Notice of Final Determination of Sales at Less Than Fair Value: Certain Polyester Staple Fiber From Taiwan

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On November 8, 1999, the Department of Commerce published its preliminary determination of sales at not less than fair value of certain polyester staple fiber from Taiwan. The investigation covers two manufacturers/exporters. The period of investigation is April 1, 1998, through March 31, 1999.

Based on our analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination differs from the preliminary determination. The final weighted-average dumping margins for the investigated companies are listed below in the section entitled “Suspension of Liquidation.”

EFFECTIVE DATE:

March 30, 2000.

FOR FURTHER INFORMATION CONTACT:

Cynthia Thirumalai or Gregory Campbell, Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, DC 20230; telephone: (202) 482-4087 or 482-2239, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to provisions of the Tariff Act of 1930 (“the Act”) as amended by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) regulations refer to the regulations codified at 19 CFR Part 351 (April 1999).

Case History

Since the preliminary determination of this investigation (see 64 FR 60771 (November 8, 1999) (“Preliminary Determination”)), the following events have occurred:

In December 1999, we received supplemental section D responses from the respondents, Far Eastern Textiles, Ltd. (FETL) and Nan Ya Plastics Corporation (Nan Ya). On January 6, 2000, we received revised U.S. and home market listings from FETL. Subsequently, in February FETL and Nan Ya submitted revised cost of production and constructed value databases.

Verification of the responses to the sales and cost questionnaires took place in January 2000 (see the “Verification” section below).

The petitioners and the respondents filed case briefs on February 24, 2000. On February 29, 2000, the petitioners and both respondents filed rebuttal briefs. At the request of interested parties, the Department held a public hearing on March 10, 2000.

Scope of Investigation

For the purposes of this investigation, the product covered is certain polyester staple fiber (“PSF”). Certain polyester staple fiber is defined as synthetic staple fibers, not carded, combed or otherwise processed for spinning, of polyesters measuring 3.3 decitex (3 denier, inclusive) or more in diameter. This merchandise is cut to lengths varying from one inch (25 mm) to five inches (127 mm). The merchandise subject to this investigation may be coated, usually with a silicon or other finish, or not coated. PSF is generally used as stuffing in sleeping bags, mattresses, ski jackets, comforters, cushions, pillows, and furniture. Merchandise of less than 3.3 decitex (less than 3 denier) classified under the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheading 5503.20.00.20 is specifically excluded from this investigation. Also specifically excluded from this investigation are polyester staple fibers of 10 to 18 denier that are cut to lengths of 6 to 8 inches (fibers used in the manufacture of carpeting).

The merchandise subject to this investigation is classified in the HTSUS at subheadings 5503.20.00.40 and 5503.20.00.60. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

For a discussion of scope comments and determinations, see the March 22, 2000, Issues and Decision Memorandum for the Investigation of Certain Polyester Staple Fiber from the Republic of Korea from Susan Kuhbach, Acting Deputy Assistant Secretary, Import Administration, to Richard W. Moreland, Acting Assistant Secretary for Import Administration, Comments 4 and 5, which is on file in the Central Records Unit, Room B-099 of the main Department building (“B-099”) and on the Web at: www.ita.doc.gov/import_admin/records/frn.

Period of Investigation

The period of investigation (“POI”) is April 1, 1998 through March 31, 1999. This period corresponds to each respondent's four most recent fiscal quarters prior to the filing of the petition.

Critical Circumstances

No comments were received regarding the Department's preliminary critical circumstances determination, and the Department has not made any changes to that determination. As set forth in our preliminary determination, because imports from FETL and Nan Ya have not been “massive” within the meaning of section 733(e)(1) of the Act, the Department continues to find, for the purposes of this final determination, that critical circumstances do not exist for imports of PSF from Taiwan.

Product Comparisons

We compared the products sold by the respondents in the comparison market during the POI to the products sold in the United States during the POI using the methodology described in the Preliminary Determination, with the following exception:

At the Preliminary Determination, we included product grade as a matching criterion for Nan Ya because it specified grade in both the U.S. and comparison markets. Upon further consideration of information provided by FETL, we have determined that it is also appropriate to include grade as a matching criterion for FETL.

Fair Value Comparisons

To determine whether sales of PSF from Taiwan to the United States were made at less than fair value, we compared the export price (“EP”) to comparison market prices or CV, as described in the “Export Price” and “Normal Value” sections below. Our calculations followed the methodologies described in the Preliminary Determination, except as noted below and in the company-specific calculation memoranda dated March 22, 2000, which have been placed in the file in Room B-099.

Export Price

For the price to the United States, we used EP as defined in section 772 of the Act. We calculated EP based on the same methodology described in the Preliminary Determination, with the following exceptions:

General Issues

We corrected clerical errors in which we inadvertently double-converted U.S. packing expenses and excluded U.S. credit expenses. See the March 22, 2000, Issues and Decision Memorandum for the Investigation of Certain Polyester Staple Fiber from Taiwan from Susan Kuhbach, Acting Deputy Assistant Secretary, Import Administration, to Richard W. Moreland, Acting Assistant Secretary for Import Administration (“Decision Memorandum”), comment 2, which is on file in B-099 and on the Web at: www.ita.doc.gov/import_admin/record/frn/.

FETL

a. We excluded sales of infused antibacterial products from the U.S. sales database. See Decision Memorandum, comment 5.

b. We adjusted the reported amounts for bank charges, ocean freight, domestic inland freight and brokerage expenses by the weighted-average percentage deviation between the reported amounts and the amounts actually incurred on transactions examined during verification. For those transactions examined at verification, we used the actual amounts for the above-referenced expenses. See Decision Memorandum, comment 6.

c. Based on certain errors found at verification, we adjusted U.S. packing costs for all sales. See Memorandum to the Case File from Cynthia Thirumalai and Gregory Campbell; Results of sales verification of FETL (February 11, 2000) (“FETL's Sales Verification Report”).

d. We made revisions to certain product codes correcting for errors identified by FETL in preparation for verification. See Decision Memorandum, comment 3.

Nan Ya

a. We recalculated the date of sale for certain U.S. sales. See Decision Memorandum, comment 17, and Memorandum to Richard Moreland from Case Team; Errors in Nan Ya's Reported Dates of Sale (March 22, 2000).

b. We increased foreign inland freight expense by adding an amount for general and administrative (G&A) expenses. See Decision Memorandum, comment 19.

c. We added an amount for foreign inland freight for two U.S. sales. See Decision Memorandum, comment 20.

d. We added a commission amount to one U.S. sale. See Decision Memorandum, comment 25.

e. We recalculated U.S. credit expense based on a revised short-term interest rate. See Decision Memorandum, comment 26.

f. Based on certain errors found at verification, we added bank fees to one observation that were originally unreported; we corrected the following expenses for certain U.S. sales: Domestic inland freight, ocean freight, bank charges, and brokerage. We excluded three sales from the U.S. database because they either were made outside the POI or were sample sales. See Nan Ya's Sales Verification Report.

Normal Value

We used the same methodology to calculate NV as that described in the Preliminary Determination, with the following exceptions:

1. Cost of Production Analysis

General Issues

We used grade to define separate products in the cost test. See Decision Memorandum, comment 2.

FETL

a. We adjusted the G&A ratio applied to the cost of manufacture for purified terephthalic acid (PTA), a major input in the production of PSF, purchased from an affiliate to include certain unreported expenses. We then revised the cost of the PTA purchased from the affiliate to reflect the cost of production of this input in accordance with the major input rule. See Decision Memorandum, comment 10.

b. We revised the cost of manufacture for ethylene glycol (EG), a major input in the production of PSF, purchased from an affiliate to include certain unreported expenses. We then revised the cost of the EG purchased from the affiliate to reflect the cost of production of this input in accordance with the major input rule. See Decision Memorandum, comment 11.

c. We adjusted the total cost of manufacture for each product to account for the difference between the reported value and the book value of FETL's net scrap input costs. See Decision Memorandum, comment 12.

d. We revised the G&A ratio to include certain foreign exchange gains and losses and to exclude packing expenses from the denominator. See Decision Memorandum, comments 13 and 14.

e. We revised the financial expense ratio to include certain exchange gains and losses. In addition, we applied the rate to the total cost of manufacture plus packing. See Decision Memorandum, comment 13 and comment 14.

Nan Ya

a. We have made no adjustment to the reported credit for recovered EG. See Decision Memorandum, comment 28.

b. We revised the G&A ratio to include certain foreign exchange gains and losses. We have excluded other operating costs from the denominator in the G&A ratio calculation and, instead, included these costs in the numerator of that calculation. In addition, we applied the G&A ratio to the total cost of manufacturing plus packing. See Decision Memorandum, comment 29, comment 32, and comment 34.

c. We increased the cost of manufacture for silicon-coated products by applying the highest cost of silicon reported by FETL as adverse facts available. Moreover, we did not allow a difference in merchandise adjustment when a home market silicon coated product was matched to a non-silicon coated product. See Decision Memorandum, comment 31.

d. We adjusted Nan Ya's financial expense ratio to include certain net foreign exchange gains and to exclude long-term interest income. In addition, we applied the financial expense ratio to the total cost of manufacturing plus packing. See Decision Memorandum, comment 33.

e. We increased the total cost of manufacturing to include certain unreported production costs that were incurred by Nan Ya. See Decision Memorandum, comment 35.

f. We adjusted Nan Ya's fiber scrap credit due to over-reporting. See Decision Memorandum, comment 38.

g. We revised the cost of production for PTA to include (i) the quantity and costs from an unreported plant, (ii) certain overhead costs, and (iii) an amount for other expenses. See Decision Memorandum, comment 39.

2. Calculation of NV Based on Comparison Market Prices

We performed price-to-price comparisons where there were sales of comparable merchandise in the comparison market that did not fail the cost test using the same methodology described in the Preliminary Determination, with the following exceptions:

FETL

a. We excluded certain sales to an affiliate from the home market database. See Decision Memorandum, comment 7.

b. Based on certain errors found at verification, we revised inland freight and credit days for certain home market sales. In addition, we revised the home market packing expenses for all home market sales. See FETL's Sales Verification Report.

c. We made revisions to certain product codes correcting for errors identified by FETL in preparation for verification. See Decision Memorandum, comment 3.

Nan Ya

We adjusted home market credit expense and inventory carrying costs due to a change in the short-term interest rate. (See Decision Memorandum, comment 27).

3. Calculation of NV Based on Constructed Value

We calculated CV in the same way as in the Preliminary Determination, with the following exceptions:

FETL

a. We made the changes identified in the “Cost of production analysis” section above.

b. We revised FETL's U.S. indirect selling expenses to reflect changes made during verification. See FETL's Sales Verification Report.

Nan Ya

We made the changes identified in the “Cost of Production Analysis” section above.

Level of Trade

We have made the same level of trade determinations described in the Preliminary Determination.

Currency Conversions

We made currency conversions in accordance with section 773A of the Act in the same manner as in the Preliminary Determination.

Verification

As provided in section 782(i)(1) of the Act, we verified the information submitted by the respondents for use in our final determination. We used standard verification procedures, including examination of relevant accounting and production records, as well as original source documents provided by the respondents.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the March 22, 2000, Decision Memorandum, which is hereby adopted. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in Room B-099. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at: www.ita.doc.gov/importadmin/records/frn/. The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

In accordance with section 735(c)(1)(A) of the Act, we are directing the U.S. Customs Service (“Customs”) to suspend liquidation of all imports of the subject merchandise from Taiwan, except for subject merchandise produced and exported by Nan Ya (which has a de minimis weighted-average margin), that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Customs shall require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice.

The weighted-average dumping margins are as follows:

The rate for all other producers and exporters applies to all entries of the subject merchandise except for entries from exporters that are identified individually above. In accordance with section 735(c)(5)(A) of the Act, we have excluded the de minimis margin for Nan Ya from the calculation of the “all others” rate.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

APPENDIX

Appendix

List of Comments and Issues in the Decision Memorandum

I. Issues Applicable to Both Respondents

Comment 1: Adverse Facts Available

Comment 2: Errors in Computer Programing

II. Issues Specific to Far Eastern Textiles, Ltd.

A. General Issues

Comment 3: Pre-verification Revisions and Minor Errors

Comment 4: Product Coding

Comment 5: Antibacterial and Flame-Retardant Products

B. Sales Issues

Comment 6: Movement Expenses and Bank Charges on U.S. Sales

Comment 7: Commissions

Comment 8: Sales to Affiliate

Comment 9: Verification of Surprise Sales

C. Cost of Production/Constructed Value Issues

Comment 10: Major Inputs—PTA

Comment 11: Major Inputs—EG

Comment 12: Material Costs—Scrap Consumption

Comment 13: Foreign Exchange Gains and Losses

Comment 14: GA Expenses

III. Issues Specific to Nan Ya Plastics Corporation

A. General Issues

Comment 15: Mis-coding of Regenerated and Virgin Products

Comment 16: Recoding of Sale

B. Sales Issues

Comment 17: Exchange Rates

Comment 18: Inland Freight—General Issues

Comment 19: Inland Freight—Adjustment for Affiliated Expenses

Comment 20: Inland Freight—Additional Freight to Factory

Comment 21: Inland Freight—Affiliated Transactions at Arm's Length

Comment 22: Indirect Selling Expenses

Comment 23: Imputed Credit Expenses on Certain Sales to the United States

Comment 24: Bank Charges

Comment 25: Commission and Marine Insurance

Comment 26: U.S. Short-Term Interest Rate

Comment 27: Home Market Short-Term Interest Rate

C. Cost of Production/Constructed Value Issues

Comment 28: Recovery of Inputs

Comment 29: Exchange Gains

Comment 30: Minor Verification Corrections

Comment 31: Product-Specific Costs

Comment 32: General and Administrative Cost

Comment 33: Long-term Interest Income

Comment 34: Packing Expenses

Comment 35: Unreported Costs

Comment 36: Revised Yields

Comment 37: Positive Yields

Comment 38: Scrap Credit

Comment 39: Inputs from Affiliates