[Federal Register Volume 63, Number 4 (Wednesday, January 7, 1998)]
[Notices]
[Pages 779-781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-278]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-827]


Certain Cased Pencils From the People's Republic of China; Final 
Results of Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative 
review of certain cased pencils from the People's Republic of China.

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SUMMARY: On September 5, 1997, the Department of Commerce published the 
preliminary results and partial rescission of administrative review of 
the antidumping duty order on certain cased pencils from the People's 
Republic of China covering the period of review of December 1, 1995, 
through November 30, 1996 (62 FR 46945). We gave interested parties an 
opportunity to comment on our preliminary results. We received one 
comment from the petitioners, the Pencil Section of the Writing 
Instrument Manufacturers Association and its members (domestic 
producers of pencils). We received no other comments from respondents 
or other interested parties. Based on our analysis of the comment 
received, there are no changes to these final results of review from 
the preliminary results of review, and the review indicates the 
existence of a country-wide dumping margin of 53.65 percent for this 
period.

EFFECTIVE DATE: January 7, 1998.

FOR FURTHER INFORMATION CONTACT:
Jack Dulberger or Irene Darzenta, AD/CVD Enforcement Group II, Office 
Four, Import Administration, U.S. Department of Commerce, 14th Street 
and Constitution Avenue NW., Washington, DC 20230, telephone (202) 482-
5505/6320.
    APPLICABLE STATUTE: Unless otherwise indicated, all citations to 
the statute are references to the provisions effective January 1, 1995, 
the effective date of the amendments made to the

[[Page 780]]

Tariff Act of 1930 (the Act), by the Uruguay Round Agreements Act 
(URAA). In addition, unless otherwise indicated, all citations to the 
regulations of the Department of Commerce (the Department) are to the 
regulations set forth at 19 CFR part 353 (April 1997).

SUPPLEMENTARY INFORMATION: 

Scope of the Review

    The products covered by this review are certain cased pencils of 
any shape or dimension which are writing and/or drawing instruments 
that feature cores of graphite or other materials encased in wood and/
or man-made materials, whether or not decorated and whether or not 
tipped (e.g., with erasers, etc.) in any fashion, and either sharpened 
or unsharpened (pencils). The pencils subject to this review are 
classified under subheading 9609.10.00 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Specifically excluded from the 
scope of this investigation are mechanical pencils, cosmetic pencils, 
pens, non-case crayons (wax), pastels, charcoals, and chalks.\1\ 
Although the HTSUS subheading is provided for convenience and customs 
purposes, our written description of the scope of this review is 
dispositive.
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    \1\ On September 15, 1997, the Department determined that 
``Bensia'' pencils imported by Nadel Trading Corporation from the 
PRC are also excluded from the scope of the order. See Final Scope 
Ruling--Antidumping Duty Order on Certain Cased Pencils from the 
People's Republic of China--Request by Nadel Trading Corporation for 
a Ruling on the Bensia Pencil.
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Background

    The antidumping duty order on pencils from the People's Republic of 
China (PRC) was published on December 28, 1994 (59 FR 66909). On 
September 5, 1997, the Department published in the Federal Register the 
preliminary results of its review of this order for the period of 
review (POR) December 1, 1995 through November 30, 1996. In our 
preliminary results of September 5, 1997, we rescinded the review as to 
the companies which reported that they had no shipments of subject 
merchandise during the POR (i.e., China First Pencil Company, Ltd. 
(China First) and Guangdong Provincial Stationery & Sporting Goods 
Import and Export Corporation (Guangdong)). With respect to these 
companies, we confirmed by letter from the U.S. Customs Service dated 
August 19, 1997, that the only subject merchandise exported during the 
POR was merchandise excluded from the order (i.e., merchandise 
manufactured by the factories upon which zero margins in the less-than-
fair-value investigation were based).\2\ See Antidumping Duty Order: 
Certain Cased Pencils from the People's Republic of China, 59 FR 66909 
(December 28, 1994). Therefore, these final results apply only to the 
PRC-wide entity, which includes the remaining respondents in this 
review which did not reply to our questionnaire and show that they are 
entitled to a rate separate from the PRC entity. In response to an 
opportunity to comment on our preliminary results, the petitioners 
submitted a comment on October 6, 1997. We receive no other comments 
from respondents or other interested parties.
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    \2\ China First exports of merchandise produced by China First 
itself were originally excluded from this order, and thus no 
suspension of liquidation of such entries was made prior to or 
during this POR (i.e., 1995-1996). However, in litigation brought to 
challenge the Final Determination of Sales at Less Than Fair Value 
(LTFV), the Department issued a remand determination which was 
subsequently affirmed by the U.S. Court of International Trade 
(CIT). See Writing Instrument Manufacturers Ass'n Pencil Section, et 
al. v. United States, Slip Op. 97-151 (CIT November 13, 1997). In 
this remand determination, the Department determined, among other 
things, that merchandise exported and produced by China First is, in 
fact, covered by the order. Therefore, for entries of merchandise 
exported and produced by China First and entered on or after 
November 23, 1997, there will be suspension of liquidation pending 
final and conclusive disposition of the remand results. See also the 
Department's Notice of Court Decision: Certain Cased Pencils from 
the People's Republic of China, 62 FR 65243 (December 11, 1997).
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Analysis of Comment Received

Comment

    Petitioners assert that the Department's proposal to use the 
recalculated petition rate as the facts available (FA) is incorrect. 
Petitioners assert that agency practice and the applicable statutory 
provisions require that the FA charges be reliable and relevant. 
According to petitioners, the recalculated petition rate applied by the 
Department in the preliminary results fails to meet the reliability 
requirement because it is based on several legal errors. According to 
the petitioners, these errors include the selection of the surrogate 
market economy country to determine surrogate wood costs, the failure 
to exclude data which were untimely submitted, the failure to determine 
a surrogate value for factors of production (such as the transportation 
of raw materials from suppliers to producers and the transportation of 
pencils from producers to the ports of exportation), the failure to 
take into account information determined during the investigation 
concerning actual general expenses for the Indian pencil industry, and 
several errors the Department committed during the remand determination 
that render the surrogate valuation of Chinese pencil slats, and thus 
the ``PRC rate'' which was premised on such valuation, unreliable.

Department's Position

    We disagree with the petitioners. Where the Department must rely on 
FA because a respondent failed to cooperate to the best of its ability 
in responding to a request for information, section 776(b) of the Act 
authorizes the Department to make an inference adverse to the interests 
of that respondent in choosing FA. Section 776(b) of the Act also 
authorizes the Department to use as adverse FA information derived from 
the petition, the final determination in the investigation, a previous 
administrative review, or other information placed on the record. 
Because information from prior proceedings constitutes secondary 
information, section 776(c) of the Act provides that the Department 
shall, to the extent practicable, corroborate that secondary 
information from independent sources reasonably at its disposal. See 
also, Statement of Administrative Action (SAA) (H. Doc. 316, 103d 
Cong., 2nd Sess. 870), providing that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. The SAA, at page 870, clarifies that the 
petition is ``secondary information.''
    The Department, as indicated in the preliminary results of review, 
has decided to use the petition in the LTFV investigation as the basis 
for adverse FA. The petition rate was ``recalculated'' for the first 
time during the LTFV investigation. Later, in litigation arising out of 
that investigation, we requested that the CIT remand to us two issues 
for further consideration: (1) Basswood prices; and (2) valuation of 
slats and logs. In performing this remand, the Department revised 
certain calculations; these revisions led to a change in the 
recalculated petition rate (from 44.66 percent to 53.65 percent). The 
newly recalculated petition rate was then affirmed by the CIT in 
Writing Instrument Manufacturer's Ass'n Pencil Section, et al., v. 
United States, Slip Op. 97-151 (CIT November 13, 1997). Consistent with 
a recent ruling by the U.S. Court of Appeals for the Federal Circuit in 
an unrelated action, we consider it to be inappropriate to use as FA a 
rate we have determined to be inaccurate. See D&L Supply v. United 
States, 1997 WL 230117, at 2 (Fed. Cir. May 8, 1997). We have therefore 
used the newly recalculated petition rate as the basis of FA.

[[Page 781]]

    There is no basis on the record of this case to question the 
probative value of the newly recalculated petition rate and we 
therefore consider it to be corroborated. Petitioners' claims against 
this rate, which are based on evidence which is contained in the 
administrative record of the LTFV investigation, are not properly 
before the Department in this segment of the proceeding.

Final Results of the Review

    Based on our analysis of this comment, we have determined that no 
changes to the preliminary results are warranted for purposes of these 
final results, and a margin of 53.65 percent exists for the PRC entity 
for the period December 1, 1995 through November 30, 1996. This rate 
applies to all exports of pencils from the PRC other than those 
produced and exported by China First (because China First's exports 
produced by China First and entered during the POR were excluded from 
the order), those produced by Shanghai Three Star Stationery Company, 
Ltd. (Three Star) and exported by Guangdong (because Three Star's 
exports produced by Guangdong were also excluded from the order), and 
those exported by Shanghai Foreign Trade Corporation (SFTC) (an 
exporter which was previously determined to be entitled to a separate 
rate and for which the petitioners withdrew their request for this 
administrative review). The weighted-average dumping margin is as 
follows:

------------------------------------------------------------------------
                                                               Weighted 
                                                               average  
               Manufacturer/producer/exporter                   margin  
                                                               percent  
------------------------------------------------------------------------
PRC Rate...................................................        53.65
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    The U.S. Customs Service shall assess antidumping duties on all 
appropriate entries. Individual differences between United States price 
and normal value may vary from the percentage stated above. The 
Department will issue appraisement instructions concerning the 
respondent directly to the U.S. Customs Service. Furthermore, the 
following deposit requirements will be effective for all shipments of 
the subject merchandise, entered, or withdrawn from warehouse, for 
consumption on or after the publication date of these final results of 
administrative review, as provided for by section 751(a)(1) of the Act: 
(1) No cash deposit is required for entries of subject merchandise both 
produced by Three Star and exported by Guangdong; (2) the cash deposit 
rate for merchandise both produced and exported by China First is 
unaffected by this notice (see footnote 2, above); (3) the cash deposit 
rate for SFTC will be 8.31 percent (based on the December 28, 1994 
antidumping duty order (59 FR 66909)); (4) the cash deposit rate for 
merchandise exported by China First and produced by any manufacturer 
other than China First, for merchandise exported by Guangdong and 
produced by any manufacturer other than Three Star, and merchandise 
exported by all other PRC exporters, will be the PRC rate of 53.65 
percent; and (5) for non-PRC exporters of subject merchandise from the 
PRC, the cash deposit rate will be the rate of its supplier. These 
deposit requirements shall remain in effect until publication of the 
final results of the next administrative review.
    Upon completion of this review, we will direct the U.S. Customs 
Service to assess an ad valorem rate of 53.65 percent against the 
entered value of each entry of subject merchandise during the POR for 
all firms except those firms excluded from the order or entitled to a 
separate rate.
    This notice serves as the final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of the APO is a sanctionable 
violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675 (a)(1)) and 19 CFR 353.22

    Dated: December 22, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-278 Filed 1-6-98; 8:45 am]
BILLING CODE 3510-DS-M