most recent final results

which covered that manufacturer; and (4) if neither the exporter nor

the manufacturer is a firm covered in this review or in any previous

segment of this proceeding, the cash deposit rate will be 3.85 percent,

the all others rate established in the LFTV investigation. These

deposit requirements shall remain in effect until publication of the

final results of the next administrative review.

This notice serves as a final 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 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 doubled antidumping duties.

This notice also serves as the only reminder to parties subject to

APO of their responsibility concerning the disposition of proprietary

information disclosed under APO in accordance with section 353.34(d) of

the Department's regulations. Timely notification of 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.

We are issuing and publishing this in accordance with section

751(i) of the Act.

Dated: September 8, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-25434 Filed 9-22-98; 8:45 am]

BILLING CODE 3510-DS-P