[Federal Register Volume 64, Number 207 (Wednesday, October 27, 1999)]
[Notices]
[Pages 57854-57857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28067]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-351-804]


Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose From Brazil

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

ACTION: Notice of final results of expedited sunset review: Industrial 
Nitrocellulose from Brazil.

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[[Page 57855]]

SUMMARY: On June 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping order on 
industrial nitrocellulose from Brazil (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 Result 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, DC 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 Brazil. 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. 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 Brazil 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 61.25 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 
Brazil, 55 FR 28266 (July 10, 1990).
    \2\ However, the underlying investigation and the subsequent 
administrative review dealt with only one Brazilian company, 
Companhia Nitro Quimica Brasileira (``Quimica'').
    \3\ See Industrial Nitrocellulose From the Brazil; Notice of 
Final Results of Antidumping Duty Administrative Review, 58 FR 38750 
(July 20, 1993).
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Background

    On June 1, 1999, the Department initiated a sunset review of the 
antidumping duty order on nitrocellulose from Brazil (64 FR 29261), 
pursuant to section 751(c) of the Act. The Department received a Notice 
of Intent to Participate on behalf of 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 only 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 Brazil 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''),

[[Page 57856]]

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 its contention, Hercules points to 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 virtually 
stopped.5 Id. The virtual cessation of imports in the years 
immediately after the issuance of the order, Hercules further argues, 
is 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 through 1990, imports of the subject merchandise 
were 734 and 207 metric tons, respectively; however, during 1991 and 
1998, the imports volumes were as follows: 1991--7; 1992--13; 1993--
0; 1994--228; 1995--635; 1996--1261; 1997--698; and 1998--0 metric 
tons. (See July 1, 1999 substantive response of the Hercules, 
Attachment 2.)
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    Hercules also indicates that Brazilian producers/exporters, in an 
attempt to achieve a reduced cash deposit rate in the forthcoming 
administrative review, made some small scale imports in 1991 and 1992. 
Id. Hercules notes that, soon thereafter, however, imports of the 
subject merchandise began to increase. Id. According to Hercules, this 
increasing trend stopped and the import volumes of the subject 
merchandise were reduced to zero after Hercules requested a second 
administrative review in 1996.6 Id. In conclusion, Hercules 
argues that Brazilian producers/exporters of the subject merchandise 
could not sustain their level of exports after the issuance of the 
antidumping duty order; in other words, Brazilian producers/exporters 
have to dump in order to export the subject merchandise to the United 
States.
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    \6\ Hercules is suggesting that the Brazilian producers/
exporters were dumping at an increased rate and only stopped 
exporting the subject merchandise entirely because of imminent 
imposition of a higher margin in a pending administrative review. 
Hercules states that it withdrew its request for the review after it 
recognized that Quimica, the only firm subjected to the 
investigation and review, had experienced an industrial accident 
and, as a consequence, would not be in position for some time to 
dump the subject merchandise in the United States. In other words, 
exports of the subject merchandise reduced to zero in 1998 because 
of an accident, which shut down Quimica's production facilities in 
Brazil. See Industrial Nitrocellulose From Brazil; Rescission of 
Antidumping Duty Administrative Review, 62 FR 63666 (December 15, 
1997).
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    Consistent with section 752(c) of the Act, the Department 
considered 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, immediately after the 
imposition of the order, the import volumes of the subject merchandise 
declined substantially.7 However, for the period 1994-1998, 
it is unclear whether the import volumes have declined substantially, 
or declined at all, when compared to pre-order volume.8 
Therefore, the Department determines that although the import volumes 
of the subject merchandise decreased significantly immediately after 
the issuance of the order, the Department cannot determine that import 
volumes of the subject merchandise decreased for the five-year period 
preceding the year of publication of this notice of initiation vis a 
vis pre-order imports volumes.
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    \7\ See footnote 4, supra. The numbers supplied by Hercules 
exactly correspond with those of the U.S. International Trade 
Commission Data.
    \8\ The average volume of imports of the subject merchandise 
between 1994 and 1998 was 564.4; however, if we exclude 1998 zero 
level, which was due to Quimica's production incapacitation, the 
average volume between 1994 and 1997 was 705.5. The average of 1989 
and 1990 pre-order volume was 470.5; in 1989 alone, the pre-order 
volume was 734.
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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 considered 
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,9 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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    \9\ See footnote 3, supra. In this Administrative Review, 
covering the period July 1991 through June 1992, the Department 
determined that the weighted-average dumping margin for Quimica was 
5.81 percent and for all-others was 61.25 percent.
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    Given that dumping of the subject merchandise continued above the 
de minimis level 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 Quimica and 
all-others: 61.25 percent.10 We note that, to date, the 
Department has not issued any duty absorption findings in this case.
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    \10\ See Final Determination of Sales at Less Than Fair Value: 
Industrial Nitrocellulose from Brazil, 55 FR 23120 (June 6, 1990).
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    In its substantive response, Hercules urges the Department to 
report to the

[[Page 57857]]

Commission the dumping margins from the original investigation as the 
margins likely to prevail. (See the July 1, 1999 Substantive Response 
of Hercules at 6-7.) Although the Department found a substantially 
reduced 5.81 percent dumping margin for a Brazilian producer in its 
administrative review, Hercules contends that the reduced dumping 
margin coincided with greatly declined import volumes of the subject 
merchandise.11 Id. Therefore, the rates which would most 
accurately reflect the antidumping margins that are likely to prevail 
were the order revoked are the ones from the original investigation.
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    \11\ See footnote 5 and 8, supra.
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    The Department agrees with Hercules' suggestion pertaining to the 
margins that are likely to prevail if the order were revoked. Because 
the margins from the original investigation reflect the behavior of 
Brazilian 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)
------------------------------------------------------------------------
Companhia Nitro Quimica Brasileira.........................        61.25
All Others.................................................        61.25
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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 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. 99-28067 Filed 10-26-99; 8:45 am]
BILLING CODE 3510-DS-P