[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)] [Notices] [Pages 42656-42658] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-20222] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration [A-570-003] Final Results of Expedited Sunset Review: Cotton Shop Towels From the People's Republic of China AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of final results of expedited sunset review: cotton shop towels from the People's Republic of China. ----------------------------------------------------------------------- SUMMARY: On January 4, 1999, the Department of Commerce (``the Department'') initiated a sunset review of the antidumping duty order on cotton shop towels from the People's Republic of China (64 FR 364) 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 adequate substantive comments filed on behalf of a domestic interested party 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 the antidumping order would be likely to lead to continuation or recurrence of dumping at the levels indicated in the Final Results of Review section of this notice. FOR FURTHER INFORMATION CONTACT: Scott E. Smith or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482- 6397 or (202) 482-1560, respectively. EFFECTIVE DATE: August 5, 1999. Statute and Regulations This review was conducted pursuant to sections 751(c) and 752 of the Act. The Department's procedures for the conduct of sunset reviews are set forth in Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 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 duty order is cotton shop towels from the People's Republic of China. Shop towels are absorbent industrial wiping cloths made from a loosely woven fabric. The fabric may be either 100-percent cotton or a blend of materials. Shop towels are currently classifiable under item numbers 6307.10.2005 and 6307.10.2015 of the Harmonized Tariff Schedules of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding remains dispositive.1 --------------------------------------------------------------------------- \1\ The Department determined that certain 18''x30'' dish towels (02/19/93) are within the scope of the order. Pursuant to court remand, the Department determined that certain cotton shop towels, hemmed or cut and hemmed in Honduras, are within the scope of the order (1/18/94). The Department determined that the following products are outside the scope of the order: towels assembled in Canada from cotton grey fabric from the People's Republic of China (8/21/90). --------------------------------------------------------------------------- This review covers imports from all manufacturers and exporters of Chinese shop towels. History of the Order On August 16, 1983, the Department issued its amended final determination of sales at less than fair value in the investigation of cotton shop towels from the People's Republic of China (48 FR 37055). The Department published weighted average dumping margins of 30.1 percent for China National Textile Import & Export Corporation and 37.2 percent for China National Arts & Crafts Import & Export Corporation. The Department also published a weighted average dumping margin of 36.2 percent for all other Chinese manufacturers/exporters. The antidumping duty order on cotton shop towels from the People's Republic of China was published in the Federal Register on October 4, 1983 (48 FR 45277). Since that time, the Department has conducted six administrative reviews.2 The order remains in effect for all manufacturers and exporters of the subject merchandise. --------------------------------------------------------------------------- \2\ See Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 50 FR 26020 (June 24, 1985); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 55 FR 7756 (March 5, 1990); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 56 FR 4040 (February 1, 1991); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 56 FR 60969 (November 29, 1991); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 57 FR 30466 (July 9, 1992); and Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 57 FR 43695 (September 22, 1992). --------------------------------------------------------------------------- Background On January 4, 1999, the Department initiated a sunset review of the antidumping duty order on cotton shop towels from the People's Republic of China (64 FR 364), pursuant to section 751(c) of the Act. The Department received a Notice of Intent to Participate on behalf of Milliken & Company (``Milliken'') on January 19, 1999, within the deadline specified in Sec. 351.218(d)(1)(i) of the Sunset Regulations. We received a complete substantive response from Milliken on February 3, 1999, within the 30-day deadline specified in the Sunset Regulations under Sec. 351.218(d)(3)(i). Milliken claimed interested party status under section 771(9)(C) of the Act, as a domestic producer of shop towels. In addition, Milliken stated that it was the petitioner in the original investigation. We did not receive a substantive response from any respondent interested party to this proceeding. As a result, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct an expedited, 120-day, review of this order. The Department determined that the sunset review of the antidumping duty order on cotton shop towels from the People's Republic of China is extraordinarily complicated. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). Therefore, on May 3, 1999, the Department extended the time limit for [[Page 42657]] completion of the final results of this review until not later than August 2, 1999, in accordance with section 751(c)(5)(B) of the Act.3 --------------------------------------------------------------------------- \3\ See Steel Wire Rope From Japan, Shop Towels From the People's Republic of China, Shop Towels From Bangladesh, Candles From the People's Republic of China, Steel Wire Rope From Mexico, Shop Towels From Pakistan, Steel Wire Rope From South Korea, Malleable Cast Iron Pipe Fittings From South Korea, Malleable Cast Iron Pipe Fittings From Taiwan, Malleable Cast Iron Pipe Fittings From Japan: Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR 24573 (May 7, 1999). --------------------------------------------------------------------------- Determination In accordance with section 751(c)(1) of the Act, the Department conducted this review to determine whether revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping. Section 752(c) 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 duty order, and it shall provide to the International Trade Commission (``the Commission'') the magnitude of the margin of dumping likely to prevail if the order is revoked. The Department's determinations concerning continuation or recurrence of dumping and the magnitude of the margin are discussed below. In addition, Milliken's 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.2). In addition, the Department indicated that normally it will determine that revocation of an antidumping duty 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 of the subject merchandise declined significantly (see section II.A.3). In addition to considering guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of an order is likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In the instant review, the Department did not receive a response from any respondent interested party. Pursuant to Sec. 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. In its substantive response, Milliken argues that the history of the case and the actions taken by Chinese producers and exporters of shop towels prior to and during the pendency of this proceeding clearly demonstrate that revocation likely would result in a recurrence of dumping of shop towels in the United States. Specifically, Milliken, citing The World Trade Atlas (Nov. 1998), asserts that Chinese producers and exporters significantly reduced their shipments to the United States and ultimately ceased exportation after the Department calculated extremely high dumping margins in subsequent reviews (see February 3, 1999, Substantive Response of Milliken at 4). In conclusion, Milliken argues that the Department should determine that there is a likelihood that dumping would continue or recur were the order revoked because imports of the subject merchandise decreased significantly after the imposition of the order and continue to be virtually non-existent. The Department agrees with Milliken that imports of the subject merchandise decreased substantially over the 16-year period from the imposition of the order in 1983 to the present. However, we disagree with Milliken's assertion that the Department should rest its decision on the basis that imports of subject merchandise have ceased. Despite a two-year cessation of imports between 1996 and 1997, shipments of the subject merchandise from the People's Republic of China continue. With respect to dumping margins, an examination of the final results of administrative reviews confirms that dumping margins above de minimis levels have continued throughout the life of the order.4 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. --------------------------------------------------------------------------- \4\ See Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 50 FR 26020 (June 24, 1985); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 55 FR 7756 (March 5, 1990); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 56 FR 4040 (February 1, 1991); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 56 FR 60969 (November 29, 1991); Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 57 FR 30466 (July 9, 1992); and Shop Towels of Cotton From the People's Republic of China; Final Results of Administrative Review of Antidumping Order, 57 FR 43695 (September 22, 1992). --------------------------------------------------------------------------- Based on this analysis, the Department finds that the existence of dumping margins after the issuance of the order is highly probative of the likelihood of continuation or recurrence of dumping. Deposit rates above de minimis levels continue in effect for exports of the subject merchandise by all known Chinese manufacturers/exporters. Therefore, given that dumping has continued over the life of the order, imports of subject merchandise declined significantly, and respondent interested parties have waived their right to participate in this review before the Department, and absent argument and evidence to the contrary, the Department determines that dumping is likely to continue if the order were revoked. Magnitude of the Margin In the Sunset Policy Bulletin, the Department stated that it will normally provide to the Commission the margin that was determined in the final determination in the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the ``all others'' rate from the investigation. (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 determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.) The Department, in its final determination of sales at less than fair value, published weighted-average [[Page 42658]] dumping margins for two producers/exporters of cotton shop towels from the People's Republic of China (48 FR 37055, August 16, 1983).5 The Department also published an ``all others'' rate in its determination. We note that, to date, the Department has not issued any duty absorption findings in this case. --------------------------------------------------------------------------- \5\ The dumping margins from this determination were subsequently amended. See Cotton Shop Towels From the People's Republic of China; Amended Final Determination of Sales at Less Than Fair Value, 48 FR 37055 (August 16, 1983). --------------------------------------------------------------------------- In its substantive response, citing to the final results of the 1990/1991 administrative review, Milliken asserts that the margins found in the original investigation are far below the most recently calculated margins. Accordingly, Milliken argues that, consistent with the Sunset Policy Bulletin and legislative history, the Department should inform the Commission that the margins likely to prevail are the more recently calculated rates of 72.14 percent for Tianjin Arts & Crafts Import & Export Corporation and 122.81 percent for all other companies. Milliken notes that its suggested margins, from the 1990/ 1991 administrative review, reflect the most likely U.S. pricing levels for Chinese shop towels if the order were revoked (see February 3, 1999 Substantive Response of Milliken at 6). The Department disagrees with Milliken's argument concerning the choice of the margins to report to the Commission. The Department finds the existence of higher margins after the initial investigation, as a sole criterion, provides insufficient reason for the Department to deviate from its stated policy.6 Milliken has not presented any argument or evidence to suggest that such increases in margins have been coupled with increases in import volumes and, thus, increased dumping in an attempt to gain, or even maintain, market share. Absent such argument and evidence, the Department finds that the margins calculated in the original investigation are probative of the behavior of Chinese producers and/or exporters if the order were revoked as they are the only margins which reflect their actions absent the discipline of the order. As such, the Department will report to the Commission the company-specific and ``all others'' rates from the original investigation as contained in the Final Results of Review section of this notice. --------------------------------------------------------------------------- \6\ The Department recognizes that where a more recent dumping margin is ``more representative of a company's behavior in the absence of an order,'' such margin should be reported to the Commission (see Sunset Policy Bulletin). The ``more representative'' standard may be satisfied if the Department finds an ``increase in imports * * * corresponding to the increase in the dumping margin'' (see Final Results of Expedited Sunset Review: Barium Chloride From the People's Republic of China, 64 FR 5633 (February 4, 1999)). --------------------------------------------------------------------------- Final Results of Review As a result of this review, the Department finds that revocation of the antidumping duty order would likely lead to continuation or recurrence of dumping at the margins listed below: ------------------------------------------------------------------------ Margin Manufacturer/exporter (percent) ------------------------------------------------------------------------ China National Textile Import & Export Corp................ 30.1 China National Arts & Crafts Import & Export Corp.......... 37.2 All Other Chinese Manufacturers/Exporters.................. 36.2 ------------------------------------------------------------------------ This notice serves as the only 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 351.305 of the Department's regulations. Timely notification of return/destruction of APO materials or conversion 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 sections 751(c), 752, and 777(i)(1) of the Act. Dated: July 30, 1999. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. [FR Doc. 99-20222 Filed 8-4-99; 8:45 am] BILLING CODE 3510-DS-P