[Federal Register Volume 64, Number 8 (Wednesday, January 13, 1999)]
[Notices]
[Pages 2171-2173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-694]


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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 Duty Administrative Review

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

ACTION: Notice of final results of antidumping duty administrative 
review.

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SUMMARY: On September 11, 1998, the Department of Commerce (the 
Department) 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 (59 FR 66909 (December 28, 
1994)), covering the period December 1, 1996, through November 30, 1997 
(63 FR 48697). 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 
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, where we 
determined the existence of a country-wide dumping margin of 53.65 
percent for this period of review (POR).

EFFECTIVE DATE: January 13, 1999.

FOR FURTHER INFORMATION CONTACT: Jack K. Dulberger or Wendy Frankel, 
Antidumping/Countervailing Duty 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 
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's regulations are 
to the regulations set forth at 19 CFR part 351, 62 FR 27296 (May 19, 
1997).

Period of Review

    The 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

    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 11, 1998, the Department published in the Federal Register 
the preliminary results of its review of this order for the POR 
December 1, 1996 through November 30, 1997, (see 63 FR 48697) 
(Preliminary Results). In the Preliminary Results, 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 conducting a data 
query of the U.S. Customs Service (Customs) database, (see Preliminary 
Results at 48698), that the only subject merchandise exported by the 
exporters China First and Guangdong, respectively, to the United States 
during the POR was merchandise excluded from the order (i.e., 
merchandise manufactured by the factories which received zero margins 
in the less-than-fair-value (LTFV) investigation).1

[[Page 2172]]

Therefore, these final results apply only to the PRC-wide entity, which 
includes the remaining respondents in this review that did not reply to 
our questionnaire and demonstrate 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 one comment on 
October 13, 1998. We received no other comments from respondents or 
other interested parties.
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    \1\ China First exports of merchandise produced by China First 
itself were originally excluded from this order. However, in 
litigation brought to challenge the 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), 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 was, in fact, sold at less than fair value. 
Therefore, as we stated in the Preliminary Results, (see Preliminary 
Results at 48698, footnote 1), for entries of merchandise exported 
and produced by China First and entered on or after November 23, 
1997, there has been suspension of liquidation pending final and 
conclusive disposition of the remand determination. 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 
inappropriate. Petitioners argue that agency practice and the 
applicable statutory provisions require that the FA rate be both 
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 legal 
error.
    According to the petitioners, in calculating the revised petition 
rate, the Department erred in failing to exclude data regarding certain 
U.S. wood prices which were untimely submitted, with the result that 
the recalculation of the ``petition rate'' was based on a fundamental 
procedural flaw, thus rendering the exporter-specific rates and the 
``PRC rate,'' which were premised on such recalculation, unreliable.
    In the litigation arising from the LTFV investigation, the 
petitioners have alleged this error, among others, in an appeal 
currently pending in the U.S. Court of Appeals for the Federal Circuit. 
The petitioners further contend that if they obtain a favorable 
decision in this appeal, the recalculated ``PRC rate'' would be found 
by the court to be in error and thus render the Department's use of 
such rate illegal, in accordance with the ruling of D&L Supply Co. v. 
United States, 113 F.3d 1220 (Fed. Cir. 1997) (D&L Supply), which 
states ``that it is improper for Commerce to continue to use, as the 
BIA [best information available] rate, an antidumping duty rate that 
has been vacated as erroneous.''

Department's Position

    We disagree with petitioners that the newly recalculated petition 
rate is an inappropriate basis for FA in this case. 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 Department ``recalculated'' the petition rate 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). This 
second recalculation of the petition rate was then affirmed by the CIT 
in Writing Instrument Manufacturers. We have therefore used this second 
recalculation petition rate as the basis of FA, rather than the 
original petition rate or the petition rate as adjusted by the 
Department in making its final LTFV determination. This decision is in 
accordance with the ruling by the U.S. Court of Appeals for the Federal 
Circuit in D&L Supply, which states that it is inappropriate to use as 
FA a rate determined to be inaccurate. See D&L Supply, 113 F.3d at 
1222. We have ignored rates found to be inaccurate and have used a rate 
that has been affirmed by the CIT. Thus, contrary to petitioners' 
argument, our selection of FA is appropriate.
    We have determined that there is no evidence on the record of this 
case which would cause us to question the reliability of the newly 
recalculated petition rate. 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, 1996 through November 30, 1997. 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 were excluded from the order), those produced 
by 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. The 
weighted-average dumping margin for the period December 1, 1996, 
through November 30, 1997 is as follows:

------------------------------------------------------------------------
                                                       Weighted average
           Manufacturer/producer/exporter               margin percent
------------------------------------------------------------------------
PRC Rate...........................................               53.65
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    Customs shall assess antidumping duties on all appropriate entries. 
The Department will issue appraisement instructions concerning the 
respondent directly to Customs. 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) The cash 
deposit rate for all Chinese exporters (including 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)), except for SFTC, will

[[Page 2173]]

be the rate indicated above; (2) for merchandise exported by SFTC, the 
cash deposit rate will continue to be the rate published in the final 
LTFV determination; 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.
    Upon completion of this review, we will direct Customs 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.

Notification to Interested Parties

    This notice serves as a final reminder to importers of their 
responsibility under section 19 CFR 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 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 of 
the return, destruction, or conversion to judicial protective order of 
APO materials 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. section 1675(a)(1)) and 19 CFR 
351.221.

    Dated: January 5, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-694 Filed 1-12-99; 8:45 am]
BILLING CODE 3510-DS-P