[Federal Register Volume 64, Number 207 (Wednesday, October 27, 1999)]
[Notices]
[Pages 57859-57862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28069]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-427-009]


Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose From France

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

ACTION: Notice of Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose from France.

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SUMMARY: On June 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping duty order 
on industrial nitrocellulose from France (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, 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

[[Page 57860]]

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 France. 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 France was 
published in the Federal Register on August 10, 1983 (48 FR 
36303).1 In that order, the Department determined that the 
weighted-average dumping margin for all entries of the subject 
merchandise was 1.38 percent.2 Since that time, the 
Department has completed several administrative reviews.3 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 Industrial Nitrocellulose from France; Antidumping Duty 
Order, 48 FR 36303 (August 10, 1983).
    \2\ However, the underlying investigation and subsequent 
administrative reviews dealt with only one French company, Societe 
Nationale des Poudres et Explosifs (``SNPE'') except in the most 
recent administrative review in which Bergerac, N.C. (``Bergerac''), 
a successor company with respect to production of the subject 
merchandise and a subsidiary of SNPE, became the subject of the 
review.
    \3\ See Industrial Nitrocellulose From France: Final Results of 
Antidumping Duty Administrative Review, 51 FR 43227 (December 1, 
1986); Industrial Nitrocellulose From France: Final Results of 
Antidumping Duty Administrative Review, 53 FR 15262 (April 28, 
1988); Industrial Nitrocellulose From France: Final Results of 
Antidumping Duty Administrative Review, 53 FR 27185 (July 19, 1988); 
Industrial Nitrocellulose From France: Final Results of Antidumping 
Duty Administrative Review, 63 FR 49085 (September 14, 1998).
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Background

    On June 1, 1999, the Department initiated a sunset review of the 
antidumping duty order on nitrocellulose from France (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 all review proceedings. (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 France 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 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 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 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 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

[[Page 57861]]

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 assertion, Hercules points out that, during the 1990s, 
Bergerac continued to increase its extent of dumping of the subject 
merchandise. Hercules notes that, after finding Bergerac was dumping at 
the rate of 4.39 percent for the period of 1986-1987, in the next and 
the most recent administrative review covering 1996-1997, the 
Department determined that the dumping margin for Bergerac was 13.35 
percent. Id. Hercules argues that Bergerac has demonstrated over the 
past decade that it has to dump in order to export the subject 
merchandise to the United States.
    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 Commission 
indicate that, during 1990s, the import volumes of the subject 
merchandise have shown an increasing trend.5 Specifically, 
between 1994 and 1998, the Commission's data show a rather substantial 
increase in the import volumes of the subject merchandise vis a vis 
pre-order volumes.6 Therefore, the Department determines 
that the import volumes of the subject merchandise increased or showed 
an increasing trend after the issuance of the order.
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    \5\ The import volumes of the subject merchandise during the 
1990s are as follows (the order was issued in August 1983; numbers 
are in metric tons): 1990--188; 1991--306; 1992--788; 1993--1,633; 
1994--2,564; 1995--2,338; 1996--2,760; 1997--4,377; 1998--3,883. 
These numbers correspond exactly with the Commission data.
    \6\ See footnote 5, supra. During 1994--1998, the average import 
volume of the subject merchandise was 3,184.4 metric tons, which 
denotes a 36.58 percent increase over the average of 1982 and 1983 
pre-order import levels (2,331.5 metric tons).
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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 to dump 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 reviews,7 the Department determines that, 
since the issuance of the order, except for the period between May 1983 
and July 1986, the weighted-average dumping margins for the subject 
merchandise have continued at above the de minimis level.
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    \7\ See footnote 3, supra. Although the weighted-average dumping 
margins of the subject merchandise decreased to zero or de minimis 
levels in each of the first three administrative reviews (from the 
original investigation margin of 1.38 percent to 0.17 percent in the 
first review, 0 percent in the second review, and 0.07 percent in 
the third review), in the fourth review, the margin increased to 
4.39 percent, and in the most recent, fifth, review, the dumping 
margin increased to 13.35 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 SNPE and 
all-others of 1.38 percent.8 To date, the Department has not 
issued any duty absorption findings in this case.
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    \8\ See Final Determination of Sales at Less Than Fair Value: 
Industrial Nitrocellulose from France, 48 FR 21615 (May 13, 1983).
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    In its substantive response, while acknowledging that the 
Department normally will provide the Commission with the dumping 
margins from the original investigation, Hercules argues that, in the 
instant review, the Department should report to the Commission a more 
recently calculated margin because Bergerac increased its dumping in 
order to increase its market share in the United States. (See the July 
1, 1999, Substantive Response of Hercules at 6-7.) In addition to 
supplying data which indicate clearly that Bergerac's market share in 
the United States increased during the 1990s,9 Hercules also 
claims that Bergerac's market behavior of not raising its export 
prices,10 after a higher dumping margin was imposed in the 
most recent administrative review,11 suggests that Bergerac 
intends to continue dumping at the recent, higher margins to hold onto 
or to increase its market share. Id. Therefore, Hercules urges the 
Department to provide to the Commission the more recent, higher margin 
because that margin is a better indicator of Bergerac's likely behavior 
in the event the order is revoked.
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    \9\ In particular, during and after the period covered by the 
latest administrative review, in which the Department found 
substantially increased dumping of the subject merchandise, 
Bergerac's market share increased rather significantly as well 
(inasmuch as the U.S. demand for the domestic like product has 
remained stable during the relevant period, Bergerac's increase in 
the volume of exports of the subject merchandise is directly 
translated to the increase in Bergerac's market share). Also, in 
general, during the 1990's, Bergerac's market share showed an 
increasing trend; this trend started after the Department's fourth 
administrative review in which the Department found that Bergerac 
was dumping at 4.39 percent rather than at the zero or de minimis 
levels, which the Department found during the first three 
administrative reviews.
    \10\ To support this, Hercules submitted its business manager's 
sworn affidavit, in which the business manager indicated that 
Bergerac had not offered any price increase in its offers to 
customers since Bergerac's antidumping margin increased from 4.39 
percent to 13.35 percent in September 1998. (See the July 1, 1999 
Substantive Response of Hercules, attachment 4.)
    \11\ See footnote 6, supra.
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    The Department agrees with the Hercules' argument pertaining to the 
margin that is likely to prevail were the order revoked. In the Sunset 
Policy Bulletin, the Department indicated that, when a company chooses 
to increase dumping in order to maintain or increase its market share, 
the Department may report a more recently calculated margin to the 
Commission if dumping margins increased after the issuance of the 
order. (See section II.B.2 of the Sunset Policy Bulletin.) Absent 
argument and evidence to the contrary, the Department sees no reason to 
change its practice as articulated in the Sunset Policy Bulletin of 
selecting a more recently calculated rate when increased weighted-
average dumping margins for a company coincide with its increased 
market share of the subject merchandise. We will report to the

[[Page 57862]]

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 duty order would likely lead to continuation or 
recurrence of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
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Bergerac, N.C..............................................        13.35
All Others.................................................         1.38
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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. 99-28069 Filed 10-26-99; 8:45 am]
BILLING CODE 3510-DS-P