[Federal Register Volume 63, Number 176 (Friday, September 11, 1998)]
[Notices]
[Pages 48697-48699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24487]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-827]


Certain Cased Pencils From the People's Republic of China: Notice 
of Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review

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

ACTION: Notice of preliminary results and partial rescission of 
antidumping duty administrative review.

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SUMMARY: On January 26, 1998, the Department of Commerce published a 
notice of initiation of administrative review of the antidumping duty 
order on certain cased pencils from the People's Republic of China 
covering the period December 1, 1996 through November 30, 1997.
    We are now rescinding this review in part with respect to 
respondents who had no shipments of the subject merchandise during the 
period of review. We are basing our preliminary results on ``facts 
available'' for those companies that did not respond to our 
questionnaire. If these preliminary results are adopted in our final 
results of administrative review, we will instruct the U.S. Customs 
Service to assess antidumping duties on entries during the period.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the argument: (1) A statement of the issue; and (2) a 
brief summary of the argument.

EFFECTIVE DATE: September 11, 1998.

FOR FURTHER INFORMATION CONTACT: Jack Dulberger or Wendy Frankel, 
Antidumping/Countervailing Duty Enforcement Group II, Office Four, 
Import Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230, telephone (202) 482-
5505 and 482-5849, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department) regulations are to the regulations set forth at 19 CFR part 
351, 62 FR 27296 (May 19, 1997).

Period of Review

    The period of review (POR) is December 1, 1996 through November 30, 
1997.

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. 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 order are 
mechanical pencils, cosmetic pencils, pens, non-case crayons (wax), 
pastels, charcoals, and chalks. Although the HTSUS subheading is 
provided for convenience and customs purposes, our written description 
of the scope of this review is dispositive.

Background

    On December 28, 1994, we published an antidumping duty order (see 
Antidumping Duty Order: Certain Cased Pencils from the People's 
Republic of China, 59 FR 66909 (December 28, 1994)) (Pencils Order) 
which stated that imports of the two producer/exporter combinations 
identified in the less-than-fair-value (LTFV) investigation had margins 
of zero. We stated in the Pencils Order that we would exclude from the 
order imports of subject merchandise that are sold by China First 
Pencil Company, Ltd. (China First) or Guangdong Provincial Stationery & 
Sporting Goods Import and Export Corporation (Guangdong) ``and 
manufactured by the producers whose factors formed the basis for the 
zero margin'' (59 FR at 66910). Those exporter/producer combinations 
were identified in the order as: (1) China First/China First, and (2) 
Guangdong/Shanghai Three Star Stationery Industry Corporation (Three 
Star).
    In response to our notice of opportunity to request administrative 
review for this third POR, the petitioner, the Writing Instrument 
Manufacturers Association, Pencil Section (WIMA), requested, by letter 
dated December 29, 1997, that the Department conduct an administrative 
review of China First, Guangdong, Three Star, and others. (See Letter 
from WIMA to the Department, December 29, 1997 (WIMA Request Letter) at 
2).
    On January 26, 1998, the Department published a notice of 
initiation of an administrative review of China First, Guangdong, Three 
Star, and 38 other potential producers/exporters named by the 
petitioner in its review request (63 FR 3702). On February 13, 1998, we 
sent a questionnaire to each of the companies for which the petitioner 
requested a review, including China First, Guangdong, and Three Star. 
We also sent a questionnaire to the Ministry of Foreign Trade and 
Economic Cooperation requesting its assistance in transmitting the 
questionnaire to companies for which we lacked complete addresses. 
Several of the questionnaires were returned to the Department by the 
carrier service as undeliverable due to incorrect or insufficient 
addresses. After soliciting assistance from the U.S. Embassy in 
Beijing, we re-sent those questionnaires in April and May 1998 to the 
proper addresses.
    With respect to China First, pencils both produced and exported by 
China First were originally excluded from this order. See Pencils Order 
at 66910. However, pursuant to litigation brought to challenge the 
Department's final determination in the original investigation (Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cased 
Pencils From the People's Republic of China, 59 FR 55625 (November 8, 
1994) (Pencils Final Determination)), 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, 984 F. Supp. 629 (CIT 1997) 
(Writing Instrument Manufacturers). 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. On 
November 13, 1997, the CIT

[[Page 48698]]

affirmed the Department's remand determination. On December 11, 1997, 
the Department published its notice of court decision. See Notice of 
Court Decision: Certain Cased Pencils from the People's Republic of 
China, 62 FR 65243 (December 11, 1997) (Notice of Court 
Decision).1
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    \1\ In its Notice of Court Decision, the Department stated:
    On November 13, 1997, the CIT affirmed the Department's remand 
determination. In its decision in Timken Co. v. United States, 893 
F.2d 337 (Fed. Cir. 1990) (Timken), the United States Court of 
Appeals for the Federal Circuit held that, pursuant to 19 U.S.C. 
section 1516a (e), the Department must publish a notice of a court 
decision which is not ``in harmony'' with a Department 
determination, and must suspend liquidation of entries pending 
``conclusive'' court decision. The CIT's decision in Writing 
Instrument Manufacturers on November 13, 1997, constitutes a 
decision not in harmony with the Department's final affirmative 
determination. Publication of this notice fulfills the Timken 
requirement. Accordingly, the Department will continue to suspend 
liquidation pending the expiration of the period of appeal, or, if 
appealed, until a ``conclusive'' court decision. In addition, 
pursuant to the affirmed remand results, China First is no longer 
excluded from the antidumping duty order issued in this case 
(Antidumping Duty Order: Certain Cased Pencils from the People's 
Republic of China, 59 FR 66909 (December 28, 1994)). Therefore, 
liquidation shall be suspended on entries, or withdrawals from 
warehouse, for consumption of the subject merchandise from China 
First effective ten days from the date of the decision in Writing 
Instrument Manufacturers. Absent an appeal, or, if appealed, upon a 
``conclusive'' court decision affirming the CIT's opinion, the 
Department will amend the final LTFV determination and the 
antidumping duty order on certain cased pencils from the PRC to 
reflect the Department's remand results.
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    On March 13, 1998, China First and Guangdong responded to the 
Department's February 13, 1998 questionnaire. Guangdong stated that it 
had ``sold no subject merchandise to the United States'' during the 
POR. See Letter from Guangdong to the Department (March 13, 1998) at 2. 
China First stated that it had ``sold no subject merchandise 
manufactured by any other producer to the United States,'' (i.e., a 
producer other than China First), during the POR. See Letter from China 
First to the Department (March 13, 1998) (China First Letter) at 4. At 
the same time, China First and Guangdong requested that the Department 
terminate its review of these companies, arguing that they were 
excluded from the antidumping duty order. See Letter from Guangdong to 
the Department (March 13, 1998) and Letter from China First to the 
Department (March 13, 1998). We received no comment on the respondents' 
request from the petitioner.
    After due consideration, we decided that it was appropriate to 
continue our review of China First and Guangdong, concerning producers 
other than those specified in the order as excluded exporter/producer 
combinations, in accordance with our practice in previous reviews of 
this order. See Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review: Certain Cased Pencils from the 
People's Republic of China, 62 FR 46945, 46946 (September 5, 1997).
    We note that China First also stated in its March 13, 1998 letter 
that it made no entries of China First-produced merchandise between 
November 23, 1997 and November 30, 1997. See China First Letter at 3. 
As we stated in our Notice of Court Decision, we instructed the U.S. 
Customs Service (Customs) to commence suspension of liquidation of any 
such merchandise effective November 23, 1997 pending issuance of a 
final and conclusive court decision on this matter. When there is a 
final and conclusive court decision, the Department will publish an 
amended final determination and an amended antidumping duty order, as 
appropriate. Because the Department has not yet published an amended 
order with respect to entries of merchandise both produced and exported 
by China First, the Department currently lacks authority to conduct an 
administrative review of any such entries.
    On April 14, 1998, we sent a questionnaire to Jinan Pencil Factory 
(Jinan), a company named in WIMA's request (see WIMA Request Letter), 
setting original deadlines of May 8, 1998 for its Section A 
questionnaire response and May 29, 1998 for the remainder of its 
response. Jinan later requested, and we granted, several extensions of 
the deadline for submitting its response; ultimately, we granted Jinan 
an extension to June 30, 1998 for submitting its entire response. We 
granted these requests for extensions of the response deadlines in an 
attempt to accommodate Jinan, because of the communication 
complications we encountered with Jinan and its status as a first-time, 
pro se respondent, among other factors. (See Memorandum from Pencils 
Team Analyst to Holly A. Kuga, Senior Director, AD/CVD Enforcement, 
Group II, June 9, 1998; see also Letter from Holly A. Kuga, Senior 
Director, AD/CVD Enforcement, Group II, to Jinan Pencil Factory, June 
18, 1998 (June 18, 1998 letter)). We expressly informed Jinan that June 
30, 1998 would be its ``absolute final deadline,'' due to the statutory 
time constraints for issuing these preliminary results of review, 
delays we had earlier encountered in sending questionnaires to 
respondents in the PRC, and the previous time extensions granted to 
Jinan. See June 18, 1998 letter. We also specified that any information 
Jinan submitted after that date would be considered untimely and could 
result in our applying facts available (FA) for the preliminary results 
of this review for Jinan. Id. Because we received no questionnaire 
response from Jinan, we have determined that we must resort to FA for 
Jinan pursuant to section 776(a) of the Act. (See ``Facts Available'' 
section, below).

Rescission

    In response to respondents' assertions of having sold no subject 
merchandise that entered the United States during the POR, we sought to 
determine whether, during the POR, China First exported pencils that 
entered the United States during the POR that were manufactured by 
producers other than China First, and whether Guangdong exported 
pencils that entered the United States during the POR that were 
manufactured by producers other than Three Star.
    In order to make our determination, we conducted a query of the 
Customs database and found no information that contradicted the claim 
made by respondents that no subject merchandise manufactured by 
producers other than China First or Three Star was shipped by the 
exporters China First and Guangdong, respectively, to the United States 
during the POR. (See Decision Memorandum Regarding Whether China First 
and Guangdong Should be Considered Non-Shippers in this Review from 
Case Analyst to Holly Kuga, dated September 1, 1998). Based on this 
information, we have determined to rescind this review with respect to 
China First and Guangdong. See 19 CFR 351.213(d)(3).

Facts Available

    Section 776(a)(1) of the Act mandates that the Department use FA if 
necessary information is not available on the record of an antidumping 
proceeding. In addition, section 776(a)(2) of the Act mandates that the 
Department use FA where an interested party or any other person: (A) 
withholds information requested by the Department; (B) fails to provide 
requested information by the requested date or in the form and manner 
requested; (C) significantly impedes an antidumping proceeding; or (D) 
provides information that cannot be verified. In this case, all of the 
named respondents, other than China First and Guangdong, failed to 
respond to the Department's questionnaire. Where the Department must 
base the entire dumping margin for a respondent in an administrative 
review on FA because that respondent failed to cooperate by

[[Page 48699]]

not acting to the best of its ability, section 776(b) authorizes the 
Department to use an inference adverse to the interests of that 
respondent in choosing FA. Section 776(b) 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. Information from 
prior segments of a proceeding constitutes secondary information. 
Section 776(c) of the Act provides that the Department shall, to the 
extent practicable, corroborate secondary information from independent 
sources reasonably at its disposal. The Statement of Administrative 
Action (SAA) (H. Doc. 316, 103d Cong., 2nd Sess. 870) provides 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.''
    As noted above, various exporters, including Jinan, of certain 
cased pencils from the PRC failed to respond to our questionnaire (see 
``Background'' section of this notice). Therefore, we considered these 
exporters to have failed to cooperate by not acting to the best of 
their ability to comply with the Department's requests for information. 
Therefore, we preliminarily decided to use adverse FA with respect to 
Jinan and all other non-responding exporters, in accordance with 
section 776(b) of the Act. See Memorandum from Pencils Team Analyst to 
Holly A. Kuga, Senior Director, AD/CVD Enforcement, Group II, July 18, 
1998 (July 18, 1998 Memorandum) at 3. Further, these exporters, 
together with all other exporters that have not established they are 
entitled to a separate rate, are presumed to be under common government 
control and, therefore, receive a single PRC-wide rate. Consequently, 
we are basing the PRC-wide rate on adverse FA, in accordance with 
section 776(b) of the Act.
    For the preliminary results of this review, we determine it 
appropriate to use, as adverse FA, the petition rate (which was the 
basis for the PRC-wide rate in the LTFV investigation), as amended by 
our August 1995 remand determination, of 53.65 percent. This is 
consistent with our decision in the amended final results of the first 
administrative review and the final results of the second 
administrative review of this order. See Certain Cased Pencils From the 
People's Republic of China; Amended Final Results of Antidumping Duty 
Administrative Review, 62 FR 36491 (July 8, 1997) (Pencils Amended 
Final); see also Certain Cased Pencils From the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 63 FR 
779 (January 7, 1998). Further, we determined this rate to be 
corroborated based on our analysis in the previous segment of the 
proceeding (see Pencils Amended Final, 62 FR at 36492). There is no new 
information in the record of the instant proceeding to lead us to re-
examine this issue.
    Accordingly, we are applying a single dumping rate--the PRC-wide 
rate established in the Pencils Amended Final--to all exporters in the 
PRC, except for China First and Guangdong, as discussed above, and 
Shanghai Foreign Trade Corporation, an exporter which was previously 
determined to be entitled to a separate rate and for which the 
petitioner did not request an administrative review.
    The weighted-average dumping margin is as follows:

------------------------------------------------------------------------
                                                             Weighted-  
             Manufacturer/producer/exporter               average margin
                                                            percentage  
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PRC-wide Rate...........................................           53.65
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    Parties to this proceeding may request disclosure within 5 days of 
the date of publication of this notice (see section 351.224(b) of the 
Department's regulations). In accordance with section 351.310(c) of the 
Department's regulations, any interested party may request a hearing 
within 30 days of publication of this notice. Any hearing, if 
requested, will be held 44 days after the publication of this notice, 
or the first workday thereafter. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 35 days after the date of 
publication. See sections 351.309 and 351.310 of the Department's 
regulations. The Department will publish a notice of final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments, not later than 120 days 
after the date of publication of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. We intend to issue 
assessment instructions to Customs for the exporters subject to this 
review based on the dumping rate stated above. The Department will 
issue appraisement instructions directly to Customs. Further, the 
following deposit requirements will be effective upon publication of 
the final results of this administrative review for all shipments of 
certain cased pencils from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) the cash deposit rate 
for all Chinese exporters, except for China First, Guangdong, and SFTC, 
will be the rate established in the final results of this review; (2) 
for merchandise exported by SFTC, China First (with respect to 
merchandise produced by anyone other than China First), and Guangdong 
(with respect to merchandise produced by anyone other than Three Star), 
the cash deposit rate will continue to be the most recent rate 
published in the determination or final results for that firm; and (3) 
for non-PRC exporters of subject merchandise from the PRC, the cash 
deposit rate will be the rate of their suppliers. These deposit 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this POR. 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 administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. section 1675(a)(1)), section 
777(i) of the Act (19 U.S.C. section 1677f(i)), and 19 CFR 351.221.

    Dated: September 1, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24487 Filed 9-10-98; 8:45 am]
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