[Federal Register Volume 64, Number 207 (Wednesday, October 27, 1999)]
[Notices]
[Pages 57847-57850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28064]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-580-805]


Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose From the Republic of Korea

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

ACTION: Notice of final results of expedited sunset review: Industrial 
Nitrocellulose from the Republic of Korea.

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SUMMARY: On June 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping order on 
industrial nitrocellulose from the Republic of Korea (64 FR 29261) 
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 response 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 duty 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: Eun W. Cho 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, D.C. 20230; telephone: (202) 482-
1698 or (202) 482-1560, respectively.

EFFECTIVE DATE: October 27, 1999.

Statute and Regulations

    This review was conducted pursuant to sections 751(c) and 752(c) 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'') and 19 CFR Part 351 (1998) in 
general. 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 product covered by this order is industrial nitrocellulose 
(``nitrocellulose'') from the Republic of Korea. Industrial 
nitrocellulose is a dry, white, amorphous synthetic chemical with a 
nitrogen content between 10.8 and 12.2 percent, and is produced from 
the reaction of cellulose with nitric acid. Industrial nitrocellulose 
is used as a film-former in coatings, lacquers, furniture finishes, and 
printing inks.

[[Page 57848]]

The scope of this order does not include explosive grade 
nitrocellulose, which has a nitrogen content greater than 12.2 percent. 
Industrial nitrocellulose is currently classifiable under Harmonized 
Tariff Schedule (``HTS'') item number 3912.20.00. The HTS item number 
is provided for convenience and customs purposes only. The written 
description remains dispositive.

History of the Order

    The antidumping duty order on nitrocellulose from the Republic of 
Korea was published in the Federal Register on July 10, 1990 (55 FR 
28266).1 In that order, the Department determined that the 
weighted-average dumping margin for all entries of the subject 
merchandise was 66.30 percent.2 Since that time, the 
Department has completed one administrative review.3 We note 
that, to date, the Department has not issued any duty absorption 
findings in this case. The order remains in effect for all 
manufacturers and exporters of the subject merchandise.
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    \1\ See Antidumping Duty Order: Industrial Nitrocellulose from 
the Republic of Korea, 55 FR 28266 (July 10, 1990).
    \2\ However, the underlying investigation dealt with only one 
Korean company, Miwon Company, Ltd. (``Miwon'').
    \3\ See Industrial Nitrocellulose From the Republic of Korea; 
Notice of Final Results of Antidumping Duty Administrative Review, 
63 FR 60302 (November 9, 1998).
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Background

    On June 1, 1999, the Department initiated a sunset review of the 
antidumping duty order on nitrocellulose from the Republic of Korea 
(``Korea'') (64 FR 29261), pursuant to section 751(c) of the Act. The 
Department received a Notice of Intent to Participate on behalf of the 
petitioner Hercules Incorporated (``Hercules''), on June 9, 1999, 
within the deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations. Hercules asserts that it is not related to a foreign 
producer, foreign exporter, or domestic importer of the subject 
merchandise and that it is not an importer of the subject merchandise 
except on an occasional spot basis. (See Hercules' June 9, 1999 Intent 
to Participate at 2.)
    We received a complete substantive response from Hercules on July 
1, 1999, within the 30-day deadline specified in the Sunset Regulations 
under section 351.218(d)(3)(i). Hercules claims interested party status 
under section 771(9)(C) of the Act as a U.S. manufacturer, producer, 
and wholesaler of the subject merchandise. In its substantive response, 
Hercules indicates that it is the sole remaining U.S. producer of 
nitrocellulose, was the petitioner in the original investigation, and 
has participated in the administrative review proceeding. (See 
Hercules' July 1, 1999 Substantive Response at 1-2.)
    We did not receive a substantive response from any respondent 
interested party to this proceeding. Consequently, pursuant to section 
351.218(e)(1)(ii)(C) of the Sunset Regulations, the Department 
determined to conduct an expedited, 120-day, review of this order.
    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--an order which was in effect on January 
1, 1995. See section 751(c)(6)(C) of the Act. The Department determined 
that the sunset review of the antidumping duty order on industrial 
nitrocellulose from Korea is extraordinarily complicated. Therefore, on 
October 12, 1999, the Department extended the time limit for completion 
of the preliminary results of this review until not later than December 
28, 1999, in accordance with section 751(c)(5)(B) of the 
Act.4
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    \4\ See Extension of Time Limit for Final Results of Five-Year 
Reviews, 64 FR 55233 (October 12, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department 
conducted this review to determine whether revocation of the 
antidumping 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 order, and 
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 margins are discussed 
below. In addition, Hercules' comments with respect to continuation or 
recurrence of dumping and the magnitude of the margins 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 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).
    In addition to considering the 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 section 351.218(d)(2)(iii) of the Sunset 
Regulations, this constitutes a waiver of participation.
    In its substantive response, Hercules asserts that the likelihood 
of continuation or recurrence of dumping is high if the order is 
revoked. (See July 1, 1999 substantive response of Hercules at 3-6). To 
support this argument, Hercules notes a drastic decline in import 
volumes of the subject merchandise immediately after the issuance of 
the order. According to Hercules, after the imposition of the 
antidumping order, imports of the subject merchandise completely 
stopped.5 Id. The cessation of imports in the years 
immediately after the issuance of the order, Hercules further argues, 
is

[[Page 57849]]

highly probative of the likelihood of future dumping. Id.
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    \5\ The order was imposed on July 10, 1990. (See footnote 1, 
supra.) In 1989 and 1990, imports of the subject merchandise were 
147 and 58 metric tons, respectively; however, during the period 
1991 through 1998, the import volumes were as follows: 1991--0; 
1992--0; 1993--0; 1994--0; 1995--0; 1996--0; 1997--18; and 1998--0 
metric tons. (See July 1, 1999 substantive response of the Hercules, 
Attachment 2.)
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    Hercules also indicates that, for the past five years, imports of 
the subject merchandise have been mostly at zero or near 
zero.6 Id. According to Hercules, the small amount of 
imports of the subject merchandise in 1997 was the result of Korean 
producers/exporters' attempt to attain a reduced cash deposit rate in a 
pending administrative review.7 Id. To further illustrate 
its contention, Hercules notes that after the weighted-average dumping 
margin for the subject merchandise was reduced, Korean producers/
exporters still could not sustain the exports of the subject 
merchandise.8 Id. In conclusion, Hercules argues that Korean 
manufacturers/exporters of the subject merchandise could not sustain 
their level of exports to the United States after the issuance of the 
antidumping duty order; in other words, Korean manufacturers/exporters 
have to dump in order to export the subject merchandise to the United 
States.
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    \6\ See footnote 5, supra. During 1994-1998, the average import 
volume of the subject merchandise was only 3.6 metric tons, which is 
about 3.51 percent of the average imports of 1989 and 1990, or 2.45 
percent of 1989 imports alone.
    \7\ See footnote 3, supra. In that review, the Department found 
a 2.1 percent weighted-average dumping margin for one reviewed 
company, Daesang Corporation (``Daesang'') while leaving all other 
entries of nitrocellulose from Korea subject to the rate determined 
in the original investigation: 66.30 percent.
    \8\ See footnote 5, supra. The import level of the subject 
merchandise in 1998 was zero.
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    Consistent with section 752(c) of the Act, the Department considers 
the import volumes of the subject merchandise before and after the 
issuance of the order. The data supplied by Hercules and those of the 
United States Census Bureau IM146s and the United States International 
Trade Commission indicate that, since the imposition of the order, the 
import volumes of the subject merchandise have declined 
substantially.9 Moreover, for the period 1994-1998, the 
United States International Trade Commission Data shows rather 
insignificant import volumes for the subject merchandise.10 
Therefore, the Department determines that the import volumes of the 
subject merchandise decreased significantly after the issuance of the 
order.
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    \9\ See footnote 5, supra. The numbers supplied by Hercules 
exactly correspond with those of the U.S. International Trade 
Commission Data.
    \10\ See footnote 6, supra.
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    As indicated in section II.A.3 of the Sunset Policy Bulletin, the 
SAA at 890, and House Report at 63-64, the Department also considers 
whether dumping continued at any level above de minimis after the 
issuance of the order. If companies continue dumping with the 
discipline of an order in place, the Department may reasonably infer 
that dumping would continue were the discipline removed. After 
examining the published findings with respect to weighted-average 
dumping margins in the original investigation and from the previous 
administrative review,11 the Department determines that, 
since the issuance of the order, weighted-average dumping margins for 
the subject merchandise have continued at above the de minimis level.
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    \11\ See footnote 7, supra.
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    Given that dumping of the subject merchandise continued above the 
de minimis level after the issuance of the order, that the import 
volumes of the subject merchandise decreased substantially after the 
issuance of the order, and that respondent interested parties have 
waived their right to participate in this review, the Department agrees 
with Hercules' contention that dumping is likely to continue if the 
order is 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 a weighted-average dumping margin for Miwon and 
all-others: 66.30 percent.12 We note that, to date, the 
Department has not issued any duty absorption findings in this case.
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    \12\ See Final Determination of Sales at Less Than Fair Value: 
Industrial Nitrocellulose from the Republic of Korea, 55 FR 21054 
(May 22, 1990).
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    In its substantive response, Hercules urges the Department to 
report to the Commission the dumping margins from the original 
investigation as the margins likely to prevail if the order were 
revoked. (See the July 1, 1999 Substantive Response of Hercules at 6.) 
Although the Department found a substantially reduced 2.10 percent 
dumping margin for a Korean producer in its administrative review, 
Hercules contends that the reduced dumping margin coincided with 
greatly declined import volumes of the subject 
merchandise.13 Id. Moreover, Hercules notes that a year 
after the administrative review, in 1998, imports of the subject 
merchandise again returned to zero indicating that Korean producers/
exporters were unable to increase their exports of the subject 
merchandise to the United States at the reduced antidumping margin. Id. 
Therefore, Hercules concludes, the 2.1 percent margin achieved by a 
Korean producer was clearly the result of a small test shipment and 
does not reflect commercial reality. Id. In other words, the best and 
only possible recommendation the Department can make, regarding the 
margins that are likely to prevail, is to rely upon the rates from the 
original investigation.
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    \13\ See footnote 3, supra. In its only administrative review, 
the Department found that Daesang Corporation, which was not subject 
of the original investigation, was dumping at the rate of 2.10 
percent during the period July 1, 1996 through June 30, 1997. At the 
same time, the Department indicated that cash deposit rate for Miwon 
and all-others was the original, less-than-fair-value rate of 66.30 
percent.
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    The Department agrees with Hercules' suggestion pertaining to the 
margin that is likely to prevail if the order were revoked. Because the 
margins from the original investigation reflect the behavior of Korean 
producers/exporters without the discipline of an order in place, the 
Department will provide to the Commission the margins found in the 
original investigation. Absent argument and evidence to the contrary, 
the Department sees no reason to change its usual practice of selecting 
the rate from the original investigation. We will report to the 
Commission the company-specific and all-others rate contained in the 
Final Results of Review section of this notice.

Final Results of Review

    As a result of this review, the Department finds that revocation of 
the antidumping order would likely lead to continuation or recurrence 
of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Miwon Corporation..........................................        66.30
All Others (including Daesang).............................        66.30
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    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

[[Page 57850]]

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: October 21, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-28064 Filed 10-26-99; 8:45 am]
BILLING CODE 3510-DS-P