[Federal Register Volume 63, Number 235 (Tuesday, December 8, 1998)] [Notices] [Pages 67647-67650] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-32544] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-122-047] Final Results of Expedited Sunset Review: Elemental Sulphur From Canada AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of Final Results of Expedited Review: Elemental Sulphur from Canada. ----------------------------------------------------------------------- SUMMARY: On August 3, 1998, the Department of Commerce (``the Department'') initiated a sunset review (63 FR 41227) of the antidumping finding on elemental sulphur from Canada pursuant to section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On the basis of a notice of intent to participate and substantive comments filed on behalf of the domestic industry, and inadequate response (in this case no response) from respondent interested parties, the Department determined to conduct an expedited review. As a result of this review, the Department finds that revocation of antidumping finding would be likely to lead to continuation or recurrence of dumping at the levels located in the Appendix to this notice. FOR FURTHER INFORMATION CONTACT: Martha V. Douthit or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th St. & Constitution Ave., NW, Washington, D.C. 20230; telephone (202) 482-3207 or (202) 482-1560, respectively. EFFECTIVE DATE: December 8, 1998. Statute and Regulations This review was conducted pursuant to section 751(c) and 752 of the Act. The Department's procedures for the conduct of the sunset reviews are set forth in Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Order, 63 FR 13516 (March 20, 1998) (``Sunset Regulations''). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin''). Scope The merchandise subject to this antidumping finding is elemental sulphur from Canada. This merchandise is classifiable under Harmonized Tariff Schedule (HTS) subheadings 2503.10.00, 2503.90.00, and 2802.00.00. Although the HTS subheadings are provided for convenience and for U.S. Customs purposes, the written description of the scope of this finding remains dispositive. This review covers all manufacturers and exporters of elemental sulphur from Canada other than the following for which the finding has been revoked: Shell Canada Resources, Ltd., Canadian Superior Oil, Ltd., Chevron Standard, Ltd., Gulf Oil Canada, Ltd., Hudson's Bay Oil & Gas, Ltd.,1 Sulconan, Inc., Irving Oil, Ltd.,2 Tiger Chemicals Ltd., Pan Canadian Petroleum Ltd., Amoco Canada Petroleum Company, Ltd., Imperial Oil Ltd./Exxon Chemical Americas, Inc., Canterra Energy Ltd.(formerly Aquitaine Company of Canada, Ltd.), CDC Oil & Gas Ltd., Dome Petroleum Ltd.,3 PetroGass Processing, Ltd., Cities Service Oil & Gas, Imperial Oil Limited, and Texaco Canada Ltd.,4 BP Resources Oil, Cornwell Chemical Ltd., Home Oil Ltd., Suncor,5 InterRedec,6 Petro Canada,7 and Sulco Chemicals Ltd.8 --------------------------------------------------------------------------- \1\ Elemental Sulphur From Canada; Final Results of Administrative Review and Partial Revocation of Antidumping Finding; 47 FR 3811 (January 27, 1982) (revocation with respect to Shell Canada, Ltd. and Canadian Superior Oil, Ltd.); Elemental Sulphur From Canada; Partial Revocation of Antidumping Finding; 48 FR 40760 (September 9, 1983) (revocation with respect to Chevron); Elemental Sulphur From Canada; Revocation of Antidumping Finding in Part; 49 FR 1920 (January 16, 1984) (revocation with respect to Hudson's Bay Oil & Gas Company Limited and Gulf Oil Canada Limited); Elemental Sulphur From Canada; Reinstatement in Part of Antidumping Finding; 51 FR 19580 (May 30, 1986) (reinstatement of finding with respect to Shell Canada Resources, Ltd., Canadian Superior Oil, Ltd., Chevron Standard, Ltd., Gulf Oil Canada, Ltd., and Hudson's Bay Oil & Gas, Ltd.); and Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 53 FR 1048 (January 15, 1988) (revocation with respect to Shell Canada Resources, Ltd., Canadian Superior Oil, Ltd., Chevron Standard, Ltd., Gulf Oil Canada, Ltd., and Hudson's Bay Oil & Gas, Ltd.). \2\ Elemental Sulphur From Canada; Final Results of Administrative Review and Partial Revocation of Antidumping Finding; 47 FR 31716 (July 22, 1982) (revocation with respect to Sulconam, Inc. and Irving Oil, Ltd.). \3\ Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding and Revocation in Part; 50 FR 37889 (September 18, 1985) (revocation with respect to Tiger Chemicals, Ltd., Pan Canadian Petroleum, Ltd., Amoco Canada Petroleum Company, Ltd., Imperial Oil, Ltd./Exxon Chemical Americas, Inc., Canterra Energy (formerly Aquitaine Company of Canada, Ltd.), CDC Oil & Gas, Ltd., and Dome Petroleum, Ltd.). \4\ Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 55 FR 13179 (April 9, 1990) (revocation with respect to PetroGass Processing, Cities Service Oil & Gas, Imperial Oil, and Texaco Canada). \5\ Elemental Sulphur From Canada; Final Results of Antidumping Duty; Administrative Review and Revocation in Part; 55 FR 43152 (October 26, 1990) (revocation with respect to B.P. Resources Canada, Cornwall Chemical, Home Oil, and Suncor). \6\ Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 56 FR 5391 (February 11, 1991) (revocation with respect to InterRedec Sulphur Corporation). \7\ Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 56 FR 15068 (April 19, 1991) (revocation with respect to Petro-Canada). \8\ Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 57 FR 1452 (January 14, 1992) (revocation with respect to Sulco Chemicals, Ltd.). --------------------------------------------------------------------------- Background: On August 3, 1998, the Department initiated a sunset review of the antidumping duty finding on elemental sulphur from Canada (63 FR 41227) pursuant to section 751(c) of the Tariff Act of 1930. On August 18, 1998, the Department received a Notice of Intent to Participate from Freeport-McMoRan Sulphur Inc. (``Freeport''). Freeport claimed interested party status under section 771(9)(C) of the Act as a U.S. manufacturer of elemental sulphur. Freeport stated that it acquired the sulphur production operations of Pennzoil Company (``Pennzoil'') and Duval, a subsidiary of Pennzoil. Duval was the original petitioner in this proceeding in 1972 and has actively participated in several administrative reviews. We received a complete substantive response from Freeport on September 2, 1998, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). Noting that it has requested revocation of the finding, on [[Page 67648]] September 1, 1998, Husky Oil Ltd., waived its right to participate in the Department's sunset review. We did not receive a substantive response from any respondent interested parties to this proceeding. As a result, pursuant to section 751(c)(3)(B) of the Act, and our regulations (19 CFR 351.218(e)(1)(ii)(C)(2)), the Department determined to conduct an expedited review. Determination In accordance with section 751(c)(1) of the Act, the Department conducted this review to determine whether revocation of the antidumping would be likely to lead to continuation or recurrence of dumping. Section 752 of the Act provides that, in making this determination, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping finding, and shall provide to the International Trade Commission (``the Commission'') the magnitude of the margin of dumping likely to prevail if the finding is revoked. The Department's determinations concerning continuation or recurrence of dumping and the magnitude of the margin are discussed below. In addition, parties' comments with respect to continuation or recurrence of dumping and the magnitude of the margin are addressed within the respective sections below. Continuation or Recurrence of Dumping Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act (``URAA''), specifically the Statement of Administrative Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis (see section II.A.3). In addition, the Department indicated that normally it will determine that revocation of an antidumping order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3). The antidumping finding on elemental sulphur from Canada was published in the Federal Register as Treasury Decision 74-1 (38 FR 34655, Dec. 17, 1973). Since that time, the Department has conducted numerous administrative reviews.\9\ The finding remains in effect for all imports of elemental sulphur from Canada other than those for which the finding has been revoked, as discussed previously. --------------------------------------------------------------------------- \9\ Elemental Sulphur From Canada; Final Results of Administrative Review and Partial Revocation of Antidumping Finding; 47 FR 3811 (January 27, 1982); Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 47 FR 14507 (April 25, 1982); Elemental Sulphur From Canada; Final Results of Administrative Review and Partial Revocation of Antidumping Finding; 47 FR 31716 (July 22, 1982); Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 47 FR 31911 (July 23, 1982); Elemental Sulphur From Canada; Partial Revocation of Antidumping Finding; 48 FR 40760 (September 9, 1983); Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 48 FR 53592 (November 28, 1983); Elemental Sulphur From Canada; Revocation of Antidumping Finding in Part; 49 FR 1920 (January 16, 1984); Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding and Revocation in Part; 50 FR 37889 (September 18, 1985); Elemental Sulphur From Canada; Reinstatement in Part of Antidumping Finding; 51 FR 19580 (May 30, 1986); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review; 51 FR 43954 (December 5, 1986); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review; 51 FR 45153 (December 17, 1986); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review; 52 FR 41601 (October 29, 1987); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 53 FR 1048 (January 15, 1988); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review; 53 FR 15257 (April 28, 1988); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 55 FR 13179 (April 9, 1990); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review; 55 FR 28794 (July 13, 1990); Elemental Sulphur From Canada; Final Results of Antidumping Duty; Administrative Review and Revocation in Part; 55 FR 43152 (October 26, 1990); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 56 FR 5391 (February 11, 1991); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Review and Revocation in Part; 57 FR 1452 (January 14, 1992); Elemental Sulphur From Canada; Final Results of Antidumping Finding Administrative Review; 61 FR 8239 (March 4, 1996); Elemental Sulphur From Canada; Final Results of Antidumping Duty Administrative Reviews; 62 FR 37970 (July 15, 1997). --------------------------------------------------------------------------- In its substantive response, Freeport applied the criteria contained in the Department's Sunset Policy Bulletin and concluded that revocation of the finding would result in continued and increased dumping. Freeport provided in its comments a table which identified dumping margins, by company, over the life of the finding. Freeport claimed that this evidence demonstrated that, in practically every case, dumping not only continued, but that the margin of dumping remained steady or increased. In addition, Freeport provided a table presenting Census data on the total quantity of sulphur imported into the United States from Canada and stated that imports have decreased every year since 1992, when the domestic industry began requesting administrative reviews. We find that the existence of dumping margins after the issuance of the finding is highly probative of the likelihood of continuation or recurrence of dumping. Deposit rates above de minimis levels continue in effect for exports by several Canadian manufacturers and exporters of elemental sulphur (for example Allied Signal Inc., Brimstone Export, Mobil Oil Canada, Ltd., Norcen Energy Resources, Petrosul International). As discussed in Section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. Therefore, given that dumping has continued over the life of the finding, and absent argument and evidence to the contrary, the Department determines that dumping is likely to continue if the finding were revoked. Magnitude of the Margin In the Sunset Policy Bulletin, the Department stated that, in a sunset review of an antidumping finding for which no company-specific margin or ``all others'' rate is included in the Treasury finding published in the Federal Register, the Department normally will provide to the Commission the company-specific margin from the first final results of administrative review published in the Federal Register by the Department. Additionally, if the first final results do not contain a margin for a particular company, the Department normally will provide the Commission, as the margin for that company, the first ``new shipper'' rate established by the Department for that finding. (See section II.B.1 of the Sunset Policy Bulletin). Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption [[Page 67649]] determinations. (See section II.B.2 and 3 of the Sunset Policy Bulletin.) Because Treasury did not publish weighted-average dumping margins in its finding, and such margins are not otherwise publicly available, the margins determined in the original investigation are not available to the Department for use in this sunset review. Under these circumstances, the Department normally will select the margin from the first administrative review conducted by the Department as the magnitude of the margin of dumping likely to prevail if the finding is revoked. We note that, to date, the Department has not issued any duty absorption findings in this case. In its substantive comments, Freeport suggests that the Department use the margins from both the first (which covered 33 companies) and second (which covered 17 companies) final results of administrative review because both determinations established company-specific margins for the period in the 1970s immediately following the issuance of Treasury's 1973 antidumping finding. For companies covered in either of these first two reviews for which margins have increased over the life of the finding, Freeport recommends that the Department select the highest rate applied to those companies. Finally, for companies covered by neither of these two reviews, but covered in subsequent reviews, Freeport recommends either the first ``all others'' rate calculated by the Department, the highest company-specific rate calculated by the Department, or, in the case to two manufacturer/exporter combinations, the only rate ever calculated for the combination. Other than its discussion related to the appropriate margin for Husky, Freeport merely suggests that the Department's policy provides for the selection of the highest rate for companies where the Department has calculated a margin higher than the original. With respect to Husky Oil, Ltd. (``Husky'') (a company that was first reviewed by the Department during the 1991-1992 administrative review), Freeport argues that, if the finding were revoked, the magnitude of the margin likely to prevail would be the highest rate calculated for Husky. Freeport notes that the margins determined by the Department for Husky in the 91-92, 92-93, 93-94, and 94-95 administrative reviews have been 7.17%, 40.38%, 3.38% and 0.33%, respectively. Freeport argues that the enormous increase in Husky's margin between the 91-92 and 92-93 administrative reviews reflects Husky's choice to increase dumping in a effort to maintain market share, particularly during a period when U.S. market prices declined significantly. Freeport further argues that Husky's margins from the 93-94 and 94-95 administrative reviews are aberrationally low and reflect dramatic reduction in Husky's U.S. sales volumes and reversible changes in its operations designed to minimize the margins calculated by the Department. Using the non-confidential ranged figures reported by Husky during the course of the administrative reviews, Freeport states that Husky's U.S. sales volumes decreased from the 91-92 administrative review high to a 92-93 all time low, and then increased during the 94-95 administrative review. Freeport adds that in the course of the ongoing administrative review of the 96-97 administrative review, Husky again decreased the volume of its exports of sulphur to the U.S. market. Freeport notes that the overwhelming majority of Husky's (and Canada's) sulphur is produced at major sour gas processing plants. Freeport then states that, under the discipline of the finding, Husky made changes in its operations by limiting its U.S. exports to sulphur produced at an unrepresentative facility (the Lloydminster heavy oil upgrader, as opposed to sour gas processing plants) and shifted to production of formed sulphur at its sour gas facilities. Freeport adds that these changes had a major impact on Husky's reported cost of production and constructed value and the resultant dumping margins calculated by the Department. Freeport concludes that in the absence of the constraints imposed by the antidumping finding, Husky would again export much larger volumes of sulphur to the United States, would resume exporting to the U.S. from its major sour gas production facilities and would otherwise revert to its normal commercial operations. On April 5, 1982, the Department issued the final results of review of this finding covering 47 of the 52 known exporters and, generally, the period July 1, 1978 through November 30, 1980 (47 FR 14507). On November 28, 1983, the Department issued the final results of review of this finding covering 43 of the 49 manufacturers and/or exporters and, generally, the period December 1, 1980 through November 30, 1981 (48 FR 53592). We note, however, that for some companies, the November 1983 notice covered an earlier review period than did the April 1982 notice. For example, the November 1983 notice covered entries dating back to 1973 for certain companies. Therefore, we agree with Freeport and have selected, as the magnitude of the margin likely to prevail, the margin for the first period reviewed for each company, regardless of which Federal Register notice contained the review results. With respect to selecting the highest rate calculated by the Department for companies whose dumping margins have increased over time, we do not agree with Freeport. In the Sunset Policy Bulletin the Department stated that ``a company may choose to increase dumping in order to maintain or increase market share'' and that ``the Department may, in response to argument from an interested party, provide to the Commission a more recently calculated margin for a particular company, where, for that particular company, dumping margins increased after the issuance of the order.'' (See section II.B.2 of the Sunset Policy Bulletin.) The Department's intent was to establish a policy of using the original investigation margin as the starting point, thus providing interested parties the opportunity and incentive to come forward with data which would support a different estimate. Freeport, however, merely asserts that the highest rate calculated should be selected based on ``the `increasing margins' criterion'' established in the Sunset Policy Bulletin. (See Freeport's September 2, 1998, Substantive Response, p. 9.) Freeport did not, however, present arguments with respect to changes in margin levels as related to market share. The statistics provided by Freeport, 1991-1997 annual volume and value of imports from Canada, do not show an increase in imports concurrent with an increase in dumping, nor does it present the Department with a picture of the relative market shares held by Canada manufacturers and exporters. Given the information available to the Department, it is not possible to discern whether any increases or decreases in margins reflect an effort to maintain or increase market share. Similarly, Freeport did not offer any reason for its request that the Department select the highest margin or ``all others'' rate, whichever is higher, for those companies that were not reviewed in either of the first or second administrative reviews conducted by the Department. Finally, with respect to the magnitude of the margin likely to prevail with respect to Husky, we are not persuaded by Freeport's arguments. While we agree that the volume of Husky's exports declined significantly after the 91-92 review, and never reached the 91-92 level, the level of Husky's exports increased between 92-93 and 93-94. Further, we have no reason to believe that Husky will, if the finding is [[Page 67650]] revoked, revert to producing sulphur for export to the United States at its other facilities. Therefore, as discussed previously, we have determined that the magnitude of the margin likely to prevail for Husky is the first ``new shippers'' rate determined by the Department (see Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 48 FR 53592 (November 28, 1982)). Our review of the margin history over the life of this finding demonstrates that there have, with respect to some companies, been fluctuations in the level of the margins. We do not, however, view them as demonstrating a consistent patter of behavior. Therefore, the Department finds no reason to deviate in this review from our stated policy of using the first rates calculated by the Department. We determine that the original margins calculated by the Department are probative of the behavior of Canadian manufacturers and exporters of elemental sulphur. (See Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 47 FR 14507 (April 5, 1982 and Elemental Sulphur From Canada; Final Results of Administrative Review of Antidumping Finding; 48 FR 53592 (November 28, 1983)). We will report to the Commission the company-specific and ``all others'' rate included in the Appendix to this notice. Final Results of Review As a result of this review, the Department finds that revocation of the antidumping finding would be likely to lead to continuation or recurrence of dumping at the levels indicated in the Appendix to this notice. This notice serves as the only reminder to parties to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of return or destruction of APO materials or conversation to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation. This five-year (``sunset'') review and notice are in accordance with section 751(c) and 777(i) of the Act. Dated: December 1, 1998. Robert S. LaRussa, Assistant Secretary for Import Administration. Appendix ------------------------------------------------------------------------ Manufacturer/exporter Margin (percent) ------------------------------------------------------------------------ Amerada Minerals.......................... 28.90. Amoco Canada.............................. Revoked. Brimstone Export/all other mfgs........... 87.65. Canadian Bright Sulphur................... 26.95. Canadian Reserve.......................... 19.06. Canadian Reserve/Canamex.................. 87.65. Canamex Commodity......................... 3.20. Canterra Energy (formerly Aquitaine Co. of Revoked. Canada Ltd. Canterra/Brimstone........................ 87.65. Canterra/Canamex.......................... 5.56. CDC Oil & Gas............................. Revoked. Cornwall Chemicals........................ Revoked. Dome Petroleum............................ Revoked. Home Oil.................................. Revoked. Home Oil-Canamex.......................... 2.86. Imperial Oil.............................. Revoked. Imperial Oil/Exxon........................ Revoked. Irving Oil................................ Revoked. Koch Oil.................................. 26.95. Marathon Oil.............................. 28.90. Pacific Petroleum......................... 26.95. Pacific Petroleum-Canamex................. 20.28. Pan Canadian.............................. Revoked. Pan Canadian/Canamex...................... 0. Petro Canada Exploration.................. Revoked. Petrofina................................. 28.90. Petrogas Processing....................... Revoked. Petrosul.................................. 0. Rampart Resources/Sulbow Minerals......... 0. Real Int'l Marketing...................... 0.21. Sulbow Minerals........................... 26.95. Sulconam (formerly Laurentide Sulphur & Revoked. Chemicals, Ltd.). Sulmar Canada............................. 26.95. Sulpetro (formerly Candel Oil)............ 28.90. Suncor, Inc. (formerly Sun Oil Company of Revoked. Canada, Ltd. and Great Canadian Oil Sands, Ltd.). Suncor/Canamex............................ 20.28. Texaco Canada............................. Revoked. Tiger Chemicals........................... Revoked. Union Texas............................... 0. West Decalta.............................. 28.90. West Coast Transmission................... 28.90. All others................................ 5.56. ------------------------------------------------------------------------ [FR Doc. 98-32544 Filed 12-7-98; 8:45 am] BILLING CODE 3510-DS-P