[Federal Register Volume 63, Number 29 (Thursday, February 12, 1998)]
[Notices]
[Pages 7122-7125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3486]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-429-601]
Solid Urea From the Former German Democratic Republic; Final
Results of Changed Circumstances Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of changed circumstances review.
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SUMMARY: On May 1, 1995, the Department of Commerce published the
preliminary results of its changed circumstances review to examine the
effect, if any, that the reunification of Germany had on the
antidumping duty order covering solid urea from the five German states
(Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt, and
Thuringia (plus any other territory; hereinafter the ``Five States'')
that formerly constituted the German Democratic Republic (GDR) (60 FR
21067). We have now completed this review and have not changed our
determination from the preliminary results.
EFFECTIVE DATE: February 12, 1998.
FOR FURTHER INFORMATION CONTACT:
Steven D. Presing and Nithya Nagarajan at (202) 482-3793, Office of AD/
CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th and Constitution
Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
Background
On May 1, 1995, the Department of Commerce published the
preliminary results of this review.
On November 17, 1997, the Department of Commerce published the
final results of an administrative review of the order on solid urea
from the Five States pursuant to section 751(a) of the Tariff Act of
1930, as amended (the Act). The review covered one manufacturer/
exporter, SKW Stickstoffwerke Piesteritz GmbH (SKWP), and the period
July 1, 1995 through June 30, 1996. As a result of that review, the
Department instructed Customs to establish a new cash deposit rate for
SKWP of 0.00 percent. Also as a result of that review, the Department
instructed Customs to terminate suspension of liquidation for shipments
of solid urea produced by firms located outside the Five States.
We have now completed the instant changed circumstances review and
have not changed our determination from the preliminary results.
Scope of the Review
Importers covered by this review are those of solid urea. At the
time of the publication of the antidumping duty order, such merchandise
was classifiable under item number 480.30 of the Tariff Schedules of
the United States Annotated (TSUSA). This merchandise is currently
classified under the Harmonized Tariff Schedule of the United States
(HTS) item number 3102.10.00. These TSUSA and HTS item numbers are
provided for convenience and Customs purposes only. The Department's
written description remains dispositive.
Analysis of Comments Received
We received comments from the German Government, the Ad Hoc
Committee of Domestic Nitrogen Producers (the ``Petitioner''), and SKW
(on behalf of SKW Trostberg AG, SKWP, and SKW Chemicals, Inc.). We
received rebuttal comments from the Petitioner, SKW, and Hydro Agri
Brunsbuttel GmbH (``Hydro Agri''). We conducted a hearing attended by
all parties on June 14, 1995.
Comment 1: The German Government believes that the Department
should immediately revoke the antidumping duty order on urea, arguing
that the Department's preliminary determination ignores the de jure and
de facto integration of the Five States into the unified FRG and the
integration of companies located in the Five States into the unified
FRG's market economy. The German Government states that it is
unacceptable that privatized German companies are still being judged by
the behavior of their predecessors.
SKW agrees with the German Government and argues that the
``fundamental and irreversible'' changes which have taken place as a
result of reunification constitute changed circumstances which justify
revocation of the order pursuant to the Department's regulations and
section 751(c) of Act (19 U.S.C. 1675(c)(1988)).
Petitioner objects to revocation of the order on this basis
contending that 1) that there is no evidence on the record of this
proceeding which establishes when, if ever, the Five States ceased to
operate as a non-market economy within the meaning of section 771(18)
of the Act (19 U.S.C. Sec. 1677(18)(1988)); 2) a change in economic
status does not provide a basis for revoking the order; 3) revocation
of the order based upon the change in political borders would deprive
if of the relief from unfairly traded imports that it sought and
obtained, a principle, petitioner asserts, upheld by the Court of
International Trade in Techsnabexport, Ltd. v. United States, 802 F.
Supp. 469, 472 (CIT 1992) and 4) this changed circumstances review was
initiated only to examine the applicability of the order to post-
unification shipments of the subject merchandise from producers located
outside the Five States--not whether the order should be revoked.
Department's Position: As in the Federal Register on May 1, 1995,
the Department determined that ``as of October 3, 1990, producers
located in
[[Page 7123]]
the five German states that formerly constituted the GDR have been
operating in a market-oriented economy.'' See Initiation of Changed
Circumstances Antidumping Duty Administrative Review, 83 Fed. Reg.
21067, 21068 (1995), citing Final Affirmative Countervailing Duty
Determinations; Certain Steel Products from Germany, 58 FR 37315, 37324
(1993). However, it is settled Department practice that a change in
economic structure does not, by itself, justify revocation of an
antidumping order. See, e.g., Antidumping Duty Order and Initiation of
Changed Circumstances Antidumping Duty Administrative Review; Certain
Cut-to-Length Carbon Steel Plate From Poland, 58 Fed. Reg. 44166, 44166
(Aug. 19, 1993). As the court in the Techsnabexport case held, such
matters are properly the subject of an administrative review under
section 751 of the Act. 802F. Supp. at 472. This position renders moot
Petitioner's argument that there is no evidence on the record of this
proceeding which demonstrates the conversion from non-market to market
economy.
Second, U.S. antidumping law does not require revocation of an
order where the country covered by the order undergoes a change in geo-
political boundaries. The focus of the law is on merchandise. See
Postponement of Preliminary Antidumping Duty Determination: Uranium
from the Former Union of Soviet Socialist Republics (USSR), 57 Fed.
Reg. 11064 (1992) (incorporating by reference, memorandum from F.
Sailer to A. Dunn dated March 24, 1992). See also Jia Farm
Manufacturing Co., Ltd. v. United States, 817 F. Supp. 969, 973 (CIT
1993). The governing principle in cases involving changes in the
political borders of respondent countries is that such changes do not
affect the geographic scope of an antidumping measure. This principle
comports with the holding in Techsnabexport, where the Department
determined that the breakup of the Soviet Union did not justify the
termination of the then-pending investigation of uranium. In that case,
the Department determined that the correct approach in situations where
countries under an antidumping duty order or investigation undergo
changes in geo-political boundaries is to preserve, notwithstanding the
change, the original geographic scope of the order or investigation.
Comment 2: SKW argues that the order must be revoked pursuant to
section 353.25(d)(4)9iii) of the Department's regulations because the
Petitioner did not file a formal objection to revocation of the order
after five years had passed without a request for an administrative
review, citing Kemira Fibres Oy v. United States, 861 F. Supp. 144 (CIT
1994)
Petitioner disagrees, contending that the Kemira Fibers case, which
involved an extremely inactive domestic industry, is at the very least
distinguishable from this case because in this case petitioners have
filed numerous submissions with the Department over the relevant five
year period expressing either support for the order or opposition to
its revocation. Petitioner also maintains that Kemira Fibers was
wrongly decided arguing that an essential prerequisite to revocation
under section 353.25(d)(4) is notice and comment. Petitioner asserts
that no such notification was ever provided in this case and that as a
result the Department lacks the authority to revoke. Petitioner
concludes by noting that the Department has appealed the holding in
Kemira Fibers, and it is the Department's usual practice not to follow
adverse decisions that may be reversed on appeal.
Department's Position: The Court of Appeals for the Federal Circuit
has overturned the decision in Kemira Fibers. Kemira Fibres Oy v.
United States, 61 F.3d 866, 875 (Fed. Cir. 1995) (``Revocation must be
predicated on a lack of domestic industry interest and such interest
must be ascertained through notification of an intent to revoke.'')
Therefore, the fact that the Department never indicated an intent to
revoke pursuant to section 353.25(d)(4) of its regulations, precludes
revocation on the grounds advanced by SKW.
Comment 3: SKW argues that under the Act and its legislative
history the Department is without authority to maintain an order on any
geo-political entity other than a country. SKW argues that the
maintenance of a province- or region-specific order would be an
unjustifiable departure from the Department's practice. It further
argues that additional support for its position is found in Article VI
of the 1947 GATT which defines dumping as the introduction of products
from ``one country'' into the commerce of ``another country'' at less
than their normal value. Finally, SKW argues that the Techsnabexport
case does not support the Department's preliminary determination to
maintain the antidumping duty order on imports from the Five States
because Techsnabexport involved the dissolution of a country (the
Soviet Union) and whether a pending antidumping investigation could
proceed against the twelve countries that succeeded it. Here, SKW
submits, the question is whether changed circumstances warrant the
revocation of an antidumping order covering a non-market country that
has ceased to exist due to its complete unification with and
assimilation into a market economy country. Furthermore, SKW argues,
Techsnabexport did not embrace province- or region-specific orders but
rather expressly stated that antidumping orders must address
merchandise from particular countries.
Citing section 771(3) of the Act, Petitioner argues that neither
the 1947 GATT nor U.S. law preclude the maintenance of an antidumping
duty order on less than a country-wide basis. Petitioner also cites
Certain Softwood Lumber from Canada as an example of at least one
proceeding under Title VII which did not apply to merchandise on a
country-wide basis. 57 FR 22570, 22623 (1992). Petitioner further
contends that a province- or region-specific order is supported by the
holding and rationale of the Techsnabexport case. 802 F. Supp. 469. The
principal issue in both cases, petitioner argues, is what effect, if
any, political changes in a geographic region subject to an antidumping
proceeding have upon that proceeding. The holding of the court in the
Techsnabexport case is that antidumping proceedings need not be
extinguished as a result of shifting geo-political borders or changes
in governments. Petitioner also argues that SKW is mistaken when it
claims that the Techsnabexport decision supports the proposition that
an antidumping order must always apply to merchandise from a particular
country. According to Petitioner, the definition of ``country'' under
the statute was never at issue in the Techsnabexport case.
Hydro Agri agrees that the Department has the legal authority to
maintain the subject order on the Five States.
Department's Position: The issue in this case is whether the
Department, once having issued a country-wide order, must revoke that
order if the country covered by the order undergoes a change in geo-
political boundaries or whether the Department may maintain the order
on the same merchandise from the same geographic region as before the
change occurred.
As state above, in response to Comment No. 1, nothing in U.S.
antidumping law requires revocation of an order where the country
covered by the order undergoes a change in geo-political boundaries.
Rather, the correct approach in such situations is to preserve,
notwithstanding the change in
[[Page 7124]]
government and political borders, the geographic region (and by
extension the producers) subject to the order. We believe this position
in consistent with U.S. antidumping law and our international
obligations and note again that this principle has been upheld by the
Courts in Techsnabexport, 802 F. Supp. at 472.
Comment 4: Petitioner argues that the order should be applied to
urea produced throughout Germany, contending that extension of the
order is consistent with the 1947 GATT, which does not require an
injury determination to be based upon an examination of all exports
from an exporting country, and is consistent with U.S. law. Petitioner
notes that the Department normally analyzes only 60 percent of all
sales in a LTFV investigation. Petitioner further contends that in Pure
and Alloy Magnesium from Canada, the Department made an affirmative
LTFV determination with respect to exports from the province of Quebec,
but applied the order to all of Canada. 57 FR 30939 (1992). Lastly,
Petitioner claims that extending the order to all urea producers in
Germany is necessary, as a practical matter, in order to preserve the
integrity of the order and prevent the potential transshipment of urea.
SKW opposes extension of the order to all urea produced in Germany,
arguing that under U.S. law such action would violate the due process
rights of producers located outside the Five States since neither the
Department nor the International Trade Commission (ITC) has
investigated these producers. SKW also argues that this action would
violate the 1947 GATT, which states that an investigation must be
conducted before levying duties. SKW asserts that applying the results
of an investigation covering part of an industry to an entire industry
in a country, does not justify extending an order on one country to
another country. Finally, SKW argues that Petitioner's discussion of
circumvention is unfounded.
Hydro Agri also objects to extension of the order, arguing that
extension would deprive Hydro Agri of its due process rights. According
to Hydro Agri, Petitioner's concerns about circumvention are baseless.
Department Position: It would be contrary to the 1947 GATT and U.S.
law for the Department to expand the geographic scope of the order on
urea to include shipments from all of Germany. First, this result would
be inconsistent with the principle, affirmed in the Techsnabexport
case, that changes in the political borders of respondent countries do
not affect the geographic scope of antidumping measures. 802 F. Supp.
at 472. Second, both the 1947 GATT and U.S. law prohibit the assessment
of antidumping duties in the absence of injury and LTFV determinations.
Jackson, World Trade And The Law of GATT, 412-24 (1969); see also 19
U.S.C. 1673 (1988). Neither the Department nor the ITC has ever
investigated imports of solid urea from the pre-unification territory
of the FRG. See SCM Corp. v. United States, 473 F. Supp. 791, 793
(Cust. Ct. 1979) (antidumping duties may not be imposed or an order
maintained without affirmative injury and LTFV determinations).
Third, since the original investigation was limited to urea from
the Five States, producers outside the Five States did not satisfy the
definition of ``interested parties'' eligible to participate in the
investigations at the Department and the ITC. See 19 U.S.C. 1677(9)
(1988); 19 CFR 353.2(k). Given that they were not (and could not have
been) parties to the original investigation, they received no formal
notice or opportunity to comment, either during the LTFV or injury
investigation. They also lacked standing to appeal the final results of
these proceedings. See 19 U.S.C. 1516a(d) (1988). These procedural
safeguards are an essential aspect of every antidumping order. See,
e.g., Smith Corona Corp. v. United States, 796 F. Supp. 1532, 1535 (CIT
1992) (``[v]arious procedural safeguards such as opportunity to respond
and to be heard are built into the unfair trade laws'').
Comment 5: Petitioner argues that the administration of a
bifurcated order will require additional measures (i.e., monitoring and
special Customs requirements) to ensure adequate consideration of
administrative and enforcement issues.
SKW argues that the Department should disregard Petitioner's
discussion of circumvention as irrelevant and unsupported.
Hydro Agri argues that special Customs requirements are
unnecessary, unduly burdensome and arbitrary, and that until there is
real evidence that circumvention is even being contemplated, additional
administrative burdens are unreasonable.
Department's Position: The record of this proceeding lacks adequate
grounds upon which to require special administrative procedures in
connection with this order.
Comment 6: SKW argues that if the Department does not revoke this
order, it should reduce the cash deposit rate to zero percent, citing
as precedent Color Televisions from Korea. See Color Television
Receivers from Korea, 49 FR 18336 (1984); Gold Star Co., Ltd. v. United
States, 692 F. Supp. 1382, 1382 (CIT 1988).
Petitioner argues that reducing the cash deposit to zero would be
contrary to law and claims that SKW's reliance on Television from Korea
is misplaced.
Department's Position: This comment is moot. As noted in the
``Background'' section of this notice, as a result of the final results
of a recent administrative review, SKWP's cash deposit rate was lowered
to 0.00 percent.
Comment 7: Petitioner argues that before conducting a market-
economy analysis the Department must first determine which post-
unification shipments are eligible for such analysis.
SKW argues that the Department should use a market-economy analysis
for all post-reunification shipments.
Department Position: These issues are not relevant to this
proceeding. These final results concern the order's applicability to
post-unification shipments of subject merchandise, not the appropriate
economic analysis to be applied to such shipments.
Final Results
The Department determines to maintain the order on solid urea from
the Five States and to allow entry of shipments from producers located
outside the Five States without regard to antidumping duties.
Suspension of Liquidation
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 changed circumstances review, as provided for by
section 751(b) of the Act. A cash deposit of estimated antidumping
duties shall be required on shipments of the subject merchandise as
follows: (1) The existing 0.00 percent cash deposit rate will remain in
effect, pending further instructions, for shipments of solid urea
produced by SKWP; (2) the existing 44.80 percent cash deposit rate will
remain in effect, pending further instructions, for shipments of solid
urea produced by all other firms located in the Five States; and (3) no
cash deposit will be required for shipments of solid urea produced by
firms located outside the Five States.
This changed circumstances review and notice are in accordance with
section 752(b) of the Act (19 U.S.C. Sec. 1675(b) (1988)) and 19 CFR
353.22(f).
[[Page 7125]]
Dated: January 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-3486 Filed 2-11-98; 8:45 am]
BILLING CODE 3510-DS-M