Final Results of Expedited Sunset Review: Polyethylene Terephthalate Film From Korea

AGENCY:

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

ACTION:

Notice of Final Result of Expedited Sunset Review: Polyethylene Terephthalate Film from Korea.

SUMMARY:

On July 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the antidumping duty order on polethylene terephthalate (“PET”) film from Korea pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive response filed on behalf of a domestic interested party, and inadequate response from respondent interested parties, the Department determined to conduct an expedited sunset review. As a result of this review, the Department finds that revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping at the levels indicated in the Final Results of Review section of this notice.

FOR FURTHER INFORMATION CONTACT:

Martha V. Douthit or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th St. & Constitution Ave., NW, Washington, DC 20230; telephone (202) 482-5050 or (202) 482-1560, respectively.

EFFECTIVE DATE:

February 4, 2000.

SUPPLEMENTARY INFORMATION:

Statute and Regulations

This review was conducted pursuant to sections 751(c) and 752 of the Act. The Department's procedures for the conduct of sunset reviews are set forth in Procedures for Conducting Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (“Sunset Regulations”) and 19 CFR part 351 (1999) in general. Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98:3—Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (“Sunset Policy Bulletin”).

Scope

The merchandise covered by this antidumping duty order includes all gauges of raw pre-treated, or primed polythylene terephthalate film, sheet, and strip, whether extruded or co-extruded. The films excluded from this antidumping duty order are metallized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer of more than 0.00001 inches (0.254 micrometers) thick. Roller transport cleaning film which has at least one of its surfaces modified by the application of 0.5 micrometers of SBR latex has also been ruled as not within the scope of the order. PET film is currently classifiable under Harmonized Tariff Schedule (“HTS”) item number 3920.62.00.00. The HTS item number is provided for convenience and U.S. Customs purposes. The written description remains dispositive.

History of the Order

On June 5, 1991, the Department published the antidumping duty order and amended final determination of sales at less than fair value (“LTFV”) on PET film from Korea. See Antidumping Duty Order and Amendment to Final Determination of Sales at Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of Korea as amended (56 FR 25669, June 5, 1991). On September 26, 1997 (62 FR 50557) the Department published Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of Korea; Notice of Final Court Decision and Amended Final Determination of Antidumping Duty Investigation. In the notice of final court decision and amended final determination of the antidumping duty LTFV investigation, based on our determination on remand, SKC Limited and SKC America, Inc. (collectively “SKC”) was assigned a margin of 13.92 percent ad valorem, Cheil Synthetics Incorporated (“Cheil”), a margin of 36.33 percent ad valorem, and the “all others” margin was 21.5 percent.

The Department has completed six administrative reviews of PET film since the issuance of the antidumping duty order. On September 26, 1997, the Department issued the Final Results of Changed Circumstances Antidumping Duty Administration Review, 63 FR 3703 (January 26, 1998), in which the Department determined that Saehan Industries, Inc. (“Saehan”) was the successor firm to Cheil. The Department has not found duty absorption with respect to this order.

The order remains in effect for all producers and exporters of PET film from Korea, except for Cheil and Kolon, for which the Department revoked the antidumping duty order.

Background

On July 1, 1999, the Department initiated a sunset review of the antidumping duty order on PET film from Korea (64 FR 35588) pursuant to section 751(c) of the Act. On July 15, 1999, the Department received a Notice of Intent to Participate on behalf of E.I. Dupont de Nemours & Company (“DuPont”), and Mitsubishi Polyester Film, LLC (“MFA”), (collectively “the domestic interested parties”), within the deadline specified in § 351.218(d)(1)(i) of the Sunset Regulations. On August 2, 1999, we received a complete substantive response to the notice of initiation from the domestic interested parties within the deadline specified in § 351.218(d)(3)(i) of the Sunset Regulations. The domestic interested parties claimed interested party status under section 771(9)(C) of the Act as U.S. producers of a domestic like product. Dupont states that it was the petitioner in the original investigation and has been a participant in all completed administrative reviews of this antidumping duty order. MFA states that it purchased U.S. PET film operations from the Hoechst Celanese Corporation. Hoechst Celanese Corporation was also a petitioner in the original investigation and an active participant in prior administrative reviews.

Although we did not receive a substantive response from any respondent interested party, on August 2, 1999, we received a waiver of participation from SKC. Co., Ltd. and SKC America, Inc. (collectively “SKC”). Pursuant to 19 CFR 351.218(e)(1)(ii)(C), we determined to conduct an expedited sunset review of this order.

In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). Therefore, on November 16, 1999, the Department determined that the sunset review of the antidumping duty order on PET film from Korea is extraordinarily complicated and extended the time limit for completion of the final results of this review until not later than January 27, 2000, in accordance with section 751(c)(5)(B) of the Act. Although the deadline for this determination was originally January 27, 2000, due to the Federal Government shutdown on January 25 and 26, 2000, resulting from inclement weather, the time-frame for issuing this determination has been extended by two days.

Determination

In accordance with section 751(c)(1) of the Act, the Department conducted this review to determine whether revocation of the antidumping order would be likely to lead to continuation or recurrence of dumping. Section 752(c)(1) of the Act provides that, in making this determination, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping order. Pursuant to section 752(c)(3) of the Act, the Department shall provide to the International Trade Commission (“the Commission”) the magnitude of the margin of dumping likely to prevail if the order is revoked.

The Department's determinations concerning continuation or recurrence of dumping and the magnitude of the margin are discussed below. In addition, the petitioners' comments with respect to the continuation or recurrence of dumping and the magnitude of the margin are addressed within the respective sections below.

Continuation or Recurrence of Dumping

Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act (“URAA”), specifically the Statement of Administrative Action (“the SAA”), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt. 1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order-wide basis (see section II.A.2 of the Sunset Policy Bulletin). Additionally, the Department normally will determine that revocation of an antidumping order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3 of the Sunset Policy Bulletin).

In addition to consideration of the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of an order is likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. The Department received a waiver of participation from SKC. In addition, the Department did not receive a substantive response from any respondent interested party. Pursuant to § 351.218(d)(2)(iii) of the Sunset Regulations, lack of substantive response from respondent interested parties also constitutes a waiver of participation.

The petitioners argue that revocation of the antidumping duty order would likely lead to continuation of dumping by producers and exporters of PET film from Korea based on the continuation of dumping since the original investigation. The petitioners assert that from 1990 to 1995 dumping margins remained above de minimis (see the petitioners August 2, 1999, Substantive Response at 6). Additionally, although in some instances (between 1996 and 1998) dumping margins fell below de minimis, these de minimis dumping margins do not establish that producers and exporters of the subject merchandise have ceased dumping. Instead, petitioners argue that the most recent preliminary results of administrative review provide a strong indication that one producer, has resumed dumping (FR 41380 (July 30, 1999)). Further petitioners assert that the other producer that was assessed de minimis dumping margins in the past, STC, did not make any sales or shipments during the subsequent two reviews. Petitioners argue that this suggests that STC is unable to remain competitive in the U.S. market with the discipline of the order in place.

With respect to import volume, the domestic interested parties assert that, based on the Department's Sunset Policy Bulletin, an examination of import volumes by the Department is not necessary to make a likelihood determination given that dumping continues. However, the petitioners state that should the Department examine import statistics, the Department will find that import volumes are highly inconclusive. Using official import statistics for HTS subheading 3920.62.00.00, the petitioners argue that prior to the issuance of the antidumping duty order (between 1989 and 1990) the quantity of imports of the subject merchandise to the United States grew by 1,265.15 percent (see the petitioners August 2, 1999, Substantive Response at 7, and Exhibit 2). The petitioners note that after the imposition of the antidumping duty order, the level of import growth dropped. The petitioners maintain that, although between 1991 and 1992 import volume increased, the increase was only by 62.93 percent, compared to the 1,265.15 percent increase between 1989 and 1990. In addition, by 1998, imports declined by 5.57 percent. Further, the petitioners assert that over the history of the order, absolute import volumes have fluctuated significantly. See the petitioners August 2, 1999 Substantive Response at 7 & 8, and Exhibit 1.

The petitioners, also argue that the exchange rate movements (won/$) can be relevant to a determination of likelihood of future dumping because the movement in the exchange rate can mask the extent of dumping and affect the Department's dumping margin calculations. See the domestic interested parties Substantive Response at 8. Moreover, petitioners argue that the Department should consider the change in producer and importers behavior when making its likelihood determination. Petitioners assert that a major portion of the margins calculated in the original investigation was attributable to certain types of PET film products, such as off-grade film. Petitioners contend that producers and importers decreased their shipments of off-grade material in order to obtain lower dumping margins. Once the order is removed petitioners argue that producers and importers can resume easily their shipment of off-grade material which would result in dumping at a significant level.

As discussed above in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed.

After examining the history of this antidumping duty order, we find that dumping margins above de minimis levels continue to exist for at least some producers. Given that dumping margins continue to exist, respondent interested parties waived their right to participate in the instant review, and absent argument and evidence to the contrary, the Department determines that dumping would likely continue or recur if the order on PET film from Korea were revoked. Because we based our determination on continuation of dumping margins above de minimis, we did not consider import volumes and the other factors cited by the petitioners.

Magnitude of the Margin

In the Sunset Policy Bulletin, the Department stated that, consistent with the SAA and House Report, the Department will provide to the Commission the company-specific margins from the investigation because that is the only calculated rate that reflects the behavior of exporters without the discipline of an order. Further, for companies not specifically investigated, or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the all others rate from the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.)

The petitioners argue that, consistent with the SAA, the Department should report to the Commission the rates from the original investigation as the magnitude of the margin likely to prevail if the antidumping duty order is revoked, because they are the only calculated rates that reflect the behavior of exporters without the discipline of the order in place. In addition, for companies that did not participate in the investigation, or for companies that did not begin shipping until after the order was issued, the petitioners argue that the Department should use the “all others” rate from the investigation.

We agree with the petitioners that the dumping margins from the original investigation are representative of Korean producers and exporters behavior should the order be revoked because they reflect the behavior of producers and exporters without the discipline of the order. Therefore, absent argument or evidence to the contrary, we will report to the Commission margins contained in the Final Results of Review of this notice.

Final Results of Review

As a result of this review, the Department finds that revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping at the levels indicated below.

This notice serves as the only reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305 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.

This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.