[Federal Register Volume 64, Number 106 (Thursday, June 3, 1999)]
[Proposed Rules]
[Pages 29818-29821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14098]


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DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Part 351

[Docket No. 990521142-9142-01]
RIN 0625-AA54


Proposed Regulation Concerning the Revocation of Antidumping Duty 
Orders

AGENCY: Import Administration, International Trade Administration, 
Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Commerce (the ``Department'' or ``DOC'') is 
proposing to amend 19 CFR 351.222(b), which governs the revocation of 
antidumping duty orders, in whole or in part, based upon an absence of 
dumping. The proposed regulation is intended to conform the existing 
regulation to the United States' obligations under Article 11 of the 
Agreement on the Implementation of Article VI of the General Agreement 
on Tariffs and Trade 1994 (``Antidumping Agreement'' or ``AD 
Agreement''). The proposed regulation, if adopted, would allow the 
Secretary to revoke an antidumping duty order if the Secretary 
concludes that producers or exporters did not sell subject merchandise 
at less than normal value for at least three consecutive years and that 
the continued application of the antidumping duty order as to those 
producers or exporters is no longer necessary to offset dumping.

DATES: To be assured of consideration, written comments must be 
received not later than July 6, 1999.

ADDRESSES: A signed original and two copies of each set of comments 
including reasons for any recommendation, along with a cover letter 
identifying the commenter's name and address, should be submitted to 
Robert S. LaRussa, Assistant Secretary for Import Administration, 
Central Records Unit, Room 1870, U.S. Department of Commerce, 
Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Melissa G. Skinner, Office of Policy, 
Import Administration, U.S. Department of Commerce, at (202) 482-1560, 
or Myles S. Getlan, Office of the Chief Counsel for Import 
Administration, U.S. Department of Commerce, at (202) 482-5052.

SUPPLEMENTARY INFORMATION:

Background:

    On July 24, 1997, the Department issued the final results of the 
third administrative review of the antidumping duty order on Dynamic 
Random Access Memory Semiconductors (DRAMs) Of One Megabit Or Above 
From Korea (62 FR 39809)(``DRAMs From Korea''), in which the Department 
considered the respondents'' request that the Department revoke the 
order, in part, under 19 CFR 353.25(a)(1996) (the precursor to 19 CFR 
351.222(b)). Pursuant to this regulation, the Department may revoke an 
order, in whole or in part, if (1) producers and/or exporters have sold 
subject merchandise at not less than normal value for three consecutive 
years; and (2) the Secretary concludes that it is not likely that those 
producers and/or exporters will in the future sell subject merchandise 
at not less than normal value. Applying this regulation in DRAMs From 
Korea, the Department did not revoke the order because the second 
criterion had not been met.
    On January 29, 1999, a panel established by the Dispute Settlement 
Body (DSB) of the World Trade Organization (WTO) determined that the

[[Page 29819]]

``not likely'' standard contained in 19 CFR 353.25(a)(2) was 
inconsistent with the United States' obligations under Article 11.2 of 
the WTO Antidumping Agreement. The panel recommended that the United 
States ``bring section 353.25(a)(2)(ii) of the DOC regulations
. . . into conformity with its obligations under Article 11.2 of the AD 
Agreement.'' The DSB adopted the panel report on March 19, 1999. On 
April 15, 1999, the United States announced its intention to implement 
the recommendations and rulings of the DSB. Consistent with section 
123(g) of the Uruguay Round Agreements Act, which governs the 
Department's implementation of adverse panel reports, the Department is 
revising 19 CFR 351.222(b).

Explanation of the Proposed Regulation

    Pursuant to 19 CFR Sec. 351.222(b)(1998), the Department may revoke 
an antidumping duty order, in its entirety or with respect to certain 
exporters or producers, if several criteria are met. In order to revoke 
an order, the Secretary must conclude that the exporter or producer has 
not sold subject merchandise at less than normal value for three 
consecutive years and that ``[i]t is not likely that those persons will 
in the future sell the subject merchandise at less than normal value.'' 
See 19 CFR 351.222(b)(1) and (2).
    In its report to the DSB, the Panel considered the consistency of 
the ``not likely'' standard described above with the obligations 
contained in Article 11.2 of the Antidumping Agreement. See United 
States--Anti-Dumping Duty On Dynamic Random Access Memory 
Semiconductors (DRAMS) Of One Megabit Or Above From Korea, WT/DS99/R 
(adopted March 19, 1999) (``Panel Report''). Article 11.2 of the 
Antidumping Agreement provides:

    The authorities shall review the need for the continued 
imposition of the duty, where warranted, on their own initiative or, 
provided that a reasonable period of time has elapsed since the 
imposition of the definitive anti-dumping duty, upon request by any 
interested party which submits positive information substantiating 
the need for a review. Interested parties shall have the right to 
request the authorities to examine whether the continued imposition 
of the duty is necessary to offset dumping, whether the injury would 
be likely to continue to recur if the duty were removed or varied, 
or both. If, as a result of the review under this paragraph, the 
authorities determine that the anti-dumping duty is no longer 
warranted, it shall be terminated immediately.

    As demonstrated by the language of Article 11.2, in reviewing the 
need for the continued application of an antidumping duty, the 
Department is obligated to terminate the duty if the Department 
concludes ``that the anti-dumping duty is no longer warranted.'' In 
interpreting the obligations contained in Article 11.2, the Panel 
concluded that an absence of dumping does not, in and of itself, 
require the revocation of an antidumping duty order. See Panel Report 
at para. 6.34. Thus, insofar as the Department's regulation requires 
exporters or producers requesting revocation to have sold subject 
merchandise at not less than normal value for at least three 
consecutive years prior to revocation, the Panel concluded that the 
Department's regulation is consistent with the United States' WTO 
obligations.
    The Panel then considered whether requiring a finding that a 
recurrence of dumping is ``not likely'' before revoking an order was 
consistent with Article 11.2. In this regard, the Panel noted that 
Article 11.2 requires authorities ``to examine whether the continued 
imposition of the duty is necessary to offset dumping.'' The Panel 
described this obligation as follows:

    We note that the necessity of the measure is a function of 
certain objective conditions being in place, i.e. whether 
circumstances require continued imposition of the anti-dumping duty. 
That being so, such continued imposition must, in our view, be 
essentially dependent on, and therefore assignable to, a foundation 
of positive evidence that circumstances demand it. In other words, 
the need for the continued imposition of the duty must be 
demonstrable on the basis of the evidence adduced.

Panel Report at para. 6.42.
    As noted above, the Panel affirmed the Department's ability to 
maintain an antidumping duty order in the absence of present dumping, 
thus validating the Department's prospective analysis in determining 
the need for the continued application of an order. In addition, the 
Panel recognized that such a prospective analysis is inherently 
uncertain. However, while ``[m]athematical certainty is not required, . 
. . the conclusions should be demonstrable on the basis of the evidence 
adduced.'' Panel Report at para. 6.43. In this regard, the Panel 
determined that the Department's ``not likely'' standard does not 
provide a requisite degree of predictive assurance in performing a 
prospective analysis nor does it provide ``any demonstrable basis on 
which to reliably conclude that the continued imposition of the duty is 
necessary to offset dumping.'' Id. at para. 6.50. Thus, the Panel 
concluded that the ``not likely'' criterion contained in 19 CFR 
353.25(a)(2)(ii) (currently 19 CFR 351.222(b)) is inconsistent with 
Article 11.2 of the Antidumping Agreement.
    In implementing the Panel's findings with respect to the revocation 
regulation, we sought to reform the regulation in a manner that will 
require the Department's determination of whether to revoke an order to 
be based upon positive evidence. In adopting the Panel Report, we 
recognize the Panel's conclusion that the ``not likely'' standard may, 
on its face, allow the Department in certain cases to maintain an order 
in the absence of positive evidence suggesting the necessity of 
maintaining the order to offset dumping. In this regard, we are 
confident that the revised standard provides the appropriate degree of 
predictive assurance required in a prospective analysis and provides a 
demonstrable basis upon which to reliably conclude whether maintaining 
the antidumping duty order is warranted.
    While the Panel interpreted ``not likely'' on the basis of its 
common meaning and usage, the Panel's ruling was not based upon the 
Department's application of the standard in DRAMs from Korea or any 
other prior case in which the standard was applied. In addition, the 
Panel affirmed the Department's prospective analysis in considering 
whether to revoke an antidumping duty order. We took these factors into 
account in revising the revocation regulation.
    The Department's analysis of whether to revoke antidumping duty 
orders based upon an absence of dumping has always implicitly addressed 
whether the continued application of an antidumping duty order is 
necessary to offset dumping. Therefore, since Article 11.2 itself 
provides a standard by which to measure the continued applicability of 
an antidumping duty order, promulgating an additional standard is not 
necessary to fulfill the United States' international obligations. 
Stated differently, the requirement contained in Article 11.2 that 
authorities examine the necessity of maintaining an antidumping duty 
constitutes a transparent, meaningful standard that can be incorporated 
into the Department's current statutory and regulatory scheme.
    In previous cases, the Department has applied 19 CFR 353.25(a)(2), 
now Sec. 351.222(b), in administrative reviews where an exporter or 
producer requested revocation and established that it had sold subject 
merchandise at not less than normal value for at least three 
consecutive years. The Department has consistently considered that an 
absence of dumping for three consecutive years was indicative that a

[[Page 29820]]

foreign respondent was ``not likely'' to sell at less than normal value 
in the future. Thus, the absence of dumping for three consecutive years 
served as a presumption in favor of revoking the order, which could be 
rebutted by positive evidence indicating that dumping may recur if the 
order were revoked. Such evidence reflected the likelihood that 
respondents would dump in the future. In this regard, we note that the 
Panel considered that evidence of likelihood of future dumping was 
relevant to a determination under Article 11.2, and suggested that one 
way to meet the requirements of the Antidumping Agreement would be to 
promulgate a standard which required a finding that respondents are 
likely to dump in the future before maintaining an order. See Panel 
Report at para. 6.48 n. 494.
    It is the Department's view that the Panel's findings with respect 
to the ``not likely'' standard does not necessitate a wholesale change 
in the practice described above. When requested to revoke an 
antidumping duty order based upon an absence of dumping for three 
consecutive years, the Department intends to continue its practice of 
revoking orders in the absence of any other record evidence indicating 
that the continued application of the order is necessary to offset 
dumping. When additional evidence is placed on the record, the 
Department will fully consider all relevant factors as to whether the 
continued application of the order is necessary to offset dumping. 
Factors considered in prior cases relating to the likelihood of future 
dumping would still be deemed relevant under the ``necessary'' standard 
derived from Article 11.2 of the Antidumping Agreement. That is, the 
Department may consider trends in prices and costs, investment, 
currency movements, production capacity, as well as all other market 
and economic factors relevant to a particular case. An analysis of this 
evidence, we believe, provides a demonstrable basis upon which to 
reliably conclude whether the continued application of an antidumping 
duty order is necessary to offset dumping and provides the appropriate 
degree of predictive assurance required in a prospective analysis.

Effective Date

    Pursuant to section 123(g)(2) of the Uruguay Round Agreements Act 
(``URAA'')(19 U.S.C. 3533(g)(2)), the final amended regulation may not 
become effective until the end of the 60-day period beginning on the 
date on which the Department and the Office of the U.S. Trade 
Representative undertake consultations with the appropriate 
congressional committees concerning the proposed contents of the final 
rule. Since the date of consultations has not yet been determined, we 
are unable to determine the effective date at this time. If the 
proposed regulation is adopted, we will publish the effective date in 
the notice of final rulemaking based upon the date on which the Office 
of the U.S. Trade Representative and the Department consults with 
Congress.

Classification

E.O. 12866

    This proposed rule has been determined to be not significant under 
E.O. 12866.

Paperwork Reduction Act

    This proposed rule contains no new collection of information 
subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

E.O. 12612

    This proposed rule does not contain federalism implications 
warranting the preparation of a Federalism Assessment.

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce has 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration that this proposed rule, if adopted, would not have a 
significant economic impact on a substantial number of small entities. 
The Department's existing regulations provide a procedural and 
substantive process by which the Secretary considers whether to revoke 
an antidumping duty order. The proposed rule retains the current 
procedural process and revises the substantive standard used by the 
Secretary to make the appropriate revocation determination. As 
discussed above, the proposed regulation would not significantly change 
the Department's practice in determining whether to maintain an 
antidumping duty order. Moreover, as the proposed regulation only 
changes the standard by which the Department considers whether to 
revoke an antidumping duty order, this action, in and of itself, will 
not have a significant economic impact. Therefore, the Chief Counsel 
concluded that the proposed rule would not have a significant impact on 
a substantial number of small business entities, and a regulatory 
flexibility analysis was not prepared.

List of Subjects in 19 CFR Part 351

    Administrative practice and procedure, Antidumping duties, Business 
and industry, Cheese, Confidential business information, Countervailing 
duties, Investigations, Reporting and recordkeeping requirements.

    Dated: May 27, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
    For the reasons stated, it is proposed that 19 CFR Sec. 351.222(b) 
is amended to read as follows:

PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES

Subpart A--Scope and Definitions

    1. The authority citation for part 351 continues to read as 
follows:

    Authority: 5 U.S.C. 301, 19 U.S.C. 1202 note; 19 U.S.C. 1303 
note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.

Subpart B--Antidumping and Countervailing Duty Procedures

    2. Section 351.222 is amended by revising paragraph (b) to read as 
follows:


Sec. 351.222  Revocation of orders; termination of suspended 
investigations

* * * * *
    (b) Revocation or termination based on absence of dumping. (1) The 
Secretary may revoke an antidumping order or terminate a suspended 
antidumping investigation if the Secretary concludes that:
    (i) All exporters and producers covered at the time of revocation 
by the order or the suspension agreement have sold the subject 
merchandise at not less than normal value for a period of at least 
three consecutive years; and
    (ii) The continued application of the antidumping duty order is no 
longer necessary to offset dumping.
    (2) The Secretary may revoke an antidumping order in part if the 
Secretary concludes that:
    (i) One or more exporters or producers covered by the order have 
sold the merchandise at not less than normal value for a period of at 
least three consecutive years;
    (ii) The continued application of the antidumping duty order as to 
those persons is no longer necessary to offset dumping; and
    (iii) Provided that, for any exporter or producer that the 
Secretary previously has determined to have sold the subject 
merchandise at less than normal value, the exporter or producer agrees 
in writing to its immediate reinstatement

[[Page 29821]]

in the order, as long as any exporter or producer is subject to the 
order, if the Secretary concludes that the exporter or producer, 
subsequent to the revocation, sold the subject merchandise at less than 
normal value.
* * * * *
[FR Doc. 99-14098 Filed 6-2-99; 8:45 am]
BILLING CODE 3510-DS-P