[Federal Register Volume 61, Number 39 (Tuesday, February 27, 1996)]
[Proposed Rules]
[Pages 7308-7392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4024]




[[Page 7307]]

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Part II





Department of Commerce





_______________________________________________________________________



International Trade Administration



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19 CFR Parts 351, 353, and 355



Antidumping Duties; Countervailing Duties; Proposed Rule

  Federal Register / Vol. 61, No. 39 / Tuesday, February 27, 1996 / 
Proposed Rules  
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[[Page 7308]]


DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Parts 351, 353, and 355

[Docket No. 951122274-5274-01]
RIN 0625-AA45


Antidumping Duties; Countervailing Duties

AGENCY: International Trade Administration, Commerce.

ACTION: Notice of proposed rulemaking and request for Public Comments.

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SUMMARY: The Department of Commerce (``the Department'') proposes to 
establish regulations to conform the Department's existing antidumping 
duty and countervailing duty regulations to the Uruguay Round 
Agreements Act, which implemented the results of the Uruguay Round 
multilateral trade negotiations. In addition to conforming changes, the 
Department has sought to issue regulations that: where appropriate and 
feasible, translate the principles of the implementing legislation into 
specific and predictable rules, thereby facilitating the administration 
of these laws and providing greater predictability for private parties 
affected by these laws; simplify and streamline the Department's 
administration of antidumping and countervailing duty proceedings in a 
manner consistent with the purpose of the statute and the President's 
regulatory principles; and codify certain administrative practices 
determined to be appropriate under the new statute and under the 
President's Regulatory Reform Initiative.

DATES: Written comments will be due on April 29, 1996.

ADDRESSES: Address written comments to Susan G. Esserman, Assistant 
Secretary for Import Administration, Central Records Unit, Room B-099, 
U.S. Department of Commerce, Pennsylvania Avenue and 14th Street, NW., 
Washington, D.C. 20230. Attention: Proposed Regulations/Uruguay Round 
Agreements Act. Each person submitting a comment is requested to 
include his or her name and address, and give reasons for any 
recommendation.

FOR FURTHER INFORMATION CONTACT: William D. Hunter (202) 482-1930, or 
Penelope Naas, (202) 482-3534.

SUPPLEMENTARY INFORMATION:

Background

    In March, 1995, President Clinton issued a directive to Federal 
agencies regarding their responsibilities under his Regulatory Reform 
Initiative. This initiative is part of the National Performance review, 
and calls for immediate, comprehensive regulatory reform. The President 
directed all agencies to undertake an exhaustive review of all their 
regulations, with an emphasis on eliminating or modifying those that 
are obsolete or otherwise in need of reform. This proposed rule 
represents one of the steps in the Import Administration's response to 
the President's directive.
    On January 3, 1995, the Department published an Advance Notice of 
Proposed Rulemaking and Request for Comments in the Federal Register 
(Antidumping Duties; Countervailing Duties; Article 1904 of the North 
American Free Trade Agreement, 60 FR 80 (``Advance Notice'')), as the 
first step in the process of developing regulations under the Uruguay 
Round Agreements Act (``URAA'').1 The Department took the step of 
requesting comments in advance of issuing a proposed rule in order to 
ensure that, at the earliest possible stage, we could consider and take 
account the views of the private sector entities that are subject to 
the antidumping and countervailing duty laws.2

    \1\ Among other things, the URAA amended the antidumping and 
countervailing duty provisions of the Tariff Act of 1930 to conform 
those provisions to the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 (``AD Agreement'') 
and the Agreement on Subsidies and Countervailing Measures (``SCM 
Agreement''), both of which are part of the Marrakesh Agreement 
Establishing the World Trade Organization (``WTO Agreement'').
    \2\ On February 22, 1995, the Department published in the 
Federal Register (60 FR 9802) a notice extending until April 3, 
1995, the deadline for filing final comments pursuant to the Advance 
Notice. In addition, on May 11, 1995, the Department published in 
the Federal Register (60 FR 25130) a Notice of Interim Regulations 
and Request for Comments (``Interim Regulations''). The Interim 
Regulations dealt with certain new or revised procedures resulting 
from the URAA that would have an immediate impact on the orderly 
administration of the antidumping and countervailing duty laws. 
Although the Department invited immediate comments on the Interim 
Regulations, it allowed the deadline for comments on the Interim 
Regulations to coincide with the deadline for comments on this 
proposed rulemaking.
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    In these proposed regulations, the Department has been guided by 
the following objectives. First, the Department is proposing to revise 
the regulations to conform to the statutory amendments made by the 
URAA. Second, consistent with the Administration's commitment in the 
Statement of Administrative Action accompanying H.R. 5110 (H.R. Doc. 
No. 316, Vol. 1, 103d Cong., 2d Sess. (1994) (``SAA''), the Department 
has fleshed out through regulation certain statements contained in the 
SAA. Under section 102(d) of the URAA, the SAA constitutes an 
authoritative expression concerning the interpretation and application 
of the provisions of the URAA, including those provisions relating to 
antidumping and countervailing duties. Finally, the Department has 
developed proposed regulations mindful of President Clinton's 
Regulatory Reform Initiative and his directive to identify and either 
eliminate or modify obsolete and burdensome regulations.
    The Department has carefully reviewed its existing regulations, and 
has taken several steps to enhance their effectiveness and make them 
more accessible to the business community. We have consolidated the 
antidumping and countervailing duty regulations (which currently are 
contained in separate Parts 353 and 355) into a single Part 351. 
Because, for the most part, antidumping and countervailing duty 
procedures are identical, the consolidation of those portions of the 
regulations dealing with procedures will make the regulations easier to 
use, will make it easier to identify those instances where antidumping 
and countervailing duty procedures differ, and, by reducing the sheer 
size of the regulations, will make the regulations less burdensome to 
the non-expert.
    To the extent possible, we have proposed regulations that simplify 
and streamline the antidumping/countervailing duty process. For 
example, in the case of administrative reviews, we have added a new 
provision which allows, under certain circumstances, the Department to 
cover two review periods in a single review, an approach which should 
be more efficient for all parties concerned. We have attempted to 
harmonize, to the extent possible, the rules applicable to both the 
investigation and review phases of antidumping and countervailing duty 
proceedings. Because the maintenance of different rules for different 
phases of antidumping and countervailing duty proceedings merely adds 
another layer of complexity to an already complex area, we have 
attempted to eliminate needless differences. For example, in the case 
of correction of ministerial errors, we generally have made the 
procedures identical for both investigations and reviews.
    In addition, we have developed rules which reduce burdens and 
facilitate the use of the regulations and administrative procedures. 
For example, we have consolidated and harmonized the rules governing 
the submission of information. We have reduced the 

[[Page 7309]]
number of copies that parties must file when they make submissions to 
the Department. We also have included charts which set forth in a 
single place the various deadlines in antidumping and countervailing 
duty investigations and reviews.
    Further, where possible, we have proposed regulations that 
supplement, rather than repeat, the statute. We have included narrative 
explanations that put a particular regulation in context and explain 
how the regulation fits in the administrative process. We have also 
sought to use language that will be readily understood by members of 
the business community.
    Finally, where possible, we have tried to use these regulations as 
a vehicle for enhancing the predictability of the antidumping and 
countervailing duty laws. We recognize that there are many areas in 
which the statute provides the Department with discretion, and we have 
attempted to provide guidance as to how the Department will exercise 
that discretion. For example, in the regulation that deals with so-
called ``price averaging'' in antidumping proceedings, we have 
attempted to flesh out how the Department will apply this new 
methodology added to the law by the URAA.
    In this regard, however, there are limits as to the amount of 
detail that the Department can provide in these regulations at this 
time. In some instances, the statute or the SAA already provides 
extremely detailed rules, thereby obviating the need for additional 
regulatory guidance. In other instances, the SAA expressly directs the 
Department to take a case-by-case approach and to eschew hard-and-fast 
rules. Finally, in many instances, the URAA has created new procedural 
and methodological issues on which the Department has little, if any, 
experience. Absent such experience, the Department lacks a basis for 
promulgating detailed rules.
    Streamlining the regulations is only one part of a larger effort of 
the Department to simplify its practices. For example, we have been 
revising our standard questionnaires to make them more ``user 
friendly'' and efficient. We have made significant changes to our 
verification procedures in the interest of increased effectiveness. We 
also will publicly announce the issuance of Policy Bulletins and ensure 
that they are easily accessible to the public.

Timetable

    Certain regulations dealing with the treatment of business 
proprietary information and administrative protective order procedures 
were the subject of a separate Notice of Proposed Rulemaking and 
Request for Public Comment on [Insert date and citation when published] 
(``APO Rule''). However, the Department intends that, when it publishes 
final regulations, it will publish a single document that will include 
the regulations contained in this proposed rule, as well as those 
regulations contained in the APO Rule.
    In addition, the Department intends to publish separately proposed 
rules regarding countervailing duty methodology. When completed, these 
rules will be included as subpart E of proposed Part 351.
    The issuance of final regulations on this topic is a priority for 
the Department. After reviewing and analyzing comments on this proposed 
rule and the APO Rule, the Department intends to issue final 
regulations as soon as possible.

Comments--In General

    The Department wishes to emphasize that the regulations contained 
in this proposed rule reflect our best judgment at this time regarding 
the appropriate style and content of antidumping and countervailing 
duty regulations. We have not foreclosed consideration of any issue 
raised herein, and we would appreciate greatly public comment and 
suggestions. In particular, while there are certain matters on which, 
in our view, the statute and its legislative history give the 
Department relatively little flexibility, there are other matters where 
the Department has a much greater degree of discretion in interpreting 
and applying the statute. With respect to this latter category of 
matters, the fact that in these proposed regulations the Department has 
exercised its discretion in a particular manner (or has declined to 
exercise its discretion at all in the form of regulations) should not 
be construed as an indication that the Department's position on these 
matters is immutable. We welcome any and all suggestions.
    Therefore, we are very interested in receiving public comment on 
these proposed regulations. We have found the dialogue that commenced 
with the Advance Notice to be extremely useful, and we hope and expect 
that it will continue. We encourage the submission of new comments, as 
well as the resubmission of old comments if commentators believe that 
the Department did not fully understand or appreciate a comment the 
first time around.

Comments--Format and Number of Copies

    Each person submitting a comment should include his or her name and 
address, and give reasons for any recommendation. To facilitate their 
consideration by the Department, comments regarding these proposed 
regulations should be submitted in the following format: (1) Number 
each comment in accordance with the number designated for that issue as 
indicated in the list of issues set forth below; (2) begin each comment 
on a separate page; (3) concisely state the issue identified and 
discussed in the comment; and (4) provide a brief summary of the 
comment (a maximum of 3 sentences) and label this section ``summary of 
the comment.''
    To simplify the processing and distribution of comments, the 
Department encourages the submission of documents in electronic form 
accompanied by an original and two copies in paper form. We request 
that documents filed in electronic form be on DOS formatted 3.5'' 
diskettes and prepared in either WordPerfect 5.1 format or a format 
that the WordPerfect program can convert and import into WordPerfect 
5.1. Please submit comments on a separate file on the diskette and 
labeled by the number designated for that issue based upon the list of 
issues set forth below.
    Comments received on diskette will be made available to the public 
on the Internet at the following addresses:

FTP://FWUX.FEDWORLD.GOV/PUB/IMPORT or
FTP://FTP.FEDWORLD.GOV/PUB/IMPORT/IMPORT.HTM

In addition, the Department will make comments available to the public 
on 3.5'' diskettes, with specific instructions for accessing compressed 
data, at cost, and paper copies will be available for reading and 
photocopying in the Central Records Unit, Room B-099, U.S. Department 
of Commerce, Pennsylvania Avenue and 14th Street, NW., Washington, D.C. 
20230. Any questions concerning file formatting, document conversion, 
access on the Internet, or other file requirements should be addressed 
to Andrew Lee Beller, Director of Central Records, (202) 482-1248.

Classification of Issues for Comment

Antidumping Issues

    11. Comparison Methodology:
    a. Viability, third-country sales, intermediate country sales, and 
tolling;
    b. Constructed export price deductions and value-added deductions; 
    
[[Page 7310]]

    c. Normal value adjustments;
    d. Level of trade matching, level of trade adjustments, and 
constructed export price offset;
    12. Start-up
    13. Profit and selling, general and administrative expenses in 
constructed value;
    14. Sales below cost of production and constructed value generally;
    15. Currency conversion;
    16. Price averaging;
    17. Anticircumvention;
    18. Affiliated persons (address separately for AD and CVD);
    19. AD methodology issues other than those outlined above;

Procedural issues

    20. Initiation of petitions;
    21. Evidence;
    22. Facts available;
    23. De Minimis (address separately for AD and CVD);
    24. Reviews, other than five-year reviews (if specific to AD or 
CVD, please specify);
    25. Five-year reviews and revocation;
    26. Repeal of Section 303;
    27. Regional industries;
    28. Critical circumstances;
    29. Simplification;
    30. Business proprietary information and administrative protective 
orders;
    31. Ministerial errors;
    32. Procedural issues other than those outlined above;
    33. Other issues.

Explanation of the Proposed Rules

General Background

Consolidation of Antidumping and Countervailing Duty Regulations
    As discussed above, in response to the President's Regulatory 
Reform Initiative, to reduce the amount of duplicative material in the 
regulations, the Department has consolidated the antidumping and 
countervailing duty regulations into a new Part 351, and is removing 
Parts 353 and 355.
    The structure of Part 351 is as follows. Subpart A (Scope and 
Definitions) is based on existing subpart A of Parts 353 and 355. Among 
other things, the regulations contained in subpart A deal with general 
definitions applicable to antidumping and countervailing duty 
proceedings, the record for such proceedings, and de minimis standards 
for countervailable subsidies and dumping margins.
    Subpart B (Antidumping and Countervailing Duty Procedures) is based 
on existing subpart B of Parts 353 and 355. As suggested by the title, 
subpart B deals with the procedural aspects of antidumping and 
countervailing duty proceedings. Where the procedures for antidumping 
and countervailing duty proceedings are different, the regulations in 
subpart B so specify.
    Subpart C (Information and Argument) is based on existing subpart C 
of Parts 353 and 355. Subpart C establishes rules for antidumping and 
countervailing proceedings regarding such matters as the submission of 
information, the treatment of proprietary information, the verification 
of information, and determinations based on the facts available. As 
noted, certain portions of Subpart C were contained in the APO Notice.
    Subpart D (Calculation of Export Price, Constructed Export Price, 
Fair Value, and Normal Value) is based on existing subpart D of Part 
353. Subpart D essentially deals with methodologies for identifying and 
measure dumping.
    Subpart E is designated ``[Reserved],'' but, as explained above, 
eventually will include rules dealing with countervailing duty 
methodology. Subpart E does not have a counterpart in existing Part 
355, although proposed methodological regulations were published in 
1989. 54 FR 23366 (1989).
    Subpart F (Cheese Subject to In-Quota Rate of Duty) is based on 
subpart D of existing Part 355, and implements section 702 of the Trade 
Agreements Act of 1979, as amended by the URAA.

Explanation of Particular Provisions

Part 351, Subpart A--Scope and Definitions

    Subpart A of Part 351 sets forth the scope of Part 351, 
definitions, and other general matters applicable to antidumping and 
countervailing duty proceedings.
Section 351.101
    Section 351.101 deals with the scope of Part 351, countervailing 
duty investigations involving imports from a country that is not a 
Subsidies Agreement country, and the application of antidumping and 
countervailing duties to importations by the United States Government.
Section 351.102
    Section 351.102 sets forth the definition of terms that are used in 
antidumping and countervailing duty proceedings, but that are not 
defined in the statute or that warrant clarification. A few definitions 
merit comment.
    Affiliated persons (and affiliated parties) is a new term that 
replaces prior definitions of ``related persons'' or ``related 
parties'' (the latter term continues to be governed by section 
771(4)(B)). Because the statute unintentionally uses inconsistent 
terminology, the regulation makes clear that the terms ``affiliated 
person'' and ``affiliated parties'' have the same meaning. The first 
sentence of the definition merely refers to the definition of 
``affiliated persons'' in section 771(33) of the Act. The second 
sentence elaborates on the meaning of ``control,'' a key term in the 
definition of ``affiliated persons'' under section 771(33). It reflects 
the statements in the SAA, at 838, that one person may be in a position 
to exercise restraint or direction over another person, and thus have 
``control'' over that person, by such means as corporate or family 
groupings, franchises or joint venture agreements, debt financing, or 
close supplier relationships. The definition of affiliation will also 
be applied for purposes of ``collapsing'' firms under section 
351.401(f).
    Several commentators suggested that the Department should specify 
precise thresholds for these indicia of control in order to provide a 
greater degree of predictability in the administration of the 
antidumping law. The Department appreciates the parties' desire for 
greater guidance concerning the definition of ``control.'' However, the 
Department does not believe that it is now in a position to establish 
such thresholds, but instead must develop thresholds, where 
appropriate, as it gains experience in applying the concept of control. 
``Affiliated persons'' is a new statutory term embodying new concepts, 
and the complexity of the relationships potentially covered by this 
term mitigate against the issuance of detailed regulations at this 
time. Moreover, some indicia of the ability to exercise restraint or 
direction over another party's pricing, cost, or production decisions 
may not lend themselves to the use of simple, black-and-white 
thresholds. Therefore, the Department intends to apply this new 
definition on a case-by-case basis, considering all relevant factors, 
including the indicia included in the regulatory definition. Mere 
identification of the presence of one or more of these or other indicia 
of control does not end our task. We will examine these indicia, in 
light of business and economic reality, to determine whether they are, 
in fact, evidence of control. Business and economic reality suggest 
that these relationships must be significant and not easily replaced. 
In addition, temporary market power, created by variations in supply 
and demand conditions, would not suffice.
    In addition, some commentators suggested that the Department should 
define ``control'' as existing only where 

[[Page 7311]]
there is evidence that control previously had been exercised. We have 
not adopted this suggestion because the statute, by its use of the 
phrase ``in a position to exercise restraint or direction,'' defines 
``control'' in terms of the ability to exercise restraint and 
direction. The actual exercise of restraint or direction would 
constitute evidence as to the existence of such ability.
    Finally, some commentators suggested that the Department establish 
in the regulations that if one or more of the factors listed in section 
771(33) is present, the Department should presume that the parties are 
affiliated. Other commentators suggested, conversely, that if certain 
factors are not present, the Department should presume that the parties 
are not affiliated. With regard to the former suggestion, the statute 
provides that if any one of the factors in section 771(33) is present, 
the Department is required to find that persons are affiliated, not 
merely presume that they are affiliated. With regard to the latter 
suggestion, the Department is required to consider evidence of any one 
of the factors. The only factor for which a presumption could be 
developed is the factor of control. However, as explained above, the 
Department is not yet in a position to develop such presumptions in 
these regulations.
    Domestic interested party is a new term intended to serve as a 
convenient, shorthand substitute for the more lengthy phrase used in 
the statute (``an interested party described in paragraph (C), (D), 
(E), (F), or (G) of section 771(9) of the Act'') and its existing 
regulatory counterpart (e.g., ``an interested party, as defined in 
paragraph (k)(3), (k)(4), (k)(5), or (k)(6) of Sec. 353.2''). In 
addition, the definition of ``domestic interested party'' reflects the 
creation of a new category of interested party relating to processed 
agricultural products. Omnibus Trade and Competitiveness Act of 1988, 
Public Law 100-418, section 1326(c).
    The definition of fair value is based on existing section 
353.42(a). The courts have long recognized that the Secretary possesses 
additional methodological flexibility in an antidumping investigation, 
see, e.g., Southwest Fla. Winter Veg. Growers Ass'n v. United States, 
584 F. Supp. 10, 17 (Ct. Int'l Trade 1984), and the definition of fair 
value is intended to reflect this fact.
    With respect to the definition of ordinary course of trade, 
generally, in calculating normal value, the Department must rely on 
sales and transactions that are in the ordinary course of trade. The 
first sentence of the definition refers to section 771(15) of the Act. 
The second sentence draws on the SAA, at 834, to elaborate on this 
definition, and contains examples of the types of sales or transactions 
that might be considered as outside the ordinary course of trade.
    Some commentators urged the Department to refrain from specifying 
criteria to be used in determining whether sales or transactions are 
outside the ordinary course of trade. We agree that it would be 
inappropriate to include in regulations a detailed list of criteria 
that the Department might consider, but we also believe that there 
should be some guidance to the public as to how the Department will 
analyze ``ordinary course of trade'' issues. Accordingly, as noted 
above, we have incorporated the relevant language from the SAA, which 
provides a general description of the standard to be applied.
    One commentator suggested that the Department clarify that the 
addition in the statute of two specific types of transactions deemed to 
be outside the ordinary course of trade does not affect the criteria 
the Department traditionally has used to determine whether other types 
of transactions are outside the ordinary course of trade. The second 
sentence of the regulatory definition addresses this concern.
    Two commentators suggested that the Department identify examples of 
the types of sales that would be considered as being outside the 
ordinary course of trade, including sales at aberrational prices. The 
second sentence of the regulatory definition responds to these 
comments, although we emphasize that the second sentence is not an 
exhaustive list of all of the possible types of sales or transactions 
that might be considered as being outside the ordinary course of trade.
    One commentator requested that the Department clarify that below-
cost sales and affiliated transactions are not always outside the 
ordinary course of trade. Further clarification is not needed, because 
section 771(15) of the Act is clear that not all sales below cost or 
affiliated transactions will be deemed automatically to be outside the 
ordinary course of trade. Instead, only sales or transactions that are 
disregarded under the pertinent statutory and regulatory provisions 
automatically will be deemed to be outside the ordinary course of 
trade. Of course, the fact that such sales or transactions are not 
automatically considered to be outside the ordinary course of trade 
does not mean that they never could be considered to be outside the 
ordinary course of trade. For example, in the case of a below-cost sale 
of an ``off-spec'' product, even if the sale is not disregarded as a 
below-cost sale under section 773(b) of the Act, it might be 
disregarded as not in the ordinary course of trade due to the ``off-
spec'' nature of the product.
    Rates is used in these regulations as a single shorthand expression 
for the various terms used in the Act. In addition, the second sentence 
of the definition clarifies that in an antidumping proceeding involving 
imports from a nonmarket economy (``NME'') country, the Secretary may 
calculate a single dumping margin applicable to all exporters and 
producers. Because the government of an NME country may control export 
activities, the Department currently presumes that a single rate will 
apply, but allows individual exporters or producers to receive their 
own separate rates if they can demonstrate independence from the NME 
government. See, e.g., Silicon Carbide from the People's Republic of 
China, 59 FR 22585 (1994).
    We have decided not to codify the current presumption in favor of a 
single rate or the so-called ``separate rates test,'' which outlines 
the type of information that an exporter or producer must present to 
obtain a separate rate. Because of the changing conditions in those NME 
countries most frequently subject to antidumping proceedings, this test 
(and the assumptions underlying the test) must be allowed to adjust to 
such changes on a case-by-case basis.
    The Department received comments proposing changes to the separate 
rates test, as well as objections to the proposed changes. Because we 
are codifying neither the single rate presumption nor the separate 
rates test, we are not addressing these comments at this time. However, 
we will take the comments into consideration as our policy in this area 
evolves.
    In addition, the Department is considering whether to promulgate 
special rules regarding the rates that should be applied to exporters 
that are not also producers, such as trading companies. In this 
situation, one alternative would be to calculate a separate rate for 
each exporter/producer combination, so that the rate to be applied to 
an exporter would depend upon the producer of the particular 
merchandise in question. However, before proceeding further, the 
Department would like to receive additional public comment on this 
issue.
    Respondent interested party is a counterpart to, and is intended to 
serve 

[[Page 7312]]
the same function as the term ``domestic interested party.'' A 
respondent interested party is an interested party described in 
paragraph (A) or (B) of section 771(9) of the Act.
    The term segment of the proceeding refers to discrete portions of 
the proceeding which are separately reviewable under section 516A of 
the Act. Thus, for example, an investigation and an administrative 
review are separate segments of a proceeding.
    The term third country applies in antidumping proceedings, and is 
intended to be a shorthand expression for the more lengthy statutory 
phrase ``a country other than the exporting country or the United 
States.''
Section 351.103
Section 351.103
    Section 351.103 describes the location and function of Import 
Administration's Central Records Unit, provides that documents must be 
filed with the Central Records Unit, and indicates that the Central 
Records Unit is responsible for maintaining the service list for each 
antidumping and countervailing duty proceeding.
Section 351.104
    Section 351.104 defines what constitutes the official and public 
records of an antidumping or countervailing duty proceeding, and 
prohibits the removal of a record or any portion thereof unless ordered 
by the Secretary or required by law.
    One change warranting discussion is the treatment of material 
returned by the Department to the submitter. The existing regulations 
provide that material which is not timely filed or which is returned to 
the submitter for some other reason shall not be retained in the 
official record. However, because parties have a right to seek judicial 
or binational panel review of a decision to reject a submission, as a 
matter of practice the Department has found it necessary to retain a 
copy of the returned materials in order to be able to document for the 
court or binational panel the reasons for the Department's decision to 
reject the submission. Therefore, paragraph (a)(2) conforms to current 
practice. Under paragraph (a)(2), the Department will include in the 
official record material that has been returned to the submitter for 
reasons other than untimeliness, but the Department will not use such 
material in its determinations. In the case of a submission rejected as 
untimely, it is unnecessary to retain a copy of the submission in the 
official record, because the timeliness/untimeliness of the submission 
can be documented by means other than retention of the submission.
Section 351.105
    Section 351.105 defines the four categories of information 
applicable to antidumping and countervailing duty proceedings: public, 
business proprietary, privileged, and classified. One change from the 
existing regulations is that paragraph (c)(10) provides that the 
position of domestic producers or workers regarding a petition may be 
treated as business proprietary information. The new statute requires 
that the Department make an affirmative determination of domestic 
industry support for a petition before initiating an antidumping or 
countervailing duty investigation. Some domestic producers or workers 
might be reluctant to communicate their positions regarding a petition 
for fear that their positions might become public information, thereby 
potentially subjecting them to commercial retaliation. Accordingly, it 
is essential that domestic producers and workers have the option of 
communicating their positions to the Department on a confidential 
basis.
Section 351.106
    Section 351.106 deals with the de minimis standard, and implements 
section 703(b)(4) and section 733(b)(3) of the Act. The Department has 
long applied a de minimis standard under which it treated net 
countervailable subsidies and weighted-average dumping margins that 
were less than 0.5 percent ad valorem (or the equivalent specific rate) 
as zero. The URAA incorporated the de minimis standards of the AD 
Agreement and the SCM Agreement into the statute, thereby modifying the 
prior Department standard in antidumping and countervailing duty 
investigations.
    Consistent with the statute and the SAA, paragraph (b)(1) provides 
that the de minimis standards set forth in section 703(b)(4) and 
section 733(b)(3) of the Act will apply to the investigatory segment of 
an antidumping or countervailing duty proceeding. Although not restated 
in paragraph (b)(1), these statutory standards are 2 percent ad valorem 
(or the equivalent specific rate) for antidumping duty investigations, 
and normally 1 percent ad valorem (or the equivalent specific rate) for 
countervailing duty investigations. However, the de minimis standard in 
a countervailing duty investigation may be 2 percent if the 
investigated merchandise is from a developing country, or 3 percent if 
the investigated merchandise is from a ``least developed country'' or 
from a country which has phased out its export subsidies prior to the 
deadline established in the SCM Agreement.
    Paragraph (b)(2) provides a transition rule for investigations that 
were initiated under pre-URAA law, suspended, and then later resumed 
due to a cancellation of the suspension agreement. Paragraph (b)(2) 
provides that in making a final determination in this situation, the 
Department will apply the de minimis standard which it would have used 
if the investigation never had been suspended (i.e., the old law 
standard for investigations of 0.5 percent). However, paragraph (b)(2) 
has no effect on the standard which the Department may apply in 
determining that a suspension agreement has been violated or that a 
violation is ``inadvertent or inconsequential'' within the meaning of 
section 351.209.
    The de minimis standards set forth in paragraph (b)(1) will apply 
only in antidumping or countervailing duty investigations. Paragraph 
(c)(1) provides that for all other antidumping or countervailing duty 
determinations, the de minimis standard will be 0.5 percent ad valorem, 
the standard set forth in existing sections 353.6 and 355.7. Several 
commentators suggested that the new de minimis standards set forth in 
paragraph (b)(1) should not be limited to the investigatory segment. 
The Department has not adopted these suggestions, because, as a matter 
of domestic law, the statute and the SAA are very clear that the new 
standards apply only to investigations. Moreover, as a matter of 
international law, neither the AD Agreement nor the SCM Agreement 
require that the new standards be applied outside of the investigatory 
segment.
    In this regard, several commentators suggested that the Department 
should abandon its practice of assessing antidumping duties even when 
the weighted-average dumping margin was de minimis, arguing that (1) 
this practice is in conflict with the statement in the SAA, at 844, 
that ``de minimis margins are regarded as zero margins,'' and (2) a 
failure to apply the de minimis standard to assessment effectively 
would negate that standard. The Department agrees that the language of 
the SAA suggests that the de minimis standard should not be applied 
solely to cash deposits, but to assessment of duties as well. The 0.5 
percent de minimis standard will apply to the assessment of both 
antidumping and countervailing duties, but, in the case of antidumping 
duties, the Department will apply this standard to the 

[[Page 7313]]
``assessment rate'' calculated under new section 351.212(b)(1). As 
discussed in more detail below, the Department will calculate the 
assessment rate on an importer-by-importer basis. In situations where 
an exporter sells to one importer at dumped prices and to another 
importer at non-dumped prices, the application of the de minimis 
standard to these importer-specific assessment rates will prevent the 
dumped transactions from escaping the assessment of duties. With 
respect to the assessment of countervailing duties, the Department will 
continue to refrain from assessing duties where the countervailable 
subsidy rate (or the all-others or country-wide subsidy rate) is de 
minimis.

Subpart B--Antidumping Duty and Countervailing Duty Procedures

    Subpart B deals with antidumping duty and countervailing duty 
procedures and is based on subpart B of Part 353 and Part 355 of the 
Department's existing regulations.
Section 351.201
    Section 351.201 deals with the self-initiation of investigations by 
the Department, and is based on existing sections 353.11 and 355.11.
Section 351.202
    Section 351.202 deals with the contents of, and filing requirements 
for, antidumping and countervailing duty petitions, and is based on 
existing sections 353.12 and 355.12.
    Paragraph (b) is based on existing sections 353.12(b) and 
355.12(b), and retains the standard that a petition need only contain 
information that is reasonably available to the petitioner. The 
following changes in paragraph (b) merit comment.
    Paragraph (b)(3) is new and reflects the requirement that, before 
initiating an investigation, the Department must make an affirmative 
determination that the domestic industry supports the petition. 
Paragraph (b)(3) does not prescribe a single method by which a 
petitioner may seek to establish industry support, because the type of 
information establishing industry support may vary from industry to 
industry. However, as provided in the SAA, at 861, the petitioner must 
provide the volume and value of its own production of the domestic like 
product, as well as the production of that product by each member of 
the industry, to the extent that such information is reasonably 
available to the petitioner. In addition, the petitioner must provide 
information on the total volume and value of U.S. production of the 
domestic like product, to the extent that such information is 
reasonably available to the petitioner.
    In paragraph (b)(7)(ii)(C)(1), which deals with upstream subsidy 
allegations, the phrase ``Countervailable subsidies, other than an 
export subsidy'' replaces the phrase in existing Sec. 355.12(b)(8)(i), 
``Domestic subsidies described in section 771(5). * * *'' This change 
reflects the URAA amendment to section 771A of the Act, which, in turn, 
was due to the URAA's creation of a third category of subsidies, so-
called ``import substitution subsidies,'' in section 771(5)(C) of the 
Act.
    In paragraph (b)(10), the phrase ``and causation'' has been added. 
Petitioners always have been required to submit information indicating 
that dumped or subsidized imports cause, or threaten to cause, material 
injury to a domestic industry. The addition of this phrase is intended 
simply to document this requirement.
    Paragraph (b)(11), which deals with critical circumstances 
allegations, has been revised from existing Sec. 353.12(b)(12) to 
reflect the statutory amendments regarding the elements necessary for a 
finding of critical circumstances.
    Paragraph (e) deals with amendments to petitions, and is based on 
existing Secs. 353.12(e) and 355.12(e). In the first sentence, ``may'' 
has been substituted for ``will'' in order to more accurately reflect 
the discretion that the statute confers on the Department regarding the 
acceptance of amendments to petitions.
    Paragraph (i) is based on existing Secs. 353.12(i) and 355.12(j), 
but has been revised to reference sections 702(b)(4)(B) and 
733(b)(3)(B) of the Act, which now deal expressly with the issue of 
pre-initiation communications between the Department and outside 
parties. The last sentence of paragraph (i)(1) clarifies that the 
Department will not consider the filing of a notice of appearance in an 
antidumping or countervailing duty proceeding to constitute a 
communication. However, if any communication is appended to a notice of 
appearance on any subject other than industry support, the Department 
will consider the entire document to be prematurely filed. In addition, 
paragraph (i)(2) provides that, in a countervailing duty proceeding, 
the Department will take the initiative and ``invite'' the government 
of the exporting country involved for consultations, instead of taking 
a more passive approach and merely providing an opportunity for 
consultations.
    Several commentators suggested that the Department should solicit 
comments regarding the petition, such as comments concerning the 
accuracy of the information contained in the petition. However, the 
SAA, at 863-64, states that ``the pre-initiation right to comment will 
be limited solely to the issue of industry support for the petition.'' 
Thus, the legislative intent was to prohibit the type of communication 
contemplated by these commentators, and it would contravene this intent 
if the Department were to allow parties to submit such information by 
``requesting'' parties to provide it.
Section 351.203
    Section 351.203 deals with determinations regarding the sufficiency 
of a petition, and implements sections 702(c) and 732(c) of the Act. 
While based on existing Secs. 353.13 and 355.13, Sec. 351.203 contains 
several changes that reflect amendments to the statute.
    Paragraph (b)(1) provides that the Department normally will make 
the determination regarding the sufficiency of a petition within 20 
days of the date on which the petition is filed. In this regard, 
paragraph (b)(1) repeats the language of the statute with respect to 
the determination concerning the ``accuracy and adequacy'' of a 
petition. The Department does not believe that the new statutory 
standard constitutes a significant departure from past Department 
practice.
    Paragraph (b)(1) reflects the new statutory requirement that the 
Department examine sources readily available to it in determining the 
sufficiency of a petition. In the past, it was the Department's 
practice, in reviewing a petition, to note information that lacked 
sufficient support or that appeared aberrational, and to ask the 
petitioner to provide additional information. This practice is 
consistent with the type of review contemplated by the new statute. 
Under paragraph (b)(1), the Department will seek information from 
sources other than the petitioner where: (1) Support for a particular 
allegation is weak, but better information is unavailable to the 
petitioner, particularly where the allegation is central to the 
adequacy of the petition or has a significant impact on the alleged 
rates, or (2) the information, although supported, appears aberrational 
and is central to the adequacy of the petition or has a significant 
impact on the alleged rates. The Department will give the petitioner an 
opportunity to comment on any such information acquired by the 
Department.
    In this regard, the use of information ``readily available'' is 
intended to mean information that does not require extensive research 
by the Department to 

[[Page 7314]]
obtain. An example of such information would be the replacement of a 
significant factor of production value in a nonmarket economy 
antidumping petition with non-proprietary information used in a 
recently completed investigation or review.
    With respect to injury and causation, given the bifurcated 
responsibilities of the Department and the Commission under the Act, 
the Department will continue to work in cooperation with Commission 
staff in evaluating a petition.
    Paragraph (b)(2) deals with situations in which the Department 
extends the period for determining the sufficiency of a petition in 
order to poll or otherwise determine industry support for a petition. 
Under paragraph (b)(2), the Department will extend the period only by 
the amount of time required to gather and analyze information relevant 
to the question of industry support, and in no case will the Department 
exceed the maximum period of 40 days authorized by the statute.
    Paragraph (c)(2) is new and incorporates the requirements of the 
SAA, at 867, regarding the distribution of a public version of a 
petition once the Department has made a determination to initiate an 
investigation. Normally, the Department will provide a public version 
of the petition to all known exporters. However, in accordance with the 
SAA, at 867, where the number of exporters is very large, the 
Department may provide a copy of the petition to a trade association, 
with instructions to provide copies to all exporters. Alternatively, 
the Department may consider this obligation to have been satisfied by 
the delivery of a public version of the petition to the government of 
the exporting country under Sec. 351.202(f). In the latter case, the 
Department will notify the government in question that its obligation 
has been met through such delivery. In addition, to conserve resources, 
the Department is looking into the feasibility of making the petition 
available on computer diskette.
    Paragraph (e) is new and deals with the new statutory requirements 
regarding determinations of industry support for a petition. Paragraph 
(e)(1) deals with the measurement of domestic production, an important 
issue in light of the fact that expressions of support or opposition 
for a petition are weighted according to production. Consistent with 
the SAA, at 862, paragraph (e)(1) provides that the Department may 
measure production on the basis of volume or value. In addition, in 
order to provide a degree of predictability, paragraph (e)(1) also 
provides that the Department normally will measure production over a 
twelve-month period. Because in certain cases some period other than 
twelve months may be more appropriate, the Secretary retains the 
discretion to prescribe the precise period on a case-by-case basis. 
However, normally the Secretary will use the most recent twelve-month 
period for which data are available.
    The second sentence of paragraph (e)(1) provides that where the 
Department is satisfied that actual production data for the relevant 
period is not available, production levels may be established on the 
basis of alternative data that the Department determines to be 
indicative of production levels. For example, for some industries or 
firms, shipment data may correspond directly with production data, and, 
thus, be a reliable alternative. However, because of the vast array of 
industries that appear before it, the Department has not attempted to 
specify data that would be an acceptable surrogate in all cases for 
production data.
    Paragraph (e)(2) provides that the expression of a position 
regarding a petition may be treated as business proprietary information 
under Sec. 351.105(c)(10), discussed above. Several commentators 
expressed concern that, if parties were required to state publicly 
their position regarding a petition, they could face commercial 
retaliation. Therefore, business proprietary treatment may be necessary 
in order to encourage domestic producers and workers to present their 
candid views regarding a petition.
    Paragraph (e)(3) sets forth rules regarding the weight accorded to 
the positions of workers and management regarding a petition. 
Consistent with the SAA, at 862, an opinion expressed by workers will 
be considered to be of equal weight to an opinion expressed by 
management. Thus, for example, if a union expressed support for a 
petition, the Department would consider that support to be equal to the 
production of all of the firms that employ workers belonging to the 
union. On the other hand, if management and workers at a particular 
firm expressed opposite views with respect to a petition, the 
production of that firm would be treated as representing neither 
support for, nor opposition to, the petition.
    Paragraph (e)(4) reflects sections 702(c)(4)(B) and 734(c)(4)(B) of 
the Act and the SAA, at 858-859, which allow the Department to 
disregard, in certain situations, opposition to a petition by certain 
domestic producers. Paragraph (e)(4)(i) clarifies that a ``related'' 
domestic producer includes a domestic producer related to a foreign 
exporter, as well as a domestic producer related to a foreign producer. 
In this regard, the Department believes that the statutory requirement 
that the Department ``shall'' ignore the opposition of related domestic 
producers ``unless such domestic producers demonstrate that their 
interests as domestic producers would be adversely affected'' puts the 
burden of demonstrating such an effect on those producers. Paragraph 
(e)(4)(ii) clarifies that the Department may disregard the views of 
domestic producers who are also importers of the subject merchandise 
and domestic producers who are related to such importers within the 
meaning of section 771(4)(B)(ii) of the Act. In evaluating whether to 
disregard such producers, the Department may consider the import levels 
and percentage of ownership common to other members of the domestic 
industry.
    Paragraph (e)(5) deals with the question of industry support where 
the petition alleges the existence of a regional industry under section 
771(4)(C) of the Act. The SAA, at 863, states that industry support 
shall be assessed ``on the basis of production in the alleged region.'' 
Consistent with this statement, paragraph (e)(5) provides that, for 
purposes of assessing industry support, the applicable region will be 
the region specified in the petition.
    Paragraph (e)(6) deals with situations in which the Department may 
have to poll the industry in order to determine whether the industry 
supports a petition. Paragraph (e)(6) clarifies that in conducting such 
a poll, the Department will include in the poll unions, groups of 
workers, and trade and business associations.
    Paragraph (f) interprets sections 702(c)(1)(C) and 732(c)(1)(C) of 
the Act, which provide for expeditious investigations involving subject 
merchandise that previously was covered by an order that was revoked or 
a suspended investigation that was terminated. Paragraph (f) clarifies 
that these provisions of the Act apply if the revocation or termination 
occurred under a pre-URAA version of the statute.
Section 351.204
    Section 351.204 deals with issues relating to the transactions and 
persons to be examined in an investigation, voluntary respondents and 
exclusions. Paragraph (b) deals with the period of time covered by an 
investigation (``POI''). In a departure from existing Sec. 353.42(b), 
paragraph (b)(1) provides that the POI in an antidumping investigation 
normally will be the four most recently completed fiscal quarters (or, 
in a case involving a nonmarket 

[[Page 7315]]
economy, the two most recently completed fiscal quarters) as of the 
month preceding the month in which a petition is filed or in which the 
Department self-initiated an investigation. The use of fiscal quarters 
is intended to ease reporting requirements and permit more efficient 
verification of submitted information. However, paragraph (b)(1) would 
permit the Department to use an additional or alternative period in 
appropriate circumstances. Paragraph (b)(2) codifies existing practice 
regarding the POI in countervailing duty investigations.
    Paragraph (c) deals with the selection of the exporters and 
producers to be examined. In light of section 777A(c) of the Act, 
paragraph (c) does not retain the 60 and 85 percent thresholds of 
existing Sec. 353.42(b). Additionally, paragraph (c) permits the 
Department to decline to examine a particular exporter or producer 
where all parties agree. Such exporter or producer will be subject to 
the all-others rate, where such a rate is calculated.
    Paragraph (d) deals with the treatment of voluntary respondents 
under section 782(a) of the Act. Through its reference to section 
777A(e)(2)(A) of the Act, paragraph (d)(1) provides that the Department 
will not consider voluntary respondents in investigations conducted on 
an aggregate basis under section 777A(e)(2)(B) of the Act. As discussed 
below, however, in so-called ``aggregate cases,'' the Department will 
consider requests for exclusion under paragraph (e)(3) by individual 
exporters or producers. Paragraph (d)(2) provides that if the 
Department accepts a voluntary response, the voluntary respondent will 
be subject to the same requirements as those firms initially selected 
by the Department for individual examination, including, where 
applicable, the use of the facts available. The purpose of this 
provision is to ensure that the Department is not burdened with 
frivolous voluntary responses from parties that wish to see the 
preliminary all-others rate before deciding whether to withdraw their 
request to be investigated. Finally, paragraph (d)(3) provides for the 
exclusion of voluntary respondents from the calculation of the all-
others rate. The purpose of this provision is to prevent manipulation 
and to maintain the integrity of the all-others rate.
    Paragraph (e) deals with exclusions and constitutes a significant 
change from prior practice, as reflected in Secs. 353.14 and 355.14. 
With the exception of countervailing duty investigations conducted on 
an aggregate basis, paragraph (e)(1) eliminates the various 
certification requirements of the prior regulations and, instead, 
provides that any exporter or producer that is individually examined 
and that receives an individual weighted-average dumping margin or 
countervailable subsidy rate of zero or de minimis will be excluded 
from an order.
    In this regard, the Department is considering whether there should 
be separate exclusion rules for firms, such as trading companies, that 
sell, but do not produce, subject merchandise. For example, one 
alternative would be to limit the exclusion of a non-producing exporter 
to subject merchandise produced by those producers that supplied the 
exporter during the period of investigation. However, before issuing 
final rules, the Department is interested in receiving additional 
public comments regarding this issue.
    Paragraph (e)(2) clarifies that, while no exporter will be excluded 
from an investigation as a result of a preliminary determination, those 
found to have zero or de minimis rates will not be subject to 
provisional measures.
    Paragraph (e)(3) explains that, where a countervailing duty 
investigation is conducted on an aggregate basis under section 
777A(e)(2)(B) of the Act, individual responses will be accepted for 
purposes of establishing exclusion. However, consistent with section 
782(a)(2) of the Act, the number of such responses must not be so large 
that individual examination of such exporters or producers would be 
unduly burdensome and inhibit the timely completion of the 
investigation. Responses submitted in support of a request for 
exclusion must include a certification that the party received zero or 
de minimis net countervailable subsidies and a calculation 
demonstrating the basis for that conclusion. Additionally, because the 
countervailable subsidy rate for a reseller normally is based on the 
producer's rate, an exporter that is not the producer of subject 
merchandise must provide a certification from the suppliers or 
producers of the merchandise that the exporter sold during the period 
of investigation, stating that those persons also received zero or de 
minimis net countervailable subsidies. Finally, an exporter or producer 
seeking exclusion also must submit a certification from the government 
that the government did not provide the firm with net countervailable 
subsidies above de minimis. An exporter or producer requesting 
exclusion may be required to provide more detailed information 
regarding the nature and amount of any countervailable subsidies 
received. If the Department determines that an exporter or producer 
seeking exclusion has received net countervailable subsidies above de 
minimis, that firm will not be excluded from a countervailing duty 
order and will be subject to the country-wide subsidy rate.
Section 351.205
    Section 351.205 deals with preliminary antidumping and 
countervailing duty determinations, and is based on existing sections 
353.15 and 355.15.
Section 351.206
    Section 351.206 deals with critical circumstances findings, and is 
little changed from existing Secs. 353.16 and 355.15. However, the 
reader should note that the statutory prerequisites for a finding of 
critical circumstances have changed. See sections 705(a)(2) and 
735(a)(3) of the Act.
Section 351.207
    Section 351.207 deals with the termination of investigations, 
something that typically occurs through a withdrawal of the petition. 
Section 351.207 is based on existing Secs. 353.17 and 355.17, and the 
principal changes are: (1) the last sentence of paragraph (b)(1) 
contains a cross-reference to the statutory and regulatory provisions 
that deal with the treatment in a subsequent investigation of records 
compiled in an investigation in which the petition is withdrawn; and 
(2) paragraph (c) references the Department's authority, pursuant to 
section 782(h)(1) of the Act, to terminate an investigation due to lack 
of interest. As the SAA, at 864, makes clear, the Department's 
authority to carry out a no-interest termination is unaffected by those 
provisions of the statute prohibiting the post-initiation 
reconsideration of industry support for a petition.
Section 351.208
    Section 351.208 deals with suspension agreements and suspended 
investigations, and is based on existing Secs. 353.18 and 355.18. The 
most significant changes reflected in Sec. 351.208 relate to the new 
statutory provisions regarding suspension agreements in regional 
industry cases (paragraphs (f)(1)(ii), (f)(2)(ii), and (f)(3)). In this 
regard, paragraphs (f)(1)(ii) and (f)(2)(ii) address situations in 
which the Commission finds a regional industry in its final 
determination, but not in its preliminary determination. If the 
Commission finds a regional industry in its preliminary determination, 
the Secretary still could accept a regional industry suspension 

[[Page 7316]]
agreement under section 704(l) and section 734(m) of the Act, but the 
procedures and deadlines in paragraphs (f)(1)(i) and (f)(2)(i) would 
apply. In addition, it should be noted that paragraph (f)(2) lists 
some, but not all, of the procedural steps required by the Act with 
respect to the suspension of an investigation.
    In addition, the deadlines for initialling and signing suspension 
agreements have been advanced. Under current practice, consideration of 
a suspension agreement and briefing and drafting of comments in 
preparation for a final determination occur simultaneously, thereby 
creating an enormous burden on parties and on the Department. The 
proposed rule allows parties to propose a suspension agreement within 
15 days of a preliminary antidumping determination, or within 5 days of 
a preliminary countervailing duty determination. In an antidumping 
investigation, parties may also request an extension of the final 
determination. An extension will not affect the time allotted for 
consideration of a suspension agreement, only the time allotted for 
preparation of the final determination. In a countervailing duty 
investigation, the period for consideration of a suspension agreement 
would be expedited because no extension of the final determination is 
possible, unless the investigation is aligned with a companion 
antidumping investigation or an upstream investigation is initiated. 
While the suspension agreement is under consideration, the briefing and 
hearing schedule would be postponed. The proposed timeline will reduce 
burdens on all parties by eliminating the need to file case briefs, 
rebuttal briefs, and to participate in a hearing, if a suspension 
agreement is accepted.
Section 351.209
    Section 351.209 deals with the violation of suspension agreements. 
Although Sec. 351.209 is largely identical to existing Secs. 353.19 and 
355.19, there are a few changes worth noting. First, in several places, 
the term ``a signatory'' has been substituted for ``exporters.'' This 
change from the plural to the singular is intended to clarify that the 
actions of a single signatory can constitute a violation of a 
suspension agreement.
    Second, paragraph (b)(2) provides that if, as a result of a 
violation, the Department resumes a suspended investigation that had 
not been completed under sections 704(g) or 734(g) of the Act, the 
Department may update previously submitted information, where 
appropriate, for purposes of making a final determination. For example, 
if a considerable amount of time has passed since the POI of the 
original investigation or if there have been significant changes in 
market circumstances, it might be inappropriate to make a final 
determination on the basis of dated information. This issue has arisen 
in prior cases, and paragraph (b)(2) is intended to clarify the 
Department's authority to seek updated information in these types of 
situations.
Section 351.210
    Section 351.210 deals with final determinations in investigations, 
and is little changed from existing Secs. 353.20 and 355.20. One change 
worth noting is that because the URAA eliminated the preference for a 
country-wide rate in countervailing duty investigations, Sec. 351.210 
lacks a provision comparable to existing Sec. 355.20(d).
Section 351.211
    Section 351.211 deals with the issuance of antidumping duty and 
countervailing duty orders, and is based on existing Secs. 353.21 and 
355.21. The most significant new provision is paragraph (c), which 
implements sections 706(c) and 736(d) of the Act regarding the coverage 
of orders issued in investigations where the Commission has identified 
a regional industry. Paragraph (c) establishes procedures by which an 
exporter or producer that did not supply the region during the POI may 
be excepted from the assessment of duties.
Section 351.212
    Section 351.212 is new, and deals with matters related to the 
assessment of antidumping and countervailing duties. Although portions 
of Sec. 351.212 are based on provisions of the Department's current 
regulations, other portions are entirely new.
    Paragraph (b) deals with the assessment of duties as the result of 
a review. Paragraph (b)(1) establishes rules regarding the assessment 
of antidumping duties. By way of background, when the Department 
assumed responsibility for the administration of the antidumping law in 
1980, it inherited from its predecessor, the U.S. Customs Service, the 
practice of issuing assessment instructions in the form of so-called 
``master lists.'' Typically, a master list would list each entry (or 
each shipment). Over time, the Department encountered numerous problems 
in creating master lists. For example, because dumping margins are 
calculated on the basis of sales, the creation of a master list 
requires the ability to link each U.S. sale to a corresponding customs 
entry. Frequently, this is an impractical task for both the Department 
and exporters and importers. For example, if sales are made after 
importation, the U.S. affiliate (or consignee) of the foreign exporter 
usually will not maintain records that link each sale to an 
unaffiliated customer to a corresponding customs entry. Similarly, when 
the Department examines sales by a foreign producer to intermediaries 
outside the United States, such as foreign trading companies, the 
producer normally does not have the information that would allow the 
Department to identify the specific customs entries that correspond to 
specific sales to the intermediaries.
    This inability to link sales to entries also has prevented the 
Department from conducting reviews on the basis of merchandise entered 
during a particular review period. Where this type of problem exists, 
the Department has been forced to define review periods on the basis of 
shipments or sales during the period.
    One method of dealing with this problem would be to require 
respondents to maintain records in such a way that sales can be linked 
to entries. However, such a requirement would impose a burden on 
respondents that would be disproportionate to the minor gains in the 
precision of duty assessments, and simply would render an already 
complex process even more complex. Therefore, commercial reality and 
the need to streamline the administration of the antidumping law have 
caused the Department to rely on the use of duty assessment rates 
instead of entry-by-entry master lists. In the interests of clarity and 
predictability, we believe that this practice should be codified in the 
regulations.
    With respect to the use of duty assessment rates, the Department 
believes that, except in unusual situations, we should assess duties on 
subject merchandise entered during each review period. Therefore, 
paragraph (b)(1) provides that the Department normally will calculate a 
duty assessment rate based on sales reviewed, and will apply those 
rates to entries made during the review period. In all cases, this will 
result in the assessment of duties on merchandise entered during the 
review period. To the extent possible, these assessment rates will be 
specific to each importer, because the amount of duties assessed should 
correspond to the degree of dumping reflected in the price paid by each 
importer. Where possible, we will 

[[Page 7317]]
base assessment rates on the entered value of the sales examined in the 
review. If entered values are not available, it may be necessary to use 
unit rates.
    For example, assume that a U.S. importer (affiliated with the 
foreign exporter) sells after importation two different products, A and 
B, both of which are subject to an antidumping order. The Department 
reviews sales totalling 100 tons of product A and 200 tons of product 
B. The entered value of the merchandise during the review period was 
$40 per ton for product A and $30 per ton for product B. The absolute 
dumping margin found for all of the sales was $100. In this example, 
the assessment rate would be 10 percent [($100/($40x100 + $30x100) = 10 
percent]. Put differently, it is the rate of dumping reflected in these 
sales relative to the entered value of the merchandise. We would 
collect antidumping duties on merchandise entered during the review 
period by applying this 10 percent rate to the entered value of each of 
those entries.
    The Department believes that, except in unusual situations, it 
should not abandon the objective of assessing duties on the basis of 
entries, even when it is not possible to precisely link sales to 
entries. In most antidumping proceedings, it is necessary to assess 
duties on the basis of entries in order to maintain continuity with 
periods of no review and to avoid the over- or undercollection of 
duties. Moreover, because we typically cannot link sales to entries, we 
currently have no means of collecting precisely an amount of duties 
equal to the total absolute dumping margin calculated for the sale 
reviewed. This would require exact knowledge, for each importer, as to 
the total quantity or value of unliquidated entries during the review 
period, information that often is difficult or impossible to obtain.
    The Department intends to continue to use master lists in 
situations where there are few shipments, and to assess duties on the 
basis of merchandise sold or shipped if warranted by the pattern of 
imports and sales. We also will evaluate the effect of reconciliation 
entries, which are authorized by the Customs Modernization Act, on the 
duty assessment process, and we may collect duties on the basis of 
merchandise sold or shipped if a reconciliation entry is used.
    Paragraph (b)(2) deals with the assessment of countervailing 
duties, and is consistent with current practice.
    Paragraph (c) deals with the automatic assessment of duties in 
situations where an administrative review of an order under 
Sec. 351.213 is not requested, and is based on existing Secs. 353.22(e) 
and 355.22(g). Paragraph (c)(3) is new, and provides that automatic 
assessment will not occur, even though an administrative review is not 
requested, if the merchandise in question is subject to a new shipper 
review under Sec. 351.214 or an expedited antidumping review under 
Sec. 351.215.
    Paragraph (d) deals with the provisional measures deposit cap, and 
is based on existing Secs. 353.23 and 355.23. The language of paragraph 
(d) has been revised to reflect the new concept of assessment rates in 
paragraph (b). Finally, paragraph (e) deals with interest on over- and 
underpayments of estimated duties, and is little changed from existing 
Secs. 353.24 and 355.24.
Section 351.213
    Section 351.213 deals with administrative reviews under section 
751(a)(1) of the Act. Section 351.213 is based largely on existing 
Secs. 353.22 and 355.22, but certain changes are worth noting.
    Paragraph (c) establishes a new procedure by which the Secretary, 
upon request, may defer the initiation of an administrative review for 
one year. The purpose of this provision is to simplify the review 
process and reduce the burden on all concerned by allowing the 
Department, in effect, to cover two review periods in a single review. 
However, the Secretary will not defer an administrative review if one 
of the parties identified in the regulation objects to deferral.
    Paragraph (d) deals with the rescission (previously referred to as 
``termination'') of administrative reviews, and clarifies that the 
Department may rescind a review that the Secretary self-initiated or in 
which there are no entries, exports, or sales to be reviewed.
    Paragraph (e)(2) codifies existing practice regarding the period of 
review for countervailing duty administrative reviews, and is similar, 
but not identical, to the period covered by investigations under 
Sec. 351.204(b)(2).
    Paragraph (f) deals with the treatment of voluntary respondents in 
administrative reviews, and provides that voluntary respondents will be 
treated in the same manner as in an investigation.
    Paragraph (g) cross-references new Sec. 351.221, a new provision 
which consolidates in one place the procedures to be applied in the 
different types of reviews provided for by the Act.
    Paragraph (h) sets forth deadlines for issuing preliminary and 
final results of administrative reviews, and also provides for 
extensions to those deadlines.
    Paragraph (j) establishes procedures for the analysis of the 
absorption of antidumping duties under section 751(a)(4) of the Act. 
The Department will make a determination regarding duty absorption in 
administrative reviews initiated in the second and fourth years after 
the issuance of an antidumping order. In addition, if an order remains 
in existence following a sunset review under section 751(c) of the Act, 
the Department will make a duty absorption determination in the second 
and fourth years following the Department's determination in the sunset 
review. However, the Department will make a determination regarding 
duty absorption only if a request for such a determination is made 
within 30 days of the initiation of the administrative review. For 
transition orders, reviews initiated in 1996 will be considered 
initiated in the second year and reviews initiated in 1998 will be 
considered initiated in the fourth year.
    Paragraph (k) deals with administrative reviews of countervailing 
duty orders that are conducted on an aggregate basis. Paragraph (k)(1) 
establishes a procedure under which an individual exporter or producer 
may seek a zero rate. This procedure is modeled on Sec. 351.204(e)(3), 
discussed above, which deals with requests for exclusion in 
countervailing duty investigations conducted on an aggregate basis. As 
with requests for exclusion, the Secretary will consider requests for 
zero rates to the extent practicable. Paragraph (k)(2) provides that, 
where an administrative review of a countervailing duty order is 
conducted on an aggregate basis, the country-wide rate calculated in 
such a review, if any, will supersede, for cash-deposit purposes, rates 
calculated in a prior segment of the proceeding, with the exception of 
zero rates determined under paragraph (k)(1).
Section 351.214
    Section 351.214 sets forth the procedures for conducting new 
shipper reviews, a new procedure contained in section 751(a)(2) of the 
Act. This section also establishes a procedure for conducting an 
expedited review of exporters that are not individually examined in 
countervailing duty investigations. Certain features of Sec. 351.214 
merit discussion.
    Paragraph (b) sets forth the procedures for requesting a new 
shipper review. Under paragraphs (b)(1), (b)(2), and (b)(3), the 
requester must provide certifications demonstrating that the 

[[Page 7318]]
party is a bona fide new shipper. The purpose of these certifications 
is to ensure that new shipper status is not achieved through mere 
restructuring of corporate organizations or channels of distribution. 
In accordance with the SAA, at 875, this provision also makes clear 
that parties will not be granted new shipper status merely because they 
were not individually examined during the investigation.
    Paragraph (b)(4) requires the requesting party to document the 
entry date of the shipment which establishes the basis for the new 
shipper review, as well as the date of the first sale to an 
unaffiliated customer in the United States. If the requesting party 
cannot provide such information it may, in the alternative, provide 
documentation establishing the date on which the merchandise was 
shipped. The date of first entry (or the date of shipment) will be used 
to establish the timeliness of the request for a new shipper review 
under Sec. 351.214(c).
    In the case of a countervailing duty order, paragraph (b)(5) 
requires the requesting party to certify that it has informed the 
government of the exporting country that the government will be 
required to provide a full questionnaire response. This requirement is 
intended to put parties on notice that, in a review of a countervailing 
duty order, the party will have to have the cooperation of the 
government. By requiring at the outset a certification that the 
government has been put on notice of the review, the Department hopes 
to minimize situations in which it will be forced to rely upon the 
facts available.
    Paragraph (c) clarifies that a request for a new shipper review 
must be submitted no later than one year after the date of the first 
shipment to the United States. By setting this deadline, the Department 
clarifies that the statute is intended to provide a new shipper an 
opportunity to obtain its own rate on an expedited basis, and not to 
permit shippers to request expedited reviews long after the first 
shipment has taken place.
    Paragraph (d) deals with the time for initiating new shipper 
reviews, and provides an illustrative example. Paragraph (f) permits 
the Secretary to rescind a new shipper review upon the request of the 
new shipper made within 60 days of the initiation of the review. In 
addition, the Secretary may rescind a new shipper review if the 
Secretary concludes that: (i) There were no entries, exports, or sales 
(as appropriate) during the standard period of review for a new shipper 
review, and (ii) an expansion of the standard period to include 
entries, exports, or sales would prevent the timely completion of the 
new shipper review. This might occur, for example, in an antidumping 
proceeding where a new shipper exports merchandise to an affiliated 
U.S. importer, but the importer does not resell the merchandise to an 
unaffiliated U.S. purchaser within the standard period of review. 
Although the Secretary would have the discretion to expand the period 
of review to cover a subsequent resale, if the merchandise has not been 
resold within a reasonable period of time following the end of the 
standard review period, the Secretary could rescind the new shipper 
review. The new shipper still would have the option of requesting a new 
shipper review if and when the merchandise was resold.
    Paragraph (g) deals with the period of review. New shipper reviews 
in antidumping proceedings normally will cover a period of six months 
or one year, depending on whether the review was initiated following 
the anniversary month or the semiannual anniversary month. In a 
countervailing duty proceeding, the period of review will be the same 
as in an administrative review. However, because of the novelty of the 
new shipper review procedure, the period of review may change as the 
Department gains experience in this area. It is the Department's intent 
to apply paragraph (g) in a flexible manner so that the Department may 
expand the standard period of review to cover the first exportation of 
a new shipper, provided that any such expansion of the period of review 
does not prevent the completion of the review within the statutory time 
limits.
    Because new shipper reviews may be requested at any time, but are 
initiated only at six-month intervals, the Department may find that the 
Customs Service has liquidated the relevant entries based upon 
instructions issued under the automatic assessment provisions of 
Sec. 351.212(c). Although the Department may be forced to review 
entries that already have been liquidated, this should not be 
interpreted as a change in the Department's general policy of refusing 
to conduct administrative reviews of liquidated entries.
    Paragraph (h) cross-references section 351.221, which, as discussed 
above, contains procedural rules for the various types of reviews 
conducted by the Department. Here, we should note that under 
Sec. 351.221(b)(6), the results of review will form the basis for the 
assessment of duties on unliquidated entries. Some commentators have 
argued that the Department should exclude a new shipper from an order 
if the Department determines in a new shipper review a zero or de 
minimis rate. The Department has not adopted this suggestion for the 
following reasons. Section 751(a)(2) implements obligations arising 
under both the AD Agreement and the SCM Agreement, but during the 
Uruguay Round negotiations, the subject of new shippers was negotiated 
primarily in connection with the AD Agreement. The negotiating history 
of the AD Agreement indicates that while a proposal was made regarding 
the exclusion from an order of new shippers found to be selling at non-
dumped prices, this proposal was not included in the final AD 
Agreement. Thus, the purpose of the new shipper review procedure merely 
was to provide an expedited review of imports already considered to be 
subject to an order. We note that we invite comment on our proposal to 
change the rules governing revocation, Sec. 351.222, and that these 
rules apply to new shippers.
    Finally, paragraph (j) addresses situations in which a new shipper 
may be subject to more than one review or more than one request for 
review. For example, a new shipper might request a new shipper review 
notwithstanding the fact that the new shipper is already subject to an 
administrative review under Sec. 351.213. To minimize the potential for 
confusion and to conserve administrative resources, paragraph (j) 
permits the Department to terminate a review, in whole or in part, 
including a new shipper review. Paragraph (j) also would permit the 
Department to conduct an administrative review under Sec. 351.213 of 
less than the normal one year review period. Paragraph (j) also permits 
the Department to conduct a new shipper review concurrently with an 
administrative review under section 351.213, if the new shipper is 
willing to waive the time limits for a new shipper review set forth in 
paragraph (i). If a new shipper waives the time limits, all other 
provisions of Sec. 351.214, including the bonding provision of 
paragraph (e), will continue to apply for the duration of the new 
shipper review.
    To implement Article 19.3 of the SCM Agreement, paragraph (k) 
expands the new shipper review procedure to cover exporters that were 
not individually examined in a countervailing duty investigation where 
the Secretary limited the investigation under section 777A(e)(2)(A) of 
the Act. There are a few important differences between this procedure 
and the procedure for a regular new shipper review. First, to allow the 
Department to manage its limited resources efficiently, a 
noninvestigated exporter desiring an 

[[Page 7319]]
expedited review must file a request within 30 days of the publication 
of a countervailing duty order. This is a reasonable time limit, 
because a noninvestigated exporter will be aware of its status long 
before an order is published. Second, because the noninvestigated 
exporter does not qualify as a new shipper, the Secretary will not 
permit a bond to be substituted for a cash deposit of estimated duties.
Section 351.215
    Section 351.215 deals with expedited antidumping reviews under 
section 736(c) of the Act. But for stylistic and formatting changes, 
section 351.215 is unchanged from existing Sec. 353.22(g).
Section 351.216
    Section 351.216 deals with changed circumstances reviews under 
section 751(b) of the Act. Again, except for stylistic and formatting 
changes, this provision is unchanged from existing Secs. 353.22(f) and 
355.22(h).
Section 351.217
    Section 351.217 deals with reviews under section 751(g) of the Act. 
Section 751(g) establishes a mechanism for reviewing a countervailing 
duty order to take account of the outcome of a subsidies-related WTO 
dispute.
Section 351.218
    Section 351.218 deals with sunset reviews under section 751(c) of 
the Act. In accordance with section 751(c), paragraph (c) provides that 
the Department will publish a notice of initiation no later than 30 
days before the fifth anniversary date of an order or suspended 
investigation. As described in the SAA, at 882, the Department may 
initiate a sunset review at an earlier date, at the request of a 
domestic interested party. The purpose of this provision is to enable 
the Commission to conduct a cumulative injury analysis. However, if the 
Department determines that the party requesting an early sunset review 
is related to a foreign exporter or producer or is an importer (or is 
related to an importer) within the meaning of section 771(4)(B) of the 
Act and Sec. 351.203(e)(4), the Department may decline such a request.
    With respect to sunset reviews, the Department would like to remind 
parties that section 751(c)(3)(A) of the Act requires the Department to 
make a final sunset determination within 90 days of the notice of 
initiation if no domestic interested party responds to the notice of 
initiation. Therefore, once the Department publishes a notice of 
initiation of a sunset review, parties will receive no further notice 
of the review unless and until they provide such information.
Section 351.219
    Section 351.219 deals with section 753 of the Act. In general, 
section 753 of the Act provides a mechanism for providing an injury 
test in the case of countervailing duty orders that (i) pertain to a 
Subsidies Agreement country, and (ii) were issued under section 303 of 
the Act without an injury test. Under section 753, upon request, the 
Commission will conduct an investigation to determine if a U.S. 
industry is likely to be materially injured if a countervailing duty 
order is revoked. If the Commission's determination is negative, or if 
no request for an investigation is received, the Department will revoke 
the order.
    Section 351.219 differs from Sec. 355.40, which the Department 
issued as an interim-final rule on May 11, 1995 (60 FR 25130, 25139). 
The principal change is that we have eliminated provisions that merely 
repeated the language of section 753. However, consistent with the SAA, 
at 942-943, paragraph (b) continues to provide that the Secretary will 
notify domestic interested parties as soon as possible after the 
opportunity for requesting a section 753 investigation arises.
Section 351.220
    Section 351.220 deals with reviews conducted at the request of the 
President under section 762 of the Act. But for stylistic and 
formatting changes, Sec. 351.220 is unchanged from existing 
Sec. 355.22(i).
Section 351.221
    Section 351.221 consolidates in one section the procedural actions 
that the Department will take with respect to the various types of 
reviews provided for under the Act. Paragraph (b) is in the nature of a 
generic provision, and is based on existing Secs. 353.22(c) and 
355.22(c). Paragraph (c) contains special rules for particular types of 
reviews.
Section 351.222
    Section 351.222 deals with the revocation of orders and termination 
of suspended investigations.
    Paragraph (b), which deals with revocation or termination based on 
the absence of dumping, is substantively unchanged from existing 
Sec. 353.25(a). Paragraph (c) retains the current requirements (found 
in Sec. 355.25(a)) for revocation or termination based on the absence 
of countervailable subsidies. As provided in Sec. 351.213(e) and 
Sec. 351.204(d), the Department generally will not consider voluntary 
respondents in an administrative review of a countervailing duty order 
that is conducted on an aggregate basis under section 777A(e)(2)(B) of 
the Act. However, the requirements for a company-specific revocation 
set forth in paragraph (c)(3) may be satisfied in a proceeding 
conducted on an aggregate basis by the submission of certifications 
that the company received zero or de minimis countervailable subsidies. 
See Sec. 351.222(e)(2)(iii). As in the case of exclusions, the 
Department is considering whether there should be separate revocation 
rules for firms, such as trading companies, that sell, but do not 
produce, subject merchandise. One alternative would be to limit the 
revocation of a non-producing exporter to subject merchandise produced 
by those producers that supplied the exporter prior to revocation. 
However, before issuing final rules, the Department is interested in 
receiving additional public comments regarding this issue.
    Under the current regulations, a company must have been the subject 
of three (or, in a countervailing duty proceeding, five) consecutive 
administrative reviews in order to qualify for a company-specific 
revocation. One consequence of this policy is that it forces companies 
to request administrative reviews that they might not otherwise 
request, thereby needlessly adding to the Department's workload.
    In an attempt to reduce the administrative burden on parties and 
Department personnel, while at the same time maintaining our current 
policy that there must be a consistent pattern of no dumping or 
subsidization before we will consider revocation, paragraph (d) 
eliminates the requirement that the Department actually conduct a 
review in each of the three (or five) years before revocation. Instead, 
the Department will require that reviews of the first and last years of 
the three- or five-year period demonstrate an absence of dumping or 
subsidization. In other words, the Department would be able to revoke 
an order (or terminate a suspended investigation), despite the fact 
that an administrative review may not have been conducted for one or 
more of the intervening years, as long as the cash deposit rate in the 
end review years was zero. The Department reasons that if a review of 
the first year establishes an absence of dumping or countervailable 
subsidies, the lack of a request for reviews of subsequent years by 
domestic interested parties is sufficient to establish the continued 
absence of dumping or countervailable subsidies 

[[Page 7320]]
during those years. However, to ensure that the lack of requests for 
reviews is not simply due to the absence of imports in commercial 
quantities, the Department will require a certification from a company 
seeking revocation (or each signatory in the case of a suspended 
investigation) that it sold subject merchandise to the United States in 
commercial quantities in each of the three (or five) years, including 
any unreviewed intervening years. The Department will establish whether 
sales were made in commercial quantities based upon examination of the 
normal sizes of sales by the producer/exporter and other producers of 
subject merchandise. In deciding commercial quantities, the Department 
will consider natural disasters and other unusual occurrences which 
might affect the potential for production or exportation.
    Paragraph (e) retains the procedures currently found in 
Secs. 353.25(b) and 355.25(b) regarding requests for revocation and 
termination based on the results of administrative reviews. One change 
is that in a countervailing duty proceeding, paragraph (e)(2)(iii) 
requires that, along with the certification that the person has 
received no net countervailable subsidy for five consecutive years, the 
person must submit a calculation demonstrating the basis for the 
conclusion that the person received no net countervailable subsidy in 
the fifth year. This calculation should be based on methodologies used 
by the Department in the most recently completed segment of a 
proceeding. The Department will review this calculation, and will 
notify the person if the Department identifies a methodological or 
other error, the correction of which may reveal a net countervailable 
subsidy that is above de minimis for that year. In addition, to conform 
to the changes in paragraph (d) regarding unreviewed intervening years, 
the requester must provide certifications regarding sales to the United 
States in commercial quantities.
    Paragraph (g) deals with revocations and terminations based on 
changed circumstances reviews, and is almost identical to prior 
sections 353.25(d) and 355.25(d). The one substantive change is that, 
in light of the new sunset review procedure under section 751(c) of the 
Act, we have eliminated the prior ``sunset revocation'' procedure based 
on the absence of requests for administrative reviews.
    Paragraphs (h) through (i) deal with revocations and terminations 
based on other review procedures, such as changed circumstances reviews 
by the Commission and sunset reviews by the Department and the 
Commission.
    Paragraph (m) is a transition rule designed to account for the fact 
that the URAA altered the substantive rules for determining when 
merchandise is fairly traded under the Act. Essentially, for purposes 
of satisfying the three- and five-year requirements for revocation or 
termination, paragraph (m) gives a company or foreign government credit 
for the absence of dumping or countervailable subsidies during years to 
which the pre-URAA version of the Act applies. For example, in the case 
of a particular company, if, under the transition rules of section 
291(a)(2) of the URAA, there were two administrative reviews showing 
two years of no sales at less than foreign market value (under the pre-
URAA version of the Act) and one year of no sales at less than normal 
value (under the Act as amended by the URAA), the company would be 
deemed to have satisfied the three-year requirement for revocation.
Section 351.223
    Section 351.223 deals with the procedures for requesting and 
initiating a downstream product monitoring program under section 780 of 
the Act. There are no substantive changes from existing Sec. 353.27.
Section 351.224
    Section 351.224 deals with the disclosure of calculations and 
procedures for the correction of ministerial errors. Section 351.224 is 
based on existing Secs. 353.20(e), 355.20(h), 353.28, and 355.28, and 
on proposed regulations concerning the correction of significant 
ministerial errors in preliminary determinations in antidumping and 
countervailing duty investigations (see Notice of Proposed Rulemaking 
and Request for Public Comments, 57 FR 1131 (January 10, 1992) 
(Proposed Regulations)). However, section 351.224 contains numerous 
changes intended to streamline the disclosure and ministerial error 
correction process.
    The principal goal of these changes is to provide for the issuance 
of a correction notice normally within 30 days after the date of public 
announcement of the preliminary or final determination or final results 
of review. The date of public announcement is the date on which the 
signed determination or results of review is first made available to 
interested parties. This goal is consistent with the proposal from a 
number of commentators that the Department should respond to 
ministerial error allegations prior to the date when a summons must be 
filed with the Court of International Trade or when a notice of intent 
to commence panel review must be filed with the NAFTA Secretariat. This 
30-day framework is intended to avert needless litigation by allowing 
parties sufficient time to review the correction notice before the 
litigation deadline arrives.
    Paragraph (b), which deals with disclosure, has been revised from 
the existing and proposed regulations to eliminate the requirement that 
a party to the proceeding request disclosure. Instead, paragraph (b) 
provides for automatic disclosure normally within five days after the 
date of public announcement of the preliminary or final determination 
or final results of review. In this context, disclosure refers both to 
the release of disclosure documents and to the holding of a disclosure 
meeting. In this regard, because paragraph (c)(1) provides that 
comments concerning ministerial errors must be filed within five days 
after the earlier of the date of the release of the disclosure 
documents or the date of the disclosure meeting, parties are advised to 
schedule disclosure meetings as early as possible. One commentator 
proposed that there be at least five days between the release of 
disclosure materials and the disclosure meeting. Due to the time 
constraints of the 30-day framework, however, the Department normally 
will not be able to extend the disclosure and comment process.
    Paragraph (b) also provides for disclosure normally within 10 days 
after the date of public announcement of the preliminary results of 
review. Although, as discussed below, the Department will not amend a 
preliminary results of review to correct a ministerial error, the 
Department believes that prompt disclosure will assist parties in the 
preparation of any case brief and in determining whether to request a 
hearing. In either an investigation or a review, parties that do not 
want to receive disclosure materials or to have a disclosure meeting 
should inform the Department promptly.
    A number of commentators proposed that as part of disclosure, the 
Department provide the computer program on diskette. The Department 
intends to accommodate this proposal, where practicable, upon request 
from a party. The Department may charge a nominal fee for providing a 
copy of the computer program on diskette.
    We also should note that paragraph (b) provides for disclosure only 
if the Secretary has performed calculations. For example, in certain 
types of reviews, such as a sunset review or an Article 4/Article 7 
review, the Department may not calculate dumping margins or 

[[Page 7321]]
countervailable subsidy rates, but instead might only make a judgment 
as to whether an order should remain in effect. In such instances, the 
final results of review would contain a full statement of the 
Department's legal and factual conclusions, and there would be nothing 
further to ``disclose.''
    Paragraph (c)(2) establishes the time limits for filing comments 
concerning ministerial errors. Specifically, a party to the proceeding 
must file comments not later than five days after the earlier of (i) 
the date of release of disclosure documents to that party, or (ii) the 
date of the disclosure meeting with that party. With respect to a 
preliminary determination in an investigation, a party may submit only 
comments concerning a significant ministerial error as defined in 
paragraph (g). With respect to a final determination in an 
investigation or a final results of review, a party may submit comments 
concerning any ministerial error as defined in paragraph (f). One 
commentator proposed that the Department establish regulations for the 
correction of ministerial errors made in a preliminary results of 
review. The Department does not believe that such regulations would be 
appropriate. Unlike a preliminary determination in an investigation, 
which may result in the suspension of liquidation and the imposition of 
provisional measures, a preliminary results of review has no immediate 
legal consequence. As a result, a more judicious use of Department 
resources is to correct any ministerial errors made in a preliminary 
results of review in the final results. See Proposed Regulations at 
1132.
    Paragraph (c)(3) establishes the time limits for filing replies to 
comments. Specifically, replies to comments must be filed not later 
than five days after the date on which such comments are made. One 
commentator suggested eliminating replies to comments because alleged 
ministerial errors should be indisputable. While it is often the case 
that a ministerial error is obvious, there are instances where the 
``ministerial'' nature of an error or the impact of an error is in 
dispute. In these instances, parties' replies aid the Department in 
analyzing the allegation. There is an exception for replies to comments 
in connection with a significant ministerial error in a preliminary 
determination. Because of greater time constraints due, in part, to the 
fact that Department personnel conduct verification soon after the 
announcement of a preliminary determination, the Department will not 
consider replies to comments in a preliminary determination. Any reply 
that a party wishes to make should be included in that party's case 
brief so that the Department may address the reply in its final 
determination.
    Paragraph (c)(4) deals with the extension of the time limit for 
filing comments concerning a ministerial error in a final determination 
or a final results of review. A party may file a written request 
showing good cause for extension within three days after the date of 
the public announcement of a final determination or a final results of 
review. The Department will not grant an extension of the time limit 
for filing comments on a significant ministerial error in a preliminary 
determination. Although the Department normally has 30 days in which to 
announce the issuance of a correction notice, the time frame for 
analyzing significant ministerial errors allegations in a preliminary 
determination is, as explained above, more constrained. As noted 
previously, a party has the opportunity to raise a ministerial error 
allegation in its case brief for consideration in the final 
determination or final results of review.
    Some commentators suggested that domestic interested parties be 
allowed more time to file comments on ministerial errors because these 
parties have more material to review than respondents. The Department 
does not believe that it is appropriate to distinguish between domestic 
interested parties and respondents in this fashion. However, the fact 
that a domestic interested party intends to file ministerial error 
comments on a large number of respondents may provide good cause for an 
extension of the time to file comments. The Department will make such 
extension decisions on a case-by-case basis, taking into consideration 
the intended 30-day framework for addressing ministerial error 
allegations.
    Paragraph (d) deals with the contents of comments and replies. In 
order for the Department to complete its analysis of alleged 
ministerial errors within the 30-day framework, comments must reference 
specific evidence in the official record to explain the alleged 
ministerial error and must present the appropriate correction. In 
addition, comments concerning an alleged significant ministerial error 
in a preliminary determination must demonstrate how the alleged 
ministerial error is significant by illustrating the effect of the 
error on the weighted-average dumping margin or countervailable subsidy 
rate. One commentator proposed that parties be allowed to submit 
factual information past the appropriate time limits if the information 
is needed to show or deny the existence of ministerial errors. The 
Department has not adopted this proposal. Based on the definition of 
ministerial error as set forth in paragraph (f), whether something 
qualifies as a ministerial error should be discernable from evidence 
already on the official record. Paragraph (d) also requires that 
replies to any comments be limited to issues raised in such comments.
    Paragraph (e) deals with the analysis of any comments received and 
the announcement of the issuance of a correction notice (normally not 
later than 30 days after the date of public announcement of the 
Department's preliminary or final determination or final results of 
review). As discussed above, the 30-day framework is intended to avoid 
needless litigation by providing for resolution of ministerial error 
allegations before the litigation deadline expires.
    Paragraph (f) defines ministerial error and is largely unchanged 
from existing Secs. 353.28(d) and 355.28(d).
    Paragraph (g) defines significant ministerial error and essentially 
is unchanged from proposed Secs.  353.15(g)(4) and 355.15(h)(4). See 
Proposed Regulations at 1133-34. A number of commentators proposed 
setting a flat rate as a benchmark for ``significant.'' These proposed 
rates were lower than the standard for ``significant'' originally set 
out in the Proposed Regulations and incorporated herein. The Department 
believes that it would not be appropriate to lower the significant 
ministerial error standard. In establishing this standard, which, as a 
matter of administrative practice, the Department has applied 
successfully for several years, the Department had to balance the 
competing interests of accurate preliminary determinations and the need 
to complete the investigation in a timely manner. The Department has 
determined that the current standard allows it to correct the most 
serious errors promptly, while also permitting it to complete 
verification and issue a timely final determination. Moreover, the 
Department encourages parties, in their case briefs, to comment on all 
ministerial errors, including those not meeting the ``significant'' 
standard; all such errors will be addressed in the final determination.
Section 351.225
    Section 351.225 deals with scope rulings, including rulings 
involving circumvention. With a few exceptions, section 351.225 is 
substantively unchanged from existing Secs. 353.29 and 355.29, but 
paragraphs (b) through (f) do 

[[Page 7322]]
contain some clarifications regarding procedures. Among other things, 
these clarifications are intended to make clear that the Department 
may, if appropriate, make a scope ruling based solely upon the 
application and prior determinations. Only if the Department determines 
that further inquiry is warranted will it formally initiate a scope 
inquiry. One other change worth noting is that paragraph (f)(5) 
establishes a 300-day deadline for scope rulings to which the 
Department will adhere to the extent practicable.
    Paragraphs (g) and (h) incorporate by reference sections 781(a) and 
(b) of the Act. Several commentators argued that the standard for 
determining whether the process of assembly or completion under these 
sections of the Act was minor or insignificant had not changed from 
prior law. However, as observed by other commentators, the Senate 
Report states that, ``section 230 [of the URAA] amends section 781(a) 
and (b) to shift the focus of the circumvention inquiry away from a 
test of the difference in value between the subject merchandise and the 
imported parts or components toward the nature of the process performed 
in the United States or third country.'' S. Rep. 103-412, 103d Cong, 2d 
Sess., at 81.
    Paragraphs (g) and (h) require the Department, in determining the 
value of parts or components purchased from affiliated parties, to 
apply the major input rule of section 773(f)(3) of the Act. Several 
commentators argued that such a provision is necessary to avoid the use 
of distorted values between affiliated parties. The Department agrees 
that such a provision is consistent with the Department's policy of 
avoiding the use of distortive prices paid to affiliated parties in its 
calculations.
    Several commentators also argued that the Department should 
establish numeric guidelines for determining whether the value of 
imported parts or components constitutes a ``significant portion of the 
total value of the merchandise'' within the meaning of sections 
781(a)(1)(D) and (b)(1)(D) of the Act. We have not adopted this 
suggestion, because the SAA recognizes that no single standard would be 
appropriate for every product examined by the Department. The SAA, at 
894, states, ``[t]hese provisions do not establish rigid numerical 
standards for determining the significance of the assembly (or 
completion) activities in the United States or for determining the 
significance of the value of the imported parts or components.''
    One commentator argued that the term ``class or kind'' as used in 
section 781(a) and (b) of the Act should be construed to encompass more 
than merely the category of merchandise covered by an order. 
Specifically, this commentator argued that, for purposes of 
circumvention inquiries, the term ``class or kind'' should always 
include components or parts. The Department agrees with other 
commentators, however, who argued that the term ``class or kind'' in 
the circumvention context is not broader than the merchandise covered 
by an order for other purposes of the statute.
    Paragraph (k) adds advertisement or display to the criteria that 
the Department uses to determine whether a product is within the scope 
of an antidumping duty or countervailing duty order. Although this 
criterion was not previously specified in the regulations, the courts 
have recognized that it is a factor that should be considered. See 
Kyowa Gas Chem. Indus. v. United States, 582 F. Supp. 887, 889 (CIT 
1984). One commentator urged the Department to add ``substitutability'' 
to the criteria. However, the Department believes that such a criterion 
would add significant uncertainty to the Department's orders, because 
it implies that an order could be expanded to include many products not 
contemplated in the petition (for example ``substitutability'' could be 
cited to expand an order covering honey to include sugar, corn syrup 
and molasses).
    Paragraph (l) sets forth the procedures for suspension of 
liquidation. One party argued that the Department should order the 
suspension of liquidation as soon as a circumvention inquiry is 
initiated and impose cash deposits retroactively if the final 
circumvention determination is affirmative. While the Department 
recognizes that parties may have a ``free ride'' by circumventing until 
caught, the proposal would punish unfairly parties who unknowingly 
circumvent an order. The statute does not require a finding of intent 
in order to make an affirmative circumvention determination. Moreover, 
the Department agrees with commentators who argued that this proposal 
would create tremendous business uncertainty and impose a heavy burden 
on the Department and on Customs.
    Paragraph (l)(4) provides that, when a final scope ruling is made 
within 90 days of the initiation of a review, products covered by that 
decision will be included in the calculation of any dumping margin or 
countervailing duty rate in that review, where practicable. If the 
ruling is made after that date, entries of the product will be subject 
to the final results of review, but, because collection of information 
is not practicable after this date, the Department will rely on non-
adverse facts available.
    New paragraph (m) provides that if different orders relate to the 
same product, the Department may, under appropriate circumstances, 
conduct a single scope inquiry covering all such orders. Thus, for 
example, if there is an antidumping duty order on widgets from Germany, 
and a countervailing duty order on widgets from France, the Department 
may conduct a single inquiry under paragraph (i) (minor alterations), 
(l) (later developed products) or (k) (other scope determinations). Any 
final ruling resulting from the inquiry would apply to both orders. In 
this way the Department will avoid both the burden of redundant 
inquiries and the danger of inconsistent determinations.
    Finally, paragraph (n) deals with the service requirements for 
scope inquiries. Paragraph (n) defines the term ``scope service list'' 
as used throughout section 351.225 to include all parties who have 
participated in any segment of the proceeding. This broad service list 
is necessary because scope rulings are not often limited to the 
specific parties raising the issue, but rather affect all domestic and 
respondent interested parties.
    Two commentators argued that the Department should look to Customs 
rulings in determining the country of origin of merchandise. The 
Department agrees that a Customs ruling may provide useful guidance; 
however, as recognized by the CIT, the Department is not required to 
follow Customs rulings in making its own scope rulings. Diversified 
Products v. United States, 572 F. Supp. 883, 887-88 (1983).

Other Issues

    One commentator suggested that the Department publish in the 
Federal Register its ``remand determinations''; i.e., the 
determinations the Department makes in response to a remand order from 
a court or a NAFTA binational panel. We have not adopted this 
suggestion at this time, because it is expensive to publish documents 
in the Federal Register and because the Department's current practice 
is to make remand determinations available to the public on request 
(with business proprietary information deleted, of course). However, to 
the extent that parties experience difficulties in obtaining copies of 
remand determinations, the Department will consider this suggestion as 
well as other alternatives, such as making these and other documents 
available on the Internet. 

[[Page 7323]]

    Some commentators have expressed the view that industrial users of 
products under antidumping or countervailing duty orders should have an 
opportunity to demonstrate that certain products are not available 
domestically, that continued inclusion of such products within an order 
does not serve the purpose of the law, and that, if the petitioners 
fail to show that the material is available domestically, the order 
should be revoked or narrowed with respect to those certain products. 
We are not proposing changes to the rules in this area because the 
existing practices have been adequate to address valid concerns. The 
clarification of investigations in their early stages to avoid later 
supply problems, and the narrowing of existing orders through changed 
circumstances proceedings has resulted in exclusion of a number of 
products not made in the United States, in direct response to supply 
concerns expressed by industrial users. Suggestions as to the use of 
existing authority for this purpose would be appropriate.

Subpart C--Information and Argument

    Subpart C deals with collection of information and presentation of 
arguments to the Department, and is based on subpart C of Parts 353 and 
355 of the Department's existing regulations. In addition to the 
regulatory changes noted in this section, the Department is also in the 
process of introducing other procedural reforms to streamline and 
simplify antidumping and countervailing duty proceedings. Where these 
reforms require regulatory change or are appropriately contained in 
regulations, they are included here. Other non-regulatory 
simplification measures will be introduced in Policy Bulletins and 
through Department procedures. Non-regulatory changes include (1) 
providing greater consistency in the handling of draft and newly-filed 
petitions by having, to the extent practicable, the same Department 
personnel initiate and conduct the investigation that reviewed the 
original petition; and (2) making available on the Internet all 
Department determinations under the URAA, as well as the URAA itself, 
the Statement of Administrative Action, and these regulations. The 
process of simplification is ongoing and one in which the Department 
continues to invite suggestions.
Section 351.301
    Section 351.301 sets forth the time limits for submission of 
factual information in investigations and reviews.
    Paragraph (b) is based on existing Secs. 353.31(a)(1) and 
355.31(a)(1), and sets forth the time limits in general for submission 
of factual information. Several commentators suggested that the 
Department adopt regulations establishing a final deadline of seven 
days prior to verification for the submission of information, whether 
solicited or unsolicited. Another commentator suggested a deadline of 
14 days prior to verification. The Department believes that the seven-
day deadline appropriately balances the needs of the Department to 
prepare for verification with the goal of easing the burdens on parties 
appearing before the Department. Therefore, paragraph (b)(1) provides 
that, with respect to investigations, submission of factual information 
is due no later than seven days before the date on which verification 
of any person is scheduled to commence. The timing of submission of 
factual information under existing Secs. 353.31(a)(1)(i) and 
355.31(a)(1)(i) also is tied to verification. However, there has been 
some confusion over the deadline as parties variously interpreted 
``verification'' to mean a company-specific verification or 
verification for any company (or, in a CVD proceeding, verification of 
the government). In furtherance of the goal of simplifying the 
Department's procedures, these regulations clarify that the deadline 
for submission of factual information is identical for all parties, 
i.e., seven days before the date on which verification of any person is 
scheduled to commence. (In contrast, the deadline for submission of 
factual information after verification, for reasons discussed below, is 
company- or government-specific.)
    With respect to administrative reviews, paragraph (b)(2) provides 
that submission of factual information is due no later than 140 days 
after the last day of the anniversary month. With respect to changed 
circumstances, sunset, and section 762 (quantitative restriction 
agreements) reviews, paragraph (b)(3) provides that submission of 
factual information is due no later than 140 days after the publication 
of notice of initiation of the review. With respect to new shipper 
reviews, new paragraph (b)(4) provides that submission of factual 
information is due no later than 100 days after the publication of 
notice of initiation of the review. With respect to the remaining types 
of reviews, paragraph (b)(5) provides for submission of factual 
information by a date specified by the Department.
    One commentator proposed that, once the deadline for submissions 
prior to verification has passed, the Department should not allow for 
submission of any corrections at verification. The Department has not 
adopted this proposal. The Department's current practice allows 
respondents to submit information at the beginning of verification to 
correct errors found during the course of preparing for verification. 
This policy balances the requirement that respondents present accurate 
and timely responses, with the goal of accurate determinations. Cf. 
Murata Mfg. Co. v. United States, 820 F. Supp. 603, 607 (CIT 1993) with 
NSK Ltd. v. United States, 798 F. Supp. 721 (CIT 1992), aff'd, 996 F.2d 
1236 (Fed. Cir. 1993). The regulations make clear that the Department 
will continue this practice, as well as the practice of allowing 
respondents to submit information after verification where the 
Department has requested such information. Specifically, paragraphs 
(b)(1)-(4) provide that where verification is scheduled for a person, 
factual information requested by verifying officials will be due no 
later than seven days after the date on which the verification of that 
person is completed. This practice promotes accuracy and completeness 
in the calculation of margins (rates), both of which are underlying 
objectives of the new facts available methodology. Furthermore, the 
SAA, at 868, notes that the Department is not precluded from requesting 
information, in addition to that set forth in the verification outline, 
during a verification.
    New paragraph (c) sets for the time limits for certain submissions, 
including information to rebut, clarify, or correct factual information 
submitted by another party, information in questionnaire responses, and 
publicly available information to obtain values for factors in 
nonmarket economy cases.
    Paragraph (c)(1) is based on existing Secs. 353.31(a)(2) and 
355.31(a)(2), and provides the time limits for when an interested party 
may submit factual information to rebut, clarify, or correct factual 
information submitted by any other interested party. The existing 
regulations allow only domestic interested parties to rebut, clarify, 
or correct factual information submitted by respondent interested 
parties. The regulation was drafted this way to allow domestic 
interested parties time to comment on respondents' information, 
particularly where such information may have been submitted on or after 
the applicable deadline. Upon further consideration, the Department has 
determined that the goal of accurate determinations is enhanced by 
allowing any interested party time to comment on submissions of factual 
information. As a result, paragraph (c)(1) provides that 

[[Page 7324]]
any interested party may submit factual information to rebut, clarify, 
or correct factual information submitted by any other interested party 
at any time prior to the applicable deadline for submission of factual 
information. If factual information is submitted (with the Department's 
permission) after the applicable deadline, interested parties have 10 
days to comment on such information. This 10-day period, however, does 
not allow interested parties to continue to comment indefinitely on an 
alternating 10-day cycle. Rather, if the applicable deadline for 
submission of factual information has passed, interested parties would 
have one opportunity to comment on each such submission.
    Paragraph (c)(2) deals with questionnaire responses and other 
submissions on request, and is based on existing Secs. 353.31(b) and 
355.31(b). Paragraph (c)(2)(i) provides that the Department may request 
any person to submit factual information at any time during a 
proceeding. Paragraph (c)(2)(ii) is new, and incorporates the 
requirements of the SAA, at 869, that the Department give notice of 
certain requirements to each interested party from whom the Department 
requests information.
    Paragraph (c)(2)(iii) is new, and incorporates the requirements of 
the SAA, at 866, that interested parties shall have at least 30 days 
from the date of receipt to respond to the full initial questionnaire. 
The time limit for response to individual sections of the 
questionnaire, if the Secretary requests a separate response to such 
sections, may be less than the 30 days allotted for response to the 
full questionnaire. In particular, the Department anticipates that the 
response to Section A of a questionnaire, which seeks general 
information about a company, will be due before the expiration of the 
30-day period. The Department's ability to timely identify appropriate 
respondents, in particular, would be hampered were the Department to 
delay the deadline for submission of this information. Consistent with 
the SAA, at 866, paragraph (c)(2)(iii) also provides that the ``date of 
receipt'' will be seven days from the date on which the initial 
questionnaire was transmitted.
    Paragraph (c)(2)(iv) is new, and provides a 14-day deadline for 
notification by an interested party, under section 782(c)(1) of the 
Act, of difficulties in submitting a questionnaire response. Section 
782(c)(1) of the Act provides that, if promptly asked to do so by an 
interested party, the Department may modify its requests for 
information to avoid imposing an unreasonable burden on that party. The 
statute also provides that the Department will take into account 
difficulties experienced by interested parties, particularly small 
companies, in supplying information, and will provide any assistance 
that is practicable. One commentator suggested that petitioners be 
allowed to comment formally on requests by respondents that the 
Department modify information requests. Parties do have the right 
generally to submit comments on any relevant issue, and, as such, the 
Department does not believe that a special regulation addressing this 
issue is necessary. Another commentator proposed defining ``small 
companies'' to whom the Department would provide assistance using an 
objective criterion, such as a company's annual sales volume (e.g., 
small companies are those that earn less than $1 million in annual 
gross revenue). The Department does not believe that it is in a 
position to define ``small companies'' at this juncture. The Department 
will make a determination of what is a small company on a case-by-case 
basis.
    Paragraph (c)(2)(v) is new, and, consistent with the SAA, at 866, 
indicates that a respondent interested party may request that the 
Department conduct a questionnaire presentation, during which 
Department officials will explain the requirements of the 
questionnaire.
    Paragraph (c)(3) is new and extends the time limits for submission 
of publicly available information to obtain values for factors in 
nonmarket economy cases. Because publicly available valuation data is 
not verified, the Department is able to accept such data after 
verification. The extended time limits, therefore, permit parties to 
submit publicly available information even after a preliminary 
determination or a preliminary results of review, but still allow 
parties ample opportunity to comment on such information in their case 
briefs.
    Paragraph (d) sets the time limits for certain allegations, 
including allegations concerning market viability, allegations of sales 
at prices below the cost of production, countervailable subsidy 
allegations, and upstream subsidy allegations.
    Paragraph (d)(2) is new, and sets the time limits in investigations 
and reviews for allegations of sales at prices below the cost of 
production (COP) under section 773(b) of the Act.
    The Department received a number of comments regarding the 
``reasonable grounds'' threshold for initiation of COP investigations. 
Some commentators argued for consideration of sales below cost 
allegations on a country-wide basis. Other commentators suggested that 
the Department's regulations provide that where sales below cost 
allegations are not submitted until after respondents have provided 
questionnaire data, the allegations must be based on information 
specific to the exporter or producer.
    The Department agrees with the latter commentators that where 
company-specific information has been placed on the record, any 
subsequent sales below cost allegation must take into consideration 
such information. The SAA, at 833, states that the standard for 
initiation of a sales below cost investigation is the same as the 
standard for initiating an antidumping investigation. The Department 
interprets this to mean that a sales below cost allegation, like an 
allegation of dumping, must be supported by information reasonably 
available to petitioner, including information already on the record.
    The Department also, however, agrees with the former commentators 
that the SAA does provide for consideration of a sales below cost 
allegation on a country-wide basis. The Department's practice under the 
existing regulations only allows for company-specific allegations based 
on company-specific data. (In some instances, petitioners have used 
their own data where certain company-specific information was 
unavailable.) In practice, this meant that petitioners did not file 
sales below costs allegations until after companies filed their Section 
B responses covering home market sales data. As a result, in many 
instances the Department was unable to request and receive companies' 
cost data in time to analyze it before the preliminary determination. 
Pursuant to the SAA, at 833-34, however, the Department now has the 
authority to consider sales below cost allegations on a country-wide 
basis. In most instances, considering a country-wide allegation at the 
outset of an investigation will allow the Department to include its 
below-cost analysis in the preliminary determination, and, hence, 
consistent with the SAA, at 833-34, will provide parties with a greater 
opportunity to comment on the Department's analysis.
    Therefore, with respect to country-wide allegations, paragraph 
(d)(2)(i)(A) allows the petitioner to file such an allegation in an 
investigation up until 20 days after the date on which the initial 
questionnaire was transmitted. Consistent with the SAA, at 833, this 
time frame will permit the Department to initiate below cost inquiries, 
where appropriate, at the outset of the case. In addition, the 20-day 
deadline--one day 

[[Page 7325]]
before Section A responses normally are due--provides petitioners with 
the maximum time available to make a country-wide allegation before 
company-specific data is filed by respondent interested parties.
    With respect to company-specific allegations, paragraph 
(d)(2)(i)(B) provides for filing such allegations in an investigation 
up to 20 days after a respondent interested party files a response to 
the relevant section of the questionnaire; i.e., the Section B response 
containing home market sales data. The time limit, under paragraph 
(d)(2)(ii), for filing company-specific sales below cost allegations in 
administrative reviews, new shipper reviews, and changed circumstances 
reviews is identical. Paragraph (d)(2)(iii) provides the time limit for 
filing company-specific sales below cost allegations in expedited 
antidumping reviews.
    A number of commentators also argued that the changes under section 
773(b) of the Act in no way relaxed the ``reasonable grounds'' 
initiation standard for COP investigations, but, instead, were intended 
simply to permit the Department to initiate such investigations at the 
outset of a case. One commentator maintained that standards for below-
cost investigations continue to be more stringent than those of an 
antidumping investigation. The Department believes that the statutory 
changes do not change the ``reasonable grounds'' requirement for 
initiation of a COP investigation. The Department will continue its 
practice of assessing the sufficiency of a petitioner's below-cost 
allegations on a case-by-case basis, and it will reject those 
allegations that are clearly frivolous or that are otherwise not 
supported by information reasonably available to petitioners.
    The Department received one other comment of note concerning its 
initiation standard for COP investigations. The commentator suggested 
that as part of its initiation threshold, the Department take into 
account ``aberrational sales'' by accepting only those below-cost 
allegations that provide a ``reasonable ground'' for the existence of 
more than 20 percent below cost sales (i.e., the substantial quantities 
threshold under section 773(b)(2)(C)(i) of the Act). Several other 
commentators urged the Department to reject this suggestion, stating 
that there was no statutory basis for such a practice. The proposal for 
a substantial quantities initiation threshold could apply only in those 
instances where respondents already have submitted questionnaire data. 
Therefore, the proposal undoubtedly conflicts with the Department's 
authority to consider country-wide cost allegations at the outset of an 
investigation. Moreover, even in the case of company-specific 
allegations filed subsequent to respondents' submission of 
questionnaire data, the proposal lacks merit, because the substantial 
quantities threshold under section 773(b)(2)(C)(i) of the Act does not 
relate to the existence of ``reasonable grounds'' to initiate a COP 
investigation.
    Paragraph (d)(3)(i) is based on existing section 355.31(c), and 
sets forth the time limits for a countervailable subsidy allegation in 
investigations and reviews. These time limits are unchanged from the 
existing regulations. Paragraph (d)(3)(ii) is based on existing 
Sec. 355.20(b), and sets forth the time limits for an upstream subsidy 
allegation in an investigation. The 10-day time limit for an allegation 
made prior to a preliminary determination is new. The 15-day time limit 
for an allegation before a final determination is consistent with 
existing regulations.
    One commentator suggested that the Department's regulations clarify 
that the determination of whether ``new'' evidence has been submitted 
by the petitioner regarding a subsidy will be based on a consideration 
of the public evidence already included in the record of the 
proceeding. The public record would automatically include all public 
verification reports from prior segments of the proceeding. 
Furthermore, the commentator argued that upon receipt of new evidence 
of a subsidy, the burden of proof should shift to the foreign 
government, because it is in possession of the information necessary to 
establish that the program is not countervailable. Finally, the 
commentator suggested that the Department change its deadline for 
receiving new subsidy allegations from 120 days after publication of 
the notice of initiation of an administrative review to three weeks 
before verification.
    While the Department may place public reports from prior segments 
of the proceeding on the record in an ongoing proceeding, it is not be 
required to do so. Parties are free to do so themselves as long as the 
information is submitted in a timely fashion. As for shifting the 
burden of proof, the Department's practice currently is to 
reinvestigate subsidy programs previously determined to be 
noncountervailable only where new information or evidence of changed 
circumstances is present. Similarly, the Department will not reexamine 
the countervailability of a program previously determined to be 
countervailable absent new information or evidence of changed 
circumstances. In both of these instances, the burden is on the 
domestic or respondent interested parties to provide new information or 
evidence of changed circumstances that would warrant a reconsideration 
of the subsidy program in question. With respect to extending the time 
for filing new subsidy allegations, the Department believes that a 
deadline of three weeks before verification does not provide sufficient 
time for the Department to send out and receive a response to a 
questionnaire concerning the alleged subsidy.
    Paragraph (d)(4) is new, and sets forth the time limit for a 
targeted dumping allegation in an antidumping investigation. One 
commentator suggested that petitioners be given at least 90 days from 
the date of receipt of a respondent's sales listings in which to 
comment on possible targeted dumping. The Department appreciates the 
fact that at the outset of an antidumping investigation, petitioners 
normally will not have access to the type of data that goes into a 
targeted dumping analysis, and that they will need time in which to 
analyze questionnaire responses once they are received. However, the 
Department believes that in most instances, a deadline of 30 days 
before the scheduled date of the preliminary determination will provide 
petitioners with sufficient time to analyze the applicable data and 
submit an allegation, if appropriate. If the timing of responses does 
not permit adequate time for analysis, the Department may extend the 
time as appropriate.
Section 351.302
    Section 351.302 is new, and clarifies the Department's authority to 
grant extensions of time limits and to reject untimely or unsolicited 
submissions. Although portions of Sec. 351.302 are based on provisions 
of the Department's current regulations, other portions are entirely 
new.
    Paragraph (b) provides that the Department may extend a regulatory 
deadline based upon its own determination that there is good cause to 
do so or where an interested party shows good cause for such an 
extension. Parties should not draw the inference that simply because a 
particular deadline does not explicitly address the Department's 
authority to extend such deadline that the Department may not do so. 
Unless expressly precluded by statute, the Secretary may extend any 
deadline for good cause. The deadlines that include the phrase ``unless 
the Secretary alters this time limit'' generally are tied to 
transmittal of, or response to, the initial questionnaire, 

[[Page 7326]]
and, as such, are more likely to be extended than other deadlines tied 
to, for example, the date of publication of the preliminary 
determination (see, e.g., Sec. 351.301(d)(1) versus 
Sec. 351.301(c)(3)).
    Paragraph (c) sets forth the procedures for requesting an extension 
of a time limit, and is based on existing Secs. 353.31(b)(3), 
355.31(b)(3), 353.31(c)(3), and 355.31(c)(3). One commentator suggested 
that extensions for submission of questionnaire responses should be 
granted only in ``extraordinary circumstances,'' and that extensions 
should be limited to a period of 10 days. The Department agrees that it 
is important to collect information as early as possible in an 
investigation or review to provide parties an adequate opportunity to 
comment on the data and to provide the Department with adequate time to 
conduct its analysis. However, decisions regarding the possibility of 
extensions will be based on the ability of the party to respond within 
the original deadline and the parties' and the Department's ability to 
accommodate the requested extension. Thus, the Department believes that 
it is appropriate to determine whether to grant an extension, and for 
how long, based upon the facts in the particular proceeding. Another 
commentator suggested that the regulations provide for issuance of only 
one supplemental questionnaire. The Department has no intention of 
requesting the same information time after time. However, a limitation 
on the number of supplementals could interfere with the Department's 
ability to obtain clarifications or further information necessary to 
reach an informed decision.
    Paragraph (d) provides that the Department will not consider 
untimely submissions for which it has not granted an extension under 
paragraph (b), and that it will return such materials to the submitter. 
In addition, consistent with section 782(c) of the Act, to the extent 
practicable rejected submissions will be accompanied by a written 
explanation of the reasons for not accepting the material.
    One commentator proposed that parties be allowed to file objections 
to the Department's rejection of information, and that these objections 
be included in the record for judicial review. As long as a party's 
objection itself does not include a restatement of the rejected 
information, parties are permitted under the regulations to file timely 
comments on the Department's decision to reject information; e.g., as 
part of its case brief. Therefore, no specific provision is necessary 
to meet the commentator's objective.
Section 351.303
    Section 351.303 is new, and contains the procedural rules regarding 
filing, format, service, translation, and certification of documents. 
The Department has attempted to simplify these requirements, and, in 
all instances, has reduced the number of copies required for filing. 
Section 351.303 applies to all persons submitting documents to the 
Department. Although portions of Sec. 351.303 are based on existing 
Secs. 353.31, 355.31, 353.38(e), and 355.38(e), other portions are 
entirely new.
    Paragraph (c) is new, and indicates the number of copies required 
for filing documents with the Department. Paragraph (c)(1) provides 
that, in general, six copies of any submission must be filed with the 
Department. Paragraph (c)(2) describes the application of the one-day 
lag rule under which filing requirements are altered slightly to allow 
for corrections in the bracketing of business proprietary information. 
The existing one-day lag rule filing requirements have been modified to 
simplify and streamline the filing process. Specifically, paragraph 
(c)(2)(i) indicates that only one copy of the business proprietary 
version of a document must be filed with the Department within the 
applicable time limit. (The service requirements of paragraph (f) also 
apply.) Paragraph (c)(2)(ii) provides that on the next business day, 
six copies of the complete, final business proprietary version (not 
just the corrected pages) must be filed with the Department. With 
respect to the final business proprietary version, the service 
requirements of paragraph (f) may be satisfied by serving other persons 
with just the corrected pages. The final business proprietary version 
must be identical to the business proprietary version filed on the 
previous business day, except for any bracketing corrections. Paragraph 
(c)(2)(iii) provides for the filing of three copies of the public 
version simultaneously with the filing of the final business 
proprietary version. Paragraph (c)(2)(iv) describes the filing 
requirements for information in double brackets (information which the 
submitter does not agree to have disclosed under APO). Finally, 
paragraph (c)(3) clarifies that all information on computer media must 
be releasable under APO.
    Paragraph (d) contains the formatting requirements for documents 
filed with the Department. Paragraph (d)(2)(iv) is new, and requires 
that documents indicate the Department office conducting the 
proceeding.
    Paragraph (e) requires that documents submitted in a foreign 
language be accompanied by an English translation. This requires that 
all non-English language documents be accompanied by an English 
translation of pertinent portions. When parties are unable to comply 
with this requirement, the Department will work with them on an 
acceptable alternative.
    Paragraph (f)(1) provides for service of copies on other persons. 
Paragraph (f)(2) provides that each document filed with the Department 
must be accompanied by a certificate of service. Paragraph (f)(3)(i) 
provides for service of briefs. Paragraph (f)(3)(ii) is new, and 
clarifies the requirements for service of requests for review.
    Paragraph (g) clarifies that each submission containing factual 
information must be accompanied by the appropriate certification 
regarding the accuracy of the information.
Section 351.304 [Reserved--APO]
Section 351.305 [Reserved--APO]
Section 351.306 [Reserved--APO]
Section 351.307
    Section 351.307 deals with verification of information, and is 
based on existing Secs. 353.36 and 355.36.
    Paragraph (b)(1) is based on existing Secs. 353.36(a)(1) and 
355.36(a)(1), and indicates when the Department will verify factual 
information. One commentator suggested defining ``good cause for 
verification,'' the standard applicable in determining whether to 
verify in an administrative, new shipper, or changed circumstances 
review, by including in the regulations a non-exhaustive list of 
particular circumstances under which the Department normally would find 
that good cause for verification exists; e.g., changes in a 
respondent's accounting methodology, organization structure, or 
ownership, or significant changes in the product-mix offered. While, 
the Department agrees that these circumstances may, in some cases, 
provide good cause for verification, it is more appropriate to 
determine good cause on a case-by-case basis, weighing the specific 
facts before the Department in any given review.
    Paragraph (b)(1)(v) deals with requests for verification in an 
administrative review, and is based on existing 
Secs. 353.36(a)(1)(v)(A) and 355.36(a)(1)(iv)(A). The deadline for 
domestic interested parties to request verification has been shortened 
from 120 days to 100 days after publication of the notice of initiation 
of review. This change is intended to give the Department a longer time 
to prepare for 

[[Page 7327]]
verification, thereby resulting in more efficient verifications.
    Paragraph (b)(2) is new, and provides that the Department may 
verify in any other segment of the proceeding not provided for in 
paragraph (b)(1), if the Department determines that it is appropriate 
to do so.
    Paragraph (b)(3) is based on existing Secs. 353.36(a)(2) and 
355.36(a)(2), and provides that the Department may select and verify a 
sample of exporters or producers where it is impractical to verify 
relevant factual information for each person due to the large number of 
exporters or producers included in an investigation or administrative 
review.
    Paragraph (b)(4) is new, and, consistent with the SAA, at 868, 
describes when the Department may conduct verification.
    Paragraph (c) is based on existing Secs. 353.36(b) and 355.36(b), 
and, consistent with the SAA, at 868, indicates that the Department 
will issue a verification report.
    Paragraph (d) is based on existing Secs. 353.36(c) and 355.36(c), 
and, consistent with the SAA, at 868, describes certain procedures for 
verification. Paragraph (d) (2), carried over from existing Sec. 353.36 
(c), provides that the Department may request access to the records of 
persons not affiliated with respondent exporters, producers, or 
importers. This provision clarifies that the Department may use the 
records of the unaffiliated party if needed to establish the accuracy 
of data provided by the respondent. The last sentence of paragraph (d) 
also is new, and, consistent with current practice, clarifies that as 
part of verification in a countervailing duty proceeding, the 
Department may request access to records of the government of the 
affected country.
    One commentator proposed that to ensure that parties have an 
adequate opportunity to prepare for verification, the regulations 
should include provisions requiring that the Department provide by a 
particular date notice of its intent to verify, as well as detailed 
information regarding the location of the verification and the exhibits 
the Department will require. These proposals are consistent with 
paragraph (d), and, to the extent practicable, the Department intends 
to implement them in practice.
    Another commentator suggested a number of ``improvements'' to the 
verification process. These included allowing the presence of a neutral 
third party at verification, copying all documentation relied upon in 
verification, allowing all parties (not just respondents) to review 
draft verification reports, including in the record both the draft 
verification report and the final report, conducting verification in 
Washington with books and records forwarded by courier or 
electronically, and permitting domestic counsel and consultants to 
participate at verifications. We agree with the commentator that there 
are a number of ways to improve the verification process. For example, 
we are modifying our questionnaire in order to collect documentation 
that would link the reported sales information to the respondent's 
general ledger. We also intend to require that, prior to verification, 
respondents submit any computer programs used to identify the sales 
subject to investigation or review. By collecting this information 
prior to the commencement of verification, the Department will be able 
to use the time available at the verification site more efficiently. 
While we disagree with the suggestion that a neutral third party or 
domestic counsel participate at verification, we invite other 
suggestions on how to improve the verification process.
    Finally, another commentator proposed that petitioners be given a 
formal opportunity to comment on verification outlines. We agree that 
petitioners should be given opportunity to comment. Because this is 
part of the Department's standard practice, the Department believes 
that it is not necessary to include a provision in the regulations.
Section 351.308
    Section 351.308 is new, and deals with determinations on the basis 
of the facts available.
    Paragraph (b) provides that the Department will make determinations 
on the basis of the facts available in accordance with section 776(a) 
of the Act. Under the statute, the Department will use the facts 
otherwise available if necessary information is not available on the 
record, or if an interested party or any other person withholds 
requested information, fails to provide such information by the 
deadlines for submission of the information or in the form and manner 
requested, significantly impedes a proceeding, or provides such 
information but the information cannot be verified.
    Evident from a comparison between the pre-URAA statute and the new 
statute is the fact that the circumstances triggering use of facts 
available are virtually identical to those triggering use of best 
information available (``BIA''). Significantly, however, although the 
circumstances giving rise to use of BIA and facts available are 
basically indistinguishable, the presumptive adverse inference 
associated with use of BIA is not automatically associated with use of 
facts available. Specifically, section 776(b) of the Act provides that 
only if the Department finds that an interested party ``has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information'' may the Department use an inference that is 
adverse to the interests of that party in selecting from among the 
facts otherwise available. Therefore, the determination of what to use 
as facts available will be affected by whether or not the Department 
may make an adverse inference under the statute.
    A number of commentators proposed that the regulations set forth 
the Department's current two-tiered methodology for selecting BIA. 
However, given the differences between the Department's past practice 
regarding BIA and the new statutory provisions on facts available, the 
Department does not believe this proposal would be appropriate.
    In cases where the Department determines that an interested party 
has not failed to cooperate, the Department will apply simply the 
``facts available''; i.e., the Department will make its determination 
``based on all evidence of record.'' SAA at 869. However, as paragraph 
(e) provides (by cross-reference to section 782(e) of the Act), the 
Department will consider information that is submitted by an interested 
party and is necessary to the determination, but that does not meet all 
the applicable requirements established by the Department, only if: (1) 
The information is submitted by the deadline established for its 
submission, (2) the information can be verified, (3) the information is 
not so incomplete that it cannot serve as a reliable basis for reaching 
the applicable determination, (4) the interested party has demonstrated 
that it acted to the best of its ability in providing the information 
and meeting the requirements established by the Department with respect 
to the information, and (5) the information can be used without undue 
difficulties.
    One commentator suggested that information contained in the 
petition should not be used as facts available. The statute, however, 
does not limit the specific sources from which the Department can 
obtain facts available.
    In cases where the Department finds that an interested party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information, section 776(b) of the Act provides that 
the Department may make an adverse inference about the missing 

[[Page 7328]]
information, and, hence, apply ``adverse facts available.'' A number of 
commentators proposed that ``a good faith effort'' to provide 
information responsive to the Department's request for information be 
sufficient to meet the requirement of ``acting to the best of [a 
company's] ability.'' The determination of whether a company has acted 
to the best of its ability will be decided on a fact- and case-specific 
basis, and the Department will consider whether a failure to respond 
was deliberate or simply due to practical difficulties that made the 
company unable to respond within the specified deadline. However, it is 
clear that affirmative evidence of bad faith on the part of a 
respondent is not required before the Department may make an adverse 
inference.
    Several commentators additionally suggested that where information 
is not maintained by the respondent in the ordinary course of trade, 
failure to produce such information should not presumptively be a 
violation of the ``best of its ability'' standard. However, not all 
information that needs to be produced during the course of a proceeding 
is kept in the ordinary course of business (e.g., worksheets), and 
failure to provide such information may be deemed to violate the ``best 
of ability'' standard. The determination as to whether a company has 
acted to the best of its ability to comply with an information request 
can only be made based on the record evidence in a particular 
proceeding.
    Consistent with section 776(b) of the Act and the SAA, at 870, 
paragraph (c) provides that an adverse inference may include reliance 
on secondary information or any other information placed on the record. 
Paragraph (c)(1) indicates that secondary information includes 
information derived from the petition, a final determination in an 
antidumping or countervailing duty investigation, or any previous 
review.
    Paragraph (d) explains that where the Department relies on 
secondary information, to the extent practicable the Department will 
corroborate that information from independent sources, such as 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the instant 
investigation or review. Consistent with the SAA, at 870, the third 
sentence of paragraph (d) indicates that ``corroborate'' in this 
context means that the Department will look to such sources reasonably 
at the Department's disposal to examine whether the secondary 
information has probative value. Paragraph (d) also indicates that in 
accordance with the SAA, at 870, where corroboration is not 
practicable, the Department still may apply an adverse inference.
    One commentator argued that secondary information taken from a 
petition need not be corroborated, because the Department used this 
information as the basis for its initiation. Section 776(c) of the Act, 
however, specifically provides that, to the extent practicable, the 
Department will corroborate secondary information, which includes the 
petition, from independent sources that are reasonably at the disposal 
of the Department. As a result, the Department has not adopted this 
proposal.
Section 351.309
    Section 351.309 deals with written argument, and is based on 
existing Secs. 353.38 and 355.38.
    Paragraph (b)(1) provides that the Department will consider in 
making its final determination or final results of review written 
arguments in case or rebuttal briefs filed within the applicable time 
limits.
    Paragraph (b)(2) provides that the Department may request written 
argument on any issue from any person at any time during a proceeding. 
For example, the Department may choose to request post-hearing briefs 
on a particular topic.
    Paragraph (c)(1) sets out the time limits for filing case briefs in 
investigations and reviews. Paragraph (c)(2) indicates that, as part of 
the case brief, parties are encouraged to provide a summary of the 
arguments not to exceed five pages.
    Paragraph (d)(1) sets out the time limits for filing rebuttal 
briefs. The time limit for filing rebuttal briefs--within five days 
after the case briefs are filed--is now the same in both investigations 
and reviews. Paragraph (d)(2) indicates that, as part of the rebuttal 
brief, parties are encouraged to provide a summary of arguments not to 
exceed five pages.
Section 351.310
    Section 351.310 is new, and deals with matters related to hearings. 
Although portions of section 351.310 are based on existing 
Secs. 353.38(b), 355.38(b), 353.38(f) and 355.38(f), other portions are 
entirely new. These provisions have been modified from prior 
regulations with an eye to easing the burdens and costs imposed on 
parties appearing before the Department.
    Paragraph (b) is new, and provides that the Department may conduct 
a pre-hearing conference to facilitate the conduct of the hearing. In 
most instances, the pre-hearing conference will be held by telephone. 
Examples of issues to be discussed include the necessity of conducting 
a hearing, time limits for direct and rebuttal presentations, 
identification of significant issues, and page limits for case and 
rebuttal briefs.
    Paragraph (c) is based on existing Secs. 353.38(b) and 355.338(b), 
and sets forth the time limit for requesting a hearing. The existing 
time limits for requesting a hearing in both investigations and reviews 
have been extended. The extended time limit--30 days after the date of 
publication of the preliminary determination or preliminary results of 
review--will allow parties more time to consider the necessity of 
requesting a hearing.
    Paragraph (d) is based on existing Secs. 353.38(f) and 355.38(f), 
and indicates that upon request, the Department will hold a public 
hearing normally two days after rebuttal briefs are filed. Under 
section 774(b) and section 751(e) of the Act, the Department is 
required to hold a hearing upon the request of an interested party in 
an investigation and in any review under section 751 of the Act. In 
other segments of a proceeding, such as scope inquiries, the decision 
to hold a hearing is discretionary. Consistent with section 774(b) of 
the Act and existing Secs. 353.38(f)(3) and 355.38(f)(3), paragraph 
(d)(2) provides that such hearings are not subject to the 
Administrative Procedure Act.
    Paragraph (e) is new, and provides that the Department may 
consolidate hearings in two or more cases. Cases where the Department 
is most likely to consolidate hearings are those where common issues 
exist concerning the same product from different countries or where 
common issues exist concerning different products from the same 
country.
    Paragraph (f) is new, and indicates that the Department may conduct 
closed hearing sessions where parties wish to discuss business 
proprietary information. The Department's existing regulations do not 
expressly provide for representatives to discuss business proprietary 
information during administrative hearings, although, in limited 
instances, the Department has allowed discussion of business 
proprietary information during a hearing. One commentator suggested 
that the Department should consider procedures similar to those used by 
the ITC regarding in camera sessions for purposes of discussing 
business proprietary information that cannot be adequately summarized 
for discussion at a public hearing. The commentator argued that the 
inability to conduct a closed hearing may prejudice parties, 

[[Page 7329]]
who may not be able to give a full presentation of their arguments.
    We agree that the Department should be able to conduct closed 
hearing sessions where appropriate. Paragraph (f), therefore, allows an 
interested party to request a closed hearing session. However, the 
Department believes that in the interest of transparency, closed 
hearing sessions should not consume the entirety of a hearing. 
Therefore, the Department intends to limit the duration of such 
sessions, and to limit them to the discrete issues identified by the 
requesting party. Before a closed hearing session begins, the hearing 
room will be cleared of all persons not subject to APO. Consistent with 
paragraph (g), the section of the transcript from a closed hearing 
session will be treated like other documents containing business 
proprietary information.
Section 351.311
    Section 351.311 deals with countervailable subsidy practices 
discovered during an investigation or review, and is based on existing 
Sec. 355.39. Apart from minor clarifications, the only change is the 
addition of subsidy programs in violation of Article 8 of the SCM 
Agreement, which the Department is notified of by the United States 
Trade Representative.
Section 351.312
    Section 351.312 is new, and, consistent with section 777(h) of the 
Act, provides consumer organizations and industrial users the 
opportunity to submit information and argument on matters relevant to a 
particular determination of dumping, subsidization, or injury. Although 
such parties are not ``parties to the proceeding'' as defined in the 
statute, the Department recognizes, as pointed out by one commentator, 
``that industrial users' comments are a potential authoritative source 
for available factual information supporting Department 
determinations.'' The importance of input from industrial users and 
consumer organizations is recognized in both the AD Agreement, at 
Article 6.12, and the SCM Agreement, at Article 12.10. The SAA, at 871, 
while emphasizing that section 777(h) of the Act does not confer 
``interested party'' status on such users and organizations, explains 
that this provision explicitly requires the Department to furnish such 
users and organizations with an opportunity to provide relevant 
information.
    Paragraph (b) indicates that industrial users and representative 
consumer organizations may submit to the Department relevant factual 
information and relevant written argument in the form of case and 
rebuttal briefs. Paragraph (b) also makes clear that all such 
submissions must be filed in accordance with the procedural rules in 
Sec. 351.303.
    One commentator noted that the opportunity under the Act for such 
users and organizations to submit relevant information would not be 
meaningful if the Department did not respond to such information. With 
respect to this comment, the Department will include in the record of a 
proceeding Information submitted by industrial users and consumer 
organizations, and the Department may rely on such information as 
appropriate. Furthermore, the Department intends to address relevant 
comments made by industrial users and consumer organizations in making 
its determinations in the same manner that it considers and responds to 
``interested party'' comments.
    Paragraph (c) clarifies that industrial users and consumer 
organizations may submit business proprietary information, but neither 
they nor their representatives will be granted access under APO to 
business proprietary information submitted by other persons.

Part 351, Subpart D--Calculation of Export Price, Constructed Export 
Price, Fair Value and Normal Value

    Subpart D deals with the calculation of export price, constructed 
export price (``CEP''), fair value and normal value, and corresponds to 
subpart D of Part 353 of the Department's existing regulations.
Section 351.401
    Section 351.401 deals with general principles common to the 
identification and calculation of export price, constructed export 
price and normal value. In this regard, although the URAA changed the 
names of purchase price and exporter's sales price to export price and 
constructed export price, respectively, to conform to the terminology 
of the AD Agreement, the SAA is clear that ``no change is intended in 
the circumstances under which export price (formerly ``purchase 
price'') versus constructed export price (formerly ``exporter's sales 
price'') are used.'' SAA at 822-23. Several commentators have argued 
that the Department should abandon its prior practice (often called 
``indirect purchase price'') under which the Department considered 
certain sales to be ``purchase price'' sales, even though there was 
some involvement by a U.S. affiliate. Other commentators have pointed 
to the language of the SAA as support for their conclusion that this 
aspect of the distinction between export price and constructed export 
price remains under the URAA.
    The Department agrees with these latter commentators that Congress 
and the Administration did not intend a change to the circumstances 
under which the Department would use export price or constructed export 
price, including the ``indirect purchase price'' situations. It has 
been the Department's longstanding and well-recognized practice that a 
transaction will be considered an export price sale, despite the 
involvement of an affiliate in the United States where: (1) The 
merchandise in question was shipped directly from the manufacturer to 
the unrelated buyer, without being introduced into the physical 
inventory of the related selling agent; (2) this was the customary 
commercial channel for sales of this merchandise between the parties 
involved; and (3) the related selling agent in the United States acted 
only as a processor of documentation and a communication link with the 
unrelated buyer. Because no change from current practice is required, 
the regulations do not address this issue.
    Paragraph (b) codifies the Department's longstanding practice of 
requiring parties claiming an adjustment to provide sufficient support 
for that claim. This regulation is not intended to change the 
Department's practice as recognized by the courts. See e.g., Timken v. 
United States, 673 F. Supp. 495, 513 (CIT 1987). Because the relevant 
information is normally under the sole control of the respondent 
interested party, this practice is usually applied to adjustments that 
would benefit such a party. This regulation is not intended to impose 
any additional burden on domestic interested parties that do not have 
access to the relevant information. Paragraph (b) also codifies the 
Department's longstanding prohibition against double-counting 
adjustments.
    Under paragraph (c), the Department will continue its practice of 
adjusting reported gross prices for discounts, rebates and certain 
post-sale adjustments to price that affect the net price. Where such 
discounts, rebates and price adjustments are granted on a transaction-
specific basis, they should be reported on that basis. However, as with 
selling expenses, the Department will continue its current practice of 
allowing non-distortive allocations where transaction-specific 
reporting is not feasible. SAA at 823-24. Where verification is 
conducted, the Department will review the 

[[Page 7330]]
respondent's records to ensure that discounts, rebates and post-sale 
price adjustments are reported on as specific a basis as those records 
permit.
    Paragraph (d) provides that the Department will not adjust costs 
used as the basis for adjustments to factor in delayed or early payment 
of expenses. Certain parties have argued that, when a party incurs an 
expense but does not pay for it immediately, the Department should 
reduce the amount of the adjustment to account for the savings that 
accrue due to the delayed payment. However, the courts have upheld the 
Department's position that the statute does not require that level of 
precision in quantifying adjustments. See, Federal Mogul v. United 
States, 839 F. Supp. 881, 886 (CIT 1993).
    Paragraph (e) deals with the adjustment for movement expenses 
described in section 772(c)(2)(A) of the Act for export price and 
constructed export price calculations, and section 773(a)(6)(B)(ii) of 
the Act for normal value calculations. Consistent with the SAA, at 823 
and 827, paragraph (e) clarifies that the deduction for movement 
expenses includes a deduction for all warehousing expenses incurred 
after the merchandise leaves the producer's factory, or, in the case of 
a reseller, the point from which the reseller shipped the merchandise. 
This paragraph also clarifies that the phrase ``original place of 
shipment'' in the Act refers to the place of shipment from the party 
making the sale which is the subject of the Department's examination. 
This is intended to clarify that, where the sale to the United States 
which is being examined is made by a reseller, movement expenses from 
the producer to the reseller are not deducted. This is appropriate 
because such expenses are part of the seller's cost of acquisition.
    Paragraph (f) describes the situations in which the Department will 
treat multiple affiliated producers as a single entity. Under prior 
practice, the Department, in certain situations, would treat related 
producers that were separate legal entities as a single entity; i.e., 
the Department would ``collapse'' the producers into a single firm. 
Where firms were so collapsed, the Department would issue a single 
questionnaire to, and calculate a single weighted-average dumping 
margin for, the collapsed entity. Paragraph (f) codifies the 
Department's approach regarding such producers, based on the new 
statutory term ``affiliated persons.'' In order to be treated as a 
single entity, the producers must be affiliated and have production 
facilities that are sufficiently similar that shifting production would 
not require substantial retooling. Although such decisions are almost 
always made on the basis of the subject merchandise and foreign like 
product, or on a more narrow basis, in rare situations the Department 
may conclude that a product that is not subject merchandise or a 
foreign like product is sufficiently similar to subject merchandise 
that the producers of those products may be candidates for collapsing. 
This paragraph does not address the Department's ability to 
``collapse'' resellers, without production facilities, and their 
affiliated producers, although the considerations identified in 
paragraphs (f) (1), (2) and (3) would be among those considered in 
reaching such a decision. Similarly, this paragraph does not address 
the issue of whether a producer or exporter in a nonmarket economy 
country is entitled to an individual antidumping rate. That 
determination is addressed by the definition of ``rates'' in section 
351.102.
    Section 351.401(g) provides that, in accordance with the 
Department's past practice, respondents may allocate expenses if 
transaction-specific reporting is not feasible. Where verification is 
conducted, the Department will verify that expenses are reported on as 
specific a basis as permitted by the company's records and that the 
allocation does not distort the comparison. This is in accordance with 
the SAA, at 828, which states that the Department may continue its 
practice of permitting allocations, ``provided that the allocation 
method does not cause inaccuracies or distortions.''
    Some commentators argued for a regulation providing that certain 
direct selling expenses never could be reported on an allocated basis, 
but instead always must be reported on a transaction-specific basis. 
Other commentators argued for a regulation permitting the reporting of 
adjustments on an allocated or average basis. Yet another commentator 
argued for a regulation that would permit customer-specific 
allocations, even if based on in-scope and out-of-scope merchandise, if 
the Department determines that such an allocation is reasonable and has 
a minimal potential for creating a distorting effect.
    Consistent with the SAA, at 823-824, paragraph (g) provides that, 
in order to qualify as a direct selling expense, an expense 
``normally'' must be reported on a transaction-specific basis. However, 
as noted above, the Department may consider allocated expenses as 
direct selling expenses when transaction-specific reporting is not 
feasible. In determining what is feasible, the Secretary may balance 
the difficulties of reporting transaction-specific expenses against the 
potential inaccuracies of reporting allocated expenses.
    New paragraph (h) deals with the Department's treatment of 
subprocessors or ``tollers.'' Several commentators expressed support 
for the Department's recent decision that tolling operations (i.e., 
subcontractors) should not be treated as manufacturers or producers of 
the subject merchandise. The Department concurs with those commentators 
who urged that, because this policy has not been widely publicized, 
that it be enunciated in the regulations. Under paragraph (h), where a 
party owning the components of subject merchandise has a subcontractor 
manufacture or assemble that merchandise for a fee, the Department will 
consider the owner to be the manufacturer, because that party has 
ultimate control over how the merchandise is produced and the manner in 
which it is ultimately sold. The Department will not consider the 
subcontractor to be the manufacturer or producer, regardless of the 
proportion of production attributable to the subcontracted operation or 
the location of the subcontractor or owner of the goods. For example, 
where Firm A sends raw materials to a subcontractor for finishing 
before Firm A sells the finished goods to the United States, the 
Department will base export price or constructed export price on the 
price charged by Firm A (or its U.S. affiliate) for the finished goods. 
Similarly, the Department will base normal value on Firm A's sales of 
the finished goods in its home market (subject to the viability 
determination described in section 351.404).
    Paragraph (i) establishes how the Department will identify the date 
of sale for sales of the subject merchandise and foreign like product. 
Under this provision, the Department will normally rely on the date of 
invoice. This is a change from prior practice under which the 
Department based the date of sale on the date on which the ``essential 
terms of sale'' (normally price and quantity) were established. See, 
Certain Forged Steel Crankshafts from the Federal Republic of Germany, 
52 FR 28170, 28172 (1987). Several commentators argued that this 
methodology delayed proceedings, increased the cost to the respondents, 
complicated verification, and was unpredictable. In response to these 
concerns, paragraph (i) provides that the Department normally will use 
the date of invoice as the date of sale. However, the Department 
recognizes that this date may not be appropriate in some circumstances, 
such as those 

[[Page 7331]]
involving certain long-term contracts or sales in which there is an 
exceptionally long time between the date of invoice and the date of 
shipment. Paragraph (i) provides the Department with sufficient 
flexibility to handle such situations.
    Some commentators suggested that the Department use as the date of 
sale whatever date a respondent uses in its internal records. However, 
this approach would create a high degree of unpredictability and 
inconsistency among respondents, and it might be subject to 
manipulation. The date of invoice is easily verifiable, and, in the 
Department's experience, is clearly recorded in most respondents' 
records. With respect to the concerns of one commentator that use of a 
respondent's invoice date could make the date of sale subject to 
manipulation, the Department intends to verify that the records upon 
which the date of invoice are based were kept in the ordinary course of 
business. Additionally, particularly during administrative reviews, the 
Department will carefully scrutinize any change in record keeping that 
could change the date of invoice.
Section 351.402
    Section 351.402 deals with certain adjustments that the Department 
will make in calculating export price and constructed export price 
under section 772 of the Act.
    Paragraph (b) clarifies the expenses that the Department will 
deduct from the price to the unaffiliated purchaser (i.e., the 
``starting price'') in calculating constructed export price under 
section 772(d) of the Act. Consistent with the SAA at 823, the 
Department will make deductions under section 772(d) for those expenses 
enumerated in the Act which are due to economic activities in the 
United States. Thus, commissions, direct selling expenses, assumptions 
of expenses on behalf of the buyer, and indirect selling expenses 
attributable to the sale to the unaffiliated purchaser in the United 
States will be deducted in calculating the constructed export price. 
This deduction will be made irrespective of when the expenses are 
incurred, or where payment is made. The cost of advertising in the 
United States, for example, may be deducted under section 772(d) even 
if the advertising is paid for outside of the United States. However, 
the foreign seller's expenses associated with selling to the affiliated 
reseller in the United States would not be deducted under section 
772(d), rather, they would be dealt with as circumstance of sale 
adjustments under section 773(a)(6)(C)(iii) of the Act.
    The manner in which the Department intends to implement the special 
rule for merchandise with value added after importation contained in 
section 772(e) of the Act is explained in some detail in paragraph (c). 
Under that section, where a substantial amount of value is added by a 
process of further manufacture or assembly in the United States, the 
Department may use surrogates for the constructed export price, rather 
than perform the extensive calculation required to deduct the actual 
value added in the United States. Paragraph (c)(1) clarifies that 
deduction for value added in the United States and the special rule may 
apply where the actual importer or purchaser, for example a 
subcontractor, is not affiliated with the exporter, but is acting on 
behalf of the affiliated party in the United States.
    Paragraph (c)(2) explains how the Department will make an 
estimation of whether the value added in the United States ``exceeds 
substantially'' the value of the subject merchandise. The SAA explains 
that, ``[w]hile Commerce is not required to calculate precisely the 
value added after importation into the United States, `exceed 
substantially' means that the value added in the United States is 
estimated to be substantially more than half of the price of the 
merchandise as sold in the United States.'' SAA at 826. For purposes of 
this estimation, the Department will normally calculate the value added 
by subtracting the average net price at which subject merchandise is 
sold to affiliated importers who undertake further manufacturing, from 
the average net price at which the merchandise with value added is 
eventually sold to unaffiliated customers in the United States. Other 
than reduction for discounts, rebates and other post-sale price 
adjustments, no adjustments will be made to these prices. Where this 
average difference (i.e., value added in the United States) is at least 
60 percent of the average price to unaffiliated customers, the special 
rule normally will be applied to all merchandise with value added in 
the United States. Usually, the Department will calculate these 
averages across the subject merchandise sold with value added. However, 
where there are significant disparities in price between subject 
merchandise or the value added products, the Department retains the 
discretion to base the averages on smaller groupings of products.
    Paragraph (c)(3) explains that, for merchandise to which the 
Department has determined the special rule applies, it will normally 
assign a margin equal to the weighted-average margin calculated based 
upon the prices of identical or other subject merchandise sold to 
unaffiliated parties. This is equivalent to using the price of sales to 
unaffiliated parties, along with all other terms and conditions of 
those sales, and calculating the margins based on those surrogate 
prices, terms and conditions. Because such margins will have been 
calculated for those sales to unaffiliated parties, the Department will 
not need to repeat the calculation for the sales to which the special 
rule applies. The Department believes this approach is appropriate, 
because a price cannot be dissociated from the terms and conditions 
that gave rise to that price. For example, a price for one product 
cannot simply be substituted as an appropriate price for a different 
product. If the Department were simply to adopt a price for a different 
product and then analyze the sale, there would be a question as to 
whether the price should be adjusted to account for the difference in 
merchandise to avoid distortion. Adjustments for other differences 
between the surrogate sales and the special rule sales also might be 
necessary. Making such adjustments would unduly complicate the analysis 
under this provision, which is intended to simplify the process.
    Paragraph (d) elaborates on the procedure the Department will 
follow in deducting profit to arrive at a constructed export price 
under sections 772(d)(3) and 772(f). Various commentators have urged 
that the regulations provide further guidance regarding the profit 
deduction. Paragraph (d)(1) specifies, in accordance with section 
772(f) of the Act, that both the expenses used to allocate the profit 
to the U.S. sales, and the profit to be allocated normally will be 
based upon all sales of the subject merchandise in the United States 
and the foreign like product in the foreign market. This clarifies 
explicitly, as suggested by some commentators, that losses in one 
market would offset profits in another. This is clearly contemplated by 
the term ``total actual profit'' in section 772(f) of the Act, and is 
reinforced by the reference in the SAA, at 825, to situations in which 
there is no profit. Some commentators suggested that the regulations 
clarify whether a profit ratio or per-unit profit will be used. This 
change to the rule is unnecessary, but in accordance with section 
772(f)(2) of the statute, the Department will apply a profit ratio, 
e.g. profit divided by selling expenses.
    In calculating profit, this paragraph specifies that the Department 
will not disregard home market sales below cost. Although some 
commentators suggested that below-cost sales should be disregarded when 
determining total 

[[Page 7332]]
actual profit, there is no provision in the statute for disregarding 
sales below cost in this context, and doing so would conflict with the 
statutory requirement to use ``actual profit.''
    Paragraph (d)(2) specifies that the Department will not be limited 
to audited financial statements, but may use any appropriate financial 
report, including internal reports, the accuracy of which can be 
verified, if verification is conducted. This provision reflects the 
suggestion of commentators that the Department make clear its 
discretion to use financial reports prepared in the normal course of 
business that are as specific as possible to the merchandise under 
investigation or review.
    Finally, paragraph (d)(3) recognizes the obligations of the 
Department not to require the reporting of costs solely to make the 
profit deduction, and, where practicable, to use costs that are 
submitted voluntarily for purposes of calculating profit. However, to 
ensure that voluntary submissions of cost data can be used for this 
purpose, the Secretary will specify deadlines after which such 
voluntary submissions will no longer be accepted. The Department has 
not adopted a rule, proposed by one commentator, that the Department 
not be allowed to initiate an investigation of sales below cost based 
on an allegation derived from cost information submitted voluntarily 
for this purpose. If the information submitted voluntarily supports a 
sufficient allegation that home market sales have been made below cost, 
then the Department is required to initiate a cost investigation.
    Various commentators suggested that the regulations specify the 
costs that will be subtracted from revenues to determine total actual 
profit. Although the Department has not elaborated on the guidance 
provided in section 773(b)(3) of the Act with respect to cost of 
production and section 773(e) of the Act with respect to constructed 
value, the Department will develop an appropriate treatment of 
particular expenses through practice, as it has done with cost of 
production and constructed value.
    A number of commentators contended that the Department should cap 
the amount of profit deducted at the amount of profit actually earned 
on each U.S. sale. Other commentators argued for an adjustment to 
normal value to offset any distortion caused by the profit allocation 
method required by the statute. These commentators claimed that failure 
to make such an adjustment to normal value would lead to double-
counting of profit.
    Article 2.4 of the Agreement provides for the deduction of profit 
and selling expenses associated with economic activities in the export 
market in order to construct an export price. The statute implements 
the Agreement by requiring that the profit calculation for constructing 
an export price be computed based on the combined profits of the 
exporter on sales to both the U.S. and home markets. The SAA, at page 
825, prohibits a cap based on the transfer price by stating that ``the 
transfer price between exporters or producers and the affiliated 
importer is irrelevant in determining the amount of profit to be 
deducted'' in constructing an export price. Further, the statute does 
not provide for an adjustment to normal value in the manner suggested.
    Some commentators also suggested that the regulations state that 
profit will be deducted in calculating CEP only when the importer is 
affiliated with the exporter. They argue that this is necessary to 
ensure that the profit of an unaffiliated consignment importer will not 
be deducted twice. While the Department fully agrees with this comment, 
the regulations do not include such a provision, because the statute 
clearly limits the profit deduction to profits allocated to expenses 
incurred by the producer, exporter, or affiliated seller.
    One commentator suggested that the regulations explain whether 
profits in the home market or a third country market will be used when 
there are few sales in the home market, i.e., that market is not 
``viable'' under section 351.404, discussed below. The statute does not 
clearly address this question, and as this is a new provision with 
which the Department has no experience, the Department will address 
this question after gaining experience in its administration.
    Paragraph (e) explains how the Department will treat payments 
between affiliated parties for purposes of section 772(d) of the Act. 
This provision explains that the Department will normally base the 
deduction of expenses on the cost to the affiliate, rather than on any 
payment to the affiliate. However, where the Department is satisfied 
that the exporter does not have access to that information, the 
Department may use the payment to the affiliated party if that payment 
represents an arm's-length price for the service provided by the 
affiliated party. The Department will determine whether the price is 
arm's length by a comparison of the price at issue with prices for 
similar services paid to unaffiliated providers, or with prices charged 
by the affiliate to unaffiliated parties. Thus, under this provision, 
where an affiliated importer sells the subject merchandise on 
commission, the Department will normally use the selling expenses of 
the affiliated importer, but may use the amount of the commission, if 
the conditions identified above exist.
    Paragraph (f) provides that the Department will deduct from the 
export price (or the constructed export price) any antidumping or 
countervailing duties paid on behalf of the importer, or reimbursed to 
the importer, by the producer or exporter and sets out an exception and 
the procedures to be applied in that situation. Other than the changes 
in language required by the URAA, the provision with respect to 
antidumping duties is unchanged from Sec. 353.26 of the existing 
regulations. The requirement that such countervailing duties be 
deducted from the export price (or constructed export price) is new.
    Under section 772(c)(1)(C) of the Act, the Department increases the 
price used to calculate export price (or constructed export price) by 
the amount of any countervailing duty imposed to offset an export 
subsidy. The countervailing duty paid by the importer has the effect of 
increasing the price to the importer by the amount of that duty. If the 
producer or exporter pays or reimburses the duty, the price has not 
been increased and a deduction in the amount of the duty paid or 
reimbursed by the producer or exporter, to offset the addition made 
under section 772(c)(1)(C), is appropriate to arrive at the correct 
export price (or constructed export price). As with antidumping duties, 
the statute authorizes no adjustment to export price (or constructed 
export price) for countervailing duties imposed to offset other types 
of subsidies. And just as with antidumping duties, payment of those 
countervailing duties by the exporter or producer on behalf of the 
importer represents an effective reduction in the price to the 
unaffiliated purchaser. Thus, in both instances it is appropriate to 
take the deduction described in paragraph (f).
Section 351.403
    With respect to the calculation of normal value, Sec. 351.403 sets 
forth, without substantive change, the regulations regarding sales and 
offers for sale and the regulations regarding use of sales to or 
through an affiliated party. However, as discussed above with respect 
to section 351.102, differences between the old term ``related party'' 
and the new term ``affiliated party'' may have an impact in this area. 
The provisions corresponding to Sec. 351.403 are currently contained in 
Secs. 353.43(a) and 353.45 of the existing regulations. 

[[Page 7333]]
Because other provisions of 353.43 have been added to the statute, they 
are not restated in these proposed regulations.
    Several commentators suggested that the Department adopt a 
regulation allowing respondents not to report ``downstream'' sales 
(i.e. sales by affiliated parties of merchandise purchased from the 
respondent) if the quantity of sales to affiliated parties is below a 
certain threshold percentage of sales to unaffiliated parties. Others 
suggested, in contrast, that the Department require that downstream 
sales always be reported. Because factors other than value, such as 
comparability of sales, affect this decision, neither proposal is 
reflected in the regulations. However, the Department will continue to 
consider this important issue, which has implications both for the 
accuracy of its calculation and the reasonableness of its information 
requirements. The Department encourages the submission of comments on 
this matter.
    Similarly, several commentators recommended methodologies for 
determining when a price to an affiliated party should be considered 
comparable to the price at which merchandise is sold to unaffiliated 
parties; i.e. when a price is at ``arm's length.'' Because of the 
complexity of this issue, and because the Department's practice in this 
area is still evolving, the Department has not addressed this issue in 
these proposed regulations. However, the Department will continue to 
consider this issue for the final regulations.
Section 351.404
    Section 351.404 sets forth in combined form the requirements of 
sections 773(a)(1)(B) and (a)(1)(C) of the Act regarding whether sales 
in the exporting country or in a third country may be used as a basis 
for normal value. This provision modifies Secs. 353.48 and 353.49 of 
the Department's existing regulations.
    The antidumping statute has long required the Department in 
calculating foreign market value (now normal value) to avoid the use of 
markets in which there are few sales (i.e., markets that are not 
``viable''). Paragraph (b)(1) sets forth the general condition under 
which the Secretary will find a market to be viable, that is, when 
satisfied that the sales in the exporting or third country market are 
of sufficient quantity to form the basis for normal value.
    Paragraph (b)(2) defines the sufficient quantity standard as 
satisfied when the aggregate quantity (or value) of foreign like 
product sold in or to the foreign country is five percent or more of 
the aggregate quantity (or value) of subject merchandise sold to the 
United States. Under the prior statute and regulations, viability was 
established by comparing the quantity of sales in the exporting country 
to the quantity of sales to all export markets except the United 
States. In accordance with the URAA, the comparison in paragraph (b)(2) 
is between sales in the foreign market and sales to the United States.
    The URAA also changed the comparison that the Department will make 
in deciding if the sales in the foreign market are in sufficient 
quantities. Under prior practice, the comparison was normally made 
between sales of ``such or similar'' merchandise. Under the URAA, the 
comparison will be between sales of the foreign like product in the 
foreign market and sales of subject merchandise to the United States. 
Some commentators have argued that the Department should measure 
viability on the basis of categories of merchandise smaller than the 
foreign like product. However, as other commentators pointed out, the 
statute is explicit that the Department determine market viability for 
each respondent on the basis of the aggregate quantity (or value) of 
the foreign like product. Moreover, the SAA, at 821-22, states that, 
``[t]he viability of a market will be assessed based on sales of all 
merchandise subject to an antidumping proceeding, not on a product-by-
product or model-by-model basis.'' Commentators noted that the 
Department's calculations would become extremely complex if, for a 
given respondent, the normal value for some U.S. sales were to be based 
in the home market, while the normal value for other U.S. sales were to 
be based in a third country. Finally, because basing this test on sales 
of the foreign like product will require less disaggregated data, it 
will allow the Department to make the viability determination earlier 
in the proceeding.
    Paragraph (b)(2) reflects the preference contained in the statute 
for measuring viability on the basis of quantity. Several commentators 
argued that the Department should retain the flexibility to measure 
viability on the basis of value. While the Department may use value, 
the statute provides that value may be used only where quantity is not 
appropriate. The SAA makes clear, however, that quantity is to be 
defined broadly, and may be measured on the basis of number of items, 
weight or such other bases that the Department considers appropriate.
    Some commentators have argued that the Department must retain the 
flexibility to use a test other than five percent. While five percent 
has long proven to be a satisfactory measure of viability, in unusual 
situations the Secretary may apply a number less than or greater than 
five percent. This is consistent with the SAA, at 821, which indicates 
that such situations will be ``unusual,'' and which reflects the fact 
that the Department has successfully applied the five percent threshold 
in the past. It also reflects the need for an early decision with 
respect to the market in which normal value will be established, 
because respondents must provide data relative to sales in that market.
    Paragraph (c)(1) stipulates that if the Department finds a viable 
exporting-country market, it will calculate normal value on the basis 
of prices in that exporting country. If the Department finds that the 
exporting-country market is not viable, but that a third-country market 
is viable, it may calculate normal value on the basis of prices to the 
third country. The use of the word ``may'' in the third country 
provision reflects the language of section 773(a)(4) of the Act, which 
provides that the normal value may be the constructed value of the 
subject merchandise even if a third country market is viable. Paragraph 
(c)(1) is not intended to address circumstances in which prices must be 
disregarded because they are below the cost of production, as discussed 
in connection with section 351.406, below.
    Paragraph (c)(2) provides that if the Department finds a viable 
market, it may decline to calculate normal value on the basis of prices 
in or to that market in certain circumstances. For both the exporting 
country and a third country, if parties establish to the Secretary's 
satisfaction that the particular market situation would not permit a 
proper comparison, the Department may decline to use sales in the 
relevant market as the basis for normal value. The SAA, at 822, cites 
as possible examples of such situations a single sale in the foreign 
market which meets the five percent threshold, extensive government 
control over pricing that does not permit competitive forces to affect 
prices, and differing patterns of demand in the United States and the 
foreign market. Also, if parties establish to the Secretary's 
satisfaction that prices to a third country are not representative, the 
Department may decline to use sales to that country.
    As explained above in connection with paragraph (b), normally a 
finding that the foreign market sales constitute five percent or more 
of sales to the United States will be considered determinative with 
respect to the issue of viability. The Department will review another 
factor only if a party 

[[Page 7334]]
convincingly demonstrates that that factor mitigates against reliance 
on the five percent standard. This is in accordance with the 
Department's experience, the language of the SAA, at 821, and the need 
for early viability determinations. The SAA explains that ``sales in 
the home market `normally' will be considered of sufficient quantity to 
render the home market viable if they are five percent or more of sales 
to the United States. The Administration intends that Commerce will 
normally use the five percent threshold except where some unusual 
situation renders its application inappropriate.'' Therefore, unless a 
party presents convincing evidence that some aspect of the market in 
question is so unusual as to make that market an inappropriate basis 
for comparison and the five percent test inappropriate, the Department 
will rely on the results of the five percent test in determining 
whether the foreign market is an appropriate basis for normal value. 
Placing primary reliance on the five percent test is also consistent 
with the need to make the viability determination early in a proceeding 
so that respondents can provide the necessary sales information and the 
Department can meet its statutory deadlines.
    In furtherance of the need to make viability determinations early 
in an investigation or review, paragraph (d) references the deadline 
for filing any allegation (along with all supporting factual 
information) regarding market viability, including an allegation that 
one of the exceptions in paragraph (c)(2) applies. That deadline (40 
days after a questionnaire is issued) is contained in 
Sec. 351.301(d)(1). The deadline, while short, is approximately two 
weeks after the general information response to the questionnaire is 
normally due. If the Department extends the deadline for responding to 
that section of the questionnaire, it also will extend the time for 
making an allegation regarding market viability. Among the allegations 
covered by Secs. 351.301(d) and 351.404(d) are arguments that some 
number other than five percent should be used to determine viability, 
or that viability should be determined based on the value, rather than 
quantity, of sales.
    Paragraph (e) outlines factors for consideration when several third 
country markets are viable. These criteria are slightly modified from 
those found in Sec. 353.49(b) of the Department's prior regulations. In 
the past, the Department has most often found that the largest third 
country market is the best basis for comparison with the United States. 
However, in a few situations, the Department has discovered that other 
factors mitigate against selection of the largest market. For example, 
where sales to a particular third country market are of merchandise 
that is very similar to that sold to the United States, the use of that 
third country market may be more appropriate, even if it is not the 
largest market.
    Several commentators argued that the Department should retain the 
criteria found in the existing regulations for selecting a third 
country. In this regard, we note that the criterion that sales to the 
selected third country market be of sufficient quantity is now 
encompassed in the five percent test, which now applies to third 
country markets as well as the home market. The criterion that the 
selected market be like the United States in terms of organization and 
development is now reflected in the requirement of paragraph (c)(2) 
that there not be a market situation which prevents a proper 
comparison. In addition, paragraph (e) provides that the Department may 
consider other criteria for selection of a third country market that 
are relevant to a particular case. As in the past, while the Department 
will consider all relevant criteria, not all of the criteria of this 
section need be present in the selected market, and none is 
dispositive.
    Paragraph (f), based on Sec. 353.48(b) of the existing regulations, 
indicates that the Department normally will choose to calculate normal 
value based on sales to a viable third country market rather than on 
constructed value. The change in terminology (i.e., the deletion of 
``prefer'') is intended to reaffirm that the Department retains the 
discretion to select constructed value over a third country price-to-
price comparison in appropriate circumstances. However, once the 
Department chooses a comparison market, it will not reexamine the issue 
of viability. Thus, if the Department finds that it must disregard 
sales in the selected foreign market of a product that is most similar 
to the subject merchandise (e.g., because the sales are below cost), 
the Department will apply constructed value rather than seek sales in 
another market or use sales of less similar merchandise. This policy is 
discussed in more detail below in connection with Sec. 351.406 
(``comparison of merchandise'').
Section 351.405
    Section 351.405 deals with the calculation of normal value based on 
constructed value, and modifies Sec. 353.50 of the Department's 
existing regulations.
    Under section 773(e)(2)(A) of the Act, as a general rule the 
Department will base amounts for profit and selling, general and 
administrative expenses (``SG&A'') on the actual amounts incurred and 
realized by the specific exporter or producer in connection with the 
production and sale of a foreign like product in the ordinary course of 
trade. For ease of discussion, this general rule will be referred to as 
the ``preferred methodology.'' If data regarding a specific company's 
actual profit and SG&A are not available, section 773(e)(2)(B) of the 
Act provides three alternative methods for calculating these amounts 
(the ``alternative methods''). As stated in the SAA, at 840, the 
statute does not establish a hierarchy or preference among the three 
alternative methods.
    Paragraph (b) clarifies an issue regarding the market that will 
form the basis for the calculation of profit and SG&A under the 
preferred methodology and under the alternative methods. Specifically, 
paragraph (b)(1) provides that in applying the preferred methodology, 
sales in the country in which the merchandise is produced or a third 
country, as appropriate, will form the basis for the calculation of 
profit and SG&A. In contrast, paragraph (b)(2) provides that in 
applying the alternative methods, only sales in the country in which 
the merchandise is produced will form the basis for the calculation of 
profit and SG&A (or in the case of the third alternative method, the 
basis of the so-called profit cap).
    The issue arises because of the use in the statute of identical 
language that the Department interprets differently in different 
situations. Specifically, the statute states that with respect to both 
the preferred methodology and the alternative methods, profit and SG&A 
shall be based on sales ``for consumption in the foreign country.'' The 
SAA, at 840, provides that in the context of the three alternative 
methods, profit and SG&A shall be based on ``home market'' sales; i.e., 
sales in the country in which the merchandise is produced. Article 
2.2.2 of the AD Agreement similarly indicates that with respect to the 
three alternative methods, the appropriate market is the ``domestic 
market of the country of origin.'' Both the SAA and the AD Agreement 
are silent, however, on the market in which to calculate profit and 
SG&A with respect to the preferred methodology. Therefore, the 
Department intends to maintain its current practice of using home 
market or third country sales as the basis for profit and SG&A, as 
appropriate. Specifically, when an exporter's third country market 
forms 

[[Page 7335]]
the basis for normal value and the Department resorts to constructed 
value due to below-cost third country sales or model matching 
considerations, the Department will use third country sales as the 
basis for profit and SG&A. Use of third country sales in these 
situations is the most accurate and practical approach for both the 
Department and the respondent.
    In practice, the Department can derive an actual amount of profit 
by subtracting the cost (derived from COP data) from the home market 
sales price (derived from the home market sales data) to arrive at a 
net profit for each transaction examined. The Department will use the 
net profit figures to derive a per unit amount for profit. The 
Department will derive an ``actual'' amount of G&A by dividing the G&A 
from a company's financial statements by the cost of goods sold to 
arrive at a G&A ratio. The Department then will apply this ratio to 
total cost of manufacture on a per unit basis. The actual amounts for 
per unit selling expenses can be derived from the home market sales 
list. This leaves the question of whether the ``actual amounts'' for 
profit and SG&A should be based on a model-specific or aggregate-figure 
basis.
    One commentator argued that the Department should not calculate 
SG&A expenses exclusive of those sales that the Department disregards 
as being below cost, because these expenses rarely relate directly to 
individual sales. Another commentator, however, argued that SG&A and 
profit should be obtained from the same, or comparable, pool of sales.
    The Department's practice has been to use aggregate figures. 
Notably, section 773(e)(1)(B) of the pre-URAA statute provided for 
calculation of an amount for profit and SG&A ``equal to that usually 
reflected in sales of merchandise of the same general class or kind as 
the merchandise under consideration'' (emphasis added). In comparison, 
section 772(e)(2)(A) of the amended Act provides for use of the actual 
amounts incurred and realized for profit and SG&A ``in connection with 
the production and sale of a foreign like product.'' The use of ``a'' 
arguably could be interpreted to mean a particular model. The SAA, on 
the other hand, refers to actual amounts incurred, ``in selling the 
particular merchandise in question (foreign like product).'' SAA, at 
839. This language supports a view that the use of ``a'' was not 
intended to overturn our prior practice of relying on aggregate figures 
for profit and SG&A. Moreover, if ``a'' were to be interpreted 
literally, the Department would have the discretion to pick and choose 
the sale of the foreign like product from which profit and SG&A would 
be taken. This clearly would undermine the predictability of the 
statute. Given these distinctions, the amended Act arguably provides 
for a narrower basis for the calculation of profit and SG&A than did 
the prior statute. Therefore, the Department intends to calculate 
profit and SG&A based on an average of the profits of foreign like 
products sold in the ordinary course of trade.
    Both the pre-URAA statute and the amended Act provide that only 
sales ``in the ordinary course of trade'' be used as the basis for 
profit and SG&A. Under section 771(15) of the amended Act, however, the 
definition of ordinary course of trade has been expanded to require 
that the Department consider sales disregarded under the cost test to 
be outside the ordinary course of trade. A number of commentators 
argued that the profit and SG&A calculations should exclude all below-
cost sales. The Department believes that automatic exclusion of below-
cost sales would be contrary to the new statute. Specifically, in 
calculating profit and SG&A under the preferred and second alternative 
methods, the statute allows for exclusion of sales outside the ordinary 
course of trade. The statutory definition of ordinary course of trade, 
in turn, provides that only those below-cost sales that are 
``disregarded under section 773(b)(1)'' of the Act are automatically 
considered to be outside the ordinary course of trade. In other words, 
the fact that sales are below cost does not automatically trigger 
exclusion; rather, the sales must have been disregarded under the cost 
test before they will be excluded from the calculation of profit and 
SG&A.
    A number of commentators argued that the regulations should provide 
representative examples of sales that would be disregarded as not being 
in the ordinary course of trade, such as sales with abnormally high 
profits. One commentator suggested that the regulations define 
``abnormally high profits.'' Another commentator, in contrast, argued 
that no sale should be disregarded because of abnormally high profits 
unless an affirmative showing is made on a sale-by-sale basis that the 
price was not set by normal market forces. The SAA, at 839-840, and 
834, indicates that the Department could consider sales with abnormally 
high profits to be outside the ordinary course of trade, along with 
sales of off-quality merchandise, sales to affiliated parties not at 
arm's-length prices, sales of merchandise produced according to unusual 
product specifications, merchandise sold at aberrational prices and 
merchandise sold pursuant to unusual terms of sale. The Department does 
not believe that it is appropriate to include these examples in the 
regulations. As implied by the statute and the SAA, the Department has 
the discretion to consider sales and transactions, other than those 
specifically cited, to be outside the ordinary course of trade. The 
Department believes that it is more appropriate to make these ordinary 
course of trade determinations on a case-by-case basis.
    A number of commentators proposed that the regulations should adopt 
a de minimis profit level of two percent, and that where the profit 
amount calculated by the Department using one methodology is de 
minimis, the Department should rely on an alternative methodology. The 
Department has not adopted this proposal. The new statute specifically 
eliminates the prior statutory minimum for profit, and, instead, 
requires the use of the ``actual'' amounts incurred and realized by a 
specific exporter or producer. Nowhere does the new statute authorize 
the Department to establish a new de minimis rule requiring the 
Department to reject an alternative for calculating profit if that 
alternative results in a low amount for profit.
    As discussed above, section 773(e)(2)(B) of the Act provides for 
three alternative methods if data regarding a specific company's actual 
profit and SG&A are not available. One commentator suggested that the 
regulations should clarify the point at which the number of sales in 
the ordinary course of trade would be so small that the Department 
would disregard actual data in favor of an alternative method to 
calculate profit and SG&A. Another commentator argued that the 
regulations should provide that when actual data is not available for 
the calculation of profit, the Department must base its profit 
calculation on the company's financial records. Still another 
commentator argued that the regulations should clarify that only in 
exceptional circumstances will the Department resort to other 
producers' profits when calculating a respondent's profit. Finally, a 
number of commentators argued that the third alternative (``any other 
reasonable'' method) should be the company-wide profitability for the 
respondent in question for the most recent fiscal year, and that the 
Department should use this alternative only where profit cannot be 
determined under either of the other two 

[[Page 7336]]
alternatives. As discussed above, the SAA, at 840, makes clear that the 
statute does not establish a hierarchy or preference among the three 
alternative methods, and that selection of an alternative must be made 
on a case-by-case basis. No one approach would be appropriate 
necessarily for use in all cases. As stated in the SAA, at 841, ``the 
Administration does not believe that it is appropriate at this time to 
establish particular methods and benchmarks for applying [the third] 
alternative [method].'' As the Department still has not had enough 
experience in this area to develop a practice, the Department believes 
that it is inappropriate to adopt these suggestions.
    Under alternative methods one and three, profit and SG&A would be 
based on sales of products in the ``same general category of products 
as the subject merchandise.'' The SAA, at 840, indicates that this 
would be consistent with the existing practice of relying on a 
producer's sales of products in the same ``general class or kind.'' In 
addition, the SAA, at 840, indicates that the term ``general category 
of merchandise'' encompasses a category of merchandise broader than the 
term ``foreign like product.'' As a result, the Department intends to 
establish appropriate general categories on a case-by-case basis.
    The SAA, at 841, provides that the Department should not require 
companies to submit all data necessary to apply each alternative. For 
example, the SAA states that the Department will not require a company 
which has provided profit information on its own sales of the 
particular foreign like product also to submit profit information on 
its sales of the same general category of products solely to enable the 
Department to use the latter information to calculate profit for a 
different company. One commentator suggested that the regulations 
reaffirm the commitment in the SAA that the Department will not make 
burdensome information requests about profits in the context of 
calculating constructed value. The commentator proposed, in particular, 
that the Department should pledge to use audited and readily-available 
profit data. However, a number of commentators expressed concern that 
respondents not be allowed to unilaterally determine what profit 
information to submit, and suggested that respondents be required to 
submit additional key information, including profit and loss operating 
statements, charts of accounts, and information demonstrating the 
company's cost of capital. One commentator argued that the regulations 
should require full cost reporting by all companies under investigation 
(or review) so that alternative two would be a viable option. Given the 
directive to refrain from requiring excessive additional reporting of 
data, the Department believes that it would be premature to adopt these 
proposals. As a practical matter, over time the Department will gain 
experience as to the appropriate type and quantity of data to request.
Section 351.406
    Section 351.406 is new, and deals with the analysis of whether to 
disregard certain sales as below the cost of production under section 
773(b) of the Act.
    The Cost Test: Section 773(b)(1) of the Act provides that the 
Department may exclude below-cost sales from the determination of 
normal value if such sales occurred within an extended period of time 
in substantial quantities, and were not at prices which permit recovery 
of all costs within a reasonable period of time.
    Paragraph (b) clarifies that the phrase ``extended period of time'' 
normally will coincide with the period over which sales under 
consideration for use in the calculation of normal value were made; 
i.e., the period of investigation or review. Most comments on this 
issue were in accord with this approach. One commentator, however, 
stated that while there was a certain practical appeal to this 
approach, it would be more prudent for the Department to interpret the 
phrase ``extended period of time'' on a case-by-case basis. The SAA, at 
831-32, states that for purposes of computing the quantity of below-
cost sales, the Department will examine sales during the entire period 
of investigation or review. Thus, the SAA suggests that ``an extended 
period'' of time is intended to coincide with the investigative or 
administrative review period, as appropriate.
    Two commentators raised the issue of whether below-cost sales must 
be made continuously throughout the period in order for the Department 
to consider such sales to have been made ``within an extended period of 
time.'' These commentators posed a scenario wherein a substantial 
quantity of below-cost sales were made during a single month of a 
twelve-month review period, and questioned whether, in such an 
instance, the Department would have a sufficient basis for disregarding 
those sales. Other commentators argued that, consistent with the SAA, 
the Department no longer was required to find that below-cost sales 
occurred in a minimum number of months before excluding such sales from 
its analysis. According to these commentators, the Department must 
disregard substantial quantities of below-cost sales even if made in 
only one month of the period of investigation or review.
    The SAA, at 831-32, states that because below-cost sales need only 
occur ``within'' an extended period of time, the Department no longer 
must find that such sales occurred in a minimum number of months during 
the period. Thus, where the below-cost sales found during one month of 
the period meet the other requirements of the cost test (i.e., 
substantial quantities and cost recovery), the Department would exclude 
such sales from its analysis.
    Although not further addressed in these regulations, section 
773(b)(1)(A) of the Act also requires that the Department determine 
whether below-cost sales have been made in substantial quantities. 
Under section 773(b)(2)(C)(i) of the Act, the Department will consider 
below-cost sales to have been made in ``substantial quantities'' if 
they account for 20 percent or more of the volume of sales under 
consideration for normal value. Under section 773(b)(2)(C)(ii) of the 
Act, the Department also may find below-cost sales to be in substantial 
quantities if the weighted average per unit price of the sales under 
consideration is less than the weighted average per unit COP of those 
sales.
    In most cases, the Department intends to apply the 20 percent test 
in identifying those instances in which respondents sold substantial 
quantities of the merchandise at below-cost prices. In cases involving 
highly perishable agricultural products, however, the Department 
intends to apply the other substantial quantities benchmark (the 
weighted average price-to-cost test), which closely corresponds to the 
Department's previous substantial quantities benchmark for below-cost 
sales in cases involving highly perishable agricultural products. The 
Department's prior practice reflected the nature of perishable 
agricultural products, which often must be sold at below-cost prices in 
large quantities as the products begin to grow old and spoil.
    Comments on the issue of substantial quantities were split. Some 
commentators argued that both substantial quantities tests should be 
applied in all cases. Other commentators maintained that under normal 
circumstances, the Department should apply only the 20 percent 
benchmark. These commentators contend that the language of the SAA 
limits the use of the weighted average 

[[Page 7337]]
benchmark strictly to cases involving highly perishable agricultural 
products.
    The SAA, at 832, states that the new weighted average price-to-cost 
benchmark, like the old 50 percent rule, is intended to account for the 
unique situation that exists with regard to below-cost sales of highly 
perishable agricultural products. As a result, the Department intends 
to apply this benchmark normally only in cases involving highly 
perishable agricultural products. However, because there may be other 
circumstances in which it would be appropriate to apply the weighted 
average price-to-cost benchmark, the Department has not established a 
bright line rule that would limit the use of this benchmark to cases 
involving highly perishable agricultural products.
    Finally, in determining whether to exclude below-cost sales from 
the calculation of normal value, section 773(b)(1)(B) of the Act 
requires that the Department determine whether such sales, ``were not 
at prices which permit recovery of all costs within a reasonable period 
of time.'' New section 773(b)(2)(D) of the Act clarifies that prices 
shall be considered to provide for recovery of costs within a 
reasonable period of time if such prices which are below cost at the 
time of sale are above the weighted average per unit cost of production 
for the period of investigation or review. Under the statute, 
therefore, the Department's cost recovery test must consist of an 
analysis involving individual prices for specific below-cost sales 
transactions. This is consistent with the position taken by a number of 
commentators.
    Regarding cost recovery, several commentators also made suggestions 
concerning the issue of adjustments to cost for ``periodic temporary 
disruptions to production'' and the treatment of ``unforeseen 
disruptions in production.'' The SAA, at 832, provides that before 
testing for cost recovery, the Department may adjust COP to take 
account of variations in per unit costs caused by ``temporary 
disruptions to production that occur on a less frequent than annual 
basis.'' The SAA cites major maintenance that occurs every three years 
as an example of such a temporary disruption, and notes that the 
respondent must demonstrate that the disruptions have ``recurred at 
regular and predictable intervals.'' The SAA also provides special 
treatment for unforeseen disruptions to production that are beyond the 
respondent's control. Here, the SAA cites as an example the destruction 
of respondent's production facilities by fire, and states that the 
Department will continue to adjust for such disruptions by relying on 
costs computed at a time prior to the unforeseen event.
    One commentator submitted draft regulations outlining the above 
concepts from the SAA with regard to periodic disruptions in production 
and their effect on cost recovery. In response to this submission, 
another commentator argued that the proposed draft language was too 
restrictive of respondents' ability to demonstrate that below-cost 
sales should not be disregarded.
    The Department believes that determinations involving periodic 
temporary disruptions to respondents' production costs are fact-
specific in nature, and that while regulatory examples of such 
disruptions might give some guidance, they also might be interpreted as 
limiting the types of circumstances for which the Department will 
consider an adjustment. Moreover, in computing cost of production, the 
Department typically allows respondents to amortize or otherwise adjust 
for costs associated with major maintenance or other periodic 
activities that disrupt production. Thus, regulations providing 
specific examples of temporary disruptions might be interpreted as 
limiting these types of adjustments solely to the cost recovery 
analysis. The Department, therefore, has not included in its 
regulations specific provisions concerning adjustments to costs for 
periodic temporary disruptions in production. Nor do the regulations 
include any discussion of how the Department intends to treat costs 
associated with unforeseen disruptions in production. To do so in the 
context of cost recovery would conflict with explicit guidance given in 
the SAA, at 832, which states that the issue of unforeseen disruptions 
in production is ``not a matter of cost recovery.''
    Initiation of Below-Cost Sales Investigation: The Department 
received several comments on the standard for determining whether an 
allegation of sales below cost provides reasonable grounds to initiate 
an investigation of sales below cost. These comments are discussed 
above in connection with section 351.301(d)(2).
    Below-Cost Sales Disregarded and Ordinary Course of Trade: Section 
773(b)(1) of the Act provides that where below-cost sales have been 
disregarded, the Department will base normal value on the remaining 
sales of the foreign like product made in the ordinary course of trade. 
However, if there are no remaining sales made in the ordinary course of 
trade, the Department will base normal value on constructed value. The 
Department's past practice was to disregard all sales of a product if 
below-cost sales exceeded 90 percent of the total sales quantity of the 
product. Under section 773(b)(1) of the Act, however, the Department is 
required to use any existing above-cost sales to compute normal value 
if such sales were made in the ordinary course of trade. Additionally, 
the SAA, at 833, states that only where there are no above-cost sales 
in the ordinary course of trade will the Department resort to 
constructed value as the basis for normal value.
    Under section 771(15) of the Act, the term ``ordinary course of 
trade'' encompasses those below-cost sales that meet the criteria of 
section 773(b)(1) of the Act. Thus, in most instances, the Department 
will disregard such sales and compute normal value using only the 
remaining above-cost sales. The SAA, however, describes two 
circumstances under which this general rule may not apply.
    The first circumstance involves sales of obsolete or year-end 
merchandise. The SAA, at 833, notes that sales of such merchandise are 
often made at below-cost prices. Despite this fact, the SAA explains 
that it is appropriate to use these below-cost sales as the basis for 
normal value where the merchandise exported to the United States is 
similarly obsolete or end-of-model year. The second circumstance, while 
not explicitly stated in the SAA, involves above-cost sales made 
outside the ordinary course of trade. The SAA, at 834, provides 
examples of sales that the Department might consider as being outside 
the ordinary course of trade. These include sales made at aberrational 
prices or with unusual terms of sale. Although such sales may pass the 
COP test under section 773(b)(1) of the Act, the Department normally 
would exclude them from the calculation of normal value. The Department 
has incorporated examples of sales that may be considered outside the 
ordinary course of trade as defined in Sec. 351.102 of the regulations.
    The Department received proposals from several commentators 
concerned about the determination of below-cost sales as outside the 
ordinary course of trade. Two of these commentators expressed the 
opinion that below-cost sales are a fundamental business reality, and, 
as such, companies set prices to obtain a reasonable return in the 
aggregate for their product line. The two commentators suggested that 
to account for this phenomenon in its antidumping analysis, the 
Department should adopt a two-tier test for substantial quantities. 
Under the first tier, the Department would look to see if below-cost 
sales in the comparison market were, in 

[[Page 7338]]
aggregate, greater than twenty percent of all such sales. If so, the 
Department would determine that the overall pattern of sales in the 
comparison market were not in the ordinary course of trade, and then 
would apply the twenty percent substantial quantities benchmark to 
comparison market sales on a model-specific basis.
    This suggestion drew sharp criticism from a number of other 
commentators, who maintained, among other things, that the exclusion 
test for sales below cost is to be applied on a model-specific basis. 
The Department agrees with these commentators that the proposed two-
tier test would not be consistent with the SAA, at 832, which states 
that ``the cost test will generally be performed on no wider than a 
model-specific basis.'' Many of the commentators opposing the two-tier 
test recommended that the Department state in its regulations its 
intent to continue use of a model-specific cost test. The Department 
believes that such a regulation is not necessary, because the 
Department has used a model-specific cost test as part of its practice 
for a number of years, and has no intention of changing its practice on 
this issue.
    The Department also received many comments relating to the use of 
remaining above-cost sales as the basis for normal value. Some 
commentators recommended that the Department's regulations reflect the 
language of the statute and the SAA by providing for the use of 
constructed value only where there were no comparison market sales made 
in the ordinary course of trade. Other commentators, however, urged the 
Department to avoid setting arbitrary and inflexible standards for 
determining when above-cost sales must be used to establish normal 
value. These commentators claimed that where there are only a few 
aberrational, high-priced sales above-cost, such sales may be totally 
unrepresentative as a basis for normal value. To avoid this problem, 
one of the commentators suggested that the Department use statistical 
concepts to identify when the price of a particular transaction is so 
far from the average price as to be deemed not in the ordinary course 
of trade.
    In rebuttal, certain commentators argued that the Department should 
not exclude from consideration for normal value small numbers of above-
cost sales simply because such sales were made at high prices. 
According to these commentators, any above-cost sales made in the 
ordinary course of trade should be used to compute normal value. The 
commentators further argued that the Department should reject the 
``simple statistical'' tests proposed by other commentators, because 
this approach is contrary to the usual practice of examining a wide 
host of factors to determine whether sales are in the ordinary course 
of trade.
    Section 773(b)(1) of the Act indicates that the Department is to 
disregard sales made outside the ordinary course of trade when 
computing normal value. In addition, section 773(b)(1) of the Act 
provides for the use of constructed value only where there are no 
above-cost sales remaining in the ordinary course of trade. However, in 
cases where the few remaining above-cost sales are made at 
aberrationally high prices, the SAA provides that these sales may be 
excluded from consideration for normal value if they are determined to 
be outside the ordinary course of trade. This determination typically 
will depend on specific facts regarding the product, the industry, the 
terms of sale, and any number of other considerations, including, 
perhaps, statistical analyses of prices. Thus, to base the ordinary 
course of trade analysis solely on statistical concepts would be 
inappropriate, at least at this time. Moreover, without the experience 
that comes from actual cases, it would be foolhardy to define specific 
criteria for deciding which above-cost sales are ``aberrational'' and 
which are in the ordinary course of trade.
    Finally, one commentator suggested that before conducting its cost 
analysis, the Department should exclude sales made outside the ordinary 
course of trade (other than below cost sales). This commentator argued 
that including such sales in the below-cost test effectively double-
counts the sales not made in the ordinary course of trade. Commentators 
opposing this suggestion stated that it is not in accordance with the 
new statute. The Department agrees that this suggestion is not 
supported by the statute. Section 773(b)(1) of the Act instructs the 
Department to determine whether sales of the foreign like product have 
been made at less than the cost of production. Nowhere does the statute 
suggest that the Department should perform its cost analysis only on 
sales in the ordinary course of trade.
    Comparison of Merchandise: Two commentators suggested that the 
regulations provide the Department with the alternative of using the 
next most similar category of products for comparison purposes, rather 
than automatically resorting to the use of constructed value (``CV'') 
when there are no above-cost sales for a particular model. In opposing 
this recommendation, one commentator argued that, in accordance with 
the statute, product matching occurs without regard to the exclusion of 
below-cost sales.
    Under section 773(a) of the Act, the Department is authorized only 
to compare the merchandise under investigation to the foreign like 
product. The suggestion of one commentator that where the most similar 
merchandise can not be used for comparison because there are 
insufficient sales above the cost of production, the Department may use 
less similar merchandise as comparison models is incompatible with the 
statutory scheme. Section 771(16) directs the Department to base its 
comparisons on the first of three categories in which there is 
merchandise that may be satisfactorily compared with the subject 
merchandise (see section 771(16) of the Act, with respect to which the 
only change brought about by the URAA was the substitution of the term 
``foreign like product'' for the term ``such or similar merchandise''). 
Most favored is ``merchandise which is identical in physical 
characteristics'' and ``produced in the same country by the same 
person'' as the merchandise under investigation. If there were no sales 
of merchandise with identical physical characteristics, the Department 
must select merchandise that meets the conditions set forth in section 
771(16)(B) of the Act; i.e., like the merchandise under investigation 
and approximately equal in commercial value. If no merchandise 
qualifies under section 771(16)(B), the Department must select 
merchandise that meets the conditions set forth in section 771(16)(C) 
of the Act; i.e., of the same general class or kind, similar in use, 
and reasonably comparable with the merchandise under investigation. The 
Department would subvert this statutory scheme if it did not use the 
first category in which there were sales; for example, by making a 
comparison with ``similar'' merchandise even though the respondent had 
sales of identical merchandise. Moreover, adopting the proposed 
methodology effectively would add an additional criterion to 771(16); 
namely, that merchandise in the category selected must be sold above 
cost in sufficient quantity. As the CIT has explained in upholding the 
Department's policy under prior law, ``[o]nce the model matches are 
established and the COP test is completed, Commerce is not required to 
reexamine all of the undifferentiated model data in order to make new 
matches and price comparisons on the basis of whatever subset of lower-
ranked such or similar merchandise survives 

[[Page 7339]]
the COP test.'' Zenith v. United States, 872 F. Supp. 992, 1000 (CIT 
1994). See also Policy Bulletin 92/4, ``The Use of Constructed Value in 
COP Cases,'' for a detailed discussion of this issue.
    One commentator recommended that for purposes of computing COP and 
CV, the Department should rely on the product categories that a 
respondent uses in its normal course of business. Several commentators 
opposed this recommendation, stating that costs are to be computed 
based on the same product categories established by the Department for 
model matching. The Department's practice is to calculate costs 
consistent with the model matching criteria it develops outset of an 
investigation or review, after having received the views of the 
parties. The product categories developed in such fashion generally 
account for significant differences in actual costs affecting price. 
The Department intends to continue this practice because it prevents 
any manipulation of the cost analysis through changes in internal 
product classifications.
Section 351.407
    Section 351.407 contains special rules for the allocation of costs 
and the calculation of CV and COP in situations involving startup 
operations.
    Allocation of Costs: Paragraph (b) provides that the Department 
will consider various factors associated with the production and sale 
of the subject merchandise and the foreign like product in order to 
ensure that the method used to allocate production costs reasonably 
reflects and accurately captures all of the producer's actual costs. 
Paragraph (b) specifically mentions two factors, production quantities 
and relative sales values, that the Department may take into account in 
judging whether common production costs (including costs incurred as 
part of a joint manufacturing process) have been allocated among 
products on an appropriate basis. As has been its practice in the past, 
however, the Department may weigh other significant qualitative and 
quantitative factors concerning the production of the merchandise in 
question to ensure that a producer has reported a representative 
measure of the materials, labor, overhead, and other costs associated 
with the subject merchandise and the foreign like product.
    Startup Costs: Startup costs are addressed in paragraph (c). Under 
section 773(f)(1)(C)(ii) of the Act, the Department may make an 
adjustment for costs relating to startup operations only if the 
following two conditions are satisfied:
    (1) A producer is using new production facilities or producing a 
new product that requires substantial additional investment, and
    (2) production levels are limited by technical factors associated 
with the initial startup phase of commercial production.

For good reason, these conditions are somewhat generalized, because 
they must allow for any number of startup operation scenarios. The 
Department recognizes the fact-specific nature of the startup 
adjustment, and realizes that much of the guidance for implementing the 
adjustment will come from future case work. Nevertheless, the 
Department believes that the regulations offer an opportunity to 
furnish parties with additional clarification of those circumstances 
that qualify as startup operations and those that do not. To achieve 
this goal, while at the same time keeping the definition of startup 
clearly within the bounds intended by Congress, the Department has 
incorporated into the regulations concepts from the SAA, at 836-838, 
that help to define startup operations and explain the startup 
adjustment.
    Definition of startup: Paragraph (c)(1) includes definitions for 
``new production facilities'' and ``new products,'' as well as guidance 
on whether improvements to products or facilities and expansion of 
capacity qualify as startup operations. The Department received a 
number of comments concerning the definition of startup. For the most 
part, the commentators fell into two camps--those who believed that 
startup should be ``narrowly defined'' in the regulations, and those 
who rejected this approach. In either case, the commentators did not 
provide substantive definitions that differed in any significant way 
from those adopted by the Department. Rather, their thoughts on whether 
or not to craft the regulations ``narrowly'' related to issues of 
implementation and burden of proof, both of which are discussed 
separately below.
    In addition to the comments described above, the Department 
received comments on two other issues regarding the startup definition. 
With respect to the first issue, one commentator argued that the term 
``new product'' does not refer to ``improved'' products or to new-
model-year versions of products, and recommended that the Department's 
regulations reflect this premise. According to the commentator, ``new 
products'' must have completely new designs or require the use of new 
facilities or ``substantial additional investment'' to existing 
facilities. Another commentator wrote to reject this position, stating 
that, while the SAA clearly intends to exclude from startup any 
incrementally improved products, it does not prohibit new-model-year 
versions from qualifying as ``new products'' where they satisfy the 
definition of a startup. The Department agrees with the latter 
commentator. There is no basis in the statute or SAA to specifically 
exclude new-model-year products or ``improved'' products where their 
production otherwise meets the startup criteria.
    With respect to the second issue, two commentators recommended that 
the Department include an additional condition to the startup analysis. 
These commentators maintained that no startup adjustment should be 
allowed where, based on a comparison of prices and costs in the startup 
period, the Department finds that the respondent has adjusted its 
prices upward to reflect the higher startup costs. The Department has 
rejected this proposal, because neither the statute nor the legislative 
history provides for this approach.
    Demonstrating entitlement to a startup adjustment: Although the 
statute does not provide any specific guidance regarding the burden of 
establishing entitlement to a startup adjustment, the SAA, at 838, 
makes clear that the burden is on the party seeking the adjustment:


    Specifically, companies must demonstrate that, for the period 
under investigation or review, production levels were limited by 
technical factors associated with the initial phase of commercial 
production and not by factors unrelated to startup, such as 
marketing difficulties or chronic production problems. In addition, 
to receive a startup adjustment, companies will be required to 
explain their production situation and identify those technical 
difficulties associated with startup that resulted in the 
underutilization of facilities.


Importantly, however, the SAA notes that the burden imposed for startup 
adjustments is consistent with the Department's approach to adjustments 
in general. Thus, in demonstrating to the Department that a startup 
adjustment is warranted, respondents will be held to the same legal and 
factual standards that apply to all other adjustments in an antidumping 
analysis.
    The Department received a number of comments regarding this 
``burden of proof'' issue. Although virtually all of the commentators 
recognized that the burden of establishing entitlement to an adjustment 
fell on the party making the claim (in all likelihood the respondent), 
there was significant disagreement as to 

[[Page 7340]]
the evidentiary standard that the Department should apply in 
considering whether to grant a startup cost adjustment. Those 
commentators seeking to limit the availability of the startup 
adjustment claimed that in considering whether to grant an adjustment, 
the Department's regulations must hold respondents to a rigid 
evidentiary standard. They reasoned that because the startup provision 
constitutes an exception to the cost of production/constructed value 
section of the statute, the Department should grant an adjustment only 
in limited circumstances. This would ensure that, in the words of the 
SAA, at 835, the startup adjustment did not provide respondents with a 
``license to dump.''
    The Department believes that, contrary to the commentators claims, 
this statement from the SAA is not intended to place a higher-than-
normal burden on parties. Instead, the statement merely advocates 
strict enforcement of the startup provision, and advises the Department 
to grant adjustments only in those circumstances where they are 
warranted.
    The Department also received recommendations from two commentators 
that wished to reduce the burden of proof below that applicable to 
other adjustments. The first commentator suggested that the 
Department's regulations provide that once a respondent has made a 
prima facie case of entitlement to a startup adjustment, the Department 
would make the adjustment unless there was clear and convincing 
evidence that factors other than startup affected sales volumes. In 
addition, the commentator recommended that the regulations impose an 
early deadline, following the request for a startup adjustment by 
respondent, by which the Department must: (1) Decide precisely what 
additional information a respondent must supply to support a claimed 
startup adjustment, and (2) decide whether an adjustment is 
appropriate. The second commentator took a somewhat less radical (but 
still far-reaching) approach in recommending that the Department 
interpret the burden on respondents as a ``burden of production'' 
rather than a ``burden of proof.'' This commentator explained that the 
term ``burden of production'' meant that a respondent has the 
responsibility for cooperating in the proceeding and producing whatever 
evidence is available to support its claim. By contrast, according to 
the commentator, the ``burden of proof'' meant that the respondent had 
the ultimate burden of persuasion in convincing the Department of its 
entitlement to a startup adjustment.
    The Department has not adopted these recommendations. Again, 
according to the SAA, the burden of proof undoubtedly rests with the 
party seeking a startup adjustment. Therefore, it is incumbent upon 
that party to (1) prove that the startup conditions of section 
773(f)(1)(C)(ii) of the Act existed during the period of investigation 
or review, and (2) as with any antidumping adjustment, document that 
fact to the Department's satisfaction.
    Duration of the startup period: Under section 773(f)(1)(C)(ii) of 
the Act, the startup phase ends at the time commercial production 
levels have been achieved. Commercial production levels themselves, 
however, represent a somewhat nebulous benchmark. Therefore, in gauging 
the end of the startup period, the statute instructs the Department to 
consider factors unrelated to startup operations that also may affect a 
respondent's production volumes. These factors include market demand, 
product seasonality, and business cycles. Section 773(f)(1)(C)(iii) of 
the Act further provides that the benchmark commercial production 
levels are to be characteristic of the merchandise, producer, or 
industry concerned.
    It is clear from the statute that measurement of commercial 
production volumes (and, thus, determination of the end of the startup 
period) is dependent on a range of factors specific to the product or 
industry under consideration. This concept is also expressed in the 
SAA, at 837, which states:


    The Administration recognizes that the nature and timing of 
startup operations will vary from industry to industry and from 
product to product, and that any determination of the appropriate 
startup period involves a fact-intensive inquiry * * *. For this 
reason, the Administration intends that Commerce determine the 
duration of the startup period on a case-by-case basis.


    However, while the duration of the startup period is to be 
evaluated based on the facts of each case, the SAA does provide 
guidance regarding the type of evidence that the Department will 
examine and the factors it should consider in making its determination. 
The SAA, at 836-37, instructs the Department to first examine the 
actual production experience for the merchandise in question in 
determining when a company reaches commercial production levels. In 
addition, the SAA states that the Department should consider other 
information, including ``historical data reflecting the same producer's 
or other producer's experiences in producing the same or similar 
products.'' The SAA makes clear, however, that the Department should 
ascribe little weight to a producer's projections of future production 
volumes or costs. Lastly, the SAA notes that the Department must 
consider those factors described in the statute that are unrelated to 
startup operations but that may affect production volumes. Again, these 
include product demand, seasonality, and business cycles. These factors 
are reflected in paragraphs (c)(2) and (c)(3). Furthermore, consistent 
with the SAA, paragraph (c)(4)(i) provides that the Department will 
determine the duration of the startup period on a case-by-case basis.
    The Department received relatively few recommendations regarding 
the duration of the startup period. This perhaps reflected the 
commentators appreciation of the fact-intensive nature of the startup 
period determination. Most commentators that did provide 
recommendations generally urged the Department to incorporate the 
statutory language into the regulations. Certain commentators suggested 
that the regulations reflect the SAA stipulation that attainment of 
peak production levels will not be the standard for identifying the end 
of the startup period. This is consistent with paragraph (c)(2)(i).
    One commentator argued that the startup period should be ``narrowly 
conscribed,'' but did not offer any direct suggestions as to what this 
meant or how it should be achieved. The Department believes, however, 
that the statute does not provide for a narrow interpretation of the 
startup period. Rather, the intent of the statute is to determine the 
duration of the startup period based on the specific facts of each 
case.
    Method of adjusting for startup costs: Section 773(f)(1)(C)(iii) of 
the Act sets forth the basic methodology for making startup 
adjustments. According to this section, where the essential conditions 
of startup have been satisfied, the Department will adjust for startup 
operations by ``substituting the unit production costs incurred with 
respect to the merchandise at the end of the startup period for the 
unit production costs incurred during the startup period.'' Section 
773(f)(1)(C)(iii) further provides that in situations where the startup 
period extends beyond the period of investigation or review, the 
Department will base any startup adjustment on ``the most recent cost 
of production data that it reasonably can obtain, analyze, and verify 
without 

[[Page 7341]]
delaying the completion of the investigation or review.''
    Given the variety of products and diverse industries investigated 
by the Department, the statutory instructions under section 
773(f)(1)(C)(iii) of the Act provide a reasonably comprehensive 
framework for implementing the startup adjustment methodology. The 
Department believes that any attempt to further define the adjustment 
methodology runs the risk of limiting the Department's ability to 
consider the facts of each case in adjusting for startup costs.
    Likewise, in those instances where the startup operations extend 
beyond the period of investigation or review, the regulations do not 
impose time limits on the acceptance of relevant cost of production 
data beyond those already set forth in the statute. Instead, the 
Department will evaluate its ability to obtain, analyze, and verify 
such data on a case-by-case basis. Moreover, the regulations do not 
limit the type of data that may be used to adjust production costs for 
extended startup periods. For example, where the startup operations 
involve a new manufacturing facility, the appropriate adjustment 
methodology may require deriving surrogate costs based on identical 
merchandise manufactured at a previously existing facility.
    Costs included in the startup adjustment: As explained in the SAA, 
at 837, in adjusting production costs for startup operations, the 
Department ``will consider unit production costs to be items such as 
depreciation of equipment and plant, labor costs, insurance, rent and 
lease expenses, materials costs, and overhead.'' The SAA further notes 
that ``sales expenses, such as advertising costs, or other non-
production costs, will not be considered startup costs because they are 
not directly tied to the manufacturing of the product.'' The Department 
believes that these examples from the SAA provide helpful guidelines in 
determining which types of costs qualify as production costs for which 
a startup adjustment may be allowed. Therefore, they are reflected in 
paragraph (c)(4)(iii).
    Despite the clear language of the SAA, some commentators have 
suggested that adjustments for startup operations should take into 
account only variable production costs, excluding altogether any fixed 
production costs that may have been incurred during the startup phase. 
This proposal is inconsistent with the SAA, which does not limit 
qualified startup costs to variable costs only. Indeed, several of the 
eligible cost categories identified in the SAA--depreciation, 
insurance, rent and lease expenses, and (in some instances) overhead--
are typically regarded by the Department as fixed costs. Moreover, the 
fact that production levels are limited during the startup period means 
that, in most instances, the per unit fixed costs will be affected to a 
greater extent by startup operations than will the per unit variable 
costs during the same period. Thus, the Department has rejected the 
proposal that the startup adjustment be limited to variable production 
costs only.
    Amortization of startup costs: In general, the adjustment for 
startup operations calls for the replacement of high, per-unit 
production costs incurred during startup operations with lower costs 
from a period subsequent to the startup phase. Under this methodology, 
however, a portion of the actual startup costs remains unaccounted for 
as a result of the startup adjustment. Although the statute is silent 
on how to treat this difference between actual costs and surrogate 
costs calculated for startup, the SAA, at 837, states that such 
deferred costs are to be amortized over a reasonable period of time. 
The SAA further provides that the amortization period should begin 
subsequent to the startup phase and extend over the life of the startup 
product or machinery. Paragraph (c)(4)(ii) reflects the language in the 
SAA by providing that where startup operations relate to a new product, 
the Department, in most cases, will look to documentation regarding the 
estimated life of that product to determine the appropriate 
amortization period for excess startup costs. Where startup operations 
relate to a new production facility, the Department normally will 
determine the proper amortization period based on reasonable estimates 
of the useful lives of new production equipment.
    Several commentators suggested that the amortization period for 
deferred costs must be ``relatively short and immediate'' in all cases. 
In addition, one of the commentators maintained that the amortization 
period must commence at the beginning of the startup phase, while 
another commentator claimed that the period for amortization could not 
extend beyond the period of investigation or review. The Department 
disagrees with the suggestion that the startup cost amortization period 
must be short and immediate in all cases, because there is no support 
for this suggestion in either the statute or the SAA. Instead, the 
length of the amortization period depends on the specific facts of each 
case and may vary greatly depending on a number of factors, including a 
respondent's past production experience and commercial practices within 
the industry under investigation or review.
    The Department also has not adopted a proposal that (1) the startup 
amortization period must commence at the beginning of the startup 
phase, and (2) the amortization period may not exceed the period of 
investigation or review. Regarding the first point, the SAA states that 
the amortization period is to begin subsequent to the startup phase. 
With respect to the second point, the SAA states that the amortization 
period for deferred startup costs should reflect the life of the 
product or machinery, as appropriate. The SAA gives no indication that 
the amortization period must not extend beyond the period of 
investigation or review. In fact, it is entirely conceivable that the 
life cycle of a particular product or piece of machinery (and, thus, 
the amortization period for deferred startup costs) could span several 
segments of a single proceeding.
    Recognition of previously incurred startup costs: Two commentators 
suggested that the Department adopt regulations to discourage selective 
use of the startup adjustment, as well as to provide for more equitable 
treatment of startup costs in general. To achieve these objectives, the 
commentators recommended that the Department disallow startup claims 
where a respondent does not also amortize startup costs for other 
products covered by an order. As one of the commentators explained in 
relating startup costs to other types of non-recurring costs:

    [T]he treatment of any non-recurring costs should provide for an 
equitable approach that adds non-recurring costs to later sales as 
well as deducting them from current sales. Thus, if certain types of 
non-recurring costs incurred during the investigation period are to 
be reduced and not fully attributed to that period, then similar 
non-recurring costs from before the period should be allocated in a 
similar manner and added to the costs during the period.

Under the commentator's proposed accounting methodology, the Department 
presumably would require a respondent seeking an adjustment for startup 
operations to recognize an amortized portion of similar startup costs 
previously incurred on all other products and facilities that had 
undergone startup prior to the period of investigation or review. Thus, 
as a condition for receiving a startup adjustment for one product, a 
respondent would have to show that it had accounted in a like manner 
for the startup costs incurred with respect to all other products sold 
during the period.
    The Department does not find the above accounting requirement to be 
an 

[[Page 7342]]
appropriate condition of startup. There is no such requirement in 
either the statute or the SAA. Moreover, the Department believes that 
requiring a respondent to account for all past startup costs as a 
precondition to receiving an adjustment for startup costs incurred 
during the period of investigation or review would discourage 
respondents from seeking a startup adjustment in those circumstances 
where an adjustment is appropriate. Under such a requirement, the 
burden placed on respondents would be too great, requiring them in many 
instances to look to detailed accounting records of old product lines 
and facilities that, for practical business reasons, may long since 
have been discarded.
    Nonrecurring Costs: New section 773(f)(1)(B) of the Act states that 
the Department will adjust COP and CV for those nonrecurring costs that 
benefit current or future production periods. The SAA, at 835, notes 
that the provisions of section 773(f)(1)(B) of the Act are consistent 
with the Department's past practice, which associated expenditures with 
production of the merchandise during the period or periods benefitted 
by those expenditures.
    Two commentators suggested that the Department establish 
regulations clarifying that nonrecurring costs treated as non-operating 
or extraordinary expenses by a company should be included in the cost 
of production only if those costs benefit current or future production. 
The commentators suggested that the Department's regulations state that 
to the extent such costs do benefit current or future production, they 
should be included in COP and CV by allocating the costs over the 
production they benefit. The commentators added that, in some 
instances, this may entail the amortization of the costs over periods 
longer than the period of investigation or review. Another commentator 
stated that while it did not object to the proposal for regulations 
clarifying the treatment of nonrecurring costs, the Department also 
should require respondents to provide information and data for 
nonrecurring costs incurred before the period of investigation or 
review. This commentator noted that the Department could then include 
in COP and CV the previously incurred costs if such costs benefitted 
production during the period of investigation or review. Finally, 
another commentator urged the Department to reject the proposed 
regulations for treatment of nonrecurring costs. The commentator stated 
that the Department should continue to examine nonrecurring costs on a 
case-by-case basis.
    As the Department has learned in past cases, it is not always easy 
to determine whether (and to what extent) a particular expenditure 
benefits current or future production periods. In virtually all 
instances, the Department must analyze the expenditure in light of any 
number of specific factors in the case. For example, the SAA, at 835, 
cites pre-production research and development (R&D) costs as an example 
of nonrecurring costs that could benefit current or future periods. 
However, there is no guarantee that such costs, if incurred to develop 
a new product or production process, would hold any future benefit to a 
company. To the contrary, after many months of costly research, a 
manufacturer could find its new product technologically useless due to 
the efforts of its competitors. In that case, the amounts incurred for 
R&D would not benefit the producer in terms of future product sales. 
Under these circumstances, the R&D expenditures must be recognized as 
an expense in the year incurred rather than amortized to some future 
periods.
    Because of the fact-specific nature of determinations involving 
nonrecurring costs, the Department has not drafted any regulations to 
implement section 773(f)(1)(B) of the Act. Examples of nonrecurring 
costs in the regulations would not prove helpful to parties, because 
there are many unique categories of expenditures to consider in a 
variety of industries. Moreover, depending on the circumstances, a 
particular expenditure in one case could provide the producer a future 
benefit, whereas the identical expenditure made by another producer in 
a different case may provide no benefit at all. Thus, including 
specific examples of nonrecurring costs in the regulations might create 
confusion for parties.
    The Department believes that a respondent's accounting treatment of 
a particular expenditure is one factor to consider in determining how 
that expenditure should be treated for purposes of computing COP and 
CV. It is by no means dispositive, however. With regard to the 
suggestion that the Department account for nonrecurring costs incurred 
in prior periods, the Department believes that it is unnecessary for 
the Department to make this a regulatory requirement. Instead, the 
Department will examine on a case-by-case basis whether to account for 
such previously-incurred costs where they benefit production during the 
period of investigation or review.
    Major Input Rule: Section 773(f)(3) of the Act (which replaces old 
section 773(e)(3)) contains the ``major input rule.'' Under this rule, 
the Department may examine transactions between affiliated producers 
and suppliers for purchases of major inputs. Section 773(f)(3) of the 
Act (formerly section 773(e)(3)) provides that where the Department has 
reasonable grounds to believe or suspect that an affiliated supplier 
has made below-cost sales of a major production input, the Department 
may base the value of the input on the affiliated supplier's production 
costs. This provision applies both to cost of production and 
constructed value.
    A number of commentators suggested that the Department clarify 
through regulation the following standards for initiating an input 
dumping investigation: (1) That no supplier cost information may be 
requested by the Department without ``reasonable grounds'' to suspect 
input dumping; (2) that no carryover of ``reasonable grounds'' exists 
between segments of a proceeding (i.e., findings of below-cost inputs 
in one segment does not provide grounds for automatic initiation in the 
next); (3) the time limits within which the Department must make a 
determination as to which affiliated party inputs are ``major''; and 
(4) that no supplier cost information may be requested if the 
supplier's transfer prices are demonstrated to be at arm's length. 
Other commentators suggested that the Department define a ``major 
input'' as any material, labor, or overhead input that represents five 
percent or more of the total cost of materials for the merchandise. In 
addition, these commentators urged the Department to consider on a 
case-by-case basis the use of transfer prices or costs in valuing major 
inputs. The commentators stressed that this determination must be made 
separately for each input rather than in the aggregate for all 
affiliated party inputs.
    The determination of whether an affiliated party input constitutes 
a ``major input'' in a particular case depends on the input and the 
product under investigation. It would be inappropriate for the 
Department to attempt to establish an all-encompassing threshold for 
defining the term ``major input,'' because such a definition likely 
would prove to be too broad in some circumstances and too narrow in 
others. However, the Department does agree that it should attempt to 
identify, as early as possible in a proceeding, a standard for 
identifying major inputs that is appropriate to the product and 
industry in question. In addition, as the Department gains more 
experience in determining whether parties are ``affiliated'' under the 
new law, the 

[[Page 7343]]
Department will establish through practice the evidentiary threshold 
for requesting transfer prices and cost data from affiliated suppliers 
that furnish major inputs (see section 351.102 and the accompanying 
explanation for further discussion regarding affiliated persons).
    Calculation of Costs: One commentator stated that it is unclear 
from the SAA when costs are ``rapidly changing'' such that it would be 
appropriate to use shorter time periods to calculate costs. The 
commentator suggested that the Department's regulations provide 
illustrative examples that would allow interested parties to determine 
when costs are ``rapidly changing.'' According to the commentator, the 
Department's regulations also should describe the shorter periods that 
would be used to compute costs in such situations.
    Another commentator recommended that the Department clarify in its 
regulations the circumstances in which it will calculate costs based on 
amounts incurred by both the exporter and producer. The commentator 
urged the Department to refrain from attempting to correct ``upstream 
dumping,'' and instead limit its analysis of both the exporter's and 
the producer's costs to those situations in which the relationship 
between the two throws into question the legitimacy of their 
transactions.
    The Department believes that determinations involving both of these 
issues are fact-specific in nature, and that while regulatory examples 
might give some guidance, they also might be construed as imposing 
limits on the circumstances in which the Department will address these 
issues. As a result, the Department has not included any provisions in 
the regulations specifically addressing these issues. The Department 
intends to develop its practice with respect to these issues over time.
    With respect to the use of a respondent's normal records in 
computing COP and CV, two commentators suggested that the regulations 
incorporate the concepts outlined in the SAA, at 834-35, including the 
stipulation that the Department will use the records of the exporter or 
producer of the merchandise, provided that such records are kept in 
accordance with the generally accepted accounting principles (GAAP) of 
the exporting or producing country and reasonably reflect the costs 
associated with the production and sale of the merchandise. The 
commentators also recommended additional regulations describing the 
type of evidence the Department will consider in determining whether 
respondent's costs are ``reasonably reflected,'' and stating that the 
Department will re-allocate costs that would inappropriately reduce COP 
and CV. In response to these suggestions, one commentator argued that 
the SAA does not provide the Department with the authority to adjust a 
respondent's books and records in order to compute a ``more accurate'' 
per-unit cost. Rather, the Department is to use company records as the 
basis for reporting costs, so long as those records are kept in 
accordance with GAAP and reasonably reflect costs incurred.
    Section 773(f) of the Act explicitly provides for the use of a 
company's books and record in the calculation of costs, provided that 
such records are kept in accordance with the generally accepted 
accounting principles of the exporting country and reasonably reflect 
the costs associated with the production and sale of the merchandise. 
As a result, the Department has not repeated this directive in the 
regulations. The determination of whether a respondent's costs are 
``reasonably reflected'' will be based on a case- and fact-specific 
analysis. Where a respondent's records do not reasonably reflect the 
costs associated with the production and sale of the merchandise, the 
Department may adjust the figures in a respondent's books and records 
in order to compute a more accurate per-unit cost.
    With respect to the Department's COP questionnaire, one commentator 
suggested that the questionnaire be revised to elicit sufficient 
information that traces the cost of production from the per unit cost 
of the subject merchandise back to a company's audited financial 
statements. The Department must balance its ability to conduct COP 
investigations with reporting burdens placed on respondents, and the 
Department this year revised its questionnaire with this balance in 
mind. Notably, the questionnaire does require respondents to provide 
reconciliation of unit costs. If, however, the information requirements 
of the Department's standard antidumping questionnaire should prove 
inadequate in a particular case, the Department will modify its 
information requirements.
Section 351.408
    The current statutory provision addressing the calculation of 
normal value in antidumping proceedings involving nonmarket economies 
(``NMEs'') was enacted as part of the Omnibus Trade and Competitiveness 
Act of 1988 (Pub. L. 100-418, section 1316(a)). The Department never 
issued regulations implementing the 1988 amendment. Instead, the 
Department developed its NME methodology through administrative 
practice. Now, with the benefit of seven years' experience in 
administering the NME provision, the Department believes it is 
appropriate to codify the rules the Department intends to apply. 
Certain of these rules, contained in Sec. 351.408, restate the practice 
the Department has developed over the past seven years, while other 
rules constitute changes that the Department believes to be 
improvements over current practice.
    We have decided not to codify the existing MOI (market oriented 
industry) test at this time. Some commentators have argued that it does 
not make sense to use an NME producer's prices or costs in an 
environment in which institutions important to the functioning of 
markets such as private ownership and private capital markets do not 
exist. In their view, an NME producer's prices or costs can only have 
economic meaning where these very fundamental types of institutions are 
in place. Other commentators see the current MOI test as overlooking 
the important role that an open trading system, with relatively few 
quantitative restraints, can play in ensuring that domestic prices and 
costs are market-determined, and in reducing the effects of remaining 
instances of state presence or control. In light of these concerns, we 
are seeking comments on whether the current MOI test succeeds in 
identifying situations where it would be appropriate to use domestic 
prices or cost in an NME as the basis for normal value and, if not, 
what form the test should take.
    Surrogate Selection: Section 773(c)(1) of the Act contains the 
usual methodology for calculating normal value in proceedings involving 
NMEs, the so-called ``factors of production'' methodology. Section 
773(c)(2) provides an alternative to the preferred methodology, 
allowing the Department in narrowly drawn circumstances to use the 
export prices of certain market economies as normal value. In either 
case, the Department is required to select a ``surrogate'' market 
economy country or countries to use in its calculations.
    Section 773(c)(4) of the Act describes the criteria for surrogate 
selection where the factors of production methodology is used: 
surrogates should be market economies at a level of economic 
development comparable to that of the NME and significant producers of 
comparable merchandise. Where the export price alternative to the 
factors of production methodology is being used, 

[[Page 7344]]
prices are to be taken from market economy countries at levels of 
economic development comparable to that of the NME. This alternative, 
as to which further comment is appropriate, has not been used in any 
antidumping proceeding since the 1988 amendment was enacted, but if it 
is used in future cases, the economic comparability criterion, 
discussed in more detail below, would be applied in the same way it is 
applied when the factors of production methodology is used.
    In selecting surrogate countries for investigations and reviews 
that were conducted under the 1988 amendment and that involved the 
valuation of NME producers' factors of production, the Department has 
accorded differing weights to the economic comparability and 
significant producer criteria. Typically, the Department has placed 
greater emphasis on the former. However, the regulations do not codify 
this weighing scheme, because, depending on the specific facts of a 
case, this scheme can result in a poor surrogate selection. For 
example, where the production process for the merchandise being 
investigated relies heavily on non-traded inputs (i.e., inputs that 
must be acquired locally, such as electricity), it is reasonable to 
expect that significant production of that merchandise will occur only 
in countries where the input is relatively inexpensive. However, these 
countries may not be economically comparable to the NME. For example, 
the Department has not observed any correlation between electricity 
prices and levels of economic development. The Department believes that 
in adopting the significant producer criterion, Congress intended for 
the Department to select a surrogate country (or countries) where input 
prices and availability allow significant production to occur. 
Therefore, where production of the subject merchandise relies heavily 
on an input that is more readily available, or available at lower cost, 
in certain countries, it is appropriate to place greater weight on the 
``significant producer'' criterion.
    On the other hand, where the most important inputs are easily 
traded and can be obtained from multiple sources in the surrogate 
country, the significant producer criterion may be less important. This 
is because in these situations there is no direct correspondence 
between significant levels of production and input price or 
availability. Instead, wage rates and other considerations such as 
investment restrictions or access to important markets will be more 
important determinants of where production will occur. With the 
exception of wage rates, which are discussed further below, these other 
considerations will not usually have as direct an impact on the input 
prices that would be used to value the NME producers' factors of 
production.
    For these reasons, the Department does not believe it is 
appropriate to create an a priori weighing scheme to be applied to the 
criteria for selecting surrogates. Instead, in each proceeding the 
Department will identify those countries that are economically 
comparable to the NME and those countries that are significant 
producers of comparable merchandise. If there is a country that meets 
both criteria, that country will be selected as the surrogate. If there 
is more than one country that meets both criteria, the Department will 
evaluate the specific facts developed in the course of the proceeding 
to determine whether to select the more economically comparable country 
or the country whose producers employ production technologies similar 
to those of the NME producers. If no country meets both the economic 
comparability and the significant producer criteria, the Department 
will examine the facts of the case and comments submitted by the 
parties to determine which criterion should receive the greatest 
weight.
    Economic Comparability: Regarding the economic comparability 
criterion, the Department's practice of relying most heavily on 
comparability of per capita GDP to select economically comparable 
countries is codified in paragraph (b). Certain other indicia of 
economic comparability have been considered in the past, such as growth 
rates and the distribution of labor between the manufacturing, 
agricultural and service sectors. However, primary weight has been 
placed on per capita GDP.
    Factor Valuation: Once a surrogate country (or countries) has been 
selected, the next step is to assign values to the actual factors or 
inputs used by the NME producer. In choosing these values, the 
Department has developed practices that emphasize ``accuracy, fairness, 
and predictability.'' Oscillating Fans and Ceiling Fans from the 
People's Republic of China, 56 FR 55271, 55275 (October 25, 1991), 
cited with approval in Lasko Metal Products, Inc. v. United States, 43 
F.3d 1442 (Fed. Cir. 1994). The Department continues to believe that 
these goals should guide the factor valuation process, and, 
consequently, is proposing rules to further this.
    Two important practices have arisen to promote the accuracy, 
fairness and predictability of the factor valuation process. First, the 
Department has developed a preference for using publicly available, 
published information (``PAPI'') to derive factor prices. See Final 
Determination of Sales at Less Than Fair Value: Certain Carbon Steel 
Butt-weld Pipe Fittings from the People's Republic of China, 57 FR 
21058, 21062 (May 18, 1992) (Butt-Weld Pipe Fittings). This practice, 
along with the practice of attempting to use data derived from a single 
surrogate country, clearly enhances the transparency and predictability 
of our determinations. However, based on experience, the Department has 
concluded that a preference for PAPI also can result in decreased 
accuracy. This is particularly true where surrogate country trade 
statistics are used and the import/export categories used to derive 
unit values are broad.
    In order to strike a better balance between the goals of accuracy 
and transparency, paragraph (c)(1) drops the preference for published 
information, limiting the preference to publicly available information. 
The public availability standard is aimed at promoting transparency, 
while the deletion of the published information standard enables the 
Department to achieve greater accuracy when information on the specific 
factor can be derived outside of published sources. Paragraph (c)(1) is 
not meant to preclude the Department from using published information. 
Instead, it is intended to reflect the Department's preference for 
input specific data over the aggregated data that frequently appear in 
published statistics.
    The Department continues to take the position that it is not 
required to use ``perfectly conforming information'' for factor 
valuations. Ceiling Fans from the People's Republic of China: Notice of 
Court Decision; Exclusion from the Application of the Antidumping Duty 
Order, in Part; and Amended Final determination and Order, 59 F.R. 9956 
(March 2, 1994). However, the Department is exploring means of 
enhancing the accuracy of the data used to value the NME producers' raw 
materials. To that end, the Department intends to use the flexibility 
accorded to the agency by section 773(c) and reflected in court 
decisions to date regarding our administration of the 1988 amendment.
    The second important practice that has developed involves 
situations where an NME producer uses inputs which are: (1) Imported 
from a market economy producer, and (2) paid for in a market economy 
currency. In these instances, the Department has used the price 
actually paid by the NME 

[[Page 7345]]
producer in lieu of a price in the surrogate country. This practice has 
been upheld by the Federal Circuit in Lasko. Paragraph(c)(1) clarifies 
the Department's authority to continue this practice.
    The regulation also clarifies two aspects of this practice. First, 
in situations where a portion of the NME producer's input is sourced 
from a market economy source (and paid for in a market economy 
currency) and the remainder is sourced from producers within the NME, 
paragraph (c)(1) makes clear that the price paid to the market economy 
supplier should normally be used to value the input, not the price 
derived from a surrogate. This reflects the Department's position that 
accuracy is enhanced when the NME producer's actual costs can be used. 
However, where the amount purchased from a market economy supplier is 
insignificant, that price may be disregarded.
    Second, in using prices of inputs imported from market economy 
suppliers, the Department in the past has stated that the imported 
input must be paid for in a convertible currency. The Department 
believes that this is an overly rigorous requirement. The extent to 
which currencies may be converted varies even among market economy 
currencies. Yet, the Department uses the exchange rates for less-than-
fully convertible currencies in our dumping proceedings involving those 
countries. Paragraph (c)(1) recognizes that full convertibility of the 
currency used to pay for the imported input is not necessary so long as 
the market economy producer is paid in a market economy currency.
    Valuation in Single Country: Paragraph (c)(2) codifies the 
Department's general preference for valuing all factors, except labor 
(as discussed below), in a single surrogate country. As noted above, to 
enhance the predictability of proceedings involving nonmarket 
economies, the Department has followed the practice of attempting to 
value the NME producers' factors of production in a single country, 
even though sections 773(c)(1) and (c)(4) clearly permit values to be 
developed from more than one country.
    Where the Department is able to develop industry specific data on 
manufacturing overhead, general expenses, and profit, it is 
particularly appropriate to remain within a single country for those 
values. Normally, it is inappropriate to combine the manufacturing 
overhead rate from producers in one surrogate with the general expenses 
of producers in another surrogate, and the profit of producers in yet 
another surrogate. Therefore, particularly for manufacturing overhead, 
general expenses and profit, the Department prefers to use a single 
surrogate.
    With regard to other inputs, however, the preference for using a 
single country addresses, at least in part, a different concern. It is 
meant to prevent parties from ``margin shopping''; i.e., to prevent 
parties from arguing that the Department combine input prices from 
different surrogates to achieve the highest or lowest valuations of 
those inputs. While it is important to discourage margin shopping, the 
Department also has encountered situations in which the accuracy of 
available information regarding prices for particular factors in the 
surrogate country is highly questionable. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cased Pencils 
from the People's Republic of China, 59 FR 55625, 55630 (November 8, 
1994). Clearly, in these situations it is appropriate to reject the 
questionable values and use data from a second country. Alternatively, 
where the factor is traded internationally, the goals of accuracy and 
fairness may be better served by using the prices observed in 
international markets to represent the price at which producers in the 
surrogate country could obtain the input.
    Labor: Paragraph (c)(3) proposes a new methodology with respect to 
the valuation of labor. Practitioners and academicians commenting on 
the application of the antidumping law to NMEs (and, in particular, the 
use of economically comparable countries as surrogates) have tended to 
equate comparable per capita GDPs with comparable wages. The Department 
has examined this proposition based on recent data of the type the 
Department uses in its proceedings, and has concluded that while per 
capita GDP and wages are positively correlated, there is great 
variation in the wage rates of the market economy countries that the 
Department typically treats as being economically comparable. As a 
practical matter, this means that the result of an NME case can vary 
widely depending on which of the economically comparable countries is 
selected as the surrogate.
    Because of the variability of wage rates in countries with similar 
per capita GDPs, paragraph (c)(3) directs the Department to use what is 
essentially an average of the wage rates in market economy countries 
viewed as being economically comparable to the NME. The statute permits 
this approach because section 773(c)(4) refers to using prices or costs 
in ``one or more market economy countries.'' Moreover, use of this 
average wage rate will contribute to both the fairness and the 
predictability of NME proceedings. By avoiding the variability in 
results depending on which economically comparable country happens to 
be selected as the surrogate, the results are much fairer to all 
parties. To enhance predictability, the average wage to be applied in 
any NME proceeding will be calculated by the Department each year, 
based on the most recently available data, and will be available to any 
interested party. This method of computing the wage rate should reduce 
the workload on the Department and the parties, because it eliminates 
the need to develop specific wage rate information for each case.
    Specifically, the Department will calculate the wage rate to be 
applied by using an ordinary least squares regression relating the wage 
rates and per capita GDP of approximately 45 market economy countries. 
The data used and the results of the regression will be available from 
the Department upon request.
    Manufacturing Overhead, General Expenses, and Profit: Paragraph 
(c)(4) deals with the valuation of manufacturing overhead, general 
expenses, and profit. These elements tend to be significant components 
of the constructed normal value of NME exports, and, hence, it is 
particularly important to have accurate values for them. However, the 
Department's experience in this regard has been less than satisfactory. 
Frequently, under prior law, the Department could not find surrogate 
values for these elements, thus forcing the Department to rely upon the 
statutory minima of 10 and 8 percent for general expenses and profit, 
respectively. The amendments to section 773(e)(2)(A) have eliminated 
this as an option. Moreover, even in cases in which PAPI was available, 
it was virtually always highly aggregated and frequently it was not 
clear what types of expenses were included in the amounts.
    Given the importance of manufacturing overhead, general expenses 
and profit in the calculation of normal value, the Department believes 
it is important to seek information that is as accurate as possible. To 
this end, paragraph (c)(4) expresses a preference for using non-
proprietary information gathered from producers of identical or 
comparable merchandise in the surrogate country for valuing 
manufacturing overhead, general expenses and profit. Because the 
Department expects that these elements will vary widely across 
industries, we 

[[Page 7346]]
will attempt to obtain data that is as specific as possible to the 
subject merchandise.
    In past cases, the Department has relied on U.S. embassies in 
surrogate countries to obtain data on manufacturing overhead, general 
expenses, and profit (as well as values for other inputs) with 
disappointing results (see Butt-Weld Pipe Fittings, supra). The 
Department intends to redouble its efforts to work with embassies in 
gathering this data, while at the same time seeking alternative means 
of developing this information. However, even if the Department is able 
to develop industry-specific information, it would be overly optimistic 
to believe that the Department will have detailed information on the 
exact expenses that have gone into the values for manufacturing 
overhead and general expenses. As far as overhead is concerned, this 
can raise problems of double counting. For example, if we do not know 
whether water or electricity is included in the surrogate producers' 
overhead, we will not know whether to value those factors separately, 
in addition to the overhead. The Department continues to believe that 
these situations must be approached on a case-by-case basis using facts 
available, in accordance with section 773(c)(1).
    Assignment of Antidumping Margins: The Department has addressed the 
rates to be applied in NME cases in connection with the definition of 
``rates'' contained in Sec. 351.102.
Section 351.409
    Section 351.409 sets forth the guidelines for making adjustments to 
normal value for differences in quantities, and is based on section 
353.55 of the existing regulations. The statutory authorization for 
quantity adjustments is found in section 773(a)(6)(C)(i) of the Act. 
The proposed rule is substantially the same as the existing rule, with 
three exceptions discussed below.
    Paragraph (b) is changed from existing section 353.55(b). The 
existing paragraph provides that the Department will deduct a quantity 
discount from the selling price of merchandise used in the antidumping 
calculation, regardless of whether the quantity discount was actually 
applied, only in two circumstances. To qualify for the adjustment, a 
respondent either had to have granted discounts of a similar magnitude 
on 20 percent of the foreign market sales, or the respondent had to 
demonstrate that savings were specifically attributable to production 
of different quantities. One commentator suggested that the Department 
should have more flexibility to grant the adjustment, because there may 
be other ways to demonstrate that different price levels exist for 
different quantities. The Department agrees that this may be so, and, 
accordingly, paragraph (b) provides that an adjustment for differences 
in quantities ``normally'' will be made only if the ``20 percent'' or 
``production savings'' rules, noted above, are satisfied.
    The same commentator also suggested that the absence of a published 
price list should not be controlling with respect to the allowance of 
an adjustment. While the Department does not necessarily agree that the 
absence of a price list is controlling under existing Sec. 353.55, 
paragraph (d) clarifies that the existence or absence of a price list 
is not controlling. In addition, the Department has clarified that 
where a price list does exist, the Department, in determining whether 
or not to grant an adjustment, will give weight to the price list only 
to the extent that the producer or exporter in question has adhered to 
the price list.
    Paragraph (e) is new, and deals with the relationship between 
adjustments for differences in quantities and adjustments for 
differences in levels of trade. Under the new statute and these 
proposed rules, the Department may grant claims for level of trade 
adjustments more frequently than it did in the past. In many instances, 
however, there is likely to be a correlation between the level of trade 
at which a sale occurs and the volume sold. Therefore, there is a real 
possibility that in adjusting for differences in level of trade, the 
Department also will be adjusting, in whole or in part, for differences 
in quantities. In order to conform to the prohibition in 
Sec. 351.401(b) against the double-counting of adjustments, paragraph 
(e) provides that where the Department makes a level of trade 
adjustment, the Department will not make an adjustment for differences 
in quantities unless the effect on price comparability of quantity 
differences can be isolated from the effect of the level of trade 
difference.
Section 351.410
    Section 351.410 clarifies aspects of the Department's practice with 
respect to adjustments for differences in circumstances of sale under 
section 773(a)(6)(C)(iii) of the Act and the SAA, at 828. In general, 
the Department's practice with respect to adjustments for direct 
selling expenses and assumptions of expenses remains unchanged from 
prior practice. However, paragraph (a) confirms that the expenses for 
which the Department will make a circumstance of sale adjustment 
include, in constructed export price situations, direct expenses and 
``assumptions'' incurred in the foreign market on sales of the subject 
merchandise, that are not deducted under section 772(d) of the Act. The 
reference to a deduction for other selling expenses relates to the 
commission offset contained in paragraph (e), discussed below.
    One commentator suggested that section 351.410 be drafted in such a 
way as to essentially function as a catch-all provision to achieve 
``fairness.'' While section 773(a) of the Act and Article 2.4 of the 
Antidumping Agreement both require that a fair comparison be made, both 
provisions specify in detail the methods by which this requirement is 
satisfied. Therefore, the Department has not adopted this suggestion.
    Paragraph (b) defines ``direct selling expenses.'' The provision 
broadly defines such expenses in the same way that they are defined in 
the statute for purposes of the deduction from constructed export price 
under section 772(d)(1)(B) of the Act. In addition, paragraph (b) 
provides a non-exhaustive list of expenses that frequently qualify as 
direct selling expenses. In this regard, this list includes 
commissions, a type of expense which often was treated as a direct 
selling expense under prior Department practice. In section 772(d)(1) 
of the Act, commissions are listed separately from direct selling 
expenses. This might suggest that, for purposes of adjustments to 
normal value, commissions should not be treated as direct selling 
expenses. However, the SAA, at 828, indicates that Congress intended 
that, with the exception of the so-called ``ESP offset,'' the 
Department's practice regarding circumstance of sale adjustments would 
remain unchanged. Accordingly, for purposes of adjustments to normal 
value, the Department has included commissions in the list of commonly 
encountered direct selling expenses.
    Some commentators suggested that the Department should recognize 
expenses as direct in the home or third country market when they are 
reported in accordance with business records normally kept by the firm 
based on the GAAP of the appropriate country. The Department has not 
adopted this suggestion. As noted above, a direct selling expense must 
result from, and bear a direct relationship to, the particular sale in 
question. The fact that, for example, salespersons' salaries are 
reported to the Department in a manner consistent with foreign GAAP and 
the 

[[Page 7347]]
particular firm's normal business records does not transform what is 
unquestionably a fixed expense into an expense that ``results from'' a 
sale.
    Other commentators suggested that direct selling expenses should be 
defined as expenses incurred after a sale. The Department has not 
adopted this suggestion. ``After'' and ``results from'' do not 
necessarily mean the same thing. While direct selling expenses 
typically are ``post-sale'' expenses, the Department has chosen to 
adhere to the language of the statute and the SAA.
    Assumed expenses, which are treated like direct expenses, are 
defined in paragraph (c). Although such expenses were not previously 
identified as a separate category of expenses, it has long been the 
Department's policy to treat such expenses in the same manner as direct 
expenses.
    Paragraph (d) is largely unchanged from prior regulations, and 
provides that the normal basis for circumstance of sale adjustments 
will be the amount of the expense. However, if appropriate, the 
Department may rely on differences in value to make the adjustment.
    Paragraph (e), based on existing Sec. 353.56(b)(1), continues the 
special rule to be applied when commissions are deducted in one market, 
but there are no commissions in the other market. Under the special 
rule, other selling expenses may be deducted from the price in the 
market without commissions up to the amount of the commission.
    The Department also received several suggestions relating to the 
treatment of particular types of adjustments, such as discounts and 
rebates and adjustments for differences in credit terms. Discounts and 
rebates are dealt with in Sec. 351.401(c). Without commenting on the 
merits of the particular suggestions with regard to selling expenses, 
the Department has declined to promulgate regulations on these 
particular topics, because they go beyond the level of methodological 
detail that the Department is attempting to achieve in these 
regulations.
Section 351.411
    Section 351.411 establishes the provisions for making adjustments 
for differences in physical characteristics. As under current practice, 
the Department is not authorized to make adjustments for physical 
characteristics when products are considered to be identical.
Section 351.412
    Section 351.412 deals with levels of trade, adjustments for 
differences in levels of trade, and the CEP offset. Paragraph (b) 
establishes how the Department will identify levels of trade in 
calculating export price, CEP, and normal value. Paragraph (b)(1) 
clarifies that, for export price and normal value, the level of trade 
will be based on the price of the sale before any adjustment is made. 
For constructed export price, the level of trade will be based on the 
price after adjustments are made under Sec. 772(d) of the Act, but 
prior to any other adjustment. The purpose of this provision is to 
establish the level of trade of the constructed export price sale at 
the level at which the sale would have been made, had it been an export 
price sale.
    With respect to the identification of levels of trade, some 
commentators argued that, consistent with past practice, the Department 
should base level of trade on the starting price for both export price 
(``EP'') and CEP sales. In support of this argument, these commentators 
cite the portion of the SAA (discussed above) that states that the 
introduction of the new terms ``EP'' and ``CEP'' was not intended to 
change prior Department practice. In addition, these commentators 
argued that the deduction of U.S. expenses and profit does not change 
the level of trade of the CEP.
    The Department believes (as did other commentators) that this 
position is not supported by the SAA, and that it is neither reasonable 
nor logical. If the starting price is used for all U.S. sales, the 
Department's ability to make meaningful comparisons at the same level 
of trade (or appropriate adjustments for differences in levels of 
trade) would be severely undermined in cases involving CEP sales. As 
noted by other commentators, using the starting price to determine the 
level of trade of both types of U.S. sales would result in a finding of 
different levels of trade for an EP sale and a CEP sale adjusted to a 
price that reflected the same selling functions. Accordingly, the 
regulations specify that the level of trade analyzed for EP sales is 
that of the starting price, and for CEP sales it is the constructed 
level of trade of the price after the deduction of U.S. selling 
expenses and profit.
    Section 351.412(c)(1) explains the general rule that the Department 
will make an adjustment for differences in levels of trade when it (i) 
calculates normal value based on sales at a level of trade different 
from that of the export price or constructed export price, and (ii) 
determines that the difference in level of trade has an effect on price 
comparability. We are interested in comments on how these rules can 
provide further guidance on this adjustment. We also will take account 
in the final rules the knowledge we expect to gain in administrative 
proceedings under the new law.
    Certain commentators argued that there should be a regulatory 
presumption that the level of trade of the EP or CEP sale is the least 
remote level. Under these circumstances, they argue, a level of trade 
adjustment could never increase normal value. Therefore, the Department 
would only be required to analyze respondents' claims for level of 
trade adjustments. In the absence of a claim for an adjustment, the 
level of trade of the U.S. sale and normal value would be considered 
the same.
    We disagree that the EP or CEP necessarily will be the least remote 
level of trade. Therefore, the regulations specify that the Department 
will in all instances analyze the level of trade of the sales in the 
United States and the comparison market, and, where appropriate, will 
increase or decrease normal value to effect a fair comparison.
    Paragraph (c)(2) sets forth the rules for determining whether there 
are different levels of trade. This determination will be based 
primarily on the selling functions performed at each of the allegedly 
different levels. As set forth in the SAA, at 830, overlap between 
functions is not necessarily determinative of whether two levels of 
trade are distinct. Paragraph (c)(2) makes clear that sales at two 
allegedly different levels will be considered to have been made at the 
same level where the selling functions at the two levels are 
substantially the same.
    Several commentators argued that the existence of a level of trade 
must be established by criteria independent of seller functions. This 
argument holds that only after establishing the existence of discrete 
levels of trade should the Department consider differences in selling 
functions and the pattern of price differences. Furthermore, they 
contend, levels of trade are properly identified by the classification 
of the seller's customers in the chain of distribution. Specifically, 
to be considered at different levels of trade, two sellers must sell to 
different customer categories in a chain of distribution (e.g., 
producer, distributor, retailer, consumer). For example, a producer and 
distributor both selling to end users would be classified at the same 
level of trade.
    Other commentators, on the other hand, stated that there is no 
mention of an additional test or criterion in either the Act or the 
SAA. These commentators also note that both the Act and the SAA stress 
activities of the seller and do not mention activities of the customer 
as a factor in the level of 

[[Page 7348]]
trade analysis. Furthermore, according to these commentators, it is 
quite common, even usual, for firms operating at different levels of 
trade to sell to the same customer categories and sometimes to the same 
customers. For example, producers sell to large retailers as well as to 
distributors that in turn sell to smaller retailers. However, the fact 
that they both sell to retailers does not justify classifying producers 
and distributors as being at the same level of trade. Each sells a 
different mix of product and service.
    The Department agrees that an additional test or criterion for 
level of trade is not required by the AD Agreement or the statute, nor 
is one justified. Although the language of section 773(a)(7)(A) of the 
Act might be interpreted to mean that the recognition of a level of 
trade is dependent on factors in addition to seller functions, the 
Department interprets the reference to level of trade as referring to a 
respondent's claimed or alleged level of trade. The only test 
identified in the statute for the legitimacy of the claimed levels of 
trade is the activity of the seller. The suggestion that customer 
classifications define levels of trade does not comport with that test 
and, furthermore, the Department believes that the effect of adopting 
such a criterion would be to curtail severely the possibility of 
adjusting for significant differences in seller functions, either with 
a level of trade adjustment or the CEP offset. Nevertheless, the 
Department does recognize that prices within a single level of trade, 
defined by seller function, can be affected by the class of customer, 
and the Department will make every effort to compare sales at the same 
level of trade and to the same class of customer.
    Paragraph (c)(2) defines level of trade solely on the basis of 
seller functions. However, small differences in the functions of the 
seller will not alter the level of trade. The latter point is 
important, because certain commentators argued that the difference in 
just one selling function should be sufficient to justify a difference 
in level of trade. While it is conceivable that the Department may find 
in a particular case that some single function is so significant as to 
change the level of trade, this would be relatively rare. Furthermore, 
the adoption of the suggested standard would result in the submission, 
and possibly the grant, of unreasonable claims for level of trade 
adjustments.
    Paragraph (c)(3) reflects the requirements of the statute for 
identifying effects on price comparability. One commentator recommended 
requiring that at least 90 percent of the sales of the foreign like 
product reflect differences in price at different levels of trade to 
qualify for an adjustment. The regulations do not include a specific 
test for a pattern of consistent price differences, because, at this 
time, the Department has no experience in applying this standard.
    Under paragraph (c)(4), the amount of any adjustment will be 
measured by calculating the average percentage difference between 
weighted-average prices at the two different levels, and applying this 
percentage to the price to be adjusted. To avoid double-counting 
adjustments, the regulation stipulates that price differences will be 
measured after making price adjustments required under other 
provisions, such as adjustments for movement and selling expenses under 
section 773(a)(6) of the Act. One commentator recommended limiting the 
adjustment to the difference between the lowest price at the more 
advanced level of trade and the highest price at the less advanced 
level of trade. The Department does not agree that this would be 
appropriate, because it would reflect price extremes rather than usual 
prices. Another commentator recommended that the regulations 
specifically exclude from the measurement of a level of trade 
adjustment related party prices that fail the arm's-length test and all 
sales deemed outside the ordinary course of trade. The Department has 
not included such regulations, because we have little experience in 
this area and will need time to develop the appropriate methodology. To 
attempt to further circumscribe this adjustment by regulation could 
have unintended consequences that would be difficult to correct in an 
actual case.
    Paragraph (d) elaborates on the constructed export price offset 
contained in section 773(a)(7)(B) by providing a definition of the 
indirect expenses that make up this offset.
    One commentator suggested that the regulations specify that in CEP 
calculations there is a presumption that there will be a level of trade 
adjustment or the offset. The Department has not included such a 
regulation. It would not be appropriate to assume that the CEP is at a 
different level of trade than the prices used as the basis of normal 
value or that any such differences in level of trade affect price 
comparability.
Section 351.413
    Section 351.413, describing the authority to disregard 
insignificant adjustments, is unchanged from section 353.59(a) of the 
Department's prior regulations.
Section 351.414
    Section 351.414 implements section 777A(d) of the Act, and deals 
with the three methods authorized by the statute for determining 
whether sales at less than fair value exist. Paragraph (b) is a 
definitional section which coins shorthand expressions for the three 
methods in order to render the remainder of Sec. 353.414 less 
cumbersome.
    Methodological Preferences: The methodological preferences set 
forth in the SAA are codified in paragraph (c). Consistent with the 
SAA, at 842-43, paragraph (c)(1) provides that the preferred method in 
an antidumping investigation will be the average-to-average method, and 
that the preferred method in an antidumping review will be the average-
to-transaction method.
    In the case of reviews, there were numerous comments regarding the 
use of the average-to-average method. The Department has not adopted 
the suggestion of one commentator that the regulations provide that the 
average-to-average method is the preferred method in a review. Although 
section 777A(d)(2) of the Act does not expressly state that the 
average-to-transaction method is the preferred method in a review, the 
SAA expressly states that it is the ``preferred methodology.''
    Conversely, the Department has not adopted the suggestion of 
several commentators that the regulations preclude use of the average-
to-average method in a review. Although the average-to-transaction 
method is clearly the preferred method in a review, neither the statute 
nor the SAA affect the Department's preexisting authority under section 
777A(a) of the Act to use the average-to-average method in reviews 
under the appropriate circumstances. In this regard, several 
commentators urged that the Department adopt a regulation expressly 
acknowledging that the average-to-average method may be used in 
reviews. The regulations do not include such a provision, because the 
Department believes that the statute and these regulations are 
sufficiently clear regarding the propriety of using the average-to-
average method in reviews.
    Several commentators argued that the average-to-average method 
should be used whenever normal value is based on constructed value. As 
with any comparisons, the preferences of the statute and these 
regulations apply. In investigations, the preferred method, including 
comparisons with constructed 

[[Page 7349]]
value, is average to average. In reviews, it is average to transaction.
    We also have not adopted a suggestion that the regulations provide 
that in cases involving highly perishable agricultural products, the 
preferred approach will be to use the average-to-average method, with 
averages being calculated over the market cycle. In the past, the 
Department has used the average-to-average method in cases involving 
perishable agricultural products, and believes that the administrative 
and judicial precedents arising out of these cases would continue to be 
valid under the new statute and these regulations. See e.g., Floral 
Trade Council of Davis, Cal. v. United States, 606 F. Supp. 695, 703 
(CIT 1991). However, at this time, the Department does not believe it 
has sufficient experience with these types of cases to warrant the 
creation of a regulatory preference in favor of the average-to-average 
method in all cases of this type. Likewise, the Department does not 
consider it appropriate to create a regulatory preference for averaging 
over the market cycle. At this point, the Department believes it is 
more appropriate to decide these issues on a case-by-case basis.
    Paragraph (c)(1) also makes clear that the transaction-to-
transaction method will only be used in unusual circumstances, as urged 
by several commentators. In addition, one commentator stated that a 
regulation should provide details regarding the Department's 
application of this method. The Department does not believe it 
appropriate at this time to go beyond what is already included in the 
SAA; namely, that this method ``would be appropriate in situations 
where there are very few sales and the merchandise sold in each market 
is identical or very similar or is custom-made.'' SAA, at 842.
    Application of the Average-to-Average Method: Paragraph (d) deals 
with the application of the average-to-average method. Paragraph (d)(1) 
provides that the Secretary will identify those sales to the United 
States that are comparable to each other and include such sales in an 
``averaging group.'' The Secretary then will compare the weighted 
average of the export prices or constructed export prices of the sales 
included within a particular averaging group to the weighted average of 
the normal values of such sales.
    Paragraph (d)(2) deals with the identification of the averaging 
group. In this regard, several commentators suggested that the 
regulations provide for the use of various percentage benchmarks or 
rules of thumb in identifying averaging groups. Paragraph (d)(2) does 
not adopt these suggestions.
    The SAA, at 842, provides the following guidance on this subject:

    To ensure that these averages are meaningful, Commerce will 
calculate averages for comparable sales of subject merchandise to 
the U.S. and sales of foreign like products. In determining the 
comparability of sales for purposes of inclusion in a particular 
average, Commerce will consider factors it deems appropriate, such 
as the physical characteristics of the merchandise, the region of 
the country in which the merchandise is sold, the time period, and 
the class of customer involved. For example, in the case of 13'' and 
21'' televisions, average normal values would be calculated for each 
size of television, not a single average for sales of both sizes of 
televisions.

    Although the SAA describes the factors that the Department will 
consider in identifying an averaging group, it does not prescribe 
exactly how these factors should be applied.
    On the other hand, the Department appreciates the need for guidance 
concerning the application of what is, for practical purposes, a new 
method of determining sales at less than fair value. Thus, paragraph 
(d)(2) provides that in identifying an averaging group, the Secretary 
will rely primarily on comparability in physical characteristics of the 
merchandise and the level of trade at which the sales to the United 
States occur. These two factors are the easiest to identify, are the 
most likely to have an effect on sales comparability, and the 
Department has used them in the past for purposes of identifying 
comparison transactions. The Secretary also will consider, but give 
less weight to, the region of the United States in which the 
merchandise is sold, the class of customer involved, and such other 
factors as the Secretary considers relevant. While it is not possible 
to reduce the identification of averaging groups to a precise formula 
with respect to these two factors, the Department's general approach 
will be to look for clear dividing lines among the sales, and to ignore 
minor differences between sales.
    With respect to the factor of physical characteristics, the views 
of the commentators were widely divergent. Some commentators appeared 
to suggest that all merchandise falling within a ``such or similar 
group,'' as that term has been used in Department practice, should be 
regarded as comparable and, thus, included in the same averaging group. 
Other commentators essentially suggested that averaging groups be 
identified on a model-specific basis or on the basis of control numbers 
(``CONNUMS''), a term used in the Department's computer programs to 
identify the specific merchandise sold in each market. Still others 
have suggested that the Department determine comparability by applying 
its ``20 percent difmer'' guideline, a guideline used in the past for 
determining whether the foreign like product is such or similar to the 
U.S. product.
    Paragraph (d)(2) limits the averaging group to ``subject 
merchandise identical or virtually identical in all physical 
characteristics.'' Thus, the Department has adopted the model specific 
or control number approach recommended by some commentators for 
selecting the physical characteristics appropriate for inclusion within 
the same averaging group. This is necessary and appropriate given the 
instruction of section 777A(d)(1) that we compare, ``the weighted 
average of the normal values to the weighted average of the export 
prices (and constructed export prices) of comparable merchandise.''
    The SAA identifies time as a factor affecting the comparability of 
sales. Paragraph (d)(3) deals with this factor by prescribing the time 
period over which weighted averages will be calculated. Paragraph 
(d)(3) provides that the Secretary ``normally'' will calculate weighted 
averages for the entire period of investigation or review, but that 
shorter periods may be used where the normal values, export prices, or 
constructed export prices for sales included within an averaging group 
differ significantly over the course of the period of investigation or 
review. Where values or prices are significantly different over time, 
it is fair to assume that time has affected sales comparability.
    On this issue, too, the comments reflected widely divergent views. 
Some commentators argued that averaging always be done over the entire 
period of investigation or review. Others suggested that the averaging 
period not exceed one month. Still others suggested a ``normal'' rule 
of one year or six months, with shorter periods in cases involving 
industries where prices change more quickly. The approach of paragraph 
(d)(3) is along the lines of the latter suggestion.
    Application of the Average-to-Transaction Method: Paragraph (e) 
deals with the application of the average-to-transaction method. 
Consistent with the SAA, at 843, paragraph (e)(1) provides that where 
normal value is based on price, the Department will limit its averaging 
of such prices to sales incurred during the ``contemporaneous month.'' 
Paragraph (e)(2), in turn, defines ``contemporaneous month.'' In 

[[Page 7350]]
response to a suggestion made by several commentators, paragraph (e)(2) 
essentially codifies the Department's longstanding ``90/60'' day rule.
    Targeted Dumping: Paragraph (f) deals with the so-called ``targeted 
dumping'' provision in section 777A(d)(1)(B) of the Act. 
Notwithstanding the general preference for the use of the average-to-
average method in an antidumping investigation, the average-to-
transaction method may be used where targeted dumping exists. Paragraph 
(f)(1) sets forth the standard to be applied in identifying targeted 
dumping, and, with one exception, tracks the language of the statute. 
The exception is that the Department has incorporated the suggestion 
made by several commentators, including both domestic and respondent 
interests, that the Department employ standard statistical techniques, 
in identifying targeted dumping.
    Some commentators advocated that the regulations clarify the 
statutory provision in various ways, such as through the use of 
``bright line'' standards for identifying targeted dumping. Other 
commentators opposed the adoption of bright line standards. In general, 
the Department has not attempted to elaborate on the language of 
section 777A(d)(1)(B), given its lack of experience with this 
provision. More specifically, the Department has eschewed the adoption 
of bright line standards for the time being. First, the SAA, at 843, 
states that the Department ``will proceed on a case-by-case basis, 
because small differences may be significant for one industry or one 
type of product, but not for another.'' A bright line test would be 
inconsistent with this case-by-case approach. Second, the commentators 
differed widely with respect to where the ``bright line'' should be 
drawn, and, given our lack of experience with this provision, the 
Department has no basis for selecting a bright line on its own. While 
it may be possible in the future to establish bright line rules-of-
thumb as rebuttable presumptions, at this point it would be premature 
to do so.
    Some commentators suggested a regulation stating that the targeted 
dumping provision will be narrowly construed, while other commentators 
argued for a liberal construction. Because the statute and its 
legislative history do not support either construction, the Department 
has not adopted either of these suggestions.
    In addition to the comments described above, the Department 
received numerous comments that, while falling short of bright line 
standards, nonetheless went in the direction of establishing per se 
rules. These comments included:
     If the prices of the preponderance of sales alleged to be 
part of the targeted dumping are within the range of prices of the non-
target sales, then targeted dumping is not taking place.
     Price variations due to seasonal demand should not be 
deemed to constitute targeted dumping.
     Any trend within the subset of alleged targeted dumped 
sales must be substantially uniform among the subset of sales.
     Mere differences in price over time will rarely, if ever, 
be sufficient to constitute targeted dumping.
     Targeted dumping automatically exists whenever there are 
significant individual sales made at prices substantially below a 
firm's prevailing price.
    Most of these comments raise factors that the Department 
legitimately should consider in conducting an analysis of targeted 
dumping in an actual antidumping investigation. In particular, the 
Department recognizes that the statute requires that there be a 
``pattern'' of sales at significantly different prices. We do not 
believe that targeted dumping exists where the price differences are 
simply random or spurious price fluctuations. In our view, targeting 
means that, within the industry under consideration, the price 
differences suggest a meaningful pattern. However, for the same reason 
that the Department is unwilling to adopt bright line standards at this 
time, the Department is unwilling to adopt per se rules or even 
rebuttable presumptions. Several commentators advocated a regulation 
which would state that targeted dumping does not exist if the same 
pattern of sales exists in both the U.S. and the comparison market. We 
have not adopted this suggestion for these proposed rules. We are 
interested, however, in receiving comments from parties on the factors 
to be considered in deciding whether the average-to-average methodology 
takes account of patterns of significantly different export prices.
    One commentator stated that the regulations should state that a 
targeted dumping analysis will be done on a respondent- and model-
specific basis. With respect to a respondent-specific analysis, we 
think it is self-evident that a targeted dumping analysis would be 
respondent-specific. Thus, we see no need for a regulation on this 
point. With respect to a model-specific analysis, while we would expect 
that a targeted dumping analysis normally would consider whether sales 
of particular models constitute targeted dumping, we are reluctant at 
this time to go beyond the language of the statute, because other modes 
of analysis also might be appropriate.
    Paragraph (f)(2) deals with the sales to which the average-to-
transaction method is applied when targeted dumping is found, a 
question which neither the statute nor the SAA expressly addresses. 
Paragraph (f)(2) provides that ``normally'' the average-to-transaction 
method will be limited to those sales determined to constitute targeted 
dumping. The average-to-average method would be applied to the 
remaining sales.
    At least one commentator suggested that if targeted dumping is 
found with respect to a particular firm, the average-to-transaction 
method should be used with respect to all of that firm's sales. The 
Department has not adopted this suggestion, because in many instances 
such an approach would be unreasonable and unduly punitive. For 
example, if targeted dumping accounted for only 1 percent of a firm's 
total sales, there would not appear to be any basis for applying the 
average-to-transaction method to those sales accounting for the 
remaining 99 percent.
    At the other extreme, some commentators suggested that the average-
to-transaction method always should be limited to those sales that 
constitute targeted dumping. The Department has not adopted this 
suggestion either, because there may be situations in which targeted 
dumping by a firm is so pervasive that the average-to-transaction 
method becomes the best benchmark for gauging the fairness of that 
firm's pricing practices.
    Paragraph (f)(3) deals with allegations of targeted dumping. Many 
commentators suggested that the Department should only analyze targeted 
dumping if the petitioner satisfies a minimum evidentiary threshold. 
The Department agrees that those interested parties familiar with the 
market for the subject merchandise are in the best position to direct 
the Department's attention toward possible targeted dumping. Thus, it 
will examine whether targeted dumping is occurring only after receipt 
of a sufficient allegation that such targeting is taking place, and 
that the average-to-average or, when appropriate, transaction-to-
transaction methods cannot adequately deal with the alleged targeting. 
The requirement of an allegation should not pose a significant burden 
on a domestic interested party, because the allegation can be based on 
information that is readily available in the record of the proceeding. 

[[Page 7351]]

    Paragraph (g) deals with requests for information. The first 
sentence of paragraph (g) provides that the Secretary will request 
information relevant to the identification of averaging groups and to 
the analysis of targeted dumping. The Department does not agree with 
the implication in the commentators' statements that it should not 
collect detailed, transaction-specific information in the absence of an 
allegation. First, the SAA, at 843, specifically provides that the 
Department will collect such transaction-specific information. Second, 
the information is necessary to permit the interested parties to reach 
reasonable judgements regarding the possibility that there is targeted 
dumping. In this regard, the Department is concerned that the 
prohibition against the release under APO of business proprietary 
customer names in investigations not serve as a bar to possible 
allegations. The Department will make every effort to ensure that 
public summaries provide the parties with adequate information.
    The second sentence of paragraph (g) provides that if a response to 
a request for information relevant to the identification of averaging 
groups and targeted dumping is such as to warrant the application of 
the facts otherwise available, the Secretary may apply the average-to-
transaction method to all of the particular respondent's sales. This 
approach was suggested by one commentator, although a different 
commentator argued that there was no need for a special ``facts 
available'' rule for price averaging. While it may be true that, as a 
legal matter, the general ``facts available'' provisions of the statute 
and these regulations are sufficiently broad to authorize the use of 
the average-to-transaction method in the types of situation under 
discussion, the Department believes that it would be useful to clarify 
in advance the possible consequences of failing to provide adequate and 
timely responses to requests for transaction-specific information.
    One commentator suggested that if the Department employs the 
targeted dumping exception, it should present its explanation for using 
the exception in its preliminary determination so that all parties have 
an opportunity to comment on the issue. The Department agrees with the 
basic proposition that all parties should have ample opportunity to 
comment on all issues in an antidumping proceeding. However, the 
Department does not consider it advisable to promulgate a regulation 
which would prohibit the application of the targeted dumping exception 
in a final determination if that exception had not been applied in the 
preliminary determination. Among other things, it would render 
petitioners' right to comment on the issue meaningless in cases where 
the Department did not invoke the exception in a preliminary 
determination. In general, the Department anticipates that issues 
relating to price averaging and targeted dumping will be among the 
first to be raised by the parties to an antidumping investigation, and 
that parties will have ample opportunity to submit comments.
Section 351.415
    Section 351.415 implements section 777A of the Act, which provides 
for the selection of the exchange rate used to convert foreign 
currencies to U.S. dollars. The Department's past practice, as 
specified in Sec. 353.60 of the prior regulations, was to convert 
normal value at the exchange rate used by the U.S. Customs Service to 
convert foreign currencies for duty assessment purposes.
    Paragraph (a) requires the Department to convert foreign currencies 
at the exchange rate in effect on the date of the U.S. sale, subject to 
certain exceptions. First, as reflected in paragraph (b), if the U.S. 
sale is tied directly to a forward exchange contract, the Department 
will convert normal value at the forward rate. In accordance with the 
SAA, at 842, group sales of currency on forward markets will be 
allowed, provided that the exchange transaction can be linked to the 
export sale. Second, as reflected in paragraph (c), fluctuations in the 
daily exchange rates are to be ignored and, third, as reflected in 
paragraph (d), respondents in an investigation must be granted at least 
60 days to adjust prices after a sustained movement in the exchange 
rate.
    The statute does not provide guidance on how to recognize a 
sustained movement or fluctuation. The SAA, at 841, provides that the 
Department is to adopt regulations to implement section 777A. We have 
not expanded on the statute in these proposed regulations because the 
provisions concerning daily rates, fluctuations and sustained movements 
are new, and we have had little practical experience. We believe, 
therefore, that it is preferable to implement the new requirements 
through an exchange rate model announced in a policy bulletin, which 
will afford us the ability to adjust practice based on experience.
    We plan to use the model for one year and then evaluate its 
performance based on public comment. We then will alter the model as 
necessary, and expand the regulations to provide more extensive 
guidance.
    The Department has designed the model with three goals in mind:

    1. To implement the requirements of the statute in as simple a 
manner as possible;
    2. To ensure that all exporters, whether or not under order, can 
estimate the daily exchange rate that the Department will employ in 
an antidumping analysis at the time they set their U.S. prices; and
    3. To capture the model in simple computer code to reduce the 
administrative burden on the Department and parties wishing to 
monitor exchange rates.

    As required by the statute, the model has been designed to convert 
a file of actual daily exchange rates to a file of ``official'' daily 
exchange rates, which will be used to convert normal value to U.S. 
dollars. In this process, the Department will classify each actual 
daily exchange rate as normal or ``fluctuating.'' An extended pattern 
of fluctuating rates will define a ``sustained movement.'' Based on 
these classifications, the model will assign the appropriate exchange 
rate for each day. This model is not suitable for use with hyper-
inflating currencies. In these cases, we intend to use the daily rate 
absent compelling evidence that a fluctuation or sustained movement in 
the currency's value has occurred.
    We will prepare the file of official daily exchange rates by 
processing the daily rate for all 32 currencies collected and certified 
by the New York Federal Reserve Bank. We intend to create files of 
official rates on a monthly basis and to post these files on the 
Internet to facilitate wide access to the rates. We also will continue 
our practice of providing rates on diskette for a small fee. In 
addition, we will make the model's computer code widely available to 
any party wishing to create the file of official rates.

Subpart F--Subsidy Determinations Regarding Cheese Subject to an In-
Quota Rate of Duty

    Subpart F of Part 351 deals with subsidy determinations regarding 
cheese subject to an in-quota rate of duty pursuant to section 702(a) 
of the Trade Agreements Act of 1979. Once known as the ``quota cheese 
provision,'' the URAA amended section 702(a) and related provisions to 
conform to the WTO Agreement on Agriculture. In particular, the URAA 
eliminated the requirement that the President impose quantitative 
restrictions on cheese where price-undercutting conditions exist, 
because such restrictions would be inconsistent with Article 4.2 of the 
Agreement on Agriculture. However, the United States retains the right 
to impose 

[[Page 7352]]
fees on within-quota quantities where the price-undercutting conditions 
of section 702 exist. See SAA, page 729.
    Because the URAA did not significantly change the Department's role 
under section 702, Subpart F is largely identical to existing Part 355, 
Subpart D. The principal changes are the elimination of material that 
merely repeats the statute and the substitution of the term ``cheese 
subject to an in-quota rate of duty'' for the term ``quota cheese.''

Classification

E.O. 12866

    This proposed rule has been determined to be significant under E.O. 
12866.

Regulatory Flexibility Act

    The Assistant General Counsel for Legislation and Regulation of the 
Department of Commerce certified to the Chief Counsel for Advocacy of 
the Small Business Administration that this proposed rule, if 
promulgated as final, would not have a significant economic impact on a 
substantial number of small entities. The Department does not believe 
that there will be any substantive effect on the outcome of antidumping 
and countervailing duty proceedings as a result of the streamlining and 
simplification of their administration. With respect to the substantive 
amendments implementing the Uruguay Round Agreements Act, the 
Department believes that these regulations benefit both petitioners and 
respondents without favoring either, and, therefore, would not have a 
significant economic effects. As such, an initial regulatory 
flexibility analysis was not prepared.

Paperwork Reduction Act

    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB Control Number. This proposed rule does 
not contain any new reporting or recording requirements subject to the 
Paperwork Reduction Act. The collections of information contained in 
this rule are currently approved by the Office of Management and Budget 
under OMB Control Numbers 0625-0105, 0625-0148, and 0625-0200. The 
public reporting burdens for these collections of information are 
estimated to average 40 hours for the antidumping and countervailing 
duty petition requirements, and 15 hours for the initiation of 
downstream product monitoring. These estimates include the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collections of information. Send comments regarding these burden 
estimates or any other aspect of these collections of information, 
including suggestions for reducing the burden, to OMB Desk Officer, New 
Executive Office Building, Washington, D.C. 20503.

E.O. 12612

    This proposed rule does not contain federalism implications 
warranting the preparation of a Federalism Assessment.

List of Subjects

19 CFR Part 351

    Administrative practice and procedure, Antidumping, Business and 
industry, Cheese, Confidential business information, Countervailing 
duties, Investigations, Reporting and recordkeeping requirments.

19 CFR Part 353

    Administrative practice and procedure, Antidumping, Business and 
industry, Confidential business information, Investigations, Reporting 
and recordkeeping requirements.

19 CFR Part 355

    Administrative practice and procedure, Business and industry, 
Cheese, Confidential business information, Countervailing duties, 
Freedom of Information, Investigations, Reporting and recordkeeping 
requirements.

    Dated: February 15, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
    For the reasons stated, it is proposed to amend 19 CFR chapter III 
as follows:

PARTS 353 AND 355 [REMOVED]

    1. Parts 353 and 355 are removed.
    2. A new Part 351 is added to read as follows:

PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES

Subpart A--Scope and Definitions

Sec.
351.101 Scope.
351.102 Definitions.
351.103 Central Records Unit.
351.104 Record of proceedings.
351.105 Public, business proprietary, privileged, and classified 
information.
351.106 De minimis net countervailable subsidies and weighted-
average dumping margins disregarded.

Subpart B--Antidumping and Countervailing Duty Procedures

351.201 Self-initiation.
351.202 Petition requirements.
351.203 Determination of sufficiency of petition.
351.204 Transactions and persons examined; voluntary respondents; 
exclusions.
351.205 Preliminary determination.
351.206 Critical circumstances.
351.207 Termination of investigation.
351.208 Suspension of investigation.
351.209 Violation of suspension agreement.
351.210 Final determination.
351.211 Antidumping order and countervailing duty order.
351.212 Assessment of antidumping and countervailing duties; 
provisional measures deposit cap; interest on certain overpayments 
and underpayments.
351.213 Administrative review of orders and suspension agreements 
under section 751(a)(1) of the Act.
351.214 New shipper reviews under section 751(a)(2)(B) of the Act.
351.215 Expedited antidumping review and security in lieu of 
estimated duty under section 736(c) of the Act.
351.216 Changed circumstances review under section 751(b) of the 
Act.
351.217 Reviews to implement results of subsidies enforcement 
proceeding under section 751(g) of the Act.
351.218 Sunset reviews under section 751(c) of the Act.
351.219 Reviews of countervailing duty orders in connection with an 
investigation under section 753 of the Act.
351.220 Countervailing duty review at the direction of the President 
under section 762 of the Act.
351.221  Review procedures.
351.222  Revocation of orders; termination of suspended 
investigations.
351.223  Procedures for initiation of downstream product monitoring.
351.224  Disclosure of calculations and procedures for the 
correction of ministerial errors.
351.225  Scope ruling.

Subpart C--Information and Argument

351.301  Time limits for submission of factual information.
351.302  Extension of time limits; return of untimely filed or 
unsolicited material.
351.303  Filing, format, translation, service, and certification of 
documents.
351.304  Establishing business proprietary treatment of information 
[Reserved].
351.305  Access to business proprietary information [Reserved].
351.306  Use of business proprietary information [Reserved].
351.307  Verification of information.
351.308  Determinations on the basis of the facts available.
351.309  Written argument.
351.310  Hearings. 

[[Page 7353]]

351.311  Countervailable subsidy practice discovered during 
investigation or review.
351.312  Industrial users and consumer organizations.
Subpart D--Calculation of Export Price, Constructed Export Price, Fair 
Value, and Normal Value
351.401  In general.
351.402  Calculation of export price and constructed export price; 
reimbursement of antidumping and countervailing duties.
351.403  Sales used in calculating normal value; transactions 
between affiliated parties.
351.404  Selection of the market to be used as the basis for normal 
value.
351.405  Calculation of normal value based on constructed value.
351.406  Calculation of normal value if sales are made at less than 
cost of production.
351.407  Calculation of constructed value and cost of production.
351.408  Calculation of normal value of merchandise from nonmarket 
economy countries.
351.409  Differences in quantities.
351.410  Differences in circumstances of sale.
351.411  Differences in physical characteristics.
351.412  Levels of trade; adjustment for difference in level of 
trade; constructed export price offset.
351.413  Disregarding insignificant adjustments.
351.414  Comparison of normal value with export price (constructed 
export price).
351.415  Conversion of currency.

Subpart E--[Reserved]

Subpart F--Subsidy Determinations Regarding Cheese Subject to an In-
Quota Rate of Duty
351.601  Annual list and quarterly update of subsidies.
351.602  Determination upon request.
351.603  Complaint of price-undercutting by subsidized imports.
351.604  Access to information.
Annex I--Deadlines for Parties in Countervailing Investigations
Annex II--Deadlines for Parties in Countervailing Administrative 
Reviews
Annex III--Deadlines for Parties in Antidumping Investigations
Annex IV--Deadlines for Parties in Antidumping Administrative 
Reviews
Annex V--Comparison of Prior and Proposed Regulations
Annex VI--Countervailing Investigations Timeline
Annex VII--Antidumping Investigations Timeline

    Authority: 5 U.S.C. 301; 19 U.S.C. 1202 note, 1303 note, 1671 et 
seq., and 3538.

PART 351--COUNTERVAILING AND ANTIDUMPING DUTIES

Subpart A--Scope and Definitions


Sec. 351.101  Scope.

    (a) In general. This part contains procedures and rules 
applicable to antidumping and countervailing duty proceedings under 
Title VII of the Act (19 U.S.C. 1671 et seq.), and also 
determinations regarding cheese subject to an in-quota rate of duty 
under section 702 of the Trade Agreements Act of 1979 (19 U.S.C. 
1202 note). This part reflects statutory amendments made by titles 
I, II, and IV of the Uruguay Round Agreements Act, Public Law 103-
465, which, in turn, implement into United States law the provisions 
of the following agreements annexed to the Agreement Establishing 
the World Trade Organization: Agreement on Implementation of Article 
VI of the General Agreement on Tariffs and Trade 1994; Agreement on 
Subsidies and Countervailing Measures; and Agreement on Agriculture.
    (b) Countervailing duty investigations involving imports not 
entitled to a material injury determination. Under section 701(c) of 
the Act, certain provisions of the Act do not apply to 
countervailing duty proceedings involving imports from a country 
that is not a Subsidies Agreement country and is not entitled to a 
material injury determination by the Commission. Accordingly, 
certain provisions of this Part referring to the Commission may not 
apply to such proceedings.
    (c) Application to governmental importations. To the extent 
authorized by section 771(20) of the Act, merchandise imported by, or 
for the use of, a department or agency of the United States Government 
is subject to the imposition of countervailing duties or antidumping 
duties under this part.


Sec. 351.102  Definitions.

    (a) Introduction. The Act contains many technical terms applicable 
to antidumping and countervailing duty proceedings. This section:
    (1) Defines terms that appear in the Act but are not defined in the 
Act;
    (2) Defines terms that appear in this Part but do not appear in the 
Act; and
    (3) Elaborates on the meaning of certain terms that are defined in 
the Act.
    In the case of terms that are not defined in this section or other 
sections of this Part, readers should refer to the relevant provisions 
of the Act.
    (b) Definitions.
    Act. ``Act'' means the Tariff Act of 1930, as amended.
    Administrative review. ``Administrative review'' means a review 
under section 751(a)(1) of the Act.
    Affiliated persons; affiliated parties. ``Affiliated persons'' and 
``affiliated parties'' have the same meaning as in section 771(33) of 
the Act. In determining whether control over another person exists, 
within the meaning of section 771(33) of the Act, the Secretary will 
consider the following factors, among others:
    (1) Corporate or family groupings;
    (2) Franchise or joint venture agreements;
    (3) Debt financing; and
    (4) Close supplier relationships.
    Aggregate basis. ``Aggregate basis'' means the calculation of a 
country-wide subsidy rate based solely on information provided by the 
foreign government.
    Anniversary month. ``Anniversary month'' means the calendar month 
in which the anniversary of the date of publication of an order or 
suspension of investigation occurs.
    APO. ``APO'' means an administrative protective order described in 
section 777(c)(1) of the Act.
    Applicant. ``Applicant'' means a representative of an interested 
party that has applied for access to business proprietary information 
under an APO.
    Article 4/Article 7 Review. ``Article 4/Article 7 review'' means a 
review under section 751(g)(2) of the Act.
    Article 8 violation review. ``Article 8 violation review'' means a 
review under section 751(g)(1) of the Act.
    Authorized applicant. ``Authorized applicant'' means an applicant 
that the Secretary has authorized to receive business proprietary 
information under an APO under section 777(c)(1) of the Act.
    Changed circumstances review. ``Changed circumstances review'' 
means a review under section 751(b) of the Act.
    Customs Service. ``Customs Service'' means the United States 
Customs Service of the United States Department of the Treasury.
    Department. ``Department'' means the United States Department of 
Commerce.
    Domestic interested party. ``Domestic interested party'' means an 
interested party described in subparagraph (C), (D), (E), (F), or (G) 
of section 771(9) of the Act.
    Expedited antidumping review. ``Expedited antidumping review'' 
means a review under section 736(c) of the Act.
    Factual information. ``Factual information'' means:
    (1) Initial and supplemental questionnaire responses;
    (2) Data or statements of fact in support of allegations;
    (3) Other data or statements of facts; and
    (4) Documentary evidence.
    Fair value. ``Fair value'' is a term used during an antidumping 
investigation, and is an estimate of normal value. 

[[Page 7354]]

    Importer. ``Importer'' means the person by whom, or for whose 
account, subject merchandise is imported.
    Investigation. Under the Act and this Part, there is a distinction 
between an antidumping or countervailing duty investigation and a 
proceeding. An ``investigation'' is that segment of a proceeding that 
begins on the date of publication of notice of initiation of 
investigation and ends on the date of publication of the earliest of:
    (1) Notice of termination of investigation,
    (2) Notice of rescission of investigation,
    (3) Notice of a negative determination that has the effect of 
terminating the proceeding, or
    (4) An order.
    New shipper review. ``New shipper review'' means a review under 
section 751(a)(2) of the Act.
    Order. An ``order'' is an order issued by the Secretary under 
section 303, section 706, or section 736 of the Act or a finding under 
the Antidumping Act, 1921.
    Ordinary course of trade. ``Ordinary course of trade'' has the same 
meaning as in section 771(15) of the Act. The Secretary may consider 
sales or transactions to be outside the ordinary course of trade when 
such sales or transactions have characteristics that are extraordinary 
for the market in question (such as sales or transactions involving 
off-quality merchandise or merchandise produced according to unusual 
product specifications), merchandise sold at aberrational prices or 
with abnormally high profits, merchandise sold pursuant to unusual 
terms of sale, or merchandise sold to an affiliated party at a non-
arm's length price.
    Party to the proceeding. ``Party to the proceeding'' means any 
interested party that actively participates, through written 
submissions of factual information or written argument, in a segment of 
a proceeding. Participation in a prior segment of a proceeding will not 
confer on any interested party ``party to the proceeding'' status in a 
subsequent segment.
    Person. ``Person'' includes any interested party as well as any 
other individual, enterprise, or entity, as appropriate.
    Proceeding. A ``proceeding'' begins on the date of the filing of a 
petition under section 702(b) or section 732(b) of the Act or the 
publication of a notice of initiation in a self-initiated investigation 
under section 702(a) or section 732(a) of the Act, and ends on the date 
of publication of the earliest notice of:
    (1) Dismissal of petition,
    (2) Rescission of initiation,
    (3) Termination of investigation,
    (4) A negative determination that has the effect of terminating the 
proceeding,
    (5) Revocation of an order, or
    (6) Termination of a suspended investigation.
    Rates. ``Rates'' means the individual weighted-average dumping 
margins, the individual countervailable subsidy rates, the country-wide 
subsidy rate, or the all-others rate, as applicable. In an antidumping 
proceeding involving imports from a nonmarket economy country, 
``rates'' may consist of a single dumping margin applicable to all 
exporters and producers.
    Respondent interested party. ``Respondent interested party'' means 
an interested party described in subparagraph (A) or (B) of section 
771(9) of the Act.
    Sale; likely sale. A ``sale'' includes a contract to sell and a 
lease that is equivalent to a sale. A ``likely sale'' means a person's 
irrevocable offer to sell.
    Secretary. ``Secretary'' means the Secretary of Commerce or a 
designee. The Secretary has delegated to the Assistant Secretary for 
Import Administration the authority to make determinations under Title 
VII of the Act and this Part.
    Section 753 review. ``Section 753 review'' means a review under 
section 753 of the Act.
    Section 762 review. ``Section 762 review'' means a review under 
section 762 of the Act.
    Segment of proceeding.
    (1) In general. An antidumping or countervailing duty proceeding 
consists of one or more segments. ``Segment of a proceeding'' or 
``segment of the proceeding'' refers to a portion of the proceeding 
that is reviewable under section 516A of the Act.
    (2) Examples. An antidumping or countervailing duty investigation 
or a review of an order or suspended investigation each would 
constitute a segment of a proceeding.
    Sunset review. ``Sunset review'' means a review under section 
751(c) of the Act.
    Third country. For purposes of subpart D, ``third country'' means a 
country other than the exporting country and the United States. Under 
section 773(a) of the Act and subpart D, in certain circumstances the 
Secretary may determine normal value on the basis of sales to a third 
country.
    URAA. ``URAA'' means the Uruguay Round Agreements Act.


Sec. 351.103  Central Records Unit.

    (a) In general. Import Administration's Central Records Unit is 
located at Room B-099, U.S. Department of Commerce, Pennsylvania Avenue 
and 14th Street, NW., Washington, D.C. 20230. The office hours of the 
Central Records Unit are between 8:30 a.m. and 5:00 p.m. on business 
days. Among other things, the Central Records Unit is responsible for 
maintaining an official and public record for each antidumping and 
countervailing duty proceeding (see Sec. 351.104), the Subsidies 
Library (see section 775(2) and section 777(a)(1) of the Act), and the 
service list for each proceeding (see paragraph (c) of this section).
    (b) Filing of documents with the Department. While persons are free 
to provide Department officials with courtesy copies of documents, no 
document will be considered as having been received by the Secretary 
unless it is submitted to the Central Records Unit and is stamped by 
the Central Records Unit with the date and time of receipt.
    (c) Service list. The Central Records Unit will maintain and make 
available a service list for each segment of a proceeding. Each 
interested party that asks to be included on the service list for a 
segment of a proceeding must designate a person to receive service of 
documents filed in that segment. The service list for an application 
for a scope ruling is described in Sec. 351.225(n).


Sec. 351.104  Record of proceedings.

    (a) Official record. (1) In general. The Secretary will maintain in 
the Central Records Unit an official record of each antidumping and 
countervailing duty proceeding. The Secretary will include in the 
official record all factual information, written argument, or other 
material developed by, presented to, or obtained by the Secretary 
during the course of a proceeding that pertains to the proceeding. The 
official record will include government memoranda pertaining to the 
proceeding, memoranda of ex parte meetings, determinations, notices 
published in the Federal Register, and transcripts of hearings. The 
official record will contain material that is public, business 
proprietary, privileged, and classified. For purposes of section 
516A(b)(2) of the Act, the record is the official record of each 
segment of the proceeding.
    (2) Material returned.
    (i) The Secretary, in making any determination under this part, 
will not use factual information, written argument, or other material 
that the Secretary returns to the submitter.
    (ii) The official record will include a copy of a returned 
document, solely for purposes of establishing and documenting the basis 
for returning the 

[[Page 7355]]
document to the submitter, if the document was returned because:
    (A) the document, although otherwise timely, contains untimely 
filed new factual information (see Sec. 351.301(b));
    (B) the submitter made a nonconforming request for business 
proprietary treatment of factual information (see Sec. 351.304);
    (C) the Secretary denied a request for business proprietary 
treatment of factual information (see Sec. 351.304);
    (D) the submitter is unwilling to permit the disclosure of business 
proprietary information under APO (see Sec. 351.304).
    (iii) In no case will the official record include any document that 
the Secretary returns to the submitter as untimely filed, or any 
unsolicited questionnaire response unless the response is a voluntary 
response accepted under Sec. 351.204(d) (see Sec. 351.302(d)).
    (b) Public record. The Secretary will maintain in the Central 
Records Unit a public record of each proceeding. The record will 
consist of all material contained in the official record (see paragraph 
(a) of this section) that the Secretary decides is public information 
under Sec. 351.105(b), government memoranda or portions of memoranda 
that the Secretary decides may be disclosed to the general public, and 
public versions of all determinations, notices, and transcripts. The 
public record will be available to the public for inspection and 
copying in the Central Records Unit (see Sec. 351.103). The Secretary 
will charge an appropriate fee for providing copies of documents.
    (c) Protection of records. Unless ordered by the Secretary or 
required by law, no record or portion of a record will be removed from 
the Department.


Sec. 351.105.  Public, business proprietary, privileged, and classified 
information.

    (a) Introduction. There are four categories of information in an 
antidumping or countervailing duty proceeding: public, business 
proprietary, privileged, and classified. In general, public information 
is information that may be made available to the public, whereas 
business proprietary information may be disclosed (if at all) only to 
authorized applicants under an APO. Privileged and classified 
information may not be disclosed at all, even under an APO. This 
section describes the four categories of information.
    (b) Public information. The Secretary normally will consider the 
following to be public information:
    (1) Factual information of a type that has been published or 
otherwise made available to the public by the person submitting it;
    (2) Factual information that is not designated as business 
proprietary by the person submitting it;
    (3) Factual information which, although designated as business 
proprietary by the person submitting it, is in a form which cannot be 
associated with or otherwise used to identify activities of a 
particular person or which the Secretary determines is not properly 
designated as business proprietary;
    (4) Publicly available laws, regulations, decrees, orders, and 
other official documents of a country, including English translations; 
and
    (5) Written argument relating to the proceeding that is not 
designated as business proprietary.
    (c) Business proprietary information. The Secretary normally will 
consider the following factual information to be business proprietary 
information, if so designated by the submitter:
    (1) Business or trade secrets concerning the nature of a product or 
production process;
    (2) Production costs (but not the identity of the production 
components unless a particular component is a trade secret);
    (3) Distribution costs (but not channels of distribution);
    (4) Terms of sale (but not terms of sale offered to the public);
    (5) Prices of individual sales, likely sales, or other offers (but 
not components of prices, such as transportation, if based on published 
schedules, dates of sale, product descriptions (other than business or 
trade secrets described in paragraph (c)(1) of this section), or order 
numbers);
    (6) Names of particular customers, distributors, or suppliers (but 
not destination of sale or designation of type of customer, 
distributor, or supplier, unless the destination or designation would 
reveal the name);
    (7) In an antidumping proceeding, the exact amount of the dumping 
margin on individual sales;
    (8) In a countervailing duty proceeding, the exact amount of the 
benefit applied for or received by a person from each of the programs 
under investigation or review (but not descriptions of the operations 
of the programs, or the amount if included in official public 
statements or documents or publications, or the ad valorem 
countervailable subsidy rate calculated for each person under a 
program);
    (9) The names of particular persons from whom business proprietary 
information was obtained;
    (10) The position of a domestic producer or workers regarding a 
petition; and
    (11) Any other specific business information the release of which 
to the public would cause substantial harm to the competitive position 
of the submitter.
    (d) Privileged information. The Secretary will consider information 
privileged if, based on principles of law concerning privileged 
information, the Secretary decides that the information should not be 
released to the public or to parties to the proceeding. Privileged 
information is exempt from disclosure to the public or to 
representatives of interested parties.
    (e) Classified information. Classified information is information 
that is classified under Executive Order No. 12356 of April 2, 1982 (47 
FR 14874 and 15557, 3 CFR 1982 Comp. p. 166), or successor executive 
order, if applicable. Classified information is exempt from disclosure 
to the public or to representatives of interested parties.


Sec. 351.106  De minimis net countervailable subsidies and weighted-
average dumping margins disregarded.

    (a) Introduction. Prior to the enactment of the URAA, the 
Department had a well-established and judicially sanctioned practice of 
disregarding net countervailable subsidies or weighted-average dumping 
margins that were de minimis. The URAA codified in the Act the 
particular de minimis standards to be used in antidumping and 
countervailing duty investigations. This section discussed the 
application of the de minimis standards in antidumping or 
countervailing duty proceedings.
    (b) Investigations. (1) In general. In making a preliminary or 
final antidumping or countervailing duty determination in an 
investigation (see sections 703(b), 733(b), 705(a), and 735(a) of the 
Act), the Secretary will apply the de minimis standard set forth in 
section 703(b)(4) or section 733(b)(3) of the Act (whichever is 
applicable).
    (2) Transition rule. (i) If:
    (A) The Secretary resumes an investigation that has been suspended 
(see section 704(i)(1)(B) or section 734(i)(1)(B) of the Act); and
    (B) the investigation was initiated before January 1, 1995, then
    (ii) The Secretary will apply the de minimis standard in effect at 
the time that the investigation was initiated.
    (c) Reviews and other determinations. (1) In general. In making any 
determination other than a preliminary or final antidumping or 
countervailing duty determination in an investigation (see paragraph 
(b) of this section), the 

[[Page 7356]]
Secretary will treat as de minimis any weighted-average dumping margin 
or countervailable subsidy rate that is less than 0.5% ad valorem, or 
the equivalent specific rate.
    (2) Assessment of antidumping duties. The Secretary will instruct 
the Customs Service to liquidate without regard to antidumping duties 
all entries of subject merchandise during the relevant period of review 
made by any person for which the Secretary calculates an assessment 
rate under Sec. 351.212(b)(1) that is less than 0.5 percent ad valorem, 
or the equivalent specific rate.

Subpart B--Antidumping and Countervailing Duty Procedures


Sec. 351.201  Self-initiation.

    (a) Introduction. Antidumping and countervailing duty 
investigations may be initiated as the result of a petition filed by a 
domestic interested party or at the Secretary's own initiative. This 
section contains rules regarding the actions the Secretary will take 
when the Secretary self-initiates an investigation.
    (b) In general. When the Secretary self-initiates an investigation 
under section 702(a) or section 732(a) of the Act, the Secretary will 
publish in the Federal Register notice of ``Initiation of Antidumping 
(Countervailing Duty) Investigation.'' In addition, the Secretary will 
notify the Commission at the time of initiation of the investigation, 
and will make available to employees of the Commission directly 
involved in the proceeding the information upon which the Secretary 
based the initiation and which the Commission may consider relevant to 
its injury determination.
    (c) Persistent dumping monitoring. To the extent practicable, the 
Secretary will expedite any antidumping investigation initiated as the 
result of a monitoring program established under section 732(a)(2) of 
the Act.


Sec. 351.202  Petition requirements.

    (a) Introduction. The Secretary normally initiates antidumping and 
countervailing duty investigations based on petitions filed by a 
domestic interested party. This section contains rules concerning the 
contents of a petition, filing requirements, notification of foreign 
governments, pre-initiation communications with the Secretary, and 
assistance to small businesses in preparing petitions.
    (b) Contents of petition. A petition requesting the imposition of 
antidumping or countervailing duties must contain the following, to the 
extent reasonably available to the petitioner:
    (1) The name and address of the petitioner and any person the 
petitioner represents;
    (2) The identity of the industry on behalf of which the petitioner 
is filing, including the names and addresses of all other known persons 
in the industry;
    (3) Information relating to the degree of industry support for the 
petition, including:
    (i) the total volume and value of U.S. production of the domestic 
like product, and
    (ii) the volume and value of the domestic like product produced by 
the petitioner and each domestic producer identified;
    (4) A statement indicating whether the petitioner has filed for 
relief from imports of the subject merchandise under section 337 of the 
Act (19 U.S.C. 1337, 1671a), sections 201 or 301 of the Trade Act of 
1974 (19 U.S.C. 2251 or 2411), or section 232 of the Trade Expansion 
Act of 1962 (19 U.S.C. 1862);
    (5) A detailed description of the subject merchandise that defines 
the requested scope of the investigation, including the technical 
characteristics and uses of the merchandise and its current U.S. tariff 
classification number;
    (6) The name of the country in which the subject merchandise is 
manufactured or produced and, if the merchandise is imported from a 
country other than the country of manufacture or production, the name 
of any intermediate country from which the merchandise is imported;
    (7)(i) In the case of an antidumping proceeding:
    (A) The names and addresses of each person the petitioner believes 
sells the subject merchandise at less than fair value and the 
proportion of total exports to the United States that each person 
accounted for during the most recent 12-month period (if numerous, 
provide information at least for persons that, based on publicly 
available information, individually accounted for two percent or more 
of the exports);
    (B) All factual information (particularly documentary evidence) 
relevant to the calculation of the export price and the constructed 
export price of the subject merchandise and the normal value of the 
foreign like product (if unable to furnish information on foreign sales 
or costs, provide information on production costs in the United States, 
adjusted to reflect production costs in the country of production of 
the subject merchandise);
    (C) If the merchandise is from a country that the Secretary has 
found to be a nonmarket economy country, factual information relevant 
to the calculation of normal value, using a method described in 
Sec. 351.408; or
    (ii) In the case of a countervailing duty proceeding:
    (A) The names and addresses of each person the petitioner believes 
benefits from a countervailable subsidy and exports the subject 
merchandise to the United States and the proportion of total exports to 
the United States that each person accounted for during the most recent 
12-month period (if numerous, provide information at least for persons 
that, based on publicly available information, individually accounted 
for two percent or more of the exports);
    (B) The alleged countervailable subsidy and factual information 
(particularly documentary evidence) relevant to the alleged 
countervailable subsidy, including any law, regulation, or decree under 
which it is provided, the manner in which it is paid, and the value of 
the subsidy to exporters or producers of the subject merchandise;
    (C) If the petitioner alleges an upstream subsidy under section 
771A of the Act, factual information regarding:
    (1) Countervailable subsidies, other than an export subsidy, that 
an authority of the affected country provides to the upstream supplier;
    (2) The competitive benefit the countervailable subsidies bestow on 
the subject merchandise; and
    (3) The significant effect the countervailable subsidies have on 
the cost of producing the subject merchandise;
    (8) The volume and value of the subject merchandise imported during 
the most recent two-year period and any other recent period that the 
petitioner believes to be more representative or, if the subject 
merchandise was not imported during the two-year period, information as 
to the likelihood of its sale for importation;
    (9) The name and address of each person the petitioner believes 
imports or, if there were no importations, is likely to import the 
subject merchandise;
    (10) Factual information regarding material injury, threat of 
material injury, or material retardation, and causation;
    (11) If the petitioner alleges ``critical circumstances'' under 
section 703(e)(1) or section 733(e)(1) of the Act and Sec. 351.206, 
factual information regarding:
    (i) Whether imports of the subject merchandise are likely to 
undermine seriously the remedial effect of any order issued under 
section 706(a) or section 736(a) of the Act;
    (ii) Massive imports of the subject merchandise in a relatively 
short period; and 

[[Page 7357]]

    (iii) (A) In an antidumping proceeding, either
    (1) A history of dumping; or
    (2) The importer's knowledge that the exporter was selling the 
subject merchandise at less than its fair value, and that there would 
be material injury by reason of such sales; or
    (B) In a countervailing duty proceeding, whether the 
countervailable subsidy is inconsistent with the Subsidies Agreement; 
and
    (12) Any other factual information on which the petitioner relies.
    (c) Simultaneous filing and certification. The petitioner must file 
a copy of the petition with the Commission and the Secretary on the 
same day and so certify in submitting the petition to the Secretary. 
Factual information in the petition must be certified, as provided in 
Sec. 351.303(g).
    (d) Business proprietary status of information. The Secretary will 
treat as business proprietary any factual information for which the 
petitioner requests business proprietary treatment and which meets the 
requirements of Sec. 351.304.
    (e) Amendment of petition. The Secretary may allow timely amendment 
of the petition. The petitioner must file an amendment with the 
Commission and the Secretary on the same day and so certify in 
submitting the amendment to the Secretary. If the amendment consists of 
new allegations, the timeliness of the new allegations will be governed 
by Sec. 351.301.
    (f) Notification of representative of the exporting country. Upon 
receipt of a petition, the Secretary will deliver a public version of 
the petition (see Sec. 351.304(c)) to a representative in Washington, 
DC, of the government of any exporting country named in the petition.
    (g) Petition based upon derogation of an international undertaking 
on official export credits. In the case of a petition described in 
section 702(b)(3) of the Act, the petitioner must file a copy of the 
petition with the Secretary of the Treasury, as well as with the 
Secretary and the Commission, and must so certify in submitting the 
petition to the Secretary.
    (h) Assistance to small businesses; additional information.
    (1) The Secretary will provide technical assistance to eligible 
small businesses, as defined in section 339 of the Act, to enable them 
to prepare and file petitions. The Secretary may deny assistance if the 
Secretary concludes that the petition, if filed, could not satisfy the 
requirements of section 702(c)(1)(A) or section 732(c)(1)(A) of the Act 
(whichever is applicable) (see Sec. 351.203).
    (2) For additional information concerning petitions, contact the 
Deputy Assistant Secretary for Investigations, Import Administration, 
International Trade Administration, Room 3099, U.S. Department of 
Commerce, Pennsylvania Avenue and 14th Street, NW, Washington, DC 
20230; (202) 482-5497.
    (i) Pre-initiation communications. (1) In general. During the 
period before the Secretary's decision whether to initiate an 
investigation, communications with the Department will be governed by 
section 702(b)(4)(B) or section 732(b)(3)(B) of the Act (whichever is 
applicable). The Secretary will not consider the filing of a notice of 
appearance to constitute a communication.
    (2) Consultations with foreign governments in countervailing duty 
proceedings. In a countervailing duty proceeding, the Secretary will 
invite the government of any exporting country named in the petition 
for consultations with respect to the petition.

(The information collection requirements in paragraph (a) of this 
section have been approved by the Office of Management and Budget 
under control number 0625-0105.)


Sec. 351.203  Determination of sufficiency of petition.

    (a) Introduction. When a petition is filed under Sec. 351.202, the 
Secretary must determine that the petition satisfies the relevant 
statutory requirements before initiating an antidumping or 
countervailing duty investigation. This section sets forth rules 
regarding a determination as to the sufficiency of a petition 
(including the determination that a petition is supported by the 
domestic industry), the deadline for making the determination, and the 
actions to be taken once the Secretary has made the determination.
    (b) Determination of sufficiency. (1) In general. Normally, not 
later than 20 days after a petition is filed, the Secretary, on the 
basis of sources readily available to the Secretary, will examine the 
accuracy and adequacy of the evidence provided in the petition and 
determine whether to initiate an investigation under section 
702(c)(1)(A) or section 732(c)(1)(A) of the Act (whichever is 
applicable).
    (2) Extension where polling required. If the Secretary is required 
to poll or otherwise determine support for the petition under section 
702(c)(4)(D) or section 732(c)(4)(D) of the Act, the Secretary may, in 
exceptional circumstances, extend the 20-day period by the amount of 
time necessary to collect and analyze the required information. In no 
case will the period between the filing of a petition and the 
determination whether to initiate an investigation exceed 40 days.
    (c) Notice of initiation and distribution of petition. (1) Notice 
of initiation. If the initiation determination of the Secretary under 
section 702(c)(1)(A) or section 732(c)(1)(A) of the Act is affirmative, 
the Secretary will initiate an investigation and publish in the Federal 
Register notice of ``Initiation of Antidumping (Countervailing Duty) 
Investigation.'' The Secretary will notify the Commission at the time 
of initiation of the investigation and will make available to employees 
of the Commission directly involved in the proceeding the information 
upon which the Secretary based the initiation and which the Commission 
may consider relevant to its injury determinations.
    (2) Distribution of petition. As soon as practicable after 
initiation of an investigation, the Secretary will provide a public 
version of the petition to all known exporters (including producers who 
sell for export to the United States) of the subject merchandise. If 
the Secretary determines that there is a particularly large number of 
exporters involved, instead of providing the public version to all 
known exporters, the Secretary may provide the public version to a 
trade association of the exporters or, alternatively, may consider the 
requirement of the preceding sentence to have been satisfied by the 
delivery of a public version of the petition to the government of the 
exporting country under Sec. 351.202(f).
    (d) Insufficiency of petition. If an initiation determination of 
the Secretary under section 702(c)(1)(A) or section 732(c)(1)(A) of the 
Act is negative, the Secretary will dismiss the petition, terminate the 
proceeding, notify the petitioner in writing of the reasons for the 
determination, and publish in the Federal Register notice of 
``Dismissal of Antidumping (Countervailing Duty) Petition.''
    (e) Determination of industry support. In determining industry 
support for a petition under section 702(c)(4) or section 732(c)(4) of 
the Act, the following rules will apply:
    (1) Measuring production. The Secretary normally will measure 
production over a twelve-month period specified by the Secretary, and 
may measure production based on either value or volume. Where a party 
to the proceeding establishes that production data for the relevant 
period, as specified by the Secretary, is unavailable, production 
levels may be established by 

[[Page 7358]]
reference to alternative data that the Secretary determines to be 
indicative of production levels.
    (2) Positions treated as business proprietary information. Upon 
request, the Secretary may treat the position of a domestic producer or 
workers regarding the petition and any production information supplied 
by the producer or workers as business proprietary information under 
Sec. 351.105(b)(10).
    (3) Positions expressed by workers. The Secretary will consider the 
positions of workers and management regarding the petition to be of 
equal weight. The Secretary will assign a single weight to the 
positions of both workers and management according to the production of 
the domestic like product of the firm in which the workers and 
management are employed. If the management of a firm expresses a 
position in direct opposition to the position of the workers in that 
firm, the Secretary will treat the production of that firm as 
representing neither support for, nor opposition to, the petition.
    (4) Certain positions disregarded. (i) The Secretary will disregard 
the position of a domestic producer that opposes the petition if such 
producer is related to a foreign producer or to a foreign exporter 
under section 771(4)(B)(ii) of the Act, unless such domestic producer 
demonstrates to the Secretary's satisfaction that its interests as a 
domestic producer would be adversely affected by the imposition of an 
antidumping order or a countervailing duty order, as the case may be; 
and
    (ii) The Secretary may disregard the position of a domestic 
producer that is an importer of the subject merchandise, or that is 
related to such an importer, under section 771(4)(B)(ii) of the Act.
    (5) Special rule for regional industries. Under section 
702(c)(4)(C) or section 732(c)(4)(C) of the Act, the applicable region 
will be the region specified in the petition.
    (6) Polling the industry. In conducting a poll of the industry 
under section 702(c)(4)(D)(i) or section 732(c)(4)(D)(i) of the Act, 
the Secretary will include unions, groups of workers, and trade or 
business associations described in paragraphs (9)(D) and (9)(E) of 
section 771 of the Act.
    (f) Time limits where petition involves same merchandise as that 
covered by an order that has been revoked. Under section 702(c)(1)(C) 
or section 732(c)(1)(C) of the Act, and in expediting an investigation 
involving subject merchandise for which a prior order was revoked or a 
suspended investigation was terminated, the Secretary will consider 
``section 751(d)'' as including a predecessor provision.


Sec. 351.204  Transactions and persons examined; voluntary respondents; 
exclusions.

    (a) Introduction. Because the Act does not specify the precise 
period of time that the Secretary should examine in an antidumping or 
countervailing duty investigation, this section sets forth rules 
regarding the period of investigation (``POI''). In addition, this 
section includes rules regarding the selection of persons to be 
examined, the treatment of voluntary respondents that are not selected 
for individual examination, and the exclusion of persons that the 
Secretary ultimately finds are not dumping or are not receiving 
countervailable subsidies.
    (b) Period of investigation. (1) Antidumping investigation. In an 
antidumping investigation, the Secretary normally will examine 
merchandise sold during the four most recently completed fiscal 
quarters (or, in an investigation involving merchandise imported from a 
nonmarket economy country, the two most recently completed fiscal 
quarters) as of the month preceding the month in which the petition was 
filed or in which the Secretary self-initiated an investigation. 
However, the Secretary may examine merchandise sold during any 
additional or alternate period that the Secretary concludes is 
appropriate.
    (2) Countervailing duty investigation. In a countervailing duty 
investigation, the Secretary normally will rely on information 
pertaining to the most recently completed fiscal year for the 
government and exporters or producers in question. If the government 
and the exporters or producers have different fiscal years, the 
Secretary normally will rely on information pertaining to the most 
recently completed calendar year. If the investigation is conducted on 
an aggregate basis under section 777A(e)(2)(B) of the Act, the 
Secretary normally will rely on information pertaining to the most 
recently completed fiscal year for the government in question. However, 
the Secretary may rely on information for any additional or alternate 
period that the Secretary concludes is appropriate.
    (c) Exporters and producers examined. (1) In general. In an 
investigation, the Secretary will attempt to determine an individual 
weighted-average dumping margin or individual countervailable subsidy 
rate for each known exporter or producer of the subject merchandise. 
However, the Secretary may decline to examine a particular exporter or 
producer if that exporter or producer and the petitioner agree.
    (2) Limited investigation. Notwithstanding paragraph (c)(1) of this 
section, the Secretary may limit the investigation by using a method 
described in subsection (a), (c), or (e) of section 777A of the Act.
    (d) Voluntary respondents. (1) In general. If the Secretary limits 
the number of exporters or producers to be individually examined under 
section 777A(c)(2) or section 777A(e)(2)(A) of the Act, the Secretary 
will examine voluntary respondents (exporters or producers, other than 
those selected for individual examination) in accordance with section 
782(a) of the Act.
    (2) Acceptance of voluntary respondents. After receiving a 
voluntary response filed in accordance with section 782(a) of the Act, 
the Secretary will determine, as soon as practicable, whether to 
examine the voluntary respondent individually. A voluntary respondent 
accepted for individual examination will be subject to the same 
requirements as an exporter or producer initially selected by the 
Secretary for individual examination, including, where applicable, the 
use of the facts available under section 776 of the Act and 
Sec. 351.308.
    (3) Exclusion of voluntary respondents' rates from all-others rate. 
In calculating an all-others rate under section 705(c)(5) or section 
735(c)(5) of the Act, the Secretary will exclude weighted-average 
dumping margins or countervailable subsidy rates calculated for 
voluntary respondents.
    (e) Exclusions. (1) In general. The Secretary will exclude from an 
affirmative final determination under section 705(a) or section 735(a) 
of the Act or an order under section 706(a) or section 736(a) of the 
Act, any exporter or producer for which the Secretary determines an 
individual weighted-average dumping margin or individual net 
countervailable subsidy rate of zero or de minimis.
    (2) Preliminary determinations. In an affirmative preliminary 
determination under section 703(b) or section 733(b) of the Act, an 
exporter or producer for which the Secretary preliminarily determines 
an individual weighted-average dumping margin or individual net 
countervailable subsidy of zero or de minimis will not be excluded from 
the preliminary determination or the investigation. However, the 
exporter or producer will not be subject to provisional measures under 
section 703(d) or section 733(d) of the Act.
    (3) Countervailing duty investigations conducted on an aggregate 
basis and requests for exclusion from 

[[Page 7359]]
countervailing duty order. Where the Secretary conducts a 
countervailing duty investigation on an aggregate basis under section 
777A(e)(2)(B) of the Act, the Secretary will consider and investigate 
requests for exclusion to the extent practicable. An exporter or 
producer that desires exclusion from an order must submit:
    (i) A certification by the exporter or producer that it received 
zero or de minimis net countervailable subsidies during the period of 
investigation;
    (ii) If the exporter or producer received a countervailable 
subsidy, calculations demonstrating that the amount of net 
countervailable subsidies received was de minimis during the period of 
investigation;
    (iii) If the exporter is not the producer of the subject 
merchandise, certifications from the suppliers and producers of the 
subject merchandise that those persons received zero or de minimis net 
countervailable subsidies during the period of the investigation; and
    (iv) A certification from the government of the affected country 
that the government did not provide the exporter or producer with more 
than de minimis net countervailable subsidies during the period of 
investigation.


Sec. 351.205  Preliminary determination.

    (a) Introduction. A preliminary determination in an antidumping or 
countervailing duty investigation constitutes the first point at which 
the Secretary may provide a remedy if the Secretary preliminarily finds 
that dumping or countervailable subsidization has occurred. The remedy 
(sometimes referred to as ``provisional measures'') usually takes the 
form of a bonding requirement to ensure payment if antidumping or 
countervailing duties ultimately are imposed. Whether the Secretary's 
preliminary determination is affirmative or negative, the investigation 
continues. This section contains rules regarding deadlines for 
preliminary determinations, postponement of preliminary determinations, 
notices of preliminary determinations, and the effects of affirmative 
preliminary determinations.
    (b) Deadline for preliminary determination. The deadline for a 
preliminary determination under section 703(b) or section 733(b) of the 
Act will be:
    (1) Normally not later than 140 days in an antidumping 
investigation (65 days in a countervailing duty investigation) after 
the date on which the Secretary initiated the investigation (see 
section 703(b)(1) or section 733(b)(1)(A) of the Act);
    (2) Not later than 190 days in an antidumping investigation (130 
days in a countervailing duty investigation) after the date on which 
the Secretary initiated the investigation if the Secretary postpones 
the preliminary determination at petitioner's request or because the 
Secretary determines that the investigation is extraordinarily 
complicated (see section 703(c)(1) or section 733(c)(1) of the Act);
    (3) In a countervailing duty investigation, not later than 250 days 
after the date on which the proceeding began if the Secretary postpones 
the preliminary determination due to an upstream subsidy allegation (up 
to 310 days if the Secretary also postponed the preliminary 
determination at the request of the petitioner or because the Secretary 
determined that the investigation is extraordinarily complicated) (see 
section 703(c)(1) and section 703(g)(1) of the Act);
    (4) Within 90 days after initiation in an antidumping 
investigation, and on an expedited basis in a countervailing duty 
investigation, where verification has been waived (see section 
703(b)(3) or section 733(b)(2) of the Act);
    (5) In a countervailing duty investigation, on an expedited basis 
and within 65 days after the date on which the Secretary initiated the 
investigation if the sole subsidy alleged in the petition was the 
derogation of an international undertaking on official export credits 
(see section 702(b)(3) and section 703(b)(2) of the Act);
    (6) In a countervailing duty investigation, not later than 60 days 
after the date on which the Secretary initiated the investigation if 
the only subsidy under investigation is a subsidy with respect to which 
the Secretary received notice from the United States Trade 
Representative of a violation of Article 8 of the Subsidies Agreement 
(see section 703(b)(5) of the Act); and
    (7) In an antidumping investigation, within the deadlines set forth 
in section 733(b)(1)(B) of the Act if the investigation involves short 
life cycle merchandise (see section 733(b)(1)(B) and section 739 of the 
Act).
    (c) Contents of preliminary determination and publication of 
notice. A preliminary determination will include a preliminary finding 
on critical circumstances, if appropriate, under section 703(e)(1) or 
section 733(e)(1) of the Act (whichever is applicable). The Secretary 
will publish in the Federal Register notice of ``Affirmative (Negative) 
Preliminary Antidumping (Countervailing Duty) Determination,'' 
including the rates, if any, and an invitation for argument consistent 
with Sec. 351.309.
    (d) Effect of affirmative preliminary determination. If the 
preliminary determination is affirmative, the Secretary will take the 
actions described in section 703(d) or section 733(d) of the Act 
(whichever is applicable). In making information available to the 
Commission under section 703(d)(3) or section 733(d)(3) of the Act, the 
Secretary will make available to the Commission and to employees of the 
Commission directly involved in the proceeding the information upon 
which the Secretary based the preliminary determination and which the 
Commission may consider relevant to its injury determination.
    (e) Postponement at the request of the petitioner. A petitioner 
must submit a request for postponement of the preliminary determination 
(see section 703(c)(1)(A) or section 733(c)(1)(A) of the Act) 25 days 
or more before the scheduled date of the preliminary determination, and 
must state the reasons for the request. The Secretary will grant the 
request, unless the Secretary finds compelling reasons to deny the 
request.
    (f) Notice of postponement. (1) If the Secretary decides to 
postpone the preliminary determination at the request of the petitioner 
or because the investigation is extraordinarily complicated, the 
Secretary will notify all parties to the proceeding not later than 20 
days before the scheduled date of the preliminary determination, and 
will publish in the Federal Register notice of ``Postponement of 
Preliminary Antidumping (Countervailing Duty) Determination,'' stating 
the reasons for the postponement (see section 703(c)(2) or section 
733(c)(2) of the Act).
    (2) If the Secretary decides to postpone the preliminary 
determination due to an allegation of upstream subsidies, the Secretary 
will notify all parties to the proceeding not later than the scheduled 
date of the preliminary determination and will publish in the Federal 
Register notice of ``Postponement of Preliminary Countervailing Duty 
Determination,'' stating the reasons for the postponement.


Sec. 351.206  Critical circumstances.

    (a) Introduction. Generally, antidumping or countervailing duties 
are imposed on entries of merchandise made on or after the date on 
which the Secretary first imposes provisional measures (most often the 
date on which notice of an affirmative preliminary determination is 
published in the Federal Register). However, if the Secretary finds 
that ``critical circumstances'' exist, duties may be 

[[Page 7360]]
imposed retroactively on merchandise entered up to 90 days before the 
imposition of provisional measures. This section contains procedural 
and substantive rules regarding allegations and findings of critical 
circumstances.
    (b) In general. If a petitioner submits to the Secretary a written 
allegation of critical circumstances, with reasonably available factual 
information supporting the allegation, 21 days or more before the 
scheduled date of the Secretary's final determination, or on the 
Secretary's own initiative in a self-initiated investigation, the 
Secretary will make a finding whether critical circumstances exist, as 
defined in section 705(a)(2) or section 735(a)(3) of the Act (whichever 
is applicable).
    (c) Preliminary finding. (1) If the petitioner submits an 
allegation of critical circumstances 30 days or more before the 
scheduled date of the Secretary's final determination, the Secretary, 
based on the available information, will make a preliminary finding 
whether there is a reasonable basis to believe or suspect that critical 
circumstances exist, as defined in section 703(e)(1) or section 
733(e)(1) of the Act (whichever is applicable).
    (2) The Secretary will issue the preliminary finding:
    (i) Not later than the preliminary determination, if the allegation 
is submitted 20 days or more before the scheduled date of the 
preliminary determination; or
    (ii) Within 30 days after the petitioner submits the allegation, if 
the allegation is submitted later than 20 days before the scheduled 
date of the preliminary determination. The Secretary will notify the 
Commission and publish in the Federal Register notice of the 
preliminary finding.
    (d) Suspension of liquidation. If the Secretary makes an 
affirmative preliminary finding of critical circumstances, the 
provisions of section 703(e)(2) or section 733(e)(2) of the Act 
(whichever is applicable) regarding the retroactive suspension of 
liquidation will apply.
    (e) Final finding. For any allegation of critical circumstances 
submitted 21 days or more before the scheduled date of the Secretary's 
final determination, the Secretary will make a final finding on 
critical circumstances, and will take appropriate action under section 
705(c)(4) or section 735(c)(4) of the Act (whichever is applicable).
    (f) Findings in self-initiated investigations. In a self-initiated 
investigation, the Secretary will make preliminary and final findings 
on critical circumstances without regard to the time limits in 
paragraphs (c) and (e) of this section.
    (g) Information regarding critical circumstances. The Secretary may 
request the Commissioner of Customs to compile information on an 
expedited basis regarding entries of the subject merchandise if, at any 
time after the initiation of an investigation, the Secretary makes the 
findings described in section 702(e) or section 732(e) of the Act 
(whichever is applicable) regarding the possible existence of critical 
circumstances.
    (h) Massive imports. (1) In determining whether imports of the 
subject merchandise have been massive under section 705(a)(2)(B) or 
section 735(a)(3)(B) of the Act, the Secretary normally will examine:
    (i) The volume and value of the imports;
    (ii) Seasonal trends; and
    (iii) The share of domestic consumption accounted for by the 
imports.
    (2) In general, unless the imports during the ``relatively short 
period'' (see paragraph (i) of this section) have increased by at least 
15 percent over the imports during an immediately preceding period of 
comparable duration, the Secretary will not consider the imports 
massive.
    (i) Relatively short period. Under section 705(a)(2)(B) or section 
735(a)(3)(B) of the Act, the Secretary normally will consider a 
``relatively short period'' as the period beginning on the date the 
proceeding begins and ending at least three months later. However, if 
the Secretary finds that importers, or exporters or producers, had 
reason to believe, at some time prior to the beginning of the 
proceeding, that a proceeding was likely, then the Secretary may 
consider a period of not less than three months from that earlier time.


Sec. 351.207  Termination of investigation.

    (a) Introduction. ``Termination'' is a term of art that refers to 
the end of an antidumping or countervailing duty proceeding in which an 
order has not yet been issued. The Act establishes a variety of 
mechanisms by which an investigation may be terminated, most of which 
are dealt with in this section. For rules regarding the termination of 
a suspended investigation following a review under section 751 of the 
Act, see Sec. 351.222.
    (b) Withdrawal of petition; self-initiated investigations. (1) In 
general. The Secretary may terminate an investigation under section 
704(a)(1)(A) or section 734(a)(1)(A) (withdrawal of petition) or under 
section 704(k) or section 734(k) (self-initiated investigation) of the 
Act, provided that the Secretary concludes that termination is in the 
public interest. If the Secretary terminates an investigation, the 
Secretary will publish in the Federal Register notice of ``Termination 
of Antidumping (Countervailing Duty) Investigation,'' together with, 
when appropriate, a copy of any correspondence with the petitioner 
forming the basis of the withdrawal and the termination. (For the 
treatment in a subsequent investigation of records compiled in an 
investigation in which the petition was withdrawn, see section 
704(a)(1)(B) or section 734(a)(1)(B) of the Act.)
    (2) Withdrawal of petition based on acceptance of quantitative 
restriction agreements. In addition to the requirements of paragraph 
(b)(1) of this section, if a termination is based on the acceptance of 
an understanding or other kind of agreement to limit the volume of 
imports into the United States of the subject merchandise, the 
Secretary will apply the provisions of section 704(a)(2) or section 
734(a)(2) of the Act (whichever is applicable) regarding public 
interest and consultations with consuming industries and producers and 
workers.
    (c) Lack of interest. The Secretary may terminate an investigation 
based upon lack of interest (see section 782(h)(1) of the Act). Where 
the Secretary terminates an investigation under this paragraph, the 
Secretary will publish the notice described in paragraph (b)(1) of this 
section.
    (d) Negative determination. An investigation terminates 
automatically upon publication in the Federal Register of the 
Secretary's negative final determination or the Commission's negative 
preliminary or final determination.
    (e) End of suspension of liquidation. When an investigation 
terminates, if the Secretary previously ordered suspension of 
liquidation, the Secretary will order the suspension ended on the date 
of publication of the notice of termination referred to in paragraph 
(b) of this section or on the date of publication of a negative 
determination referred to in paragraph (d) of this section, and will 
instruct the Customs Service to release any cash deposit or bond.


Sec. 351.208  Suspension of investigation.

    (a) Introduction. In addition to the imposition of duties, the Act 
also permits the Secretary to suspend an antidumping or countervailing 
duty investigation by accepting a suspension agreement (referred to in 
the WTO 

[[Page 7361]]
Agreements as an ``undertaking''). Briefly, in a suspension agreement, 
the exporters and producers or the foreign government agree to modify 
their behavior so as to eliminate dumping or subsidization or the 
injury caused thereby. If the Secretary accepts a suspension agreement, 
the Secretary will ``suspend'' the investigation and thereafter will 
monitor compliance with the agreement. This section contains rules for 
entering into suspension agreements and procedures for suspending an 
investigation.
    (b) In general. The Secretary may suspend an investigation under 
section 704 or section 734 of the Act and this section.
    (c) Definition of ``substantially all.'' Under section 704 and 
section 734 of the Act, exporters that account for ``substantially 
all'' of the merchandise means exporters and producers that have 
accounted for not less than 85 percent by value or volume of the 
subject merchandise during the period for which the Secretary is 
measuring dumping or countervailable subsidization in the investigation 
or such other period that the Secretary considers representative.
    (d) Monitoring. In monitoring a suspension agreement under section 
704(c), section 734(c), or section 734(l) of the Act (agreements to 
eliminate injurious effects or to restrict the volume of imports), the 
Secretary will not be obliged to ascertain on a continuing basis the 
prices in the United States of the subject merchandise or of domestic 
like products.
    (e) Exports not to increase during interim period. The Secretary 
will not accept a suspension agreement under section 704(b)(2) or 
section 734(b)(1) of the Act (elimination of dumping or countervailable 
subsidization or the cessation of exports) unless the agreement ensures 
that the quantity of the subject merchandise exported during the 
interim period set forth in the agreement does not exceed the quantity 
of the merchandise exported during a period of comparable duration that 
the Secretary considers representative.
    (f) Procedure for suspension of investigation.
    (1) Submission of proposed suspension agreement. (i) In general. As 
appropriate, the exporters and producers or, in an investigation 
involving a nonmarket economy country, the government, must submit to 
the Secretary a proposed suspension agreement within:
    (A) In an antidumping investigation, 15 days after the date of 
issuance of the preliminary determination, or
    (B) In a countervailing duty investigation, 5 days after the date 
of issuance of the preliminary determination. Where a proposed 
suspension agreement is submitted in an antidumping investigation, an 
exporter or producer or, in an antidumping investigation involving a 
nonmarket economy country, the government, may request postponement of 
the final determination under section 735(a)(2) of the Act (see 
Sec. 351.210(e)). Where the final determination in a countervailing 
duty investigation is postponed under section 703(g)(2) or section 
705(a)(1) of the Act (see Sec. 351.210(b)(3) and Sec. 351.210(i)), the 
time limits in paragraphs (f)(1)(i), (f)(2)(i), (f)(3), and (g)(1) of 
this section applicable to countervailing duty investigations will be 
extended to coincide with the time limits in such paragraphs applicable 
to antidumping investigations.
    (ii) Special rule for regional industry determination. If the 
Commission makes a regional industry determination in its final 
affirmative determination under section 705(b) or section 735(b) of the 
Act but not in its preliminary affirmative determination under section 
703(a) or section 733(a) of the Act, the exporters and producers or, in 
an investigation involving a nonmarket economy country, the government, 
must submit to the Secretary any proposed suspension agreement within 
15 days of the publication in the Federal Register of the antidumping 
or countervailing duty order.
    (2) Notification and consultation. In fulfilling the requirements 
of section 704 or section 734 of the Act (whichever is applicable), the 
Secretary will take the following actions:
    (i) In general. The Secretary will notify all parties to the 
proceeding of the proposed suspension of an investigation and provide 
to the petitioner a copy of the suspension agreement preliminarily 
accepted by the Secretary (the agreement must contain the procedures 
for monitoring compliance and a statement of the compatibility of the 
agreement with the requirements of section 704 or section 734 of the 
Act) within:
    (A) In an antidumping investigation, 30 days after the date of 
issuance of the preliminary determination, or
    (B) In a countervailing duty investigation, 15 days after the date 
of issuance of the preliminary determination; or
    (ii) Special rule for regional industry determination. If the 
Commission makes a regional industry determination in its final 
affirmative determination under section 705(b) or section 735(b) of the 
Act but not in its preliminary affirmative determination under section 
703(a) or section 733(a) of the Act, the Secretary, within 15 days of 
the submission of a proposed suspension agreement under paragraph 
(f)(1)(ii) of this section, will notify all parties to the proceeding 
of the proposed suspension agreement and provide to the petitioner a 
copy of the agreement preliminarily accepted by the Secretary (such 
agreement must contain the procedures for monitoring compliance and a 
statement of the compatibility of the agreement with the requirements 
of section 704 or section 734 of the Act); and
    (iii) Consultation. The Secretary will consult with the petitioner 
concerning the proposed suspension of the investigation.
    (3) Opportunity for comment. The Secretary will provide all 
interested parties and United States government agencies an opportunity 
to submit written argument and factual information concerning the 
proposed suspension of the investigation within:
    (i) In an antidumping investigation, 50 days after the date of 
issuance of the preliminary determination,
    (ii) In a countervailing duty investigation, 35 days after the date 
of issuance of the preliminary determination, or
    (iii) In a regional industry case described in paragraph (f)(1)(ii) 
of this section, 35 days after the date of issuance of an order.
    (g) Acceptance of suspension agreement.
    (1) The Secretary may accept an agreement to suspend an 
investigation within:
    (i) In an antidumping investigation, 60 days after the date of 
issuance of the preliminary determination,
    (ii) In a countervailing duty investigation, 45 days after the date 
of issuance of the preliminary determination, or
    (iii) In a regional industry case described in paragraph (f)(1)(ii) 
of this section, 45 days after the date of issuance of an order.
    (2) If the Secretary accepts an agreement to suspend an 
investigation, the Secretary will take the actions described in section 
704(f), section 704(m)(3), section 734(f), or section 734(l)(3) of the 
Act (whichever is applicable), and will publish in the Federal Register 
notice of ``Suspension of Antidumping (Countervailing Duty) 
Investigation,'' including the text of the agreement. If the Secretary 
has not 

[[Page 7362]]
already published notice of an affirmative preliminary determination, 
the Secretary will include that notice. In accepting an agreement, the 
Secretary may rely on factual or legal conclusions the Secretary 
reached in or after the affirmative preliminary determination.
    (h) Continuation of investigation. (1) A request to the Secretary 
under section 704(g) or section 734(g) of the Act for the continuation 
of the investigation must be made in writing. In addition, the request 
must be simultaneously filed with the Commission, and the requester 
must so certify in submitting the request to the Secretary.
    (2) If the Secretary and the Commission make affirmative final 
determinations in an investigation that has been continued, the 
suspension agreement will remain in effect in accordance with the 
factual and legal conclusions in the Secretary's final determination. 
If either the Secretary or the Commission makes a negative final 
determination, the agreement will have no force or effect.
    (i) Merchandise imported in excess of allowed quantity. (1) The 
Secretary may instruct the Customs Service not to accept entries, or 
withdrawals from warehouse, for consumption of subject merchandise in 
excess of any quantity allowed by a suspension agreement under section 
704 or section 734 of the Act, including any quantity allowed during 
the interim period (see paragraph (e) of this section).
    (2) Imports in excess of the quantity allowed by a suspension 
agreement, including any quantity allowed during the interim period 
(see paragraph (e) of this section), may be exported or destroyed under 
Customs Service supervision, except that if the agreement is under 
section 704(c)(3) or section 734(l) of the Act (restrictions on the 
volume of imports), the excess merchandise, with the approval of the 
Secretary, may be held for future opening under the agreement by 
placing it in a foreign trade zone or by entering it for warehouse.


Sec. 351.209  Violation of suspension agreement.

    (a) Introduction. A suspension agreement remains in effect until 
the underlying investigation is terminated (see Secs. 351.207 and 
351.222). However, if the Secretary finds that a suspension agreement 
has been violated or no longer meets the requirements of the Act, the 
Secretary may either cancel or revise the agreement. This section 
contains rules regarding cancellation and revisions of suspension 
agreements.
    (b) Immediate determination. If the Secretary determines that a 
signatory has violated a suspension agreement, the Secretary, without 
providing interested parties an opportunity to comment, will:
    (1) Order the suspension of liquidation in accordance with section 
704(i)(1)(A) or section 734(i)(1)(A) of the Act (whichever is 
applicable) of all entries of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the later of (i) 
90 days before the date of publication of the notice of cancellation of 
the agreement or (ii) the date of first entry, or withdrawal from 
warehouse, for consumption of the merchandise the sale or export of 
which was in violation of the agreement;
    (2) If the investigation was not completed under section 704(g) or 
section 734(g) of the Act, resume the investigation as if the Secretary 
had made an affirmative preliminary determination on the date of 
publication of the notice of cancellation, update previously submitted 
information where the Secretary deems it appropriate to do so, and 
impose provisional measures by instructing the Customs Service to 
require for each entry of the subject merchandise suspended under 
paragraph (b)(1) of this section a cash deposit or bond at the rates 
determined in the affirmative preliminary determination;
    (3) If the investigation was completed under section 704(g) or 
section 734(g) of the Act, issue an antidumping order or countervailing 
duty order (whichever is applicable), and, for all entries subject to 
suspension of liquidation under paragraph (b)(1) of this section, 
instruct the Customs Service to require for each entry of the 
merchandise suspended under this paragraph a cash deposit at the rates 
determined in the affirmative final determination;
    (4) Notify all persons who are or were parties to the proceeding, 
the Commission, and, if the Secretary determines that the violation was 
intentional, the Commissioner of Customs; and
    (5) Publish in the Federal Register notice of ``Antidumping 
(Countervailing Duty) Order (Resumption of Antidumping (Countervailing 
Duty) Investigation); Cancellation of Suspension Agreement.''
    (c) Determination after notice and comment. (1) If the Secretary 
has reason to believe that a signatory has violated a suspension 
agreement, or that an agreement no longer meets the requirements of 
section 704(d)(1) or section 734(d) of the Act, but the Secretary does 
not have sufficient information to determine that a signatory has 
violated the agreement (see paragraph (b) of this section), the 
Secretary will publish in the Federal Register notice of ``Invitation 
for Comment on Antidumping (Countervailing Duty) Suspension 
Agreement.''
    (2) After publication of the notice inviting comment and after 
consideration of comments received the Secretary will:
    (i) Determine whether any signatory has violated the suspension 
agreement; or
    (ii) Determine whether the suspension agreement no longer meets the 
requirements of section 704(d)(1) or section 734(d) of the Act.
    (3) If the Secretary determines that a signatory has violated the 
suspension agreement, the Secretary will take appropriate action as 
described in paragraphs (b)(1) through (b)(5) of this section.
    (4) If the Secretary determines that a suspension agreement no 
longer meets the requirements of section 704(d)(1) or section 734(d) of 
the Act, the Secretary will:
    (i) Take appropriate action as described in paragraphs (b)(1) 
through (b)(5) of this section; except that, under paragraph (b)(1)(ii) 
of this section, the Secretary will order the suspension of liquidation 
of all entries of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the later of 90 days before the 
date of publication of the notice of suspension of liquidation or the 
date of first entry, or withdrawal from warehouse, for consumption of 
the merchandise the sale or export of which does not meet the 
requirements of section 704(d)(1) of the Act;
    (ii) Continue the suspension of investigation by accepting a 
revised suspension agreement under section 704(b) or section 734(b) of 
the Act (whether or not the Secretary accepted the original agreement 
under such section) that, at the time the Secretary accepts the revised 
agreement, meets the applicable requirements of section 704(d)(1) or 
section 734(d) of the Act, and publish in the Federal Register notice 
of ``Revision of Agreement Suspending Antidumping (Countervailing Duty) 
Investigation''; or
    (iii) Continue the suspension of investigation by accepting a 
revised suspension agreement under section 704(c), section 734(c), or 
section 734(l) of the Act (whether or not the Secretary accepted the 
original agreement under such section) that, at the time the Secretary 
accepts the revised agreement, meets the applicable requirements of 
section 704(d)(1) or section 734(d) of the Act, and publish in the 
Federal Register 

[[Page 7363]]
notice of ``Revision of Agreement Suspending Antidumping 
(Countervailing Duty) Investigation.'' If the Secretary continues to 
suspend an investigation based on a revised agreement accepted under 
section 704(c), section 734(c), or section 734(l) of the Act, the 
Secretary will order suspension of liquidation to begin. The suspension 
will not end until the Commission completes any requested review of the 
revised agreement under section 704(h) or section 734(h) of the Act. If 
the Commission receives no request for review within 20 days after the 
date of publication of the notice of the revision, the Secretary will 
order the suspension of liquidation ended on the 21st day after the 
date of publication, and will instruct the Customs Service to release 
any cash deposit or bond. If the Commission undertakes a review under 
section 704(h) or section 734(h) of the Act, the provisions of sections 
704(h)(2) and (3) and sections 734(h)(2) and (3) of the Act will apply.
    (5) If the Secretary decides neither to consider the suspension 
agreement violated nor to revise the agreement, the Secretary will 
publish in the Federal Register notice of the Secretary's decision 
under paragraph (c)(2) of this section, including a statement of the 
factual and legal conclusions on which the decision is based.
    (d) Additional signatories. If the Secretary decides that a 
suspension agreement no longer will completely eliminate the injurious 
effect of exports to the United States of subject merchandise under 
section 704(c)(1) or section 734(c)(1) of the Act, or that the 
signatory exporters no longer account for substantially all of the 
subject merchandise, the Secretary may revise the agreement to include 
additional signatory exporters.
    (e) Definition of ``violation.'' Under this section, ``violation'' 
means noncompliance with the terms of a suspension agreement caused by 
an act or omission of a signatory, except, at the discretion of the 
Secretary, an act or omission which is inadvertent or inconsequential.


Sec. 351.210  Final determination.

    (a) Introduction. A ``final determination'' in an antidumping or 
countervailing duty investigation constitutes a final decision by the 
Secretary as to whether dumping or countervailable subsidization is 
occurring. If the final determination is negative, the proceeding, 
including the injury investigation conducted by the Commission, 
terminates. If the final determination is affirmative, in most 
instances the Commission issues a final injury determination. In 
addition, if the preliminary determination was negative but the final 
determination is affirmative, the Secretary will impose provisional 
measures. This section contains rules regarding deadlines for, and 
postponement of, final determinations, contents of final 
determinations, and the effects of final determinations.
    (b) Deadline for final determination. The deadline for a final 
determination under section 705(a)(1) or section 735(a)(1) of the Act 
will be:
    (1) Normally, not later than 75 days after the date of the 
Secretary's preliminary determination (see section 705(a)(1) or section 
735(a)(1) of the Act);
    (2) In an antidumping investigation, not later than 135 days after 
the date of publication of the preliminary determination if the 
Secretary postpones the final determination at the request of:
    (i) The petitioner, if the preliminary determination was negative 
(see section 735(a)(2)(B) of the Act); or
    (ii) Exporters or producers who account for a significant 
proportion of exports of the subject merchandise, if the preliminary 
determination was affirmative (see section 735(a)(2)(A) of the Act);
    (3) In a countervailing duty investigation, not later than 165 days 
after the preliminary determination, if, after the preliminary 
determination, the Secretary decides to investigate an upstream subsidy 
allegation and concludes that additional time is needed to investigate 
the allegation (see section 703(g)(2) of the Act); or
    (4) In a countervailing duty investigation, the same date as the 
date of the final antidumping determination, if:
    (i) In a situation where the Secretary simultaneously initiated 
antidumping and countervailing duty investigations on the subject 
merchandise (from the same or other countries), the petitioner requests 
that the final countervailing duty determination be postponed to the 
date of the final antidumping determination; and
    (ii) If the final countervailing duty determination is not due on a 
later date because of postponement due to an allegation of upstream 
subsidies under section 703(g) of the Act (see section 705(a)(1) of the 
Act).
    (c) Contents of final determination and publication of notice. The 
final determination will include, if appropriate, a final finding on 
critical circumstances under section 705(a)(2) or section 735(a)(3) of 
the Act (whichever is applicable). The Secretary will publish in the 
Federal Register notice of ``Affirmative (Negative) Final Antidumping 
(Countervailing Duty) Determination,'' including the rates, if any.
    (d) Effect of affirmative final determination. If the final 
determination is affirmative, the Secretary will take the actions 
described in section 705(c)(1) or section 735(c)(1) of the Act 
(whichever is applicable). In addition, in the case of a countervailing 
duty investigation involving subject merchandise from a country that is 
not a Subsidies Agreement country, the Secretary will instruct the 
Customs Service to require a cash deposit, as provided in section 
706(a)(3) of the Act, for each entry of the subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of the order under section 706(a) of the Act.
    (e) Request for postponement of final antidumping determination. A 
request to postpone a final antidumping determination under section 
735(a)(2) of the Act (see paragraph (b)(2) of this section) must be 
submitted in writing within the scheduled date of the final 
determination. The Secretary may grant the request, unless the 
Secretary finds compelling reasons to deny the request.
    (f) Deferral of decision concerning upstream subsidization to 
review. Notwithstanding paragraph (b)(3) of this section, if the 
petitioner so requests in writing and the preliminary countervailing 
duty determination was affirmative, the Secretary, instead of 
postponing the final determination, may defer a decision concerning 
upstream subsidization until the conclusion of the first administrative 
review of a countervailing duty order, if any (see section 
703(g)(2)(B)(i) of the Act).
    (g) Notification of postponement. If the Secretary postpones a 
final determination under paragraph (b)(2), (b)(3), or (b)(4) of this 
section, the Secretary will notify promptly all parties to the 
proceeding of the postponement, and will publish in the Federal 
Register notice of ``Postponement of Final Antidumping (Countervailing 
Duty) Determination,'' stating the reasons for the postponement.
    (h) Termination of suspension of liquidation in a countervailing 
duty investigation. If the Secretary postpones a final countervailing 
duty determination, the Secretary will end any suspension of 
liquidation ordered in the preliminary determination not later than 120 
days after the date of publication of the preliminary determination, 
and will not resume it unless and until the Secretary publishes a 
countervailing duty order.

[[Page 7364]]

    (i) Postponement of final countervailing duty determination for 
simultaneous investigations. A request by the petitioner to postpone a 
final countervailing duty determination to the date of the final 
antidumping determination must be submitted in writing within five days 
of the date of publication of the preliminary countervailing duty 
determination (see section 705(a)(1) and paragraph (b)(4) of this 
section).
    (j) Commission access to information. If the final determination is 
affirmative, the Secretary will make available to the Commission and to 
employees of the Commission directly involved in the proceeding the 
information upon which the Secretary based the final determination and 
that the Commission may consider relevant to its injury determination 
(see section 705(c)(1)(A) or section 735(c)(1)(A) of the Act).
    (k) Effect of negative final determination. An investigation 
terminates upon publication in the Federal Register of the Secretary's 
or the Commission's negative final determination, and the Secretary 
will take the relevant actions described in section 705(c)(2) or 
section 735(c)(2) of the Act (whichever is applicable).


Sec. 351.211  Antidumping order and countervailing duty order.

    (a) Introduction. The Secretary issues an order when both the 
Secretary and the Commission (except in the case of merchandise from a 
non-Subsidies Agreement country) have made final affirmative 
determinations. The issuance of an order ends the investigative phase 
of a proceeding. Generally, upon the issuance of an order, importers no 
longer may post bonds as security for antidumping or countervailing 
duties, but instead must make a cash deposit of estimated duties. An 
order remains in effect until it is revoked. This section contains 
rules regarding the issuance of orders in general, as well as special 
rules for orders where the Commission has found a regional industry to 
exist.
    (b) In general. Not later than seven days after receipt of notice 
of an affirmative final injury determination by the Commission under 
section 705(b) or section 735(b) of the Act, or, in a countervailing 
duty proceeding involving subject merchandise from a country not 
entitled to an injury test (see Sec. 351.101(b)), simultaneously with 
publication of an affirmative final countervailing duty determination 
by the Secretary, the Secretary will publish in the Federal Register an 
``Antidumping Order'' or ``Countervailing Duty Order'' that:
    (1) Instructs the Customs Service to assess antidumping duties or 
countervailing duties (whichever is applicable) on the subject 
merchandise, in accordance with the Secretary's instructions at the 
completion of each review requested under Sec. 351.213(b) 
(administrative review), Sec. 351.214(b) (new shipper review), or 
Sec. 351.215(b) (expedited antidumping review), or if a review is not 
requested, in accordance with the Secretary's assessment instructions 
under Sec. 351.212(c);
    (2) Instructs the Customs Service to require a cash deposit of 
estimated antidumping or countervailing duties at the rates included in 
the Secretary's final determination; and
    (3) Orders the suspension of liquidation ended for all entries of 
the subject merchandise entered, or withdrawn from warehouse, for 
consumption before the date of publication of the Commission's final 
determination, and instructs the Customs Service to release the cash 
deposit or bond on those entries, if in its final determination, the 
Commission found a threat of material injury or material retardation of 
the establishment of an industry, unless the Commission in its final 
determination also found that, absent the suspension of liquidation 
ordered under section 703(d)(2) or section 733(d)(2) of the Act, it 
would have found material injury (see section 706(b) or section 736(b) 
of the Act).
    (c) Special rule for regional industries. (1) In general. If the 
Commission, in its affirmative final injury determination, finds a 
regional industry under section 771(4)(C) of the Act, the Secretary 
will, to the maximum extent possible, modify the contents of an order 
in a manner consistent with section 706(c) or section 736(d) of the Act 
(whichever is applicable).
    (2) Request for exception from the assessment of duties. An 
exporter or producer seeking an exception from the assessment of 
antidumping or countervailing duties (see section 706(c) or section 
736(d) of the Act) must submit a certification that it did not export 
subject merchandise for sale in the region concerned during the period 
of investigation, and that it will not do so in the future so long as 
the antidumping or countervailing duty order is in effect. In addition, 
each such exporter or producer must submit a certification from each of 
its U.S. importers of the subject merchandise that no subject 
merchandise of that exporter or producer was entered into the United 
States outside such region and then sold into the region during or 
after the period of investigation. These certificates must be submitted 
to the Secretary no later than fifteen days after the issuance of the 
Commission's affirmative final determination.


Sec. 351.212  Assessment of antidumping and countervailing duties; 
provisional measures deposit cap; interest on certain overpayments and 
underpayments.

    (a) Introduction. Unlike the systems of some other countries, the 
United States uses a ``retrospective'' assessment system under which 
final liability for antidumping and countervailing duties is determined 
after merchandise is imported. Generally, the amount of duties to be 
assessed is determined in a review of the order covering a discrete 
period of time. If a review is not requested, duties are assessed at 
the rate established in the completed review covering the most recent 
prior period or, if no review has been completed, the cash deposit rate 
applicable at the time merchandise was entered. This section contains 
rules regarding the assessment of duties, the provisional measures 
deposit cap, and interest on over- or undercollections of estimated 
duties.
    (b) Assessment of antidumping and countervailing duties as the 
result of a review.
    (1) Antidumping duties. If the Secretary has conducted a review of 
an antidumping order under Sec. 351.213 (administrative review), 
Sec. 351.214 (new shipper review), or Sec. 351.215 (expedited 
antidumping review), the Secretary normally will calculate an 
assessment rate for each importer of subject merchandise covered by the 
review. The Secretary normally will calculate the assessment rate by 
dividing the dumping margin found on the subject merchandise examined 
by the entered value of such merchandise for normal customs duty 
purposes. The Secretary then will instruct the Customs Service to 
assess antidumping duties by applying the assessment rate to the 
entered value of the merchandise.
    (2) Countervailing duties. If the Secretary has conducted a review 
of a countervailing duty order under Sec. 351.213 (administrative 
review) or Sec. 351.214 (new shipper review), the Secretary normally 
will instruct the Customs Service to assess countervailing duties by 
applying the rates included in the final results of the review to the 
entered value of the merchandise.
    (c) Automatic assessment of antidumping and countervailing duties 
if no review is requested.
    (1) If the Secretary does not receive a timely request for an 
administrative review of an order (see paragraph (b)(1), (b)(2), or 
(b)(3) of Sec. 351.213), the 

[[Page 7365]]
Secretary, without additional notice, will instruct the Customs Service 
to (i) assess antidumping duties or countervailing duties, as the case 
may be, on the subject merchandise described in Sec. 351.213(e) at 
rates equal to the rates determined in the most recently completed 
segment of the proceeding, and (ii) to continue to collect the cash 
deposits previously ordered.
    (2) If the Secretary receives a timely request for an 
administrative review of an order (see paragraph (b)(1), (b)(2), or 
(b)(3) of Sec. 351.213), the Secretary will instruct the Customs 
Service to assess antidumping duties or countervailing duties, and to 
continue to collect cash deposits, on the merchandise not covered by 
the request in accordance with paragraph (c)(1) of this section.
    (3) The automatic assessment provisions of paragraphs (c)(1) and 
(c)(2) of this section will not apply to subject merchandise that is 
the subject of a new shipper review (see Sec. 351.214) or an expedited 
antidumping review (see Sec. 351.215).
    (d) Provisional measures deposit cap. This paragraph applies to 
subject merchandise entered, or withdrawn from warehouse, for 
consumption before the date of publication of the Commission's notice 
of an affirmative final injury determination or, in a countervailing 
duty proceeding that involves merchandise from a country that is not 
entitled to an injury test, the date of the Secretary's notice of an 
affirmative final countervailing duty determination. If the amount of 
duties that would be assessed by applying the rates included in the 
Secretary's affirmative preliminary or affirmative final antidumping or 
countervailing duty determination (``provisional duties'') is different 
from the amount of duties that would be assessed by applying the 
assessment rate under paragraphs (b)(1) and (b)(2) of this section 
(``final duties''), the Secretary will instruct the Customs Service to 
disregard the difference to the extent that the provisional duties are 
less than the final duties, and to assess antidumping or countervailing 
duties at the assessment rate if the provisional duties exceed the 
final duties.
    (e) Interest on certain overpayments and underpayments. Under 
section 778 of the Act, the Secretary will instruct the Customs Service 
to calculate interest for each entry on or after the publication of the 
order from the date that a cash deposit is required to be deposited for 
the entry through the date of liquidation of the entry.


Sec. 351.213  Administrative review of orders and suspension agreements 
under section 751(a)(1) of the Act.

    (a) Introduction. As noted in Sec. 351.212(a), the United States 
has a ``retrospective'' assessment system under which final liability 
for antidumping and countervailing duties is determined after 
merchandise is imported. Although duty liability may be determined in 
the context of other types of reviews, the most frequently used 
procedure for determining final duty liability is the administrative 
review procedure under section 751(a)(1) of the Act. This section 
contains rules regarding requests for administrative reviews and the 
conduct of such reviews.
    (b) Request for administrative review. (1) Each year during the 
anniversary month of the publication of an antidumping or 
countervailing duty order, a domestic interested party or an interested 
party described in section 771(9)(B) of the Act (foreign government) 
may request in writing that the Secretary conduct an administrative 
review under section 751(a)(1) of the Act of specified individual 
exporters or producers covered by an order (except for a countervailing 
duty order in which the investigation or prior administrative review 
was conducted on an aggregate basis), if the requesting person states 
why the person desires the Secretary to review those particular 
exporters or producers.
    (2) During the same month, an exporter or producer covered by an 
order (except for a countervailing duty order in which the 
investigation or prior administrative review was conducted on an 
aggregate basis) may request in writing that the Secretary conduct an 
administrative review of only that person.
    (3) During the same month, an importer of the merchandise may 
request in writing that the Secretary conduct an administrative review 
of only an exporter or producer (except for a countervailing duty order 
in which the investigation or prior administrative review was conducted 
on an aggregate basis) of the subject merchandise imported by that 
importer.
    (4) Each year during the anniversary month of the publication of a 
suspension of investigation, an interested party may request in writing 
that the Secretary conduct an administrative review of all producers or 
exporters covered by an agreement on which the suspension of 
investigation was based.
    (c) Deferral of administrative review. (1) In general. The 
Secretary may defer the initiation of an administrative review, in 
whole or in part, for one year if:
    (i) The request for administrative review is accompanied by a 
request that the Secretary defer the review, in whole or in part; and
    (ii) The exporter or producer for which deferral is requested, 
importers of subject merchandise of that exporter or producer, domestic 
interested parties, or, in a countervailing duty proceeding, the 
foreign government do not object to the deferral.
    (2) Timeliness of objection to deferral. An objection to a deferral 
of the initiation of administrative review under paragraph (c)(1)(ii) 
of this section must be submitted within 15 days after the end of the 
anniversary month in which the administrative review is requested.
    (3) Procedures and deadlines. If the Secretary defers the 
initiation of an administrative review, the Secretary will publish 
notice of the deferral in the Federal Register. The Secretary will 
initiate the administrative review in the month immediately following 
the next anniversary month, and the deadline for issuing preliminary 
results of review (see paragraph (h)(1) of this section) will run from 
the last day of the next anniversary month.
    (d) Rescission of administrative review. (1) Withdrawal of request 
for review. The Secretary may rescind an administrative review under 
this section, in whole or in part, if a party that requested a review 
withdraws the request not later than 90 days after the date of 
publication of notice of initiation of the requested review.
    (2) Self-initiated review. The Secretary may rescind an 
administrative review that was self-initiated by the Secretary.
    (3) No shipments. The Secretary may rescind an administrative 
review, in whole or only with respect to a particular exporter or 
producer, if the Secretary concludes that, during the period covered by 
the review, there were no entries, exports, or sales of the subject 
merchandise, as the case may be.
    (4) Notice of rescission. If the Secretary rescinds an 
administrative review (in whole or in part), the Secretary will publish 
in the Federal Register notice of ``Rescission of Antidumping 
(Countervailing Duty) Administrative Review'' or, if appropriate, 
``Partial Rescission of Antidumping (Countervailing Duty) 
Administrative Review.''
    (e) Period of review. (1) Antidumping proceedings. (i) Except as 
provided in paragraph (e)(1)(ii) of this section, an administrative 
review under this section normally will cover, as appropriate, entries, 
exports, or sales of the subject 

[[Page 7366]]
merchandise during the 12 months immediately preceding the most recent 
anniversary month.
    (ii) For requests received during the first anniversary month after 
publication of an order or suspension of investigation, an 
administrative review under this section will cover, as appropriate, 
entries, exports, or sales during the period from the date of 
suspension of liquidation under this part or suspension of 
investigation to the end of the month immediately preceding the first 
anniversary month.
    (2) Countervailing duty proceedings. (i) Except as provided in 
paragraph (e)(2)(ii) of this section, an administrative review under 
this section normally will cover entries or exports of the subject 
merchandise during the most recently completed calendar year. If the 
review is conducted on an aggregate basis, the Secretary normally will 
cover entries or exports of the subject merchandise during the most 
recently completed fiscal year for the government in question.
    (ii) For requests received during the first anniversary month after 
publication of an order or suspension of investigation, an 
administrative review under this section will cover entries or exports, 
as appropriate, during the period from the date of suspension of 
liquidation under this part or suspension of investigation to the end 
of the most recently completed calendar or fiscal year as described in 
paragraph (e)(2)(i) of this section.
    (f) Voluntary respondents. In an administrative review, the 
Secretary will examine voluntary respondents in accordance with section 
782(a) of the Act and Sec. 351.204(d).
    (g) Procedures. The Secretary will conduct an administrative review 
under this section in accordance with Sec. 351.221.
    (h) Time limits. (1) In general. The Secretary will issue 
preliminary results of review (see Sec. 351.221(b)(4)) within 245 days 
after the last day of the anniversary month of the order or suspension 
agreement for which the administrative review was requested, and final 
results of review (see Sec. 351.221(b)(5)) within 120 days after the 
date on which notice of the preliminary results was published in the 
Federal Register.
    (2) Exception. If the Secretary determines that it is not 
practicable to complete the review within the time specified in 
paragraph (h)(1) of this section, the Secretary may extend the 245-day 
period to 365 days and may extend the 120-day period to 180 days. If 
the Secretary does not extend the time for issuing preliminary results, 
the Secretary may extend the time for issuing final results from 120 
days to 300 days.
    (i) Possible cancellation or revision of suspension agreement. If 
during an administrative review the Secretary determines or has reason 
to believe that a signatory has violated a suspension agreement or that 
the agreement no longer meets the requirements of section 704 or 
section 734 of the Act (whichever is applicable), the Secretary will 
take appropriate action under section 704(i) or section 734(i) of the 
Act and Sec. 351.209. The Secretary may suspend the time limit in 
paragraph (h) of this section while taking action under Sec. 351.209.
    (j) Absorption of antidumping duties. (1) During any administrative 
review covering all or part of a period falling between the first and 
second or third and fourth anniversary of the publication of an 
antidumping order under Sec. 351.211, or a determination under 
Sec. 351.218(d) (sunset review), the Secretary, if requested within 30 
days of the initiation of the review, will determine whether 
antidumping duties have been absorbed by an exporter or producer 
subject to the review if the subject merchandise is sold in the United 
States through an importer which is affiliated with such exporter or 
producer. The Secretary will notify the Commission of its findings 
regarding such duty absorption.
    (2) For transition orders defined in section 751(c)(6) of the Act, 
the Secretary will apply paragraph (j)(1) of this section to any 
administrative review initiated in 1996 or 1998.
    (k) Administrative reviews of countervailing duty orders conducted 
on an aggregate basis.
    (1) Request for zero rate. Where the Secretary conducts an 
administrative review of a countervailing duty on an aggregate basis 
under section 777A(e)(2)(B) of the Act, the Secretary will consider and 
review requests for individual assessment and cash deposit rates of 
zero to the extent practicable. An exporter or producer that desires a 
zero rate must submit:
    (i) A certification by the exporter or producer that it received 
zero or de minimis net countervailable subsidies during the period of 
review;
    (ii) If the exporter or producer received a countervailable 
subsidy, calculations demonstrating that the amount of net 
countervailable subsidies received was de minimis during the period of 
review;
    (iii) If the exporter is not the producer of the subject 
merchandise, certifications from the suppliers and producers of the 
subject merchandise that those persons received zero or de minimis net 
countervailable subsidies during the period of the review; and
    (iv) A certification from the government of the affected country 
that the government did not provide the exporter or producer with more 
than de minimis net countervailable subsidies during the period of 
review.
    (2) Application of country-wide subsidy rate. With the exception of 
assessment and cash deposit rates of zero determined under paragraph 
(k)(1) of this section, if, in the final results of an administrative 
review under this section of a countervailing duty order, the Secretary 
calculates a single country-wide subsidy rate under section 
777A(e)(2)(B) of the Act, that rate will supersede, for cash deposit 
purposes, all rates previously determined in the countervailing duty 
proceeding in question.


Sec. 351.214  New shipper reviews under section 751(a)(2)(B) of the 
Act.

    (a) Introduction. The URAA established a new procedure by which so-
called ``new shippers'' can obtain their own individual dumping margin 
or countervailable subsidy rate on an expedited basis. In general, a 
new shipper is an exporter or producer that did not export, and is not 
affiliated with an exporter or producer that did export, to the United 
States during the period of investigation. This section contains rules 
regarding requests for new shipper reviews and procedures for 
conducting such reviews. In addition, this section contains rules 
regarding requests for expedited reviews by noninvestigated exporters 
in certain countervailing duty proceedings and procedures for 
conducting such reviews.
    (b) Request for new shipper review. A request for a new shipper 
review under section 751(a)(2)(B) of the Act must contain the 
following:
    (1) If the person requesting the review is both the exporter and 
producer of the merchandise, a certification that the person requesting 
the review did not export subject merchandise to the United States (or, 
in the case of a regional industry, did not export the subject 
merchandise for sale in the region concerned) during the period of 
investigation;
    (2) If the person requesting the review is the exporter, but not 
the producer, of the subject merchandise:
    (i) The certification described in paragraph (b)(1) of this 
section; and
    (ii) A certification from the person that produced or supplied the 
subject merchandise to the person requesting the review that that 
producer or supplier did not export the subject 

[[Page 7367]]
merchandise to the United States (or, in the case of a regional 
industry, did not export the subject merchandise for sale in the region 
concerned) during the period of investigation;
    (3)(i) A certification that, since the investigation was initiated, 
such exporter or producer has not been affiliated with any exporter or 
producer who exported the subject merchandise to the United States (or 
in the case of a regional industry, who exported the subject 
merchandise for sale in the region concerned) during the period of 
investigation, including those not individually examined during the 
investigation;
    (ii) In an antidumping proceeding involving imports from a 
nonmarket economy country, a certification that the export activities 
of such exporter or producer are not controlled by the central 
government;
    (4) Documentation establishing:
    (i) The date on which subject merchandise of the exporter or 
producer making the request was first entered, or withdrawn from 
warehouse, for consumption, or, if the exporter or producer cannot 
establish the date of first entry, the date on which the exporter or 
producer first shipped the subject merchandise for export to the United 
States;
    (ii) The volume of that and subsequent shipments; and
    (iii) The date of the first sale to an unaffiliated customer in the 
United States; and
    (5) In the case of a review of a countervailing duty order, a 
certification that the exporter or producer has informed the government 
of the exporting country that the government will be required to 
provide a full response to the Department's questionnaire.
    (c) Deadline for requesting review. An exporter or producer may 
request a new shipper review within one year of the date referred to in 
paragraph (b)(4)(i) of this section.
    (d) Time for new shipper review. (1) In general. The Secretary will 
initiate a new shipper review under this section in the calendar month 
immediately following the anniversary month or the semiannual 
anniversary month if the request for the review is made during the 6-
month period ending with the end of the anniversary month or the 
semiannual anniversary month (whichever is applicable).
    (2) Semiannual anniversary month. The semiannual anniversary month 
is the calendar month which is 6 months after the anniversary month.
    (3) Example. An order is published in January. The anniversary 
month would be January, and the semiannual anniversary month would be 
July. If the Secretary received a request for a new shipper review at 
any time during the period February-July, the Secretary would initiate 
a new shipper review in August. If the Secretary received a request for 
a new shipper review at any time during the period August-January, the 
Secretary would initiate a new shipper review in February.
    (e) Suspension of liquidation; posting bond or security. When the 
Secretary initiates a new shipper review under this section, the 
Secretary will direct the Customs Service to suspend liquidation of any 
unliquidated entries of the subject merchandise from the relevant 
exporter or producer, and to allow, at the option of the importer, the 
posting, until the completion of the review, of a bond or security in 
lieu of a cash deposit for each entry of the subject merchandise.
    (f) Rescission of new shipper review.
    (1) Withdrawal of request for review. The Secretary may rescind a 
new shipper review under this section, in whole or in part, if a party 
that requested a review withdraws its request not later than 60 days 
after the date of publication of notice of initiation of the requested 
review.
    (2) No shipments. The Secretary may rescind a new shipper review, 
in whole or in part, if the Secretary concludes that:
    (i) There have been no entries, exports, or sales, as appropriate, 
during the normal period of review referred to in paragraph (g) of this 
section; and
    (ii) An expansion of the normal period of review to include 
entries, exports, or sales would be likely to prevent the completion of 
the review within the time limits set forth in paragraph (i) of this 
section.
    (3) Notice of Rescission. If the Secretary rescinds a new shipper 
review (in whole or in part), the Secretary will publish in the Federal 
Register notice of ``Rescission of Antidumping (Countervailing Duty) 
New Shipper Review'' or, if appropriate, ``Partial Rescission of 
Antidumping (Countervailing Duty) New Shipper Review.''
    (g) Period of review. (1) Antidumping proceeding. In an antidumping 
proceeding, a new shipper review under this section normally will 
cover, as appropriate, entries, exports, or sales during the following 
time periods:
    (i) If the new shipper review was initiated in the month 
immediately following the anniversary month, the twelve-month period 
immediately preceding the anniversary month; or
    (ii) If the new shipper review was initiated in the month 
immediately following the semiannual anniversary month, the period of 
review will be the six-month period immediately preceding the 
semiannual anniversary month.
    (2) Countervailing duty proceeding. In a countervailing duty 
proceeding, the period of review for a new shipper review under this 
section will be the same period as that specified in Sec. 351.213(e)(2) 
for an administrative review.
    (h) Procedures. The Secretary will conduct a new shipper review 
under this section in accordance with Sec. 351.221.
    (i) Time limits. (1) In general. Unless the time limit is waived 
under paragraph (j)(3) of this section, the Secretary will issue 
preliminary results of review (see Sec. 351.221(b)(4)) within 180 days 
after the date on which the new shipper review was initiated, and final 
results of review (see Sec. 351.221(b)(5)) within 90 days after the 
date on which the preliminary results were issued.
    (2) Exception. If the Secretary concludes that a new shipper review 
is extraordinarily complicated, the Secretary may extend the 180-day 
period to 300 days, and may extend the 90-day period to 150 days.
    (j) Multiple reviews. Notwithstanding any other provision of this 
subpart, if a review (or a request for a review) under Sec. 351.213 
(administrative review), Sec. 351.214 (new shipper review), 
Sec. 351.215 (expedited antidumping review), or Sec. 351.216 (changed 
circumstances review) covers merchandise of an exporter or producer 
subject to a review (or to a request for a review) under this section, 
the Secretary may, after consulting with the exporter or producer:
    (1) Rescind, in whole or in part, a review in progress under this 
subpart;
    (2) Decline to initiate, in whole or in part, a review under this 
subpart; or
    (3) Where the requesting party agrees in writing to waive the time 
limits of paragraph (i) of this section, conduct concurrent reviews, in 
which case all other provisions of this section will continue to apply 
with respect to the exporter or producer.
    (k) Expedited reviews in countervailing duty proceedings for 
noninvestigated exporters. (1) Request for review. If, in a 
countervailing duty investigation, the Secretary limited the number of 
exporters or producers to be individually examined under section 
777A(e)(2)(A) of the Act, an exporter that was not selected for 
individual examination by the Secretary or that 

[[Page 7368]]
was not accepted as a voluntary respondent (see Sec. 351.204(d)) may 
request a review under this section. A request must be accompanied by a 
certification that:
    (i) The requester exported the subject merchandise to the United 
States during the period of investigation; and
    (ii) The requester is not affiliated with an exporter or producer 
that was individually examined in the investigation.
    (2) Deadline for requesting review. An exporter must submit a 
request for a review under paragraph (k)(1) of this section within 30 
days of the date of publication in the Federal Register of the 
countervailing duty order.
    (3) Conduct of review. The Secretary will initiate and conduct a 
review in accordance with the provisions of this section applicable to 
new shipper reviews, except that the Secretary will not permit the 
posting of a bond or security in lieu of a cash deposit under paragraph 
(e) of this section.


Sec. 351.215  Expedited antidumping review and security in lieu of 
estimated duty under section 736(c) of the Act.

    (a) Introduction. Exporters and producers individually examined in 
an investigation normally cannot obtain a review of entries until an 
administrative review is requested. In addition, when an antidumping 
order is published, importers normally must begin to make a cash 
deposit of estimated antidumping duties upon the entry of subject 
merchandise. Section 736(c), however, establishes a special procedure 
under which exporters or producers may request an expedited review, and 
bonds, rather than cash deposits, may continue to be posted for a 
limited period of time if several criteria are satisfied. This section 
contains rules regarding requests for expedited antidumping reviews and 
the procedures applicable to such reviews.
    (b) In general. If the Secretary determines that the criteria of 
section 736(c)(1) of the Act are satisfied, the Secretary:
    (1) May permit, for not more than 90 days after the date of 
publication of an antidumping order, the posting of a bond or other 
security instead of the deposit of estimated antidumping duties 
required under section 736(a)(3) of the Act; and
    (2) Will initiate an expedited antidumping review. Before making 
such a determination, the Secretary will make business proprietary 
information available, and will provide interested parties with an 
opportunity to file written comments, in accordance with section 
736(c)(4) of the Act.
    (c) Procedures. The Secretary will conduct an expedited antidumping 
review under this section in accordance with Sec. 351.221.


Sec. 351.216  Changed circumstances review under section 751(b) of the 
Act.

    (a) Introduction. Section 751(b) of the Act provides for what is 
known as a ``changed circumstances'' review. This section contains 
rules regarding requests for changed circumstances reviews and 
procedures for conducting such reviews.
    (b) Requests for changed circumstances review. At any time, an 
interested party may request a changed circumstances review, under 
section 751(b) of the Act, of an order or a suspended investigation.
    (c) Limitation on changed circumstances review. Unless the 
Secretary finds that good cause exists, the Secretary will not review a 
final determination in an investigation (see section 705(a) or section 
735(a) of the Act) or a suspended investigation (see section 704 or 
section 734 of the Act) less than 24 months after the date of 
publication of notice of the final determination or the suspension of 
the investigation.
    (d) Procedures. If the Secretary decides that changed circumstances 
sufficient to warrant a review exist, the Secretary will conduct a 
changed circumstances review in accordance with Sec. 351.221.
    (e) Time limits. The Secretary will issue final results of review 
(see Sec. 351.221(b)(5)) within 270 days after the date on which the 
changed circumstances review is initiated.


Sec. 351.217  Reviews to implement results of subsidies enforcement 
proceeding under section 751(g) of the Act.

    (a) Introduction. Section 751(g) provides a mechanism for 
incorporating into an ongoing countervailing duty proceeding the 
results of certain subsidy-related disputes under the WTO Subsidies 
Agreement. Where the United States, in the WTO, has successfully 
challenged the ``nonactionable'' (e.g., noncountervailable) status of a 
foreign subsidy, or where the United States has successfully challenged 
a prohibited or actionable subsidy, the Secretary may conduct a review 
to determine the effect, if any, of the successful outcome on an 
existing countervailing duty order or suspended investigation. This 
section contains rules regarding the initiation and conduct of reviews 
under section 751(g).
    (b) Violations of Article 8 of the Subsidies Agreement. If:
    (1) The Secretary receives notice from the Trade Representative of 
a violation of Article 8 of the Subsidies Agreement;
    (2) The Secretary has reason to believe that merchandise subject to 
an existing countervailing duty order or suspended investigation is 
benefiting from the subsidy or subsidy program found to have been in 
violation of Article 8; and
    (3) No administrative review is in progress, the Secretary will 
initiate an Article 8 violation review of the order or suspended 
investigation to determine whether the subject merchandise benefits 
from the subsidy or subsidy program found to have been in violation of 
Article 8 of the Subsidies Agreement.
    (c) Withdrawal of subsidy or imposition of countermeasures. If the 
Trade Representative notifies the Secretary that, under Article 4 or 
Article 7 of the Subsidies Agreement:
    (1)(i)(A) The United States has imposed countermeasures; and
    (B) Such countermeasures are based on the effects in the United 
States of imports of merchandise that is the subject of a 
countervailing duty order; or
    (ii) A WTO member country has withdrawn a countervailable subsidy 
provided with respect to merchandise subject to a countervailing duty 
order, then
    (2) the Secretary will initiate an Article 4/Article 7 review of 
the order to determine if the amount of estimated duty to be deposited 
should be adjusted or the order should be revoked.
    (d) Procedures. The Secretary will conduct an Article 8 violation 
review or an Article 4/Article 7 review under this section in 
accordance with Sec. 351.221.
    (e) Expedited reviews. The Secretary will conduct reviews under 
this section on an expedited basis.


Sec. 351.218  Sunset reviews under section 751(c) of the Act.

    (a) Introduction. The URAA added a new procedure, commonly referred 
to as ``sunset reviews,'' in section 751(c) of the Act. In general, no 
later than once every five years, the Secretary must determine whether 
dumping or countervailable subsidies would be likely to continue or 
resume if an order were revoked or a suspended investigation were 
terminated. The Commission must conduct a similar review to determine 
whether injury would be likely to continue or resume in the absence of 
an order or suspended investigation. If the determinations under 
section 751(c) of both the Secretary and the Commission are 
affirmative, the order (or suspended investigation) remains in place. 
If either determination is negative, the order will be revoked (or the 
suspended investigation will be terminated). This 

[[Page 7369]]
section contains rules regarding the procedures for sunset reviews.
    (b) In general. The Secretary will conduct a sunset review, under 
section 751(c) of the Act, of each antidumping and countervailing duty 
order and suspended investigation, and, under section 752(b) or section 
752(c) (whichever is applicable), will determine whether revocation of 
an antidumping or countervailing duty order or termination of a 
suspended investigation would be likely to lead to continuation or 
recurrence of dumping or a countervailable subsidy.
    (c) Notice of initiation of review; early initiation. No later than 
30 days before the fifth anniversary date of an order or suspension of 
an investigation (see section 751(c)(1) of the Act), the Secretary will 
publish a notice of initiation of a sunset review (see section 
751(c)(2) of the Act). The Secretary may publish a notice of initiation 
at an earlier date if a domestic interested party demonstrates to the 
Secretary's satisfaction that an early initiation would promote 
administrative efficiency. However, if the Secretary determines that 
the domestic interested party that requested early initiation is a 
related party or an importer under section 771(4)(B) of the Act and 
Sec. 351.203(e)(4), the Secretary may decline the request for early 
initiation.
    (d) Conduct of review. Upon receipt of responses to the notice of 
initiation that the Secretary deems adequate to conduct a sunset 
review, the Secretary will conduct a sunset review in accordance with 
Sec. 351.221.
    (e) Time limits. (1) In general. Unless the review has been 
completed under section 751(c)(3) of the Act (no or inadequate 
response) or, under section 751(c)(4)(B) of the Act, all respondent 
interested parties waived their participation in the Secretary's sunset 
review, the Secretary will issue final results of review within 240 
days after the date on which the review was initiated. If the Secretary 
concludes that the sunset review is extraordinarily complicated (see 
section 751(c)(5)(C) of the Act), the Secretary may extend the period 
for issuing final results by not more than 90 days.
    (2) Transition orders. The time limits described in paragraph 
(e)(1) of this section will not apply to a sunset review of a 
transition order (see section 751(c)(6) of the Act).


Sec. 351.219  Reviews of countervailing duty orders in connection with 
an investigation under section 753 of the Act.

    (a) Introduction. Section 753 of the Act is a transition provision 
for countervailing duty orders that were issued under section 303 of 
the Act without an injury determination by the Commission. Under the 
Subsidies Agreement, one country may not impose countervailing duties 
on imports from another WTO Member without first making a determination 
that such imports have caused injury to a domestic industry. Section 
753 provides a mechanism for providing an injury test with respect to 
those ``no injury'' orders under section 303 that apply to merchandise 
from WTO Members. This section contains rules regarding (i) requests 
for section 753 investigations by a domestic interested party; and (ii) 
the procedures that the Department will follow in reviewing a 
countervailing duty order and providing the Commission with advice 
regarding the amount and nature of a countervailable subsidy.
    (b) Notification of domestic interested parties. The Secretary will 
notify directly domestic interested parties as soon as possible after 
the opportunity arises for requesting an investigation by the 
Commission under section 753 of the Act.
    (c) Initiation and conduct of section 753 review. Where the 
Secretary deems it necessary in order to provide to the Commission 
information on the amount or nature of a countervailable subsidy (see 
section 753(b)(2) of the Act), the Secretary may initiate a section 753 
review of the countervailing duty order in question. The Secretary will 
conduct a section 753 review in accordance with Sec. 351.221.


Sec. 351.220  Countervailing duty review at the direction of the 
President under section 762 of the Act.

    At the direction of the President or a designee, the Secretary will 
conduct a review under section 762(a)(1) of the Act to determine if a 
countervailable subsidy is being provided with respect to merchandise 
subject to an understanding or other kind of quantitative restriction 
agreement accepted under section 704(a)(2) or section 704(c)(3) of the 
Act. The Secretary will conduct a review under this section in 
accordance with Sec. 351.221. If the Secretary's final results of 
review under this section and the Commission's final results of review 
under section 762(a)(2) of the Act are both affirmative, the Secretary 
will issue a countervailing duty order and order suspension of 
liquidation in accordance with section 762(b) of the Act.


Sec. 351.221  Review procedures.

    (a) Introduction. The procedures for reviews are similar to those 
followed in investigations. This section details the procedures 
applicable to reviews in general, as well as procedures that are unique 
to certain types of reviews.
    (b) In general. After receipt of a timely request for a review, or 
on the Secretary's own initiative when appropriate, the Secretary will:
    (1) Promptly publish in the Federal Register notice of initiation 
of the review;
    (2) Before or after publication of notice of initiation of the 
review, send to appropriate interested parties or other persons (or, if 
appropriate, a sample of interested parties or other persons) 
questionnaires requesting factual information for the review;
    (3) Conduct, if appropriate, a verification under Sec. 351.307;
    (4) Issue preliminary results of review, based on the available 
information, and publish in the Federal Register notice of the 
preliminary results of review that include:
    (i) The rates determined, if the review involved the determination 
of rates; and
    (ii) An invitation for argument consistent with Sec. 351.309;
    (5) Issue final results of review and publish in the Federal 
Register notice of the final results of review that include the rates 
determined, if the review involved the determination of rates;
    (6) If the type of review in question involves a determination as 
to the amount of duties to be assessed, promptly after publication of 
the notice of final results instruct the Customs Service to assess 
antidumping duties or countervailing duties (whichever is applicable) 
on the subject merchandise covered by the review, except as otherwise 
provided in Sec. 351.106(c) with respect to de minimis duties; and
    (7) If the review involves a revision to the cash deposit rates for 
estimated antidumping duties or countervailing duties, instruct the 
Customs Service to collect cash deposits at the revised rates on future 
entries.
    (c) Special rules. (1) Administrative reviews and new shipper 
reviews. In an administrative review under section 751(a)(1) of the Act 
and Sec. 351.213 and a new shipper review under section 751(a)(2)(B) of 
the Act and Sec. 351.214 the Secretary:
    (i) Will publish the notice of initiation of the review no later 
than the last day of the month following the anniversary month or the 
semiannual anniversary month (as the case may be); and
    (ii) Normally will send questionnaires no later than 30 days after 
the date of publication of the notice of initiation.
    (2) Expedited antidumping review. In an expedited antidumping 
review under section 736(c) of the Act and Sec. 351.215, the Secretary: 


[[Page 7370]]

    (i) Will include in the notice of initiation of the review an 
invitation for argument consistent with Sec. 351.309, and a statement 
that the Secretary is permitting the posting of a bond or other 
security instead of a cash deposit of estimated antidumping duties;
    (ii) Will instruct the Customs Service to accept, instead of the 
cash deposit of estimated antidumping duties under section 736(a)(3) of 
the Act, a bond for each entry of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the notice of initiation of the investigation and 
through the date not later than 90 days after the date of publication 
of the order; and
    (iii) Will not issue preliminary results of review.
    (3) Changed circumstances review. In a changed circumstances review 
under section 751(b) of the Act and Sec. 351.216, the Secretary:
    (i) Will include in the preliminary results of review and the final 
results of review a description of any action the Secretary proposed 
based on the preliminary or final results; and
    (ii) May combine the notice of initiation of the review and the 
preliminary results of review in a single notice if the Secretary 
concludes that expedited action is warranted.
    (4) Article 8 Violation review and Article 4/Article 7 review. In 
an Article 8 Violation review or an Article 4/Article 7 review under 
section 751(g) of the Act and Sec. 351.217, the Secretary:
    (i) Will include in the notice of initiation of the review an 
invitation for argument consistent with Sec. 351.309 and will notify 
all parties to the proceeding at the time the Secretary initiates the 
review;
    (ii) Will not issue preliminary results of review; and
    (iii) In the final results of review will indicate the amount, if 
any, by which the estimated duty to be deposited should be adjusted, 
and, in an Article 4/Article 7 review, any action, including 
revocation, that the Secretary will take based on the final results.
    (5) Sunset review. In a sunset review under section 751(c) of the 
Act and Sec. 351.218:
    (i) The notice of initiation of the review will contain a request 
for the information described in section 751(c)(2) of the Act; and
    (ii) The Secretary, without issuing preliminary results of review, 
may issue final results of review under paragraphs (3) or (4) of 
subsection 751(c) of the Act if the conditions of those paragraphs are 
satisfied.
    (6) Section 753 review. In a section 753 review under section 753 
of the Act and Sec. 351.219, the Secretary:
    (i) Will include in the notice of initiation of the review an 
invitation for argument consistent with Sec. 351.309, and will notify 
all parties to the proceeding at the time the Secretary initiates the 
review; and
    (ii) May decline to issue preliminary results of review.
    (7) Countervailing duty review at the direction of the President. 
In a countervailing duty review at the direction of the President under 
section 762 of the Act and Sec. 351.220, the Secretary:
    (i) Will include in the notice of initiation of the review a 
description of the merchandise, the period under review, and a summary 
of the available information which, if accurate, would support the 
imposition of countervailing duties;
    (ii) Notify the Commission of the initiation of the review and the 
preliminary results of review;
    (iii) Include in the preliminary results of review the 
countervailable subsidy, if any, during the period of review and a 
description of official changes in the subsidy programs made by the 
government of the affected country that affect the estimated 
countervailable subsidy; and
    (iv) Include in the final results of review the counter vailable 
subsidy, if any, during the period of review and a description of 
official changes in the subsidy programs, made by the government of the 
affected country not later than the date of publication of the notice 
of preliminary results, that affect the estimated countervailable 
subsidy.


Sec. 351.222  Revocation of orders; termination of suspended 
investigations.

    (a) Introduction. ``Revocation'' is a term of art that refers to 
the end of an antidumping or countervailing proceeding in which an 
order has been issued. ``Termination'' is the companion term for the 
end of a proceeding in which the investigation was suspended due to the 
acceptance of a suspension agreement. Generally, a revocation or 
termination may occur only after the Department or the Commission have 
conducted one or more reviews under section 751 of the Act. This 
section contains rules regarding requirements for a revocation or 
termination; and procedures that the Department will follow in 
determining whether to revoke an order or terminate a suspended 
investigation.
    (b) Revocation or termination based on absence of dumping. (1) The 
Secretary may revoke an antidumping order or terminate a suspended 
antidumping investigation if the Secretary concludes that:
    (i) All exporters and producers covered at the time of revocation 
by the order or the suspension agreement have sold the subject 
merchandise at not less than normal value for a period of at least 
three consecutive years; and
    (ii) It is not likely that those persons will in the future sell 
the subject merchandise at less than normal value.
    (2) The Secretary may revoke an antidumping order in part if the 
Secretary concludes that:
    (i) One or more exporters or producers covered by the order have 
sold the merchandise at not less than normal value for a period of at 
least three consecutive years;
    (ii) It is not likely that those persons will in the future sell 
the subject merchandise at less than normal value; and
    (iii) For any exporter or producer that the Secretary previously 
has determined to have sold the subject merchandise at less than normal 
value, the exporter or producer agrees in writing to its immediate 
reinstatement in the order, as long as any exporter or producer is 
subject to the order, if the Secretary concludes that the exporter or 
producer, subsequent to the revocation, sold the subject merchandise at 
less than normal value.
    (c) Revocation or termination based on absence of countervailable 
subsidy. (1) The Secretary may revoke a countervailing duty order or 
terminate a suspended countervailing duty investigation if the 
Secretary concludes that:
    (i) The government of the affected country has eliminated all 
countervailable subsidies on the subject merchandise by abolishing for 
the subject merchandise, for a period of at least three consecutive 
years, all programs that the Secretary has found countervailable;
    (ii) It is not likely that the government of the affected country 
will in the future reinstate for the subject merchandise those programs 
or substitute other countervailable programs; and
    (iii) Exporters and producers of the subject merchandise are not 
continuing to receive any net countervailable subsidy from an abolished 
program referred to in paragraph (c)(1)(i) of this section.
    (2) The Secretary may revoke a countervailing duty order or 
terminate a suspended countervailing duty investigation if the 
Secretary concludes that:
    (i) All exporters and producers covered at the time of revocation 
by the 

[[Page 7371]]
order or the suspension agreement have not applied for or received any 
net countervailable subsidy on the subject merchandise for a period of 
at least five consecutive years; and
    (ii) It is not likely that those persons will in the future apply 
for or receive any net countervailable subsidy on the subject 
merchandise from those programs the Secretary has found countervailable 
in any proceeding involving the affected country or from other 
countervailable programs.
    (3) The Secretary may revoke a countervailing duty order in part if 
the Secretary concludes that:
    (i) One or more exporters or producers covered by the order have 
not applied for or received any net countervailable subsidy on the 
subject merchandise for a period of at least five consecutive years;
    (ii) It is not likely that those persons will in the future apply 
for or receive any net countervailable subsidy on the subject 
merchandise from those programs the Secretary has found countervailable 
in any proceeding involving the affected country or from other 
countervailable programs; and
    (iii) Except for exporters or producers that the Secretary 
previously has determined have not received any net countervailable 
subsidy on the subject merchandise, the exporters or producers agree in 
writing to their immediate reinstatement in the order, as long as any 
exporter or producer is subject to the order, if the Secretary 
concludes that the exporter or producer, subsequent to the revocation, 
has received any net countervailable subsidy on the subject 
merchandise.
    (d) Treatment of unreviewed intervening years. (1) In general. The 
Secretary will not revoke an order or terminate a suspended 
investigation under paragraphs (b) or (c) of this section unless the 
Secretary has conducted a review under this subpart of the first and 
third (or fifth) years of the three- and five-year consecutive time 
periods referred to in those paragraphs. The Secretary need not have 
conducted a review of an intervening year (see paragraph (d)(2) of this 
section). However, except in the case of a revocation or termination 
under paragraph (c)(1) of this section (government abolition of 
countervailable subsidy programs), before revoking an order or 
terminating a suspended investigation, the Secretary must be satisfied 
that, during each of the three (or five) years, there were exports to 
the United States in commercial quantities of the subject merchandise 
to which a revocation or termination will apply.
    (2) Intervening year. ``Intervening year'' means:
    (i) The second year if revocation or termination is conditioned on 
three consecutive years of no sales at less than normal value or 
countervailable subsidies; or
    (ii) The second, third, or fourth year if revocation or termination 
is conditioned on five consecutive years of no countervailable 
subsidies.
    (e) Request for revocation or termination. (1) Antidumping 
proceeding. During the third and subsequent annual anniversary months 
of the publication of an antidumping order or suspension of an 
antidumping investigation, an exporter or producer may request in 
writing that the Secretary revoke an order or terminate a suspended 
investigation under paragraph (b) of this section with regard to that 
person if the person submits with the request:
    (i) The person's certification that the person sold the subject 
merchandise at not less than normal value during the period of review 
described in Sec. 351.213(e)(1), and that in the future the person will 
not sell the merchandise at less than normal value;
    (ii) The person's certification that, during each of the three 
consecutive years referred to in paragraph (b) of this section, the 
person sold the subject merchandise to the United States in commercial 
quantities; and
    (iii) If applicable, the agreement regarding reinstatement in the 
order or suspended investigation described in paragraph (b)(2)(iii) of 
this section.
    (2) Countervailing duty proceeding.
    (i) During the third and subsequent annual anniversary months of 
the publication of a countervailing duty order or suspension of a 
countervailing duty investigation, the government of the affected 
country may request in writing that the Secretary revoke an order or 
terminate a suspended investigation under paragraph (c)(1) of this 
section if the government submits with the request its certification 
that it has satisfied, during the period of review described in 
Sec. 351.213(e)(2), the requirements of paragraph (c)(1)(i) of this 
section regarding the abolition of countervailable subsidy programs, 
and that it will not reinstate for the subject merchandise those 
programs or substitute other countervailable subsidy programs;
    (ii) During the fifth and subsequent annual anniversary months of 
the publication of a countervailing duty order or suspended 
countervailing duty investigation, the government of the affected 
country may request in writing that the Secretary revoke an order or 
terminate a suspended investigation under paragraph (c)(2) of this 
section if the government submits with the request:
    (A) Certifications for all exporters and producers covered by the 
order or suspension agreement that they have not applied for or 
received any net countervailable subsidy on the subject merchandise for 
a period of at least five consecutive years (see paragraph (c)(2)(i) of 
this section);
    (B) Those exporters' and producers' certifications that they will 
not apply for or receive any net countervailable subsidy on the subject 
merchandise from any program the Secretary has found countervailable in 
any proceeding involving the affected country or from other 
countervailable programs (see paragraph (c)(2)(ii) of this section); 
and
    (C) A certification from each exporter or producer that, during 
each of the five consecutive years referred to in paragraph (c)(2) of 
this section, that person sold the subject merchandise to the United 
States in commercial quantities; or
    (iii) During the fifth and subsequent annual anniversary months of 
the publication of a countervailing duty order, an exporter or producer 
may request in writing that the Secretary revoke the order with regard 
to that person if the person submits with the request:
    (A) A certification that the person has not applied for or received 
any net countervailable subsidy on the subject merchandise for a period 
of at least five consecutive years (see paragraph (c)(3)(i) of this 
section), including calculations demonstrating the basis for the 
conclusion that the person received zero or de minimis net 
countervailable subsidies during the review period of the 
administrative review in connection with which the person has submitted 
the request for revocation;
    (B) A certification that the person will not apply for or receive 
any net countervailable subsidy on the subject merchandise from any 
program the Secretary has found countervailable in any proceeding 
involving the affected country or from other countervailable programs 
(see paragraph (c)(3)(ii) of this section);
    (C) The person's certification that, during each of the five 
consecutive years referred to in paragraph (c)(3) of this section, the 
person sold the subject merchandise to the United States in commercial 
quantities; and
    (D) The agreement described in paragraph (c)(3)(iii) of this 
section (reinstatement in order).
    (f) Procedures. (1) Upon receipt of a timely request for revocation 
or 

[[Page 7372]]
termination under paragraph (e) of this section, the Secretary will 
consider the request as including a request for an administrative 
review and will initiate and conduct a review under Sec. 351.213.
    (2) In addition to the requirements of Sec. 351.221 regarding the 
conduct of an administrative review, the Secretary will:
    (i) Publish with the notice of initiation under Sec. 351.221(b)(1), 
notice of ``Request for Revocation of Order (in part)'' or ``Request 
for Termination of Suspended Investigation'' (whichever is applicable);
    (ii) Conduct a verification under Sec. 351.307;
    (iii) Include in the preliminary results of review under 
Sec. 351.221(b)(4) the Secretary's decision whether there is a 
reasonable basis to believe that the requirements for revocation or 
termination are met;
    (iv) If the Secretary decides that there is a reasonable basis to 
believe that the requirements for revocation or termination are met, 
publish with the notice of preliminary results of review under 
Sec. 351.221(b)(4) notice of ``Intent to Revoke Order (in Part)'' or 
``Intent to Terminate Suspended Investigation'' (whichever is 
applicable);
    (v) Include in the final results of review under Sec. 351.221(b)(5) 
the Secretary's final decision whether the requirements for revocation 
or termination are met; and
    (vi) If the Secretary determines that the requirements for 
revocation or termination are met, publish with the notice of final 
results of review under Sec. 351.221(b)(5) notice of ``Revocation of 
Order (in Part)'' or ``Termination of Suspended Investigation'' 
(whichever is applicable).
    (3) If the Secretary revokes an order in whole or in part, the 
Secretary will order the suspension of liquidation terminated for the 
merchandise covered by the revocation on the first day after the period 
under review, and will instruct the Customs Service to release any cash 
deposit or bond.
    (g) Revocation or termination based on changed circumstances. (1) 
The Secretary may revoke an order, in whole or in part, or terminate a 
suspended investigation if the Secretary concludes that:
    (i) Producers accounting for substantially all of the production of 
the domestic like product to which the order (or the part of the order 
to be revoked) or suspended investigation pertains have expressed a 
lack of interest in the order, in whole or in part, or suspended 
investigation (see section 782(h) of the Act); or
    (ii) Other changed circumstances sufficient to warrant revocation 
or termination exist.
    (2) If at any time the Secretary concludes from the available 
information that changed circumstances sufficient to warrant revocation 
or termination may exist, the Secretary will conduct a changed 
circumstances review under Sec. 351.216.
    (3) In addition to the requirements of Sec. 351.221, the Secretary 
will:
    (i) Publish with the notice of initiation (see Sec. 353.221(b)(1), 
notice of ``Consideration of Revocation of Order (in Part)'' or 
``Consideration of Termination of Suspended Investigation'' (whichever 
is applicable);
    (ii) If the Secretary's conclusion regarding the possible existence 
of changed circumstances (see paragraph (g)(2) of this section), is not 
based on a request, the Secretary, not later than the date of 
publication of the notice of ``Consideration of Revocation of Order (in 
Part)'' or ``Consideration of Termination of Suspended Investigation'' 
(whichever is applicable) (see paragraph (g)(3)(i) of this section), 
will serve written notice of the consideration of revocation or 
termination on each interested party listed on the Department's service 
list and on any other person that the Secretary has reason to believe 
is a domestic interested party;
    (iii) Conduct a verification, if appropriate, under Sec. 351.307;
    (iv) Include in the preliminary results of review, under 
Sec. 351.221(b)(4), the Secretary's decision whether there is a 
reasonable basis to believe that changed circumstances warrant 
revocation or termination;
    (v) If the Secretary's preliminary decision is that changed 
circumstances warrant revocation or termination, publish with the 
notice of preliminary results of review, under Sec. 351.221(b)(4), 
notice of ``Intent to Revoke Order (in Part)'' or ``Intent to Terminate 
Suspended Investigation'' (whichever is applicable);
    (vi) Include in the final results of review, under 
Sec. 351.221(b)(5), the Secretary's final decision whether changed 
circumstances warrant revocation or termination; and
    (vii) If the Secretary determines that changed circumstances 
warrant revocation or termination, publish with the notice of final 
results of review, under Sec. 351.221(b)(5), notice of ``Revocation of 
Order (in Part)'' or ``Termination of Suspended Investigation'' 
(whichever is applicable).
    (4) If the Secretary revokes an order, in whole or in part, under 
paragraph (g) of this section, the Secretary will order the suspension 
of liquidation ended for the merchandise covered by the revocation on 
the effective date of the notice of revocation, and will instruct the 
Customs Service to release any cash deposit or bond.
    (h) Revocation or termination based on injury reconsideration. If 
the Commission determines in a changed circumstances review under 
section 751(b)(2) of the Act that the revocation of an order or 
termination of a suspended investigation is not likely to lead to 
continuation or recurrence of material injury, the Secretary will 
revoke, in whole or in part, the order or terminate the suspended 
investigation, and will publish in the Federal Register notice of 
``Revocation of Order (in Part)'' or ``Termination of Suspended 
Investigation'' (whichever is applicable).
    (i) Revocation or termination based on sunset review. (1) In 
general. In the case of a sunset review under Sec. 351.218, the 
Secretary will revoke an order or terminate a suspended investigation, 
unless:
    (i) The Secretary makes a determination that revocation or 
termination would be likely to lead to continuation or recurrence of a 
countervailable subsidy or dumping (see section 752(b) and section 
752(c) of the Act); and
    (ii) The Commission makes a determination that revocation or 
termination would be likely to lead to continuation or recurrence of 
material injury (see section 752(a) of the Act).
    (2) Exception for transition orders. Before January 1, 2000, the 
Secretary will not revoke a transition order (see section 751(c)(6) of 
the Act) as the result of a sunset review under Sec. 351.218.
    (j) Revocation of countervailing duty order based on Commission 
negative determination under section 753 of the Act. Upon being 
notified by the Commission that:
    (1) The Commission has determined that an industry in the United 
States is not likely to be materially injured if the countervailing 
duty order in question is revoked (see section 753(a)(1) of the Act); 
or
    (2) A domestic interested party did not make a timely request for 
an investigation under section 753(a) of the Act (see section 753(a)(3) 
of the Act), the Secretary will revoke the countervailing duty order in 
question, and will order the refund, with interest, of any estimated 
countervailing duties collected during the period liquidation was 
suspended under section 753(a)(4) of the Act.
    (k) Revocation based on Article 4/Article 7 review. (1) In general. 
The Secretary may revoke a countervailing 

[[Page 7373]]
duty order, in whole or in part, following an Article 4/Article 7 
review under Sec. 351.217(c), due to the imposition of countermeasures 
by the United States or the withdrawal of a countervailable subsidy by 
a WTO member country (see section 751(g)(2) of the Act).
    (2) Additional Requirements. In addition to the requirements of 
Sec. 351.221, if the Secretary determines to revoke an order as the 
result of an Article 4/Article 7 review, the Secretary will:
    (i) Conduct a verification, if appropriate, under Sec. 351.307;
    (ii) Include in the final results of review, under 
Sec. 351.221(b)(5), the Secretary's final decision whether the order 
should be revoked;
    (iii) If the Secretary's final decision is that the order should be 
revoked:
    (A) Determine the effective date of the revocation;
    (B) Publish with the notice of final results of review, under 
Sec. 351.221(b)(5), a notice of ``Revocation of Order (in Part),'' that 
will include the effective date of the revocation; and
    (C) Order any suspension of liquidation ended for merchandise 
covered by the revocation that was entered on or after the effective 
date of the revocation, and instruct the Customs Service to release any 
cash deposit or bond.
    (l) Revocation under section 129. The Secretary may revoke an order 
under section 129 of the URAA (implementation of WTO dispute 
settlement).
    (m) Transition rule. In the case of time periods that, under 
section 291(a)(2) of the URAA, are subject to review under the 
provisions of the Act prior to its amendment by the URAA, and for 
purposes of determining whether the three- or five-year requirements of 
paragraphs (b) and (c) of this section are satisfied, the following 
rules will apply:
    (1) Antidumping proceedings. The Secretary will consider sales at 
not less than foreign market value to be equivalent to sales at not 
less than normal value.
    (2) Countervailing duty proceedings. The Secretary will consider 
the absence of a subsidy, as defined in section 771(5) of the Act prior 
to its amendment by the URAA, to be equivalent to the absence of a 
countervailable subsidy, as defined in section 771(5) of the Act, as 
amended by the URAA.
    (n) Cross-reference. For the treatment in a subsequent 
investigation of business proprietary information submitted to the 
Secretary in connection with a changed circumstances review under 
Sec. 351.216 or a sunset review under Sec. 351.218 that results in the 
revocation of an order (or termination of a suspended investigation) 
see section 777(b)(3) of the Act.


Sec. 351.223  Procedures for initiation of downstream product 
monitoring.

    (a) Introduction. Section 780 of the Act establishes a mechanism 
for monitoring imports of ``downstream products.'' In general, section 
780 is aimed at situations where, following the issuance of an 
antidumping or countervailing duty order on a product that is used as a 
component in another product, exports to the United States of that 
other (or ``downstream'') product increase. Although the Department is 
responsible for determining whether trade in the downstream product 
should be monitored, the Commission is responsible for conducting the 
actual monitoring. The Commission must report the results of its 
monitoring to the Department, and the Department must consider the 
reports in determining whether to self-initiate an antidumping or 
countervailing duty investigation on the downstream product. This 
section contains rules regarding applications for the initiation of 
downstream product monitoring and decisions regarding such 
applications.
    (b) Contents of application. An application to designate a 
downstream product for monitoring under section 780 of the Act must 
contain the following information, to the extent reasonably available 
to the applicant:
    (1) The name and address of the person requesting the monitoring 
and a description of the article it produces which is the basis for 
filing its application;
    (2) A detailed description of the downstream product in question;
    (3) A detailed description of the component product that is 
incorporated into the downstream product, including the value of the 
component part in relation to the value of the downstream product, and 
the extent to which the component part has been substantially 
transformed as a result of its incorporation into the downstream 
product;
    (4) The name of the country of production of both the downstream 
and component products and the name of any intermediate country from 
which the merchandise is imported;
    (5) The name and address of all known producers of component parts 
and downstream products in the relevant countries and a detailed 
description of any relationship between such producers;
    (6) Whether the component part is already subject to monitoring to 
aid in the enforcement of a bilateral arrangement within the meaning of 
section 804 of the Trade and Tariff Act of 1984;
    (7) A list of all antidumping or countervailing duty investigations 
that have been suspended, or antidumping or countervailing duty orders 
that have been issued, on merchandise that is related to the component 
part and that is manufactured in the same foreign country in which the 
component part is manufactured;
    (8) A list of all antidumping or countervailing duty investigations 
that have been suspended, or antidumping or countervailing duty orders 
that have been issued, on merchandise that is manufactured or exported 
by the manufacturer or exporter of the component part and that is 
similar in description and use to the component part; and
    (9) The reasons for suspecting that the imposition of antidumping 
or countervailing duties has resulted in a diversion of exports of the 
component part into increased production and exportation to the United 
States of the downstream product.
    (c) Determination of sufficiency of application. Within 14 days 
after an application is filed under paragraph (b) of this section, the 
Secretary will rule on the sufficiency of the application by making the 
determinations described in section 780(a)(2) of the Act.
    (d) Notice of Determination. The Secretary will publish in the 
Federal Register notice of each affirmative or negative ``monitoring'' 
determination made under section 780(a)(2) of the Act, and if the 
determination under section 780(a)(2)(A) of the Act and a determination 
made under any clause of section 780(a)(2)(B) of the Act are 
affirmative, will transmit to the Commission a copy of the 
determination and the application. The Secretary will make available to 
the Commission, and to its employees directly involved in the 
monitoring, the information upon which the Secretary based the 
initiation.


Sec. 351.224  Disclosure of calculations and procedures for the 
correction of ministerial errors.

    (a) Introduction. In the interests of transparency, the Department 
has long had a practice of providing parties with the details of its 
antidumping and countervailing duty calculations. This practice has 
come to be referred to as a ``disclosure.'' This section contains rules 
relating to requests for disclosure and procedures for correcting 
ministerial errors.
    (b) Disclosure. The Secretary will disclose to a party to the 
proceeding 

[[Page 7374]]
calculations performed, if any, in connection with a preliminary 
determination under section 703(b) or section 733(b) of the Act, a 
final determination under section 705(a) or section 735(a) of the Act, 
and a final results of a review under section 736(c), section 751, or 
section 753 of the Act, normally within five days after the date of any 
public announcement or, if there is no public announcement of, within 
five days after the date of publication of, the preliminary 
determination, final determination, or final results of review 
(whichever is applicable). The Secretary will disclose to a party to 
the proceeding calculation performed, if any, in connection with a 
preliminary results of review under section 751 or section 753 of the 
Act, normally not later than ten days after the date of the public 
announcement of, or, if there is no public announcement, within five 
days after the date of publication of, the preliminary results of 
review.
    (c) Comments regarding ministerial errors. (1) In general. A party 
to the proceeding to whom the Secretary has disclosed calculations 
performed in connection with a preliminary determination may submit 
comments concerning a significant ministerial error in such 
calculations. A party to the proceeding to whom the Secretary has 
disclosed calculations performed in connection with a final 
determination or the final results of a review may submit comments 
concerning any ministerial error in such calculations. The Secretary 
will not consider comments concerning ministerial errors made in the 
preliminary results of a review.
    (2) Time limits for submitting comments. A party to the proceeding 
must file comments concerning ministerial errors within five days after 
the earlier of (i) the date on which the Secretary released disclosure 
documents to that party, or (ii) the date on which the Secretary held a 
disclosure meeting with that party.
    (3) Replies to comments. Replies to comments submitted under 
paragraph (c)(1) of this section must be filed within five days after 
the date on which the comments were filed with the Secretary. The 
Secretary will not consider replies to comments submitted in connection 
with a preliminary determination.
    (4) Extensions. A party to the proceeding may request an extension 
of the time limit for filing comments concerning a ministerial error in 
a final determination or final results of review under section 
351.302(c) within three days after the date of any public announcement, 
or, if there is no public announcement, within five days after the date 
of publication of the final determination or final results of review, 
as applicable. The Secretary will not extend the time limit for filing 
comments concerning a significant ministerial error in a preliminary 
determination.
    (d) Contents of comments and replies. Comments filed under 
paragraph (c)(1) of this section must explain the alleged ministerial 
error by reference to applicable evidence in the official record, and 
must present what, in the party's view, is the appropriate correction. 
In addition, comments concerning a preliminary determination must 
demonstrate how the alleged ministerial error is significant (see 
paragraph (g) of this section, by illustrating the effect on individual 
weighted-average dumping margin or countervailable subsidy rate, the 
all-others rate, or the country-wide subsidy rate (whichever is 
applicable). Replies to any comments must be limited to issues raised 
in such comments.
    (e) Corrections. The Secretary will analyze any comments received 
and, if appropriate, correct any significant ministerial error by 
amending the preliminary determination, or correct any ministerial 
error by amending the final determination or the final results of 
review (whichever is applicable). Where practicable, the Secretary will 
announce publicly the issuance of a correction notice, and normally 
will do so within 30 days after the date of public announcement, or, if 
there is no public announcement, within 30 days after the date of 
publication, of the preliminary determination, final determination, or 
final results of review (whichever is applicable). In addition, the 
Secretary will publish notice of such corrections in the Federal 
Register. A correction notice will not alter the anniversary month of 
an order or suspended investigation for purposes of requesting an 
administrative review (see Sec. 351.213) or a new shipper review (see 
Sec. 351.214) or initiating a sunset review (see Sec. 351.218).
    (f) Definition of ``ministerial error.'' Under this section, 
ministerial error means an error in addition, subtraction, or other 
arithmetic function, clerical error resulting from inaccurate copying, 
duplication, or the like, and any other similar type of unintentional 
error which the Secretary considers ministerial.
    (g) Definition of ``significant ministerial error.'' Under this 
section, significant ministerial error means a ministerial error (see 
paragraph (f) of this section), the correction of which, either singly 
or in combination with other errors:
    (1) Would result in a change of at least five absolute percentage 
points in, but not less than 25 percent of, the weighted-average 
dumping margin or the countervailable subsidy rate (whichever is 
applicable) calculated in the original (erroneous) preliminary 
determination; or
    (2) Would result in a difference between a weighted-average dumping 
margin or countervailable subsidy rate (whichever is applicable) of 
zero (or de minimis) and a weighted-average dumping margin or 
countervailable subsidy rate of greater than de minimis, or vice versa.


Sec. 351.225  Scope ruling.

    (a) Introduction. Issues arise as to whether a particular product 
is included within the scope of an antidumping or countervailing duty 
order or a suspended investigation. Such issues can arise because the 
descriptions of subject merchandise contained in the Department's 
determinations must be written in general terms. At other times, a 
domestic interested party may allege that changes to an imported 
product or the place where the imported product is assembled 
constitutes circumvention under section 781 of the Act. When such 
issues arise, the Department issues ``scope rulings'' that clarify the 
scope of an order or suspended investigation with respect to particular 
products. This section contains rules regarding scope rulings, requests 
for scope rulings, procedures for scope inquiries, and standards used 
in determining whether a product is within the scope of an order or 
suspended investigation.
    (b) Self-initiation. If the Secretary determines from available 
information that an inquiry is warranted to determine whether a product 
is included within the scope of an antidumping or countervailing duty 
order or a suspended investigation, the Secretary will initiate an 
inquiry, and will notify all parties on the Department's scope service 
list of its initiation of a scope inquiry.
    (c) By application. Any interested party may apply for a ruling as 
to whether a particular product is within the scope of an order or a 
suspended investigation. The application must be served upon all 
parties on the scope service list described in paragraph (n) of this 
section, and must contain the following, to the extent reasonably 
available to the interested party:
    (1) A detailed description of the product, including its technical 
characteristics and uses, and its current U.S. Tariff Classification 
number;
    (2) A statement of the interested party's position as to whether 
the 

[[Page 7375]]
product is within the scope of an order or a suspended investigation, 
including:
    (i) A summary of the reasons for this conclusion,
    (ii) Citations to any applicable statutory authority, and
    (iii) Any factual information supporting this position, including 
excerpts from portions of the Secretary's or the Commission's 
investigation, and relevant prior scope rulings.
    (d) Ruling based upon the application. If the Secretary can 
determine, based solely upon the application and the descriptions of 
the merchandise referred to in paragraph (k)(1) of this section, 
whether a product is included within the scope of an order or a 
suspended investigation, the Secretary will issue a final ruling as to 
whether the product is included within the order or suspended 
investigation. The Secretary will notify all interested parties on the 
Department's scope service list (see paragraph (n) of this section) of 
the final ruling.
    (e) Ruling where further inquiry is warranted. If the Secretary 
finds that the issue of whether a product is included within the scope 
of an order or a suspended investigation cannot be determined based 
solely upon the application and the descriptions of the merchandise 
referred to in paragraph (k)(1) of this section, the Secretary will 
notify by mail all parties on the Department's scope service list of 
the initiation of a scope inquiry.
    (f) Notice and procedure. (1) Notice of the initiation of a scope 
inquiry issued under paragraph (b) or (e) of this section will include:
    (i) A description of the product that is the subject of the scope 
inquiry; and
    (ii) An explanation of the reasons for the Secretary's decision to 
initiate a scope inquiry;
    (iii) A schedule for submission of comments that normally will 
allow interested parties 20 days in which to provide comments on, and 
supporting factual information relating to, the inquiry, and 10 days in 
which to provide any rebuttal to such comments.
    (2) The Secretary may issue questionnaires and verify submissions 
received, where appropriate.
    (3) Whenever the Secretary finds that a scope inquiry presents an 
issue of significant difficulty, the Secretary will issue a preliminary 
scope ruling, based upon the available information at the time, as to 
whether there is a reasonable basis to believe or suspect that the 
product subject to a scope inquiry is included within the order or 
suspended investigation. The Secretary will notify all parties on the 
Department's scope service list (see paragraph (n) of this section) of 
the preliminary scope ruling, and will invite comment. Unless otherwise 
specified, interested parties will have within twenty days from the 
date of receipt of the notification in which to submit comments, and 
ten days thereafter in which to submit rebuttal comments.
    (4) The Secretary will issue a final ruling as to whether the 
product which is the subject of the scope inquiry is included within 
the order or suspended investigation, including an explanation of the 
factual and legal conclusions on which the final ruling is based. The 
Secretary will notify all parties on the Department's scope service 
list (see paragraph (n) of this section) of the final scope ruling.
    (5) The Secretary will issue a final ruling under paragraph (k) of 
this section (other scope rulings) normally within 120 days of the 
initiation of the inquiry under this section. The Secretary will issue 
a final ruling under paragraph (g), (h), (i), or (j) of this section 
(circumvention rulings under section 781 of the Act) normally within 
300 days from the date of the initiation of the scope inquiry.
    (6) When an administrative review under Sec. 351.213, a new shipper 
review under Sec. 351.214, or an expedited antidumping review under 
Sec. 351.215 is in progress at the time the Secretary provides notice 
of the initiation of a scope inquiry (see paragraph (e)(1) of this 
section), the Secretary may conduct the scope inquiry in conjunction 
with that review.
    (7)(i) The Secretary will notify the Commission in writing of the 
proposed inclusion of products in an order prior to issuing a final 
ruling under paragraph (f)(4) of this section based on a determination 
under:
    (A) Section 781(a) of the Act with respect to merchandise completed 
or assembled in the United States (other than minor completion or 
assembly);
    (B) Section 781(b) of the Act with respect to merchandise completed 
or assembled in other foreign countries; or
    (C) Section 781(d) of the Act with respect to later-developed 
products which incorporate a significant technological advance or 
significant alteration of an earlier product.
    (ii) If the Secretary notifies the Commission under paragraph 
(f)(7)(i) of this section, upon the written request of the Commission, 
the Secretary will consult with the Commission regarding the proposed 
inclusion, and any such consultation will be completed within 15 days 
after the date of such request. If, after consultation, the Commission 
believes that a significant injury issue is presented by the proposed 
inclusion of a product within an order, the Commission may provide 
written advice to the Secretary as to whether the inclusion would be 
inconsistent with the affirmative injury determination of the 
Commission on which the order is based.
    (g) Products completed or assembled in the United States. Under 
section 781(a) of the Act, the Secretary may include within the scope 
of an antidumping or countervailing duty order imported parts or 
components referred to in section 781(a)(1)(B) of the Act that are used 
in the completion or assembly of the merchandise in the United States 
at any time such order is in effect. In making this determination, the 
Secretary will not consider any single factor of section 781(a)(2) of 
the Act to be controlling. In determining the value of parts or 
components purchased from an affiliated person under section 
781(a)(1)(D) of the Act, or of processing performed by an affiliated 
person under section 781(a)(2)(E) of the Act, the Secretary may 
determine the value of the part or component on the basis of the cost 
of producing the part of component under section 773(f)(3) of the Act.
    (h) Products completed or assembled in other foreign countries. 
Under section 781(b) of the Act, the Secretary may include within the 
scope of an antidumping or countervailing duty order, at any time such 
order is in effect, imported merchandise completed or assembled in a 
foreign country other than the country to which the order applies. In 
making this determination, the Secretary will not consider any single 
factor of section 781(b)(2) of the Act to be controlling. In 
determining the value of parts or components purchased from an 
affiliated person under section 781(b)(1)(D) of the Act, or of 
processing performed by an affiliated person under section 781(b)(2)(E) 
of the Act, the Secretary will apply the major input rule under section 
773(f)(3) of the Act.
    (i) Minor alterations of merchandise. Under section 781(c) of the 
Act, the Secretary may include within the scope of an antidumping or 
countervailing duty order articles altered in form or appearance in 
minor respects.
    (j) Later-developed merchandise. In determining whether later-
developed merchandise is within the scope of an antidumping or 
countervailing duty order, the Secretary will apply section 781(d) of 
the Act.
    (k) Other scope determinations. With respect to those scope 
determinations that are not covered under paragraphs (g) through (j) of 
this section, in considering whether a particular product is included 
within the scope of 

[[Page 7376]]
an order or a suspended investigation, the Secretary will take into 
account the following:
    (1) The descriptions of the merchandise contained in the petition, 
the initial investigation, and the determinations of the Secretary 
(including prior scope determinations) and the Commission.
    (2) When the above criteria are not dispositive, the Secretary will 
further consider:
    (i) The physical characteristics of the product;
    (ii) The expectations of the ultimate purchasers;
    (iii) The ultimate use of the product;
    (iv) The channels of trade in which the product is sold; and
    (v) The manner in which the product is advertised and displayed.
    (l) Suspension of liquidation. (1) When the Secretary conducts a 
scope inquiry under paragraph (b) or (e) of this section, and the 
product in question is already subject to suspension of liquidation, 
that suspension of liquidation will be continued, pending a preliminary 
or a final scope ruling, at the cash deposit rate that would apply if 
the product were ruled to be included within the scope of the order.
    (2) If the Secretary issues a preliminary scope ruling under 
paragraph (f)(3) of this section to the effect that the product in 
question is included within the scope of the order, any suspension of 
liquidation described in paragraph (l)(1) of this section will 
continue. If liquidation has not been suspended, the Secretary will 
instruct the Customs Service to suspend liquidation and to require a 
cash deposit of estimated duties, at the applicable rate, for each 
entry of the product entered, or withdrawn from warehouse, for 
consumption on or after the date of the preliminary scope ruling. If 
the Secretary issues a preliminary scope ruling to the effect that the 
product in question is not included within the scope of the order, the 
Secretary will order any suspension of liquidation on the product 
ended, and will instruct the Customs Service to refund any cash 
deposits or release any bonds relating to that product.
    (3) If the Secretary issues a final scope ruling, under either 
paragraph (d) or (f)(4) of this section, to the effect that the product 
in question is included within the scope of the order, any suspension 
of liquidation under paragraph (l)(1) or (l)(2) of this section will 
continue. Where there has been no suspension of liquidation, the 
Secretary will instruct the Customs Service to suspend liquidation and 
to require a cash deposit of estimated duties, at the applicable rate, 
for each entry of the product entered, or withdrawn from warehouse, for 
consumption on or after the date of the final scope ruling. If the 
Secretary's final scope ruling is to the effect that the product in 
question is not included within the scope of the order, the Secretary 
will order any suspension of liquidation on the subject product ended 
and will instruct the Customs Service to refund any cash deposits or 
release any bonds relating to this product.
    (4) If, within 90 days of the initiation of a review of an order or 
a suspended investigation under this subpart, the Secretary issues a 
final ruling that a product is included within the scope of the order 
or suspended investigation that is the subject of the review, the 
Secretary, where practicable, will include sales of that product for 
purposes of the review and will seek information regarding such sales. 
If the Secretary issues a final ruling after 90 days of the initiation 
of the review, the Secretary may consider sales of the product for 
purposes of the review on the basis of non-adverse facts available. 
However, notwithstanding the pendency of a scope inquiry, if the 
Secretary considers it appropriate, the Secretary may request 
information concerning the product that is the subject of the scope 
inquiry for purposes of a review under this subpart.
    (m) Orders covering identical products. Except for a scope inquiry 
and a scope ruling that involves section 781(a) or section 781(b) of 
the Act (assembly of parts or components in the United States or in a 
third country), if more than one order or suspended investigation cover 
the same subject merchandise, and if the Secretary considers it 
appropriate, the Secretary may conduct a single inquiry and issue a 
single scope ruling that applies to all such orders or suspended 
investigations.
    (n) Service of applications; scope service list. The requirements 
of Sec. 351.303(f) apply to this section, except that an application 
for a scope ruling must be served on all parties on the Department's 
scope service list. For purposes of this section, the ``scope service 
list'' will include all parties that have participated in any segment 
of the proceeding. If an application for a scope ruling in one 
proceeding results in a single inquiry that will apply to another 
proceeding (see paragraph (m) of this section), the Secretary will 
notify parties on the scope service list of the other proceeding of the 
application for a scope ruling.
    (o) Publication of list of scope rulings. On a quarterly basis, the 
Secretary will publish in the Federal Register a list of scope rulings 
issued within the last three months. This list will include the case 
name, reference number, and a brief description of the ruling.

Subpart C--Information and Argument


Sec. 351.301  Time limits for submission of factual information.

    (a) Introduction. The Department obtains most of its factual 
information in antidumping and countervailing duty proceedings from 
submissions made by interested parties during the course of the 
proceeding. This section sets forth the time limits for submitting such 
factual information, including information in questionnaire responses, 
publicly available information to value factors in nonmarket economy 
cases, allegations concerning market viability, allegations of sales at 
prices below the cost of production, countervailable subsidy 
allegations, and upstream subsidy allegations. Section 351.302 sets 
forth the procedures for requesting an extension of such time limits. 
Section 351.303 contains the procedural rules regarding filing, format, 
translation, service, and certification of documents.
    (b) Time limits in general. Except as provided in paragraphs (c) 
and (d) of this section and Sec. 351.302, a submission of factual 
information is due no later than:
    (1) For a final determination in a countervailing duty 
investigation or an antidumping investigation, seven days before the 
date on which the verification of any person is scheduled to commence, 
except that factual information requested by the verifying officials 
from a person will be due no later than seven days after the date on 
which the verification of that person is completed;
    (2) For the final results of an administrative review, 140 days 
after the last day of the anniversary month, except that factual 
information requested by the verifying officials from a person will be 
due no later than seven days after the date on which the verification 
of that person is completed;
    (3) For the final results of a changed circumstances review, sunset 
review, or section 762 review, 140 days after the date of publication 
of notice of initiation of the review, except that factual information 
requested by the verifying officials from a person will be due no later 
than seven days after the date on which the verification of that person 
is completed;
    (4) For the final results of a new shipper review, 100 days after 
the date of publication of notice of initiation of the review, except 
that factual 

[[Page 7377]]
information requested by the verifying officials from a person will be 
due no later than seven days after the date on which the verification 
of that person is completed; and
    (5) For the final results of an expedited antidumping review, 
Article 8 violation review, Article 4/Article 7 review, or section 753 
review, a date specified by the Secretary.
    (c) Time limits for certain submissions. (1) Rebuttal, 
clarification, or correction of factual information. Any interested 
party may submit factual information to rebut, clarify, or correct 
factual information submitted by any other interested party at any time 
prior to the deadline provided in this section for submission of such 
factual information or, if later, 10 days after the date such factual 
information is served on the interested party or, if appropriate, made 
available under APO to the authorized applicant.
    (2) Questionnaire responses and other submissions on request. (i) 
Notwithstanding paragraph (b) of this section, the Secretary may 
request any person to submit factual information at any time during a 
proceeding.
    (ii) In the Secretary's written request to an interested party for 
a response to a questionnaire or for other factual information, the 
Secretary will specify: the time limit for the response; the 
information to be provided; the form and manner in which the interested 
party must submit the information; and that failure to submit requested 
information in the requested form and manner by the date specified may 
result in use of the facts available under section 776 of the Act and 
Sec. 351.308.
    (iii) Interested parties will have at least 30 days from the date 
of receipt to respond to the full initial questionnaire. The time limit 
for response to individual sections of the questionnaire, if the 
Secretary requests a separate response to such sections, may be less 
than the 30 days allotted for response to the full questionnaire. The 
date of receipt will be seven days from the date on which the initial 
questionnaire was transmitted.
    (iv) A notification by an interested party, under section 782(c)(1) 
of the Act, of difficulties in submitting information in response to a 
questionnaire issued by the Secretary is due within 14 days after the 
date of receipt of the initial questionnaire.
    (v) A respondent interested party may request in writing that the 
Secretary conduct a questionnaire presentation. The Secretary may 
conduct a questionnaire presentation if the Secretary notifies the 
government of the affected country and that government does not object.
    (3) Submission of publicly available information to value factors 
under Sec. 351.408(c). Notwithstanding paragraph (b) of this section, 
interested parties may submit publicly available information to value 
factors under Sec. 351.408(c) within:
    (i) For a final determination in an antidumping investigation, 40 
days after the date of publication of the preliminary determination;
    (ii) For the final results of an administrative review, new shipper 
review, or changed circumstances review, 20 days after the date of 
publication of the preliminary results of review; and
    (iii) For the final results of an expedited antidumping review, a 
date specified by the Secretary.
    (d) Time limits for certain allegations. (1) Market viability and 
the basis for determining a price-based normal value. In an antidumping 
investigation or administrative review, allegations regarding market 
viability, including the exceptions in Sec. 351.404(c)(2), are due, 
with all supporting factual information, within 40 days after the date 
on which the initial questionnaire was transmitted, unless the 
Secretary alters this time limit.
    (2) Sales at prices below the cost of production. An allegation of 
sales at prices below the cost of production made by the petitioner or 
other domestic interested party is due within:
    (i) In an antidumping investigation,
    (A) On a country-wide basis, 20 days after the date on which the 
initial questionnaire was transmitted to any person, unless the 
Secretary alters this time limit; or
    (B) On a company-specific basis, 20 days after a respondent 
interested party files the response to the relevant section of the 
questionnaire, unless the relevant questionnaire response is, in the 
Secretary's view, incomplete, in which case the Secretary will 
determine the time limit;
    (ii) In an administrative review, new shipper review, or changed 
circumstances review, on a company-specific basis, 20 days after a 
respondent interested party files the response to the relevant section 
of the questionnaire, unless the relevant questionnaire response is, in 
the Secretary's view, incomplete, in which case the Secretary will 
determine the time limit; or
    (iii) In an expedited antidumping review, on a company-specific 
basis, 10 days after the date of publication of the notice of 
initiation of the review.
    (3) Countervailable subsidy; upstream subsidy. (i) In general. A 
countervailable subsidy allegation made by the petitioner or other 
domestic interested party is due no later than:
    (A) In a countervailing duty investigation, 40 days before the 
scheduled date of the preliminary determination; or
    (B) In an administrative review, new shipper review, or changed 
circumstances review, 20 days after all responses to the initial 
questionnaire are filed with the Department, unless the Secretary 
alters this time limit.
    (ii) Exception for upstream subsidy allegation in an investigation. 
In a countervailing duty investigation, an allegation of upstream 
subsidies made by the petitioner or other domestic interested party is 
due no later than:
    (A) 10 days before the scheduled date of the preliminary 
determination; or
    (B) 15 days before the scheduled date of the final determination.
    (4) Targeted dumping. In an antidumping investigation, an 
allegation of targeted dumping made by the petitioner or other domestic 
interested party under Sec. 351.414(f)(3) is due no later than 30 days 
before the scheduled date of the preliminary determination.


Sec. 351.302  Extension of time limits; return of untimely filed or 
unsolicited material.

    (a) Introduction. This section sets forth the procedures for 
requesting an extension of a time limit. In addition, this section 
explains that certain untimely filed or unsolicited material will be 
returned to the submitter together with an explanation of the reasons 
for the return of such material.
    (b) Extension of time limits. Unless expressly precluded by 
statute, the Secretary may, for good cause, extend any time limit 
established by this Part.
    (c) Requests for extension of specific time limit. Before the 
applicable time limit specified under Sec. 351.301 expires, a party may 
request an extension pursuant to paragraph (b) of this section. The 
request must be in writing and state the reasons for the request. An 
extension must be approved in writing.
    (d) Return of untimely filed or unsolicited material. (1) Unless 
the Secretary extends a time limit under paragraph (b) of this section, 
the Secretary will not consider or retain in the official record of the 
proceeding:
    (i) Untimely filed factual information, written argument, or other 
material that the Secretary returns to the submitter, except as 
provided under Sec. 351.104(a)(2); or
    (ii) Unsolicited questionnaire responses, except as provided under 
Sec. 351.204(d)(2).
    (2) The Secretary will return such information, argument, or other 

[[Page 7378]]
    material, or unsolicited questionnaire response with, to the extent 
practicable, written notice stating the reasons for return.


Sec. 351.303  Filing, format, translation, service, and certification 
of documents.

    (a) Introduction. This section contains the procedural rules 
regarding filing, format, service, translation, and certification of 
documents and applies to all persons submitting documents to the 
Department for consideration in an antidumping or countervailing duty 
proceeding.
    (b) Where to file; time of filing. Persons must address and submit 
all documents to the Department with the Secretary of Commerce, 
Attention: Import Administration, Central Records Unit, Room B-099, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230, between the hours of 8:30 a.m. and 5:00 p.m. on 
business days (see Sec. 351.103(b)). If the applicable time limit 
expires on a non-business day, the Secretary will accept documents that 
are filed on the next business day.
    (c) Number of copies; filing of business proprietary and public 
versions under the one-day lag rule; information in double brackets. 
(1) In general. Except as provided in paragraphs (c)(2) and (c)(3) of 
this section, a person must file six copies of each submission with the 
Department.
    (2) Application of the one-day lag rule. (i) Filing the business 
proprietary version. A person must file one copy of the business 
proprietary version of any document with the Department within the 
applicable time limit. Business proprietary version means the version 
of a document containing information for which a person claims business 
proprietary treatment under Sec. 351.304.
    (ii) Filing the final business proprietary version; bracketing 
corrections. By the close of business one business day after the date 
the business proprietary version is filed under paragraph (c)(2)(i) of 
this section, a person must file six copies of the final business 
proprietary version of the document with the Department. The final 
business proprietary version must be identical to the business 
proprietary version filed on the previous day except for any bracketing 
corrections. Although a person must file six copies of the complete 
final business proprietary version with the Department, the person may 
serve other persons with only those pages containing bracketing 
corrections.
    (iii) Filing the public version. Simultaneously with the filing of 
the final business proprietary version under paragraph (c)(2)(ii) of 
this section, a person also must file three copies of the public 
version of such document (see Sec. 351.304(c)) with the Department.
    (iv) Information in double brackets. If a person serves authorized 
applicants with a business proprietary version of a document that 
excludes information in double brackets pursuant to Sec. 351.304(b)(2), 
the person simultaneously must file with the Department one copy of 
those pages in which information in double brackets has been excluded.
    (3) Computer media and printouts. The Secretary may require 
submission of factual information on computer media unless the 
Secretary modifies such requirements under section 782(c) of the Act 
(see Sec. 351.301(c)(2)(iv)). The computer medium must be accompanied 
by the number of copies of any computer printout specified by the 
Secretary. All information on computer media must be releasable under 
APO (see Sec. 351.305).
    (d) Format of copies. (1) In general. Unless the Secretary alters 
the requirements of this section, documents filed with the Department 
must conform to the specification and marking requirements under 
paragraph (d)(2) of this section or the Secretary may refuse to accept 
such documents for the official record of the proceeding.
    (2) Specifications and markings. A person must submit documents on 
letter-size paper, single-sided and double-spaced, and must securely 
bind each copy as a single document with any letter of transmittal as 
the first page of the document. A submitter must mark the first page of 
each document in the upper right-hand corner with the following 
information in the following format:
    (i) On the first line, except for a petition, indicate the 
Department case number;
    (ii) On the second line, indicate the total number of pages in the 
document including cover pages, appendices, and any unnumbered pages;
    (iii) On the third line, indicate whether the document is for an 
investigation, scope inquiry, downstream product monitoring 
application, or review and, if the latter, indicate the inclusive dates 
of the review, the type of review, and the section number of the Act 
corresponding to the type of review;
    (iv) On the fourth line, indicate the Department office conducting 
the proceeding;
    (v) On the fifth and subsequent lines, indicate whether any portion 
of the document contains business proprietary information and, if so, 
list the applicable page numbers and state either ``Document May be 
Released Under APO'' or ``Document May Not be Released Under APO.'' The 
top of each page containing the business proprietary information must 
state ``Business Proprietary Treatment Requested'' and the warning 
``Bracketing of Business Proprietary Information is Not Final for One 
Business Day After Date of Filing'' (see Sec. 351.303(c)(2) and 
Sec. 351.304(c)); and
    (vi) For public versions of business proprietary documents required 
under Sec. 351.304(c), complete the marking as required in paragraphs 
(d)(2)(i)-(v) of this section for the business proprietary document, 
but conspicuously mark the first page ``Public Version.''
    (e) Translation to English. A document submitted in a foreign 
language must be accompanied by an English translation, unless the 
Secretary waives this requirement for an individual document.
    (f) Service of copies on other persons. (1) In general. Except as 
provided in Sec. 351.202(c) (filing of petition), Sec. 351.207(f)(1) 
(submission of proposed suspension agreement), and paragraph (f)(3) of 
this section, a person filing a document with the Department 
simultaneously must serve a copy of the document on all other persons 
on the service list by personal service or first class mail.
    (2) Certificate of service. Each document filed with the Department 
must include a certificate of service listing each person served 
(including agents), the type of document served, and the date and 
method of service on each person. The Secretary may refuse to accept 
any document that is not accompanied by a certificate of service.
    (3) Service requirements for certain documents. (i) Briefs. In 
addition to the certificate of service requirements contained in 
paragraph (f)(2) of this section, a person filing a case or rebuttal 
brief with the Department simultaneously must serve a copy of that 
brief on all persons on the service list and on any U.S. Government 
agency that has submitted a case or rebuttal brief in the segment of 
the proceeding. If, under Sec. 351.103(c), a person has designated an 
agent to receive service that is located in the United States, service 
on that person must be either by personal service on the same day the 
brief is filed or by overnight mail or courier on the next day. If the 
person has designated an agent to receive service that is located 
outside the United States, service on that person must be by first 
class airmail.
    (ii) Request for review. In addition to the certificate of service 
requirements under paragraph (f)(2) of this section, an 

[[Page 7379]]
interested party that files with the Department a request for an 
expedited antidumping review, an administrative review, a new shipper 
review, or a changed circumstances review, must serve a copy of the 
request by personal service or first class mail on each exporter or 
producer specified in the request and on the petitioner by the end of 
the anniversary month or within ten days of filing the request for 
review, whichever is later. If the interested party that files the 
request is unable to locate a particular exporter or producer, or the 
petitioner, the Secretary may accept the request for review if the 
Secretary is satisfied that the party made a reasonable attempt to 
serve a copy of the request on such person.
    (g) Certifications. A person must file with each submission 
containing factual information the certification in paragraph (1) below 
and, in addition, if the person has legal counsel or another 
representative, the certification in paragraph (2) below:
    (1) For the person's official responsible for presentation of the 
factual information:

    I, (name and title), currently employed by (person), certify 
that (1) I have read the attached submission, and (2) the 
information contained in this submission is, to the best of my 
knowledge, complete and accurate.

    (2) For the person's legal counsel or other representative:

    I, (name), of (law or other firm), counsel or representative to 
(person), certify that (1) I have read the attached submission, and 
(2) based on the information made available to me by (person), I 
have no reason to believe that this submission contains any material 
misrepresentation or omission of fact.


Sec. 351.304  Establishing business proprietary treatment of 
information. [Reserved].


Sec. 351.305  Access to business proprietary information. [Reserved].


Sec. 351.306  Use of business proprietary information. [Reserved].


Sec. 351.307  Verification of information.

    (a) Introduction. Prior to making a final determination in an 
investigation or issuing final results of review, the Secretary may 
verify relevant factual information. This section clarifies when 
verification will occur, the contents of a verification report, and the 
procedures for verification.
    (b) In general. (1) Subject to paragraph (b)(4) of this section, 
the Secretary will verify factual information upon which the Secretary 
relies in:
    (i) A final determination in a continuation of a previously 
suspended countervailing duty investigation (section 704(g) of the 
Act), countervailing duty investigation, continuation of a previously 
suspended antidumping investigation (section 705(a) of the Act), or 
antidumping investigation;
    (ii) The final results of an expedited antidumping review;
    (iii) A revocation under section 751(d) of the Act;
    (iv) The final results of an administrative review, new shipper 
review, or changed circumstances review, if the Secretary decides that 
good cause for verification exists; and
    (v) The final results of an administrative review if:
    (A) A domestic interested party, not later than 100 days after the 
date of publication of the notice of initiation of review, submits a 
written request for verification; and
    (B) The Secretary conducted no verification under this paragraph 
during either of the two immediately preceding administrative reviews.
    (2) The Secretary may verify factual information upon which the 
Secretary relies in a proceeding or a segment of a proceeding not 
specifically provided for in paragraph (b)(1) of this section.
    (3) If the Secretary decides that, because of the large number of 
exporters or producers included in an investigation or administrative 
review, it is impractical to verify relevant factual information for 
each person, the Secretary may select and verify a sample.
    (4) The Secretary may conduct verification of a person if that 
person agrees to verification and the Secretary notifies the government 
of the affected country and that government does not object. If the 
person or the government objects to verification, the Secretary will 
not conduct verification and may disregard any or all information 
submitted by the person in favor of use of the facts available under 
section 776 of the Act and Sec. 351.308.
    (c) Verification report. The Secretary will report the methods, 
procedures, and results of a verification under this section prior to 
making a final determination in an investigation or issuing final 
results in a review.
    (d) Procedures for verification. The Secretary will notify the 
government of the affected country that employees of the Department 
will visit with the persons listed below in order to verify the 
accuracy and completeness of submitted factual information. The 
notification will, where practicable, identify any member of the 
verification team who is not an officer of the U.S. Government. As part 
of the verification, employees of the Department will request access to 
all files, records, and personnel which the Secretary considers 
relevant to factual information submitted of:
    (1) Producers, exporters, or importers;
    (2) Persons affiliated with the persons listed in paragraph (d)(1) 
of this section, where applicable;
    (3) Unaffiliated purchasers, or
    (4) The government of the affected country as part of verification 
in a countervailing duty proceeding.


Sec. 351.308  Determinations on the basis of the facts available.

    (a) Introduction. The Secretary may make determinations on the 
basis of the facts available whenever necessary information is not 
available on the record, an interested party or any other person 
withholds or fails to provide information requested in a timely manner 
and in the form required or significantly impedes a proceeding, or the 
Secretary is unable to verify submitted information. If the Secretary 
finds that an interested party ``has failed to cooperate by not acting 
to the best of its ability to comply with a request for information,'' 
the Secretary may use an inference that is adverse to the interests of 
that party in selecting from among the facts otherwise available. This 
section lists some of the sources of information upon which the 
Secretary may base an adverse inference and explains the actions the 
Secretary will take with respect to corroboration of information.
    (b) In general. The Secretary may make a determination under the 
Act and this Part based on the facts otherwise available in accordance 
with section 776(a) of the Act.
    (c) Adverse Inferences. For purposes of section 776(b) of the Act, 
an adverse inference may include reliance on:
    (1) Secondary information, such as information derived from:
    (i) The petition;
    (ii) A final determination in a countervailing duty investigation 
or an antidumping investigation;
    (iii) Any previous administrative review, new shipper review, 
expedited antidumping review, section 753 review, or section 762 
review; or
    (2) Any other information placed on the record.
    (d) Corroboration of secondary information. Under section 776(c) of 
the Act, when the Secretary relies on secondary information, the 
Secretary will, to the extent practicable, corroborate that information 
from independent sources that are reasonably at the Secretary's 
disposal. Independent sources may include, but are not limited to, 
published price lists, official import statistics and customs data, and 


[[Page 7380]]
information obtained from interested parties during the instant 
investigation or review. Corroborate means that the Secretary will 
examine whether the secondary information to be used has probative 
value. The fact that corroboration may not be practicable in a given 
circumstance will not prevent the Secretary from applying an adverse 
inference as appropriate.
    (e) Use of certain information. In reaching a determination under 
the Act and this Part, the Secretary will not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all the applicable requirements 
established by the Secretary if the conditions listed under section 
782(e) of the Act are met.


Sec. 351.309  Written argument.

    (a) Introduction. Written argument may be submitted during the 
course of an antidumping or countervailing duty proceeding. This 
section sets forth the time limits for submission of case and rebuttal 
briefs and provides guidance on what should be contained in these 
documents.
    (b) Written argument. (1) In general. In making the final 
determination in a countervailing duty investigation or antidumping 
investigation or the final results of an administrative review, new 
shipper review, expedited antidumping review, section 753 review, or 
section 762 review, the Secretary will consider written arguments in 
case or rebuttal briefs filed within the time limits in this section.
    (2) Written argument on request. Notwithstanding paragraph (b)(1) 
of this section, the Secretary may request written argument on any 
issue from any person or U.S. Government agency at any time during a 
proceeding.
    (c) Case brief. (1) Any interested party or U.S. Government agency 
may submit a ``case brief'' within:
    (i) For a final determination in a countervailing duty 
investigation or antidumping investigation, 50 days after the date of 
publication of the preliminary determination, unless the Secretary 
alters this time limit;
    (ii) For the final results of an administrative review, new shipper 
review, changed circumstances review, or section 762 review, 30 days 
after the date of publication of the preliminary results of review, 
unless the Secretary alters the time limit; or
    (iii) For the final results of an expedited antidumping review, 
sunset review, Article 8 violation review, Article 4/Article 7 review, 
or section 753 review, a date specified by the Secretary.
    (2) The case brief must present all arguments that continue in the 
submitter's view to be relevant to the Secretary's final determination 
or final results, including any arguments presented before the date of 
publication of the preliminary determination or preliminary results. As 
part of the case brief, parties are encouraged to provide a summary of 
the arguments not to exceed five pages.
    (d) Rebuttal brief. (1) Any interested party or U.S. Government 
agency may submit a ``rebuttal brief'' within five days after the time 
limit for filing the case brief, unless the Secretary alters this time 
limit.
    (2) The rebuttal brief may respond only to arguments raised in case 
briefs and should identify the arguments to which it is responding. As 
part of the rebuttal brief, parties are encouraged to provide a summary 
of the arguments not to exceed five pages.


Sec. 351.310  Hearings.

    (a) Introduction. This section sets forth the procedures for 
requesting a hearing, indicates that the Secretary may consolidate 
hearings, and explains when the Secretary may hold closed hearing 
sessions.
    (b) Pre-hearing conference. The Secretary may conduct a telephone 
pre-hearing conference with representatives of interested parties to 
facilitate the conduct of the hearing.
    (c) Request for hearing. Any interested party may request that the 
Secretary hold a public hearing on arguments to be raised in case or 
rebuttal briefs within 30 days after the date of publication of the 
preliminary determination or preliminary results of review, unless the 
Secretary alters this time limit, or in a proceeding where the 
Secretary will not issue a preliminary determination, not later than a 
date specified by the Secretary. To the extent practicable, a party 
requesting a hearing must identify arguments to be raised at the 
hearing. At the hearing, an interested party may make an affirmative 
presentation only on arguments included in that party's case brief and 
may make a rebuttal presentation only on arguments included in that 
party's rebuttal brief.
    (d) Hearings in general. (1) If an interested party submits a 
request under paragraph (c) of this section, the Secretary will hold a 
public hearing on the date stated in the notice of the Secretary's 
preliminary determination or preliminary results of administrative 
review (or otherwise specified by the Secretary in an expedited 
antidumping review), unless the Secretary alters the date. Ordinarily, 
the hearing will be held two days after the scheduled date for 
submission of rebuttal briefs.
    (2) The hearing is not subject to 5 U.S.C. 551-559, and 702 
(Administrative Procedure Act). Witness testimony, if any, will not be 
under oath or subject to cross-examination by another interested party 
or witness. During the hearing, the chair may question any person or 
witness and may request persons to present additional written argument.
    (e) Consolidated hearings. At the Secretary's discretion, the 
Secretary may consolidate hearings in two or more cases.
    (f) Closed hearing sessions. An interested party may request a 
closed session of the hearing no later than the date the case briefs 
are due in order to address limited issues during the course of the 
hearing. The requesting party must identify the subjects to be 
discussed, specify the amount of time requested, and justify the need 
for a closed session with respect to each subject. If the Secretary 
approves the request for a closed session, only authorized applicants 
and other persons authorized by the regulations may be present for the 
closed session (see Sec. 351.305).
    (g) Transcript of hearing. The Secretary will place a verbatim 
transcript of the hearing in the public and official records of the 
proceeding and will announce at the hearing how interested parties may 
obtain copies of the transcript.


Sec. 351.311  Countervailable subsidy practice discovered during 
investigation or review.

    (a) Introduction. During the course of a countervailing duty 
investigation or review, Department officials may discover or receive 
notice of a practice that appears to provide a countervailable subsidy. 
This section explains when the Secretary will examine such a practice.
    (b) Inclusion in proceeding. If during a countervailing duty 
investigation or a countervailing duty administrative review the 
Secretary discovers a practice that appears to provide a 
countervailable subsidy with respect to the subject merchandise and the 
practice was not alleged or examined in the proceeding, or if, pursuant 
to section 775 of the Act, the Secretary receives notice from the 
United States Trade Representative that a subsidy or subsidy program is 
in violation of Article 8 of the Subsidies Agreement, the Secretary 
will examine the practice, subsidy, or subsidy program if the Secretary 
concludes that sufficient time remains before the scheduled date for 
the final determination or final results of review. 

[[Page 7381]]

    (c) Deferral of examination. If the Secretary concludes that 
insufficient time remains before the scheduled date for the final 
determination or final results of review to examine the practice, 
subsidy, or subsidy program described in paragraph (b) of this section, 
the Secretary will:
    (1) During an investigation, allow the petitioner to withdraw the 
petition without prejudice and resubmit it with an allegation with 
regard to the newly discovered practice, subsidy, or subsidy program; 
or
    (2) During an investigation or review, defer consideration of the 
newly discovered practice, subsidy, or subsidy program until a 
subsequent administrative review, if any.
    (d) Notice. The Secretary will notify the parties to the proceeding 
of any practice the Secretary discovers, or any subsidy or subsidy 
program with respect to which the Secretary receives notice from the 
United States Trade Representative, and whether or not it will be 
included in the then ongoing proceeding.


Sec. 351.312  Industrial users and consumer organizations.

    (a) Introduction. The URAA provides for opportunity for comment by 
consumer organizations and industrial users on matters relevant to a 
particular determination of dumping, subsidization, or injury. This 
section indicates under what circumstances such persons may submit 
relevant information and argument.
    (b) Opportunity to submit relevant information and argument. In an 
antidumping or countervailing duty proceeding under title VII of the 
Act and this Part, an industrial user of the subject merchandise or a 
representative consumer organization, as described in section 777(h) of 
the Act, may submit relevant factual information and written argument 
to the Department under Sec. 351.301(b) and paragraphs (c) and (d) of 
Sec. 351.309 concerning dumping or a countervailable subsidy. All such 
submissions must be filed in accordance with Sec. 351.303.
    (c) Business proprietary information. Persons described in 
paragraph (b) of this section may request business proprietary 
treatment of information under Sec. 351.304, but will not be granted 
access under Sec. 351.305 to business proprietary information submitted 
by other persons.

Subpart D--Calculation of Export Price, Constructed Export Price, 
Fair Value, and Normal Value


 Sec. 351.401  In general.

    (a) Introduction. In general terms, an antidumping analysis 
involves a comparison of export price or constructed export price in 
the United States with normal value in the foreign market. This section 
establishes certain general rules that apply to the calculation of 
export price, constructed export price and normal value. (See section 
772, section 773, and section 773A of the Act).
    (b) Adjustments in general. In making adjustments to export price, 
constructed export price, or normal value, the Secretary will adhere to 
the following principles:
    (1) Any interested party that claims an adjustment must establish 
the claim to the satisfaction of the Secretary.
    (2) The Secretary will not double-count adjustments.
    (c) Discounts, rebates, and other price adjustments. In calculating 
export price, constructed export price, and normal value (where normal 
value is based on price), the Secretary will rely upon a price net of 
any discounts, rebates, or post-sale adjustments to price that are 
reasonably attributable to the subject merchandise or the foreign like 
product (whichever is applicable).
    (d) Delayed payment or pre-payment of expenses. Where cost is the 
basis for determining the amount of an adjustment to export price, 
constructed export price, or normal value, the Secretary will not 
factor in any delayed payment or pre-payment of expenses by the 
exporter or producer.
    (e) Adjustments for movement expenses. In making adjustments for 
movement expenses to export price or constructed export price under 
section 772(c)(2)(A) of the Act, or to normal value under section 
773(a)(6)(B)(ii) of the Act:
    (1) The Secretary may adjust for warehousing expenses; and
    (2) The ``original place of shipment'' means the original place 
from which the seller shipped the goods.
    (f) Treatment of affiliated producers in antidumping proceedings. 
In an antidumping proceeding under this part, the Secretary will treat 
two or more affiliated producers as a single entity where those 
producers have production facilities for similar or identical products 
that would not require substantial retooling of either facility in 
order to restructure manufacturing priorities and the Secretary 
concludes that there is a significant potential for the manipulation of 
price or production. In identifying a significant potential for the 
manipulation of price or production, the factors the Secretary may 
consider include:
    (1) The level of common ownership;
    (2) Whether managerial employees or board members of one of the 
affiliated producers sit on the board of directors of the other 
affiliated person; and
    (3) Whether operations are intertwined, such as through the sharing 
of sales information, involvement in production and pricing decisions, 
the sharing of facilities or employees, or significant transactions 
between the affiliated producers.
    (g) Allocation of expenses. The Secretary may consider allocated 
expenses when transaction-specific reporting is not feasible, provided 
the Secretary is satisfied that the allocation method used does not 
cause inaccuracies or distortions.
    (h) Treatment of subcontractors (``tolling'' operations). The 
Secretary will not consider a toller or subcontractor to be a 
manufacturer or producer where the toller or subcontractor does not 
acquire ownership, and does not control the relevant sale of the 
subject merchandise or foreign like product.
    (i) Date of sale. In identifying the date of a sale of the subject 
merchandise or foreign like product, the Secretary normally will use 
the date of invoice, as recorded in the exporter or producer's records 
kept in the ordinary course of business.


Sec. 351.402  Calculation of export price and constructed export price; 
reimbursement of antidumping and countervailing duties.

    (a) Introduction. In order to establish export price, constructed 
export price, and normal value, the Secretary must make certain 
adjustments to the price to the unaffiliated purchaser (often called 
the ``starting price'') in both the United States and foreign markets. 
This regulation clarifies how the Secretary will make certain of the 
adjustments to the starting price in the United States that are 
required by section 772 of the Act.
    (b) Additional adjustments to constructed export price. The 
Secretary will make adjustments to constructed export price under 
section 772(d) of the Act for expenses associated with commercial 
activities in the United States, no matter where incurred.
    (c) Special rule for merchandise with value added after 
importation. (1) Merchandise imported by affiliated persons. In 
applying section 772(e) of the Act, merchandise imported by and value 
added by a person affiliated with the exporter or producer includes 

[[Page 7382]]
merchandise imported and value added for the account of such an 
affiliated person.
    (2) Estimation of value added. The Secretary normally will 
determine that the value added in the United States by the affiliated 
person is likely to exceed substantially the value of the subject 
merchandise if the Secretary estimates the value added to be at least 
60 percent of the price charged to the first unaffiliated purchaser for 
the merchandise as sold in the United States. The Secretary normally 
will estimate the value added based on the difference between the price 
charged to the first unaffiliated purchaser for the merchandise as sold 
in the United States and the price paid for the subject merchandise by 
the affiliated person. The Secretary normally will base this 
determination on averages of the prices and the value added to the 
subject merchandise.
    (3) Determining dumping margins. For purposes of determining 
dumping margins under paragraphs (1) and (2) of section 772(e) of the 
Act, the Secretary may use the weighted-average dumping margins 
calculated on sales of identical or other subject merchandise sold to 
unaffiliated persons.
    (d) Special rule for determining profit. This paragraph sets forth 
rules for calculating profit in establishing constructed export price 
under section 772(f) of the Act.
    (1) Basis for total expenses and total actual profit. In 
calculating total expenses and total actual profit, the Secretary 
normally will use the aggregate of expenses and profit for all subject 
merchandise sold in the United States and all foreign like products 
sold in the exporting country, including sales that have been 
disregarded as being below the cost of production. (See section 773(b) 
of the Act).
    (2) Use of financial reports. For purposes of determining profit 
under section 772(d)(3) of the Act, the Secretary may rely on any 
appropriate financial reports, including public, audited financial 
statements, or equivalent financial reports, and internal financial 
reports prepared in the ordinary course of business.
    (3) Voluntary reporting of costs of production. The Secretary will 
not require the reporting of costs of production solely for purposes of 
determining the amount of profit to be deducted from the constructed 
export price. The Secretary will base the calculation of profit on 
costs of production if such costs are reported voluntarily by the date 
established by the Secretary, and provided that it is practicable to do 
so and the costs of production are verifiable.
    (e) Treatment of payments between affiliated persons. Where a 
person affiliated with the exporter or producer incurs any of the 
expenses deducted from constructed export price under section 772(d) of 
the Act and is reimbursed for such expenses by the exporter, producer 
or other affiliate, the Secretary normally will make an adjustment 
based on the actual cost to the affiliated person. If the Secretary is 
satisfied that information regarding the actual cost to the affiliated 
person is unavailable to the exporter or producer, the Secretary may 
determine the amount of the adjustment on any other reasonable basis, 
including the amount of the reimbursement to the affiliated person if 
the Secretary is satisfied that such amount reflects the amount usually 
paid in the market under consideration.
    (f) Reimbursement of antidumping duties and countervailing duties. 
(1) In general. (i) In calculating the export price (or the constructed 
export price), the Secretary will deduct the amount of any antidumping 
duty or countervailing duty which the exporter or producer:
    (A) Paid directly on behalf of the importer; or
    (B) Reimbursed to the importer.
    (ii) The Secretary will not deduct the amount of any antidumping 
duty or countervailing duty paid or reimbursed if the exporter or 
producer granted to the importer before initiation of the antidumping 
investigation in question a warranty of nonapplicability of antidumping 
duties or countervailing duties with respect to subject merchandise 
which was:
    (A) Sold before the date of publication of the Secretary's order 
applicable to the merchandise in question; and
    (B) Exported before the date of publication of the Secretary's 
final antidumping determination. Ordinarily, the Secretary will deduct 
the amount reimbursed only once in the calculation of the export price 
(or constructed export price).
    (2) Certificate. The importer must file prior to liquidation a 
certificate in the following form with the appropriate District 
Director of Customs:

    I hereby certify that I (have) (have not) entered into any 
agreement or understanding for the payment or for the refunding to 
me, by the manufacturer, producer, seller, or exporter, of all or 
any part of the antidumping duties or countervailing duties assessed 
upon the following importations of (commodity) from (country): (List 
entry numbers) which have been purchased on or after (date of 
publication of antidumping notice suspending liquidation in the 
Federal Register) or purchased before (same date) but exported on or 
after (date of final determination of sales at less than fair 
value).

    (3) Presumption. The Secretary may presume from an importer's 
failure to file the certificate required in paragraph (f)(2) of this 
section that the exporter or producer paid or reimbursed the 
antidumping duties or countervailing duties.


Sec. 351.403.  Sales used in calculating normal value; transactions 
between affiliated parties.

    (a) Introduction. This section clarifies when the Secretary may use 
offers for sale in determining normal value. Additionally, this section 
clarifies the authority of the Secretary to use sales to or through an 
affiliated party as a basis for normal value. (See section 773(a)(1)(B) 
and section 773(a)(5) of the Act.)
    (b) Sales and offers for sale. In calculating normal value, the 
Secretary normally will consider offers for sale only in the absence of 
sales and only if the Secretary concludes that acceptance of the offer 
can be reasonably expected.
    (c) Sales to an affiliated party. If an exporter or producer sold 
the foreign like product to an affiliated party, the Secretary may 
calculate normal value based on that sale only if satisfied that the 
price is comparable to the price at which the exporter or producer sold 
the foreign like product to a person who is not affiliated with the 
seller.
    (d) Sales through an affiliated party. If an exporter or producer 
sold the foreign like product through an affiliated party, the 
Secretary may calculate normal value based on the sale by such 
affiliated party. (See section 773(a)(5) of the Act.)


Sec. 351.404  Selection of the market to be used as the basis for 
normal value.

    (a) Introduction. Although in most circumstances sales of the 
foreign like product in the home market are the most appropriate basis 
for determining normal value, section 773 of the Act also permits use 
of sales to a third country or constructed value as the basis for 
normal value. This section clarifies the rules for determining the 
basis for normal value.
    (b) Determination of viable market.  (1) In general. The Secretary 
will consider the exporting country or a third country as constituting 
a viable market if the Secretary is satisfied that sales of the foreign 
like product in that country are of sufficient quantity to form the 
basis of normal value.
    (2) Sufficient quantity. ``Sufficient quantity'' normally means 
that the aggregate quantity (or, if quantity is not 

[[Page 7383]]
appropriate, value) of the foreign like product sold by an exporter or 
producer in a country is 5 percent or more of the aggregate quantity 
(or value) of its sales of the subject merchandise to the United 
States.
    (c) Calculation of price-based normal value in viable market. (1) 
In general. Subject to paragraph (c)(2) of this section:
    (i) If the exporting country constitutes a viable market, the 
Secretary will calculate normal value on the basis of price in the 
exporting country (see section 773(a)(1)(B)(i) of the Act); or
    (ii) If the exporting country does not constitute a viable market, 
but a third country does constitute a viable market, the Secretary may 
calculate normal value on the basis of price to a third country (see 
section 773(a)(1)(B)(ii) of the Act).
    (2) Exception. The Secretary may decline to calculate normal value 
in a particular market under paragraph (c)(1) of this section if it is 
established to the satisfaction of the Secretary that:
    (i) In the case of the exporting country or a third country, a 
particular market situation exists that does not permit a proper 
comparison with the export price or constructed export price (see 
section 773(a)(1)(B)(ii)(III) or section 773(a)(1)(C)(iii) of the Act; 
or
    (ii) In the case of a third country, the price is not 
representative (see section 773(a)(1)(B)(ii)(I) of the Act).
    (d) Allegations concerning market viability and the basis for 
determining a price-based normal value. In an antidumping investigation 
or review, allegations regarding market viability or the exceptions in 
paragraph (c)(2) of this section, must be filed, with all supporting 
factual information, in accordance with Sec. 351.301(d)(1).
    (e) Selection of third country. For purposes of calculating normal 
value based on prices in a third country, where prices in more than one 
third country satisfy the criteria of section 773(a)(1)(B)(ii) of the 
Act and this section, the Secretary generally will select the third 
country based on the following criteria:
    (1) The foreign like product exported to a particular third country 
is more similar to the subject merchandise exported to the United 
States than is the foreign like product exported to other third 
countries;
    (2) The volume of sales to a particular third country is larger 
than the volume of sales to other third countries;
    (3) Such other factors as the Secretary considers appropriate.
    (f) Third country sales and constructed value. The Secretary 
normally will calculate normal value based on sales to a third country 
rather than on constructed value if adequate information is available 
and verifiable (see section 773(a)(4) of the Act).


Sec. 351.405  Calculation of normal value based on constructed value.

    (a) Introduction. In certain circumstances, the Secretary may 
determine normal value by constructing a value based on the cost of 
manufacture, selling general and administrative expenses, and profit. 
The Secretary may use constructed value as the basis for normal value 
where: Neither the home market nor a third country market is viable; 
sales below the cost of production are disregarded; sales outside the 
ordinary course of trade, or sales the prices of which are otherwise 
unrepresentative, are disregarded; sales used to establish a fictitious 
market are disregarded; no contemporaneous sales of comparable 
merchandise are available; or in other circumstances where the 
Secretary determines that home market or third country prices are 
inappropriate. (See section 773(e) and section 773(f) of the Act). This 
section clarifies the meaning of certain terms relating to constructed 
value.
    (b) Profit and selling, general, and administrative expenses. In 
determining the amount to be added to constructed value for profit and 
for selling, general, and administrative expenses, the following rules 
will apply:
    (1) Under section 773(e)(2)(A) of the Act, ``foreign country'' 
means the country in which the merchandise is produced or a third 
country selected by the Secretary under Sec. 351.404(e), as 
appropriate.
    (2) Under section 773(e)(2)(B) of the Act, ``foreign country'' 
means the country in which the merchandise is produced.


Sec. 351.406  Calculation of normal value if sales are made at less 
than cost of production.

    (a) Introduction. In determining normal value, the Secretary may 
disregard sales of the foreign-like product made at prices that are 
less than the cost of production of that product. However, among other 
criteria, such sales will be disregarded only if they are made within 
an extended period of time. (See section 773(b) of the Act.) This 
section clarifies the meaning of the term ``extended period of time'' 
as used in the Act.
    (b) Extended period of time. The ``extended period of time'' under 
section 773(b)(1)(A) of the Act normally will coincide with the period 
in which the sales under consideration for the determination of normal 
value were made.


Sec. 351.407  Calculation of constructed value and cost of production.

    (a) Introduction. This section sets forth certain rules that are 
common to the calculation of constructed value and the cost of 
production. (See section 773(f) of the Act).
    (b) Allocation of costs. In determining the appropriate method for 
allocating costs among products, the Secretary may take into account 
production quantities, relative sales values, and other quantitative 
and qualitative factors associated with the manufacture and sale of the 
subject merchandise and the foreign like product.
    (c) Startup costs. (1) In identifying startup operations under 
section 773(f)(1)(C)(ii) of the Act:
    (i) ``New production facilities'' includes the substantially 
complete retooling of an existing plant. Substantially complete 
retooling involves the replacement of nearly all production machinery 
or the equivalent rebuilding of existing machinery.
    (ii) A ``new product'' is one requiring substantial additional 
investment, including products which, though sold under an existing 
nameplate, involve the complete revamping or redesign of the product. 
Routine model year changes will not be considered a new product.
    (iii) Mere improvements to existing products or ongoing 
improvements to existing facilities will not be considered startup 
operations.
    (iv) An expansion of the capacity of an existing production line 
will not qualify as a startup operation unless the expansion 
constitutes such a major undertaking that it requires the construction 
of a new facility and results in a depression of production levels due 
to technical factors associated with the initial phase of commercial 
production of the expanded facilities.
    (2) In identifying the end of the startup period under clauses (ii) 
and (iii) of section 773(f)(1)(C) of the Act:
    (i) The attainment of peak production levels will not be the 
standard for identifying the end of the startup period, because the 
startup period may end well before a company achieves optimum capacity 
utilization.
    (ii) The startup period will not be extended to cover improvements 
and cost reductions that may occur over the entire life cycle of a 
product.
    (3) In determining when a producer reaches commercial production 
levels under section 773(f)(1)(C)(ii) of the Act:
    (i) The Secretary will consider the actual production experience of 
the merchandise in question, measuring production on the basis of units 
processed. 

[[Page 7384]]

    (ii) To the extent necessary, the Secretary will examine factors in 
addition to those specified in section 773(f)(1)(C)(ii) of the Act, 
including historical data reflecting the same producer's or other 
producers' experiences in producing the same or similar products. A 
producer's projections of future volume or cost will be accorded little 
weight.
    (4) In making an adjustment for startup operations under section 
773(f)(1)(C)(iii) of the Act:
    (i) The Secretary will determine the duration of the startup period 
on a case-by-case basis.
    (ii) The difference between actual costs and the costs of 
production calculated for startup costs will be amortized over a 
reasonable period of time subsequent to the startup period over the 
life of the product or machinery, as appropriate.
    (iii) The Secretary will consider unit production costs to be items 
such as depreciation of equipment and plant, labor costs, insurance, 
rent and lease expenses, material costs, and overhead. The Secretary 
will not consider sales expenses, such as advertising costs, or other 
non-production costs, as startup costs.


Sec. 351.408  Calculation of normal value of merchandise from nonmarket 
economy countries.

    (a) Introduction. In identifying dumping from a nonmarket economy 
country, the Secretary normally will calculate normal value by valuing 
the nonmarket economy producers' factors of production in a market 
economy country. (See section 773(c) of the Act.) This section 
clarifies when and how this special methodology for nonmarket economies 
will be applied.
    (b) Economic Comparability. In determining whether a country is at 
a level of economic development comparable to the nonmarket economy 
under section 773(c)(2)(B) or section 773(c)(4)(A) of the Act, the 
Secretary will place primary emphasis on per capita GDP as the measure 
of economic comparability.
    (c) Valuation of Factors of Production. For purposes of valuing the 
factors of production, general expenses, profit, and the cost of 
containers, coverings, and other expenses (referred to collectively as 
``factors'') under section 773(c)(1) of the Act the following rules 
will apply:
    (1) Information used to value factors. The Secretary normally will 
use publicly available information to value factors. However, where a 
factor is purchased from a market economy producer and paid for in a 
market economy currency, the Secretary normally will use the price paid 
to the market economy supplier. In those instances where a portion of 
the factor is purchased from a market economy source and the remainder 
from a nonmarket economy producer, the Secretary normally will value 
the factor using the price paid to the market economy supplier.
    (2) Valuation in a single country. Except for labor, as provided in 
paragraph (d)(3) of this section, the Secretary normally will value all 
factors in a single surrogate country.
    (3) Labor. For labor, the Secretary will use regression-based wage 
rates reflective of the observed relationship between wages and 
national income in market economy countries found to be economically 
comparable to the nonmarket economy country under section 773(c)(4)(A) 
of the Act. The Secretary will calculate the wage rate to be applied in 
nonmarket economy proceedings each year. The calculation will be based 
on current data, and will be made available to the public.
    (4) Manufacturing overhead, general expenses, and profit. For 
manufacturing overhead, general expenses, and profit, the Secretary 
normally will use non-proprietary information gathered from producers 
of identical or comparable merchandise in the surrogate country.


Sec. 351.409  Differences in quantities.

    (a) Introduction. Because the quantity of merchandise sold may 
affect the price, in comparing export price or constructed export price 
with normal value, the Secretary normally will use sales of comparable 
quantities of merchandise. Where this is not practicable, the Secretary 
will make a reasonable allowance for any difference in quantities to 
the extent the Secretary is satisfied that the amount of any price 
differential (or lack thereof) is wholly or partly due to that 
difference in quantities. (See section 773(a)(6)(C)(i) of the Act.) In 
making the allowance, the Secretary will consider, among other things, 
the practice of the industry in the relevant country of granting 
quantity discounts in the ordinary course of trade.
    (b) Sales with quantity discounts in calculating normal value. The 
Secretary normally will calculate normal value based on sales with 
quantity discounts only if:
    (1) During the period examined, or during a more representative 
period, the exporter or producer granted quantity discounts of at least 
the same magnitude on 20 percent or more of sales of the foreign like 
product for the relevant country; or
    (2) The exporter or producer demonstrates to the Secretary's 
satisfaction that the discounts reflect savings specifically 
attributable to the production of the different quantities.
    (c) Sales with quantity discounts in calculating weighted-average 
normal value. If the exporter or producer does not satisfy the 
conditions of paragraph (b) of this section, the Secretary will 
calculate normal value based on weighted-average prices that include 
sales at a discount.
    (d) Price lists. In determining whether a discount has been 
granted, the existence or lack thereof of a published price list 
reflecting such a discount will not be controlling. Ordinarily, the 
Secretary will give weight to a price list only if, in the line of 
trade and market under consideration, the exporter or producer 
demonstrates that it has adhered to its price list.
    (e) Relationship to level of trade adjustment. If adjustments are 
claimed for both differences in quantities and differences in level of 
trade, the Secretary will not make an adjustment for differences in 
quantities unless the Secretary is satisfied that the effect on price 
comparability of differences in quantities has been identified and 
established separately from the effect on price comparability of 
differences in the levels of trade.


Sec. 351.410  Differences in circumstances of sale.

    (a) Introduction. In calculating normal value the Secretary may 
make adjustments to account for certain differences in the 
circumstances of sales in the United States and foreign markets. (See 
section 773(a)(6)(C)(iii) of the Act). This section clarifies certain 
terms used in the statute regarding circumstances of sale adjustments 
and describes the adjustment when commissions are paid only in one 
market.
    (b) Direct selling expenses. Under this section, ``direct selling 
expenses'' are expenses, such as commissions, credit expenses, 
guarantees, and warranties, that result from, and bear a direct 
relationship to, the particular sale in question.
    (c) Assumed expenses. Assumed expenses are selling expenses that 
are assumed by the seller on behalf of the buyer, such as advertising 
expenses.
    (d) Reasonable allowance. In deciding what is a reasonable 
allowance for any difference in circumstances of sale, the Secretary 
normally will consider the cost of such difference to the exporter or 
producer but, if appropriate, may also consider the effect of such 
difference on the market value of the merchandise. 

[[Page 7385]]

    (e) Commissions paid in one market. The Secretary normally will 
make a reasonable allowance for other selling expenses if the Secretary 
makes a reasonable allowance for commissions in one of the markets 
under consideration, and no commission is paid in the other market 
under consideration. The Secretary will limit the amount of such 
allowance to the amount of the other selling expenses incurred in the 
one market or the commissions allowed in the other market, whichever is 
less.


Sec. 351.411  Differences in physical characteristics.

    (a) Introduction. In comparing United States sales with foreign 
market sales, the Secretary may determine that the merchandise sold in 
the United States does not have the same physical characteristics as 
the merchandise sold in the foreign market, and that the difference has 
an effect on prices. In calculating normal value, the Secretary will 
make a reasonable allowance for such differences. (See section 
773(a)(6)(C)(ii) of the Act).
    (b) Reasonable allowance. In deciding what is a reasonable 
allowance for differences in physical characteristics, the Secretary 
will consider only differences in variable costs associated with the 
physical differences. Where appropriate, the Secretary may also 
consider differences in the market value. The Secretary will not 
consider differences in cost of production when compared merchandise 
has identical physical characteristics.


Sec. 351.412  Levels of trade; adjustment for differences in level of 
trade; constructed export price offset.

    (a) Introduction. In comparing United States sales with foreign 
market sales the Secretary may determine that sales in the two markets 
were not made at the same level of trade, and that the difference has 
an effect on the comparability of the prices. The Secretary is 
authorized to adjust normal value to account for such a difference. 
(See section 773(a)(7) of the Act).
    (b) Identifying levels of trade and differences in levels of trade. 
In identifying the sales to be used in calculating normal value (see 
section 773(a)(1)(B) of the Act), and in making an adjustment for 
differences in level of trade or a constructed export price offset (see 
section 773(a)(7) of the Act), the Secretary will identify the level of 
trade as follows:
    (1) In the case of export price and normal value, the Secretary 
will identify the level of trade based on the starting price;
    (2) In the case of constructed export price, the Secretary will 
identify the level of trade based on the price after the deduction of 
expenses and profit under section 772(d) of the Act;
    (c) Adjustment for difference in level of trade. (1) In general. 
The Secretary will adjust normal value for a difference in level of 
trade if:
    (i) The Secretary calculates normal value on the basis of a sale 
that the Secretary determines is made at a different level of trade 
from the export price or the constructed export price (whichever is 
applicable); and
    (ii) The Secretary determines that the difference in level of trade 
has an effect on price comparability.
    (2) Identifying different levels of trade. The Secretary will 
determine that sales are made at different levels of trade if such 
sales involve the performance of different selling functions and 
activities. In making this determination, the Secretary will consider 
all selling functions and activities performed by the seller. The fact 
that there is some overlap in selling functions and activities will not 
preclude a determination that sales are made at different levels of 
trade. Where the selling functions and activities are substantially the 
same, however, sales normally will be considered to have been made at 
the same level of trade.
    (3) Effect on price comparability. The Secretary will determine 
that a difference in level of trade has an effect on price 
comparability only if it is established to the satisfaction of the 
Secretary that, with respect to the sales used to calculate normal 
value, there is a pattern of consistent price differences between sales 
made at different levels of trade.
    (4) Amount of adjustment. The Secretary normally will calculate the 
amount of a level of trade adjustment by:
    (i) Calculating an average of the prices of the sales used to 
calculate normal value at each level of trade in the exporting country 
or the third country (whichever is applicable), after making any other 
adjustments required by section 773(a)(6) of the Act and this subpart;
    (ii) Calculating the average of the percentage differences between 
such average prices; and
    (iii) Applying the average percentage difference to the prices of 
sales made at the level of trade that is different from the level of 
trade of the export price or the constructed export price (whichever is 
applicable).
    (d) Constructed export price offset. In making the constructed 
export price offset under section 773(a)(7)(B) of the Act, ``indirect 
selling expenses'' means expenses, other than direct selling expenses 
or assumed selling expenses (see Sec. 351.410), that the seller would 
incur regardless of whether particular sales were made, but that 
reasonably may be attributed, in whole or in part, to such sales.


Sec. 351.413  Disregarding insignificant adjustments.

    Ordinarily, under section 777A(a)(2) of the Act, an ``insignificant 
adjustment'' is any individual adjustment having an ad valorem effect 
of less than 0.33 percent, or any group of adjustments having an ad 
valorem effect of less than 1.0 percent, of the export price, 
constructed export price, or normal value, as the case may be. Groups 
of adjustments are adjustments for differences in circumstances of sale 
under Sec. 351.410, adjustments for differences in the physical 
characteristics of the merchandise under Sec. 351.411, and adjustments 
for differences in the levels of trade under Sec. 351.412.


Sec. 351.414  Comparison of normal value with export price (constructed 
export price).

    (a) Introduction. The Secretary normally will average prices used 
as the basis for normal value and, in an investigation, prices used as 
the basis for export price or constructed export price as well. This 
section explains when and how the Secretary will average prices in 
making comparisons of export price or constructed export price with 
normal value. (See section 777A(d) of the Act).
    (b) Description of methods of comparison. (1) Average-to-average 
method. The ``average-to-average'' method involves a comparison of the 
weighted average of the normal values with the weighted average of the 
export prices (and constructed export prices) for comparable 
merchandise.
    (2) Transaction-to-transaction method. The ``transaction-to-
transaction'' method involves a comparison of the normal values of 
individual transactions with the export prices (or constructed export 
prices) of individual transactions for comparable merchandise.
    (3) Average-to-transaction method. The ``average-to-transaction'' 
method involves a comparison of the weighted average of the normal 
values to the export prices (or constructed export prices) of 
individual transactions for comparable merchandise.
    (c) Preferences. (1) In an investigation, the Secretary normally 
will use the average-to-average method. The Secretary will use the 
transaction-to-

[[Page 7386]]
transaction method only in unusual situations, such as when there are 
very few sales of subject merchandise and the merchandise sold in each 
market is identical or very similar or is custom-made.
    (2) In a review, the Secretary normally will use the average-to-
transaction method.
    (d) Application of the average-to-average method. (1) In general. 
In applying the average-to-average method, the Secretary will identify 
those sales of the subject merchandise to the United States that are 
comparable, and will include such sales in an ``averaging group.'' The 
Secretary will calculate a weighted average of the export prices and 
the constructed export prices of the sales included in the averaging 
group, and will compare this weighted average to the weighted average 
of the normal values of such sales.
    (2) Identification of the averaging group. An averaging group will 
consist of subject merchandise that is identical or virtually identical 
in all physical characteristics and that is sold to the United States 
at the same level of trade. In identifying sales to be included in an 
averaging group, the Secretary also will take into account, where 
appropriate, the region of the United States in which the merchandise 
is sold, and such other factors as the Secretary considers relevant.
    (3) Time period over which weighted average is calculated. When 
applying the average-to-average method, the Secretary normally will 
calculate weighted averages for the entire period of investigation or 
review, as the case may be. However, when normal values, export prices, 
or constructed export prices differ significantly over the course of 
the period of investigation or review, the Secretary may calculate 
weighted averages for such shorter period as the Secretary deems 
appropriate.
    (e) Application of the average-to-transaction method. (1) In 
general. In applying the average-to-transaction method in a review, 
when normal value is based on the weighted average of sales of the 
foreign like product, the Secretary will limit the averaging of such 
prices to sales incurred during the contemporaneous month.
    (2) Contemporaneous month. Normally, the Secretary will select as 
the contemporaneous month the first of the following which applies:
    (i) The month during which the particular U.S. sale under 
consideration is made;
    (ii) If there are no sales of the foreign like product during this 
month, the most recent of the three months prior to the month of the 
U.S. sale in which there was a sale of the foreign like product.
    (iii) If there are no sales of the foreign like product during any 
of these months, the earlier of the two months following the month of 
the U.S. sale in which there was a sale of the foreign like product.
    (f) Targeted dumping. (1) In general. Notwithstanding paragraph 
(c)(1) of this section, the Secretary may apply the average-to-
transaction method, as described in paragraph (e) of this section, in 
an antidumping investigation if:
    (i) There is targeted dumping in the form of a pattern of export 
prices (or constructed export prices) for comparable merchandise that 
differ significantly among purchasers, regions, or periods of time; and
    (ii) The Secretary explains why such differences cannot be taken 
into account using the average-to-average method or the transaction-to-
transaction method.

In applying paragraph (f)(1)(i) of this section, the Secretary will 
use, among other things, standard statistical techniques in determining 
whether there is a pattern of prices that differ significantly.
    (2) Limitation of average-to-transaction method to targeted 
dumping. Where the criteria for identifying targeted dumping under 
paragraph (f)(1) of this section are satisfied, the Secretary normally 
will limit the application of the average-to-transaction method to 
those sales that constitute targeted dumping under paragraph (f)(1)(i) 
of this section.
    (3) Allegations concerning targeted dumping. The Secretary will not 
consider targeted dumping absent an allegation, normally filed within 
the time indicated in Sec. 351.301(d)(4). Allegations must include all 
supporting factual information, and an explanation as to why the 
average-to-average or transaction-to-transaction method could not take 
into account any alleged price differences.
    (g) Requests for information. In an investigation, the Secretary 
will request information relevant to the identification of averaging 
groups under paragraph (d)(2) of this section and to the analysis of 
possible targeted dumping under paragraph (f) of this section. If a 
response to a request for such information is such as to warrant the 
application of the facts otherwise available, within the meaning of 
section 776 of the Act and Sec. 351.308, the Secretary may apply the 
average-to-transaction method to all the sales of the producer or 
exporter concerned.


Sec. 351.415  Conversion of currency.

    (a) In general. In an antidumping proceeding, the Secretary will 
convert foreign currencies into United States dollars using the rate of 
exchange on the date of sale of the subject merchandise.
    (b) Exception. If the Secretary establishes that a currency 
transaction on forward markets is directly linked to an export sale 
under consideration, the Secretary will use the exchange rate specified 
with respect to such foreign currency in the forward sale agreement to 
convert the foreign currency.
    (c) Exchange rate fluctuations. The Secretary will ignore 
fluctuations in exchange rates.
    (d) Sustained movement in foreign currency value. In an antidumping 
investigation, if there is a sustained movement increasing the value of 
the foreign currency relative to the United States dollar, the 
Secretary will allow exporters 60 days to adjust their prices to 
reflect such sustained movement.

Subpart E--[Reserved]

Subpart F--Subsidy Determinations Regarding Cheese Subject to an 
In-Quota Rate of Duty


Sec. 351.601  Annual list and quarterly update of subsidies.

    The Secretary will make the determinations called for by section 
702(a) of the Trade Agreements Act of 1979, as amended (19 U.S.C. 1202 
note) based on the available information, and will publish the annual 
list and quarterly updates described in such section in the Federal 
Register.


Sec. 351.602  Determination upon request.

    (a) Request for determination. (1) Any person, including the 
Secretary of Agriculture, who has reason to believe there have been 
changes in or additions to the latest annual list published under 
Sec. 351.601 may request in writing that the Secretary determine under 
section 702(a)(3) of the Trade Agreements Act of 1979 whether there are 
any changes or additions. The person must file the request with the 
Central Records Unit (see Sec. 351.103). The request must allege either 
a change in the type or amount of any subsidy included in the latest 
annual list or quarterly update or an additional subsidy not included 
in that list or update provided by a foreign government, and must 
contain the following, to the extent reasonably available to the 
requesting person:
    (i) The name and address of the person;
    (ii) The article of cheese subject to an in-quota rate of duty 
allegedly benefitting from the changed or additional subsidy;

[[Page 7387]]

    (iii) The country of origin of the article of cheese subject to an 
in-quota rate of duty; and
    (iv) The alleged subsidy or changed subsidy and relevant factual 
information (particularly documentary evidence) regarding the alleged 
changed or additional subsidy including the authority under which it is 
provided, the manner in which it is paid, and the value of the subsidy 
to producers or exporters of the article.
    (2) The requirements of Sec. 351.303 (c) and (d) apply to this 
section.
    (b) Determination. Not later than 30 days after receiving an 
acceptable request, the Secretary will:
    (1) In consultation with the Secretary of Agriculture, determine 
based on the available information whether there has been any change in 
the type or amount of any subsidy included in the latest annual list or 
quarterly update or an additional subsidy not included in that list or 
update is being provided by a foreign government;
    (2) Notify the Secretary of Agriculture and the person making the 
request of the determination; and
    (3) Promptly publish in the Federal Register notice of any changes 
or additions.


Sec. 351.603  Complaint of price-undercutting by subsidized imports.

    Upon receipt of a complaint filed with the Secretary of Agriculture 
under section 702(b) of the Trade Agreements Act concerning price-
undercutting by subsidized imports, the Secretary will promptly 
determine, under section 702(a)(3) of the Trade Agreements Act of 1979, 
whether or not the alleged subsidies are included in or should be added 
to the latest annual list or quarterly update.


Sec. 351.604  Access to information.

    Subpart C of this part applies to factual information submitted in 
connection with this subpart.

Annex I.--Deadlines for Parties in Countervailing Investigations

Deadlines for Parties in Countervailing Investigations

----------------------------------------------------------------------------------------------------------------
                  Day                                 Event                         Proposed regulation         
----------------------------------------------------------------------------------------------------------------
0 days.................................  Date of Initiation 1...........  ......................................
31 days 2..............................  Extension request for responses  351.301(c)(2)(iv).                    
                                          to questionnaires.                                                    
37 days................................  Application for an               351.305(b)(3).                        
                                          Administrative Protective                                             
                                          Order.                                                                
40 days................................  Request for postponement by      351.205(e).                           
                                          petitioner.                                                           
45 days................................  Allegation of critical           351.206(c)(2)(i).                     
                                          circumstances.                                                        
47 days................................  Questionnaire Response Due.....  351.301(c)(2)(iii).                   
No deadline in an investigation........  Exclusion requests.............  351.204(e)(3).                        
55 days................................  Allegation of upstream           351.301(d)(3)(ii)(B).                 
                                          subsidies.                                                            
65 days (Can be extended)..............  Preliminary Determination......  351.205(b)(1).                        
70 days................................  Submission of proposed           351.208(f)(1).                        
                                          suspension agreement.                                                 
75 days 3..............................  Submission of information......  351.301(b)(1).                        
75 days................................  Ministerial error comments.....  351.224(c)(2).                        
77 days................................  Request to align a CVD case      351.210(i).                           
                                          with a concurrent AD case.                                            
80 days................................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
102 days...............................  Request for a hearing..........  351.310(c).                           
115 days (Can be changed)..............  Closed hearing sessions........  351.310(f).                           
115 days (Can be changed)..............  Submission of briefs...........  351.309(c)(1)(i).                     
119 days...............................  Critical circumstances           351.206(e).                           
                                          allegation.                                                           
120 days...............................  Submission of rebuttal briefs..  351.309(d).                           
125 days...............................  Allegation of upstream           351.301(d)(3)(ii)(B).                 
                                          subsidies.                                                            
140 days (Can be extended).............  Final Determination............  351.210.                              
170 days...............................  Ministerial error comments.....  351.224(c)(2).                        
175 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
175 days...............................  Request for exception from the   351.211(d).                           
                                          assessment of duties.                                                 
192 days...............................  Termination of suspension of     351.210(h).                           
                                          liquidation.                                                          
212 days...............................  Order issued...................  351.211.                              
                                                                                                                
----------------------------------------------------------------------------------------------------------------
\1\ All of the following references to days are keyed to the date of initiation.                                
\2\ This assumes that the Department will send out the questionnaire within 15 days of the initiation.          
\3\ Assuming about 17 days between the preliminary determination and verification                               

Annex II.--Deadlines for Parties in Countervailing Administrative 
Reviews

Deadlines for Parties in Countervailing Administrative Reviews

----------------------------------------------------------------------------------------------------------------
                  Day                                 Event                         Proposed Regulation         
----------------------------------------------------------------------------------------------------------------
0 days\1\..............................  Last Day of the Anniversary      351.213(b).                           
                                          Month.                                                                
30 days................................  Publication of Initiation......  None.                                 
37 days................................  Application for an               351.305(b)(3).                        
                                          Administrative Protective                                             
                                          Order.                                                                
66 days................................  Extension request for responses  351.301(c)(2)(iv).                    
                                          to questionnaires.                                                    
82 days................................  Questionnaire response.........  351.301(c)(2)(iii).                   
120 days...............................  Withdrawal of Request for        351.213(d)(1).                        
                                          Review.                                                               
170 days...............................  Submission of information......  351.301(b)(2).                        
245 days (Can be extended).............  Preliminary Results............  351.213(h)(1)                         
255 days...............................  Ministerial error comments.....  351.224(c)(2).                        
260 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
282 days...............................  Request for a hearing..........  351.310(c).                           
282 days (Can be changed)..............  Closed hearing sessions........  351.310(f).                           
282 days (Can be changed)..............  Submission of briefs...........  351.309(c)(1)(ii).                    

[[Page 7388]]
                                                                                                                
287 days...............................  Submission of rebuttal briefs..  351.309(d).                           
365 days (Can be extended).............  Final Results..................  351.213(h)(1).                        
375 days...............................  Ministerial error comments.....  351.224(c)(2).                        
380 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
\1\ This assumes that the Department will send out the questionnaire within 45 days of the last day of the      
  anniversary month.                                                                                            



Annex III.--Deadlines for Parties in Antidumping Investigations

Deadlines for Parties in Antidumping Investigations

----------------------------------------------------------------------------------------------------------------
                  Day                                 Event                         Proposed regulation         
----------------------------------------------------------------------------------------------------------------
Day 0..................................  Date of Initiation\1\..........  ......................................
37 days................................  Application for an               351.305(b)(3).                        
                                          Administrative Protective                                             
                                          Order.                                                                
50 days\2\.............................  Extension request for responses  351.301(c)(2)(iv).                    
                                          to questionnaires.                                                    
50 days................................  Section A response.............  None.                                 
54 days................................  Country-wide cost allegation...  351.301(d)(2)(i)(A).                  
65 days................................  Section B and C responses......  351.301(c)(2)(iii).                   
65 days................................  Section D and E response.......  See 351.301(c)(2)(ii).                
77 days................................  Viability arguments............  351.301(d)(1).                        
85 days................................  Company-specific cost            351.301(d)(2)(i)(B).                  
                                          allegations.                                                          
115 days...............................  Request for Postponement by      351.205(e).                           
                                          Petitioner.                                                           
120 days...............................  Allegation of critical           351.206(c)(2)(i).                     
                                          circumstances.                                                        
140 days (Can be extended).............  Preliminary Determination......  351.205(b)(1).                        
150 days...............................  Ministerial error comments.....  351.224(c)(2).                        
155 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
155 days...............................  Submission of proposed           351.208(f)(1).                        
                                          suspension agreement.                                                 
161 days\3\............................  Submission of information......  351.301(b)(1).                        
177 days...............................  Request for a hearing..........  351.310(c).                           
187 days...............................  Submission of publicly           351.301(c)(3).                        
                                          available information to value                                        
                                          factors (NME's).                                                      
194 days...............................  Critical circumstance            351.206(e).                           
                                          allegation.                                                           
197 days (Can be changed)..............  Closed hearing sessions........  351.310(f).                           
197 days (Can be changed)..............  Submission of briefs...........  351.309(c)(i).                        
202 days...............................  Submission of rebuttal briefs..  351.309(9).                           
215 days...............................  Request for postponement of the  351.210(e).                           
                                          final determination.                                                  
215 days (Can be extended).............  Final Determination............  351.210.                              
225 days...............................  Ministerial error comments.....  351.224(c)(2).                        
230 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
230 days...............................  Request for exception from       351.211(d)(2).                        
                                          assessment of duties.                                                 
267 days...............................  Order issued...................  351.211(b).                           
282 days...............................  Suspension agreement for         351.208(f)(1)(ii).                    
                                          regional industry.                                                    
                                                                                                                
----------------------------------------------------------------------------------------------------------------
\1\ All of the following references to days are keyed to the date of initiation.                                
\2\ This assumes that the Department will send out the questionnaire within 5 days of the ITC vote.             
\3\ Assuming about 28 days between the preliminary determination and verification.                              

Annex IV.--Deadlines for Parties in Antidumping Administrative 
Reviews

Deadlines for Parties in Antidumping Administrative Reviews

----------------------------------------------------------------------------------------------------------------
                  Day                                 Event                         Proposed Regulation         
----------------------------------------------------------------------------------------------------------------
0 days \1\.............................  Last Day of the Anniversary      Sec. 351.213(b).                      
                                          Month.                                                                
30 days................................  Publication of Initiation......  None.                                 
37 days................................  Application for an               351.305 (b)(3).                       
                                          Administrative Protective                                             
                                          Order.                                                                
60 days................................  Request to Examine Absorption    351.213(j).                           
                                          of Duties (AD).                                                       
66 days................................  Extension request for responses  351.301(c)(2)(iv).                    
                                          to questionnaires.                                                    
66 days................................  Section A response.............  None .                                
77 days................................  Country-wide cost allegation...  351.301(d)(2)(i)(A).                  
82 days................................  Sections B and C response......  351.301(c)(2)(iii).                   
82 days................................  Sections D and E response......  None.                                 
92 days................................  Viability arguments............  351.301(d)(1).                        
102 days...............................  Company-specific cost            351.301(d)(2)(i)(B).                  
                                          allegations.                                                          
120 days...............................  Withdrawal of Request for        351.213(d)(1).                        
                                          Review.                                                               
170 days...............................  Submission of information......  351.301(b)(2).                        
245 days (Can be extended).............  Preliminary Results............  351.213(h)(1).                        
255 days...............................  Ministerial error comments.....  351.224(c)(2).                        
260 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
272 days...............................  Submission of publicly           351.301(c)(3)(ii).                    
                                          available information to value                                        
                                          factors (NME's).                                                      
282 days...............................  Request for a hearing..........  351.310(c).                           
282 days (Can be changed)..............  Closed hearing sessions........  351.310(f).                           
282 days (Can be changed)..............  Submission of briefs...........  351.309(c)(1)(ii).                    
287 days...............................  Submission of rebuttal briefs..  351.309(d).                           

[[Page 7389]]
                                                                                                                
365 days (Can be extended).............  Final results..................  351.213(h)(1).                        
375 days...............................  Ministerial error comments.....  351.224(c)(2).                        
380 days...............................  Replies to ministerial error     351.224(c)(3).                        
                                          comments.                                                             
                                                                                                                
----------------------------------------------------------------------------------------------------------------
\1\ This assumes that the Department will send out the questionnaire within 45 days of the last day of the      
  anniversary month.                                                                                            



Annex V.--Comparison of Prior and Proposed Regulations

                                  Comparison of Prior and Proposed Regulations                                  
----------------------------------------------------------------------------------------------------------------
                 Prior                                   Proposed                           Description         
----------------------------------------------------------------------------------------------------------------
                                          PART 353--ANTIDUMPING DUTIES                                          
                                                                                                                
                                        Subpart A--Scope and Definitions                                        
                                                                                                                
353.1..................................  351.101................................  Scope of regulations.         
353.2..................................  351.102................................  Definitions.                  
353.3..................................  351.104................................  Record of proceedings.        
353.4..................................  351.105................................  Public, proprietary,          
                                                                                   privileged and classified.   
353.5..................................  Removed................................  Trade and Tariff Act of 1984  
                                                                                   amendments.                  
353.6..................................  351.106................................  De minimis weighted-average   
                                                                                   dumping margin.              
                                                                                                                
                                     Subpart B--Antidumping Duty Procedures                                     
                                                                                                                
353.11.................................  351.201................................  Self-initiation.              
353.12.................................  351.202................................  Petition requirements.        
353.13.................................  351.203................................  Determination of sufficiency  
                                                                                   of petition.                 
353.14.................................  351.204(e).............................  Exclusion from antidumping    
                                                                                   duty order.                  
353.15.................................  351.205................................  Preliminary determination.    
353.16.................................  351.206................................  Critical circumstances.       
353.17.................................  351.207................................  Termination of investigation. 
353.18.................................  351.208................................  Suspension of investigation.  
353.19.................................  351.209................................  Violation of suspension       
                                                                                   agreement.                   
353.20.................................  351.210................................  Final determination.          
353.21.................................  351.211................................  Antidumping duty order.       
353.21(c)..............................  351.204(e).............................  Exclusion from antidumping    
                                                                                   duty order.                  
353.22(a)-(d)..........................  351.213, 351.221.......................  Administrative reviews under  
                                                                                   751(a) of the Act.           
353.22(e)..............................  351.212(c).............................  Automatic assessment of       
                                                                                   duties.                      
353.22(f)..............................  351.216, 351.221(c)(3).................  Changed circumstances reviews.
353.22(g)..............................  351.215, 351.221(c)(2).................  Expedited antidumping review. 
353.23.................................  351.212(d).............................  Provisional measures deposit  
                                                                                   cap.                         
353.24.................................  351.212(e).............................  Interest on overpayments and  
                                                                                   underpayments.               
353.25.................................  351.222................................  Revocation of orders;         
                                                                                   termination of suspended     
                                                                                   investigations.              
353.26.................................  351.402(f).............................  Reimbursement of duties.      
353.27.................................  351.223................................  Downstream product monitoring.
353.28.................................  351.224................................  Correction of ministerial     
                                                                                   errors.                      
353.29.................................  351.225................................  Scope rulings.                
                                                                                                                
                                       Subpart C--Information and Argument                                      
                                                                                                                
353.31(a)-(c)..........................  351.301................................  Time limits for submission of 
                                                                                   factual information.         
353.31(a)(3)...........................  351.302(d), 351.104(a)(2)..............  Return of untimely material.  
353.31(b)(3)...........................  351.302(c).............................  Request for extension of time.
353.31(d)-(i)..........................  351.303................................  Filing, format, translation,  
                                                                                   service and certification.   
353.32.................................  351.304................................  Request for proprietary       
                                                                                   treatment of information.    
353.33.................................  351.104, 351.304(a)(2).................  Information exempt from       
                                                                                   disclosure.                  
353.34.................................  351.305, 351.306.......................  Disclosure of information     
                                                                                   under protective order.      
353.35.................................  Removed................................  Ex parte meeting.             
353.36.................................  351.307................................  Verification.                 
353.37.................................  351.308................................  Determinations on the basis of
                                                                                   the facts available.         
353.38(a)-(e)..........................  351.309................................  Written argument.             
353.38(f)..............................  351.310................................  Hearings.                     
                                                                                                                
          Subpart D--Calculation of Export Price, Constructed Export Price, Fair Value and Normal Value         
                                                                                                                
353.41.................................  351.402................................  Calculation of export price.  
353.42(a)..............................  351.102................................  Fair value (definition).      
353.42(b)..............................  351.104(c).............................  Transactions and persons      
                                                                                   examined.                    
353.43.................................  351.403(b).............................  Sales used in calculating     
                                                                                   normal value.                
353.44.................................  Removed................................  Sales at varying prices.      
353.45.................................  351.403................................  Transactions between          
                                                                                   affiliated parties.          
353.46.................................  351.404................................  Selection of home market as   
                                                                                   the basis for normal value.  
353.47.................................  Removed................................  Intermediate countries.       
353.48.................................  351.404................................  Basis for normal value if home
                                                                                   market sales are inadequate. 
353.49.................................  351.404................................  Sales to a third country.     
353.50.................................  351.405, 351.407.......................  Calculation of normal value   
                                                                                   based on constructed value.  
353.51.................................  351.406, 351.407.......................  Sales at less than the cost of
                                                                                   production.                  
353.52.................................  351.408................................  Nonmarket economy countries.  
353.53.................................  Removed................................  Multinational corporations.   

[[Page 7390]]
                                                                                                                
353.54.................................  351.401(b).............................  Claims for adjustments.       
353.55.................................  351.409................................  Differences in quantities.    
353.56.................................  351.410................................  Differences in circumstances  
                                                                                   of sale.                     
353.57.................................  351.411................................  Differences in physical       
                                                                                   characteristics.             
353.58.................................  351.412................................  Levels of trade.              
353.59(a)..............................  351.413................................  Insignificant adjustments.    
353.59(b)..............................  351.414................................  Use of averaging.             
353.60.................................  351.415................................  Conversion of currency.       
                                                                                                                
                                         PART 355--COUNTERVAILING DUTIES                                        
                                                                                                                
                                        Subpart A--Scope and Definitions                                        
                                                                                                                
355.1..................................  351.001................................  Scope of regulations.         
355.2..................................  351.002................................  Definitions.                  
355.3..................................  351.004................................  Record of proceeding.         
355.4..................................  351.005................................  Public, proprietary,          
                                                                                   privileged and classified.   
355.5..................................  351.003(a).............................  Subsidy library.              
355.6..................................  Removed................................  Trade and Tariff Act of 1984  
                                                                                   amendments.                  
355.7..................................  351.006................................  De minimis net subsidies.     
                                                                                                                
                                    Subpart B--Countervailing Duty Procedures                                   
                                                                                                                
355.11.................................  351.101................................  Self-initiation.              
355.12.................................  351.102................................  Petition requirements.        
355.13.................................  351.103................................  Determination of sufficiency  
                                                                                   of petition.                 
355.14.................................  351.104(e).............................  Exclusion from countervailing 
                                                                                   duty order.                  
355.15.................................  351.105................................  Preliminary determination.    
355.16.................................  351.106................................  Critical circumstances.       
355.17.................................  351.107................................  Termination of investigation. 
355.18.................................  351.108................................  Suspension of investigation.  
355.19.................................  351.109................................  Violation of agreement.       
355.20.................................  351.110................................  Final determination.          
355.21.................................  351.111................................  Countervailing duty order.    
355.21(c)..............................  351.104(e).............................  Exclusion from countervailing 
                                                                                   duty order.                  
355.22(a)-(c)..........................  351.113, 351.121.......................  Administrative reviews under  
                                                                                   751(a) of the Act.           
355.22(d)..............................  Removed................................  Calculation of individual     
                                                                                   rates.                       
355.22(e)..............................  351.113(h).............................  Possible cancellation or      
                                                                                   revision of suspension       
                                                                                   agreements.                  
355.22(f)..............................  Removed................................  Review of individual producer 
                                                                                   or exporter.                 
355.22(g)..............................  351.112(c).............................  Automatic assessment of       
                                                                                   duties.                      
355.22(h)..............................  351.116, 351.121(c)(3).................  Changed circumstances review. 
355.22(i)..............................  351.120, 351.221(c)(7).................  Review at the direction of the
                                                                                   President.                   
355.23.................................  351.112(d).............................  Provisional measures deposit  
                                                                                   cap.                         
355.24.................................  351.112(e).............................  Interest on overpayments and  
                                                                                   underpayments.               
355.25.................................  351.112................................  Revocation of orders;         
                                                                                   termination of suspended     
                                                                                   investigations.              
355.27.................................  351.123................................  Downstream product monitoring.
355.28.................................  351.124................................  Correction of ministerial     
                                                                                   errors.                      
355.29.................................  351.125................................  Scope determinations.         
                                                                                                                
                                       Subpart C--Information and Argument                                      
                                                                                                                
355.31(a)-(c)..........................  351.301................................  Time limits for submission of 
                                                                                   factual information.         
355.31(a)(3)...........................  351.302(d), 351.104(a)(2)..............  Return of untimely material.  
355.31(b)(3)...........................  351.302(c).............................  Request for extension of time.
355.31(d)-(i)..........................  351.303................................  Filing, format, translation,  
                                                                                   service and certification.   
355.32.................................  351.304................................  Request for proprietary       
                                                                                   treatment of information.    
355.33.................................  351.104, 351.304(a)(2).................  Information exempt from       
                                                                                   disclosure.                  
355.34.................................  351.305, 351.306.......................  Disclosure of information     
                                                                                   under protective order.      
355.35.................................  Removed................................  Ex parte meeting.             
355.36.................................  351.307................................  Verification.                 
355.37.................................  351.308................................  Determinations on the basis of
                                                                                   the facts available.         
355.38(a)-(e)..........................  351.309................................  Written argument.             
355.38(f)..............................  351.310................................  Hearings.                     
355.39.................................  351.311................................  Subsidy practice discovered   
                                                                                   during investigation or      
                                                                                   review.                      
                                                                                                                
                                 Subpart D--Quota Cheese Subsidy Determinations                                 
                                                                                                                
355.41.................................  Removed................................  Definition of subsidy.        
355.42.................................  351.601................................  Annual list and quarterly     
                                                                                   update.                      
355.43.................................  351.602................................  Determination upon request.   
355.44.................................  351.603................................  Complaint of price-           
                                                                                   undercutting.                
355.45.................................  351.604................................  Access to information.        
----------------------------------------------------------------------------------------------------------------



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[FR Doc. 96-4024 Filed 2-26-96; 8:45 am]
BILLING CODE 3510-25-C