[Federal Register Volume 65, Number 2 (Tuesday, January 4, 2000)]
[Notices]
[Pages 281-283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-98]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-504]
Final Results of Full Sunset Review: Porcelain-on-Steel Cooking
Ware From Mexico
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of Final Results of Full Sunset Review: Porcelain-on-
Steel Cooking Ware from Mexico.
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SUMMARY: On August 26, 1999, the Department of Commerce (``the
Department'') published a notice of preliminary results of the full
sunset review of the antidumping duty order on porcelain-on-steel
cooking ware from Mexico pursuant to section 751(c) of the Tariff Act
of 1930, as amended (``the Act''). We provided interested parties an
opportunity to comment on our preliminary results. We received comments
from both domestic and respondent interested parties. As a result of
this review, the Department finds that revocation of this 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: Martha V. Douthit 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-
5050 or (202) 482-1560, respectively.
Effective Date: January 4, 2000.
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) and 19 CFR Part 351 (1999) 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 merchandise subject to this antidumping duty order is
porcelain-on-steel cooking ware (``POS cooking ware'') from Mexico,
which includes tea kettles, that do not have self-contained electric
heating elements. All of the foregoing are constructed of steel and are
enameled or glazed with vitreous glasses. This merchandise is currently
classifiable under Harmonized Tariff Schedule of the United States
(``HTSUS'') subheading 7323.94.00. Kitchenware currently entering under
HTSUS subheading 7323.94.00.30 is not subject to the order. Although
the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope of the order remains
dispositive.
Background
On August 26, 1999, the Department published in the Federal
Register (64 FR 46651) the Preliminary Results of Full Sunset Review:
Porcelain-on-Steel Cooking Ware from Mexico, (``Preliminary Results'').
In the Preliminary Results, we found that revocation of the order would
likely result in the continuation or recurrence of dumping. In
addition, we preliminarily determined that the magnitude of the margin
of dumping likely to prevail if the order were revoked was 42.71
percent for Cinsa, S.A. (``Cinsa''), 129.40 percent for Esmaltaciones
de Norte America, S.A. de C.V. (``ENASA''), and 29.52 percent for ``all
others.''
On October 12, 1999, within the deadline specified in 19 CFR
351.309(c)(1)(i), we received comments on behalf of Cinsa and ENASA
(collectively, ``the respondents''). On October 12, 1999, within the
deadline specified in 19 CFR 351.309(d)(1), we received rebuttal
comments from Columbian Home Products (``CHP''), the domestic
interested party in this review. We have addressed the comments
received below.
Comments
Comment 1: The respondents assert that, in the amended final
results of the eleventh administrative review, the Department's
presumption that duties were being absorbed fails to meet the
requirement that the Department carry out a meaningful analysis of
whether antidumping duties are absorbed. The respondents assert that if
in duty absorption inquiries the Department need not actually analyze
absorption but, rather, may simply presume it from the existence of
dumping alone, the statute's duty absorption provisions are rendered
superfluous. Additionally, the respondents assert that the Department's
presumption is, in effect, impossible to rebut. Therefore, the
respondents argue that application of the duty absorption methodology
to calculate Cinsa's and ENASA's likely margins if the order were
revoked is contrary to law.
In its rebuttal comments CHP argues that Cinsa and ENASA did not
challenge the Department's duty absorption determination in either
their case brief on the Department's preliminary results of the
eleventh administrative review nor in their
[[Page 282]]
appeal of the final results of that review to a binational panel.
Therefore, CHP argues that the Department's duty absorption
determination in the eleventh administrative review is final and cannot
be disturbed. CHP argues that this argument is untimely and should be
rejected because the Department does not have the authority to make
duty absorption determinations in a sunset review. Additionally, CHP
argues that the respondent's challenge to the Department's use of a
rebuttable presumption in making a determination of duty absorption is
without merit. CHP argues that the Department has previously considered
exactly this same argument, in the course of administrative reviews
where it has properly been raised, and has rejected it. Further, CHP
asserts that given that the duty absorption provision was enacted long
before the beginning of the eleventh administrative review, the
respondents had ample opportunity to address the issue of duty
absorption and to develop evidence demonstrating that duty absorption
was not occurring. In conclusion, CHP argues that the Department's duty
absorption determination in the eleventh review is final and cannot be
changed in the sunset review. Further, under the statute, the
Department must report the duty absorption determination to the
Commission.
DOC Position: We agree with CHP that duty absorption determinations
are made in the context of administrative reviews. Additionally, we
agree with CHP that the appropriate forum for challenging the duty
absorption determination made in the course of the eleventh
administrative review would have been in case briefs and/ or post-final
challenges with respect to the administrative review. As we explained
in the Sunset Policy Bulletin, the Department will provide to the
Commission, on a company-specific basis, its findings regarding duty
absorption (see section II.B.3.a). Therefore, in this final results of
full sunset review we are reporting to the Commission the affirmative
findings of duty absorption made by the Department in the amended
review results of the eleventh administrative review.
Comment 2: The respondents argue that even if the Department's duty
absorption methodology is lawful, its application is not appropriate in
this case. Rather, for the purposes of the final results of this sunset
review, the Department should report margins in accordance with its
normal methodology--using margins found in the original investigation.
The respondents elaborate that in the eleventh review, Cinsa's and
ENASA's margins were calculated inclusive of an adjustment to account
for alleged reimbursement of antidumping duties, a determination which
they are currently challenging. They assert that in the final results
of the eleventh administrative review the Department determined that
reimbursement of antidumping duties owed by the affiliated U.S.
importer took place, and the Department adjusted Cinsa's and ENASA's EP
and CEP to effectively double the antidumping duty liability of the
U.S. importer. Therefore, they argue that an additional adjustment to
these margins--which have already been doubled due to reimbursement to
account for duty absorption--result in impermissible double counting.
The respondents argue that, in order to avoid the effects of
impermissible double counting, the Department may report either (1) the
margins calculated in the original investigation or (2) the margins
calculated in the final results of the eleventh administrative review
unadjusted for the alleged reimbursement of antidumping duties, but
subject to the duty absorption methodology.
CHP, in its rebuttal comments, cites to the Sunset Policy Bulletin,
and argues that because the Department made an affirmative
determination of duty absorption in the administrative review of this
order that was initiated in 1998, Department correctly applied its
policy in the preliminary results of this sunset review. Additionally,
CHP argues that the Department should reject the respondents' argument
because the respondents inappropriately equate the Department's
reimbursement regulation with the duty absorption provision of the
statute with respect to both the purposes of the different provisions
and the means of achieving the purposes. Specifically, CHP asserts that
the reimbursement regulation is intended to address the relationship
between the exporter and its U.S. importer (affiliated or unaffiliated)
and provide a remedy when there is evidence that the exporter has
reimbursed the U.S. importer for antidumping duties. The duty
absorption provision, in contrast, is intended to address the
relationship between an affiliated U.S. importer and its unaffiliated
customers in the United States. CHP further asserts that duty
reimbursement and duty absorption are separate problems with separate
remedies. With respect to reimbursement, the exporter would cease
transfers of funds to the importer to pay the antidumping duties, and
the importer would demonstrate that it can satisfy its antidumping
obligations without such assistance. Whereas, with respect to duty
absorption, the affiliated U.S. importer would demonstrate that it
passed the cost of antidumping duties through to its unaffiliated U.S.
customers. Additionally, citing to the Statement of Administrative
Action (``the SAA'') H.R. Doc. No. 103-316, Vol. 1 (1994), at 885-886,
CHP argues that the SAA explicitly recognizes the different and
mutually exclusive purposes of the duty absorption and reimbursement
provisions. Arguing that reimbursement and duty absorption can occur
independently of one another, CHP states that the respondents provided
no reason why there could not be reimbursement of antidumping duties
and duty absorption with respect to the same sales and, absent such
evidence, the Department must conclude that both did occur. CHP argues
that, if the Department determines that it may not adjust the final
margins from the eleventh review to account for duty absorption under
the theory that these margins have already been adjusted to reflect
duty absorption, in the alternative, the Department should report the
margins from the eleventh administrative review as the margins likely
to prevail should the order be revoked.
DOC Position: In the Sunset Policy Bulletin the Department
explained that, where duty absorption had been found in an
administrative review initiated in 1998 (for transition orders), the
Department normally will determine that a company's current dumping
margin is not indicative of the margin likely to prevail if the order
is revoked and will provide to the Commission the higher of the margin
that the Department otherwise would have reported to the Commission or
the most recent margin for that company adjusted to account for
findings on duty absorption. The Department cited to the SAA at 885,
and the House Report, H.R. Rep. No. 103-826, pt. 1 (1994), at 60, which
provide that duty absorption is a strong indicator that the current
dumping margins calculated by the Department in reviews may not be
indicative of the margins that would exist in the absence of an order.
After the revocation of an order, an importer could achieve the same
pre-revocation return on its sales by lowering its prices in the United
States in the amount of the duty that previously was being absorbed.
Additionally, the Senate Report, S. Rep. No. 103-412 (1994), at 50,
suggests that the Department's notification to the Commission of its
findings on duty absorption should
[[Page 283]]
include, to the extent practicable, some indication of the magnitude of
the absorption.
Based on our analysis of 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 order, we preliminarily determined
that we would normally determine that the margins calculated in the
original investigation best reflect the behavior of producers/exporters
without the discipline of the order (64 FR 46651). However, we noted
that consistent with the Sunset Policy Bulletin, we were adjusting the
most recent margin to account for duty absorption findings and, because
the adjusted margins for Cinsa and ENASA are higher than the rates from
the original investigation, we would report the adjusted rates as the
margins likely to prevail were the order revoked. Id.
In light of the comments received, we have reconsidered our
preliminary determination with respect to the magnitude of the margin
likely to prevail should the order be revoked. While we agree with CHP
that duty reimbursement and duty absorption are separate problems with
separate remedies, we also agree with the respondents that, in this
case, our stated policy of adjusting the margin to take into account
the findings on duty absorption may result in an overestimation of the
margin likely to prevail were the order revoked. Specifically, having
determined duty reimbursement, for the purpose of calculating the
export price and the constructed export price in the eleventh review,
the Department deducted from the starting price the amount of
antidumping duties reimbursed to CIC by Cinsa and ENASA.1
This deduction for reimbursed duties had the effect of increasing the
weighted-average margins found during the administrative review. The
Department also found that both Cinsa and ENASA made all of their sales
of the subject merchandise to the United States through an importer
that is affiliated within the meaning of section 751(a)(4) of the Act.
Because we determined that there was a dumping margin on 68.03 percent
of Cinsa's U.S. sales during the period of review and on 98.52 percent
of ENASA's sales during the period of review, we found that antidumping
duties had been absorbed by the respondents on those percent of sales,
respectively. Id. As noted above, although we agree that reimbursement
and absorption may occur with respect to the same sales, because of the
effect of consideration of reimbursement on the margin, we do not agree
that the entire margin is absorbed such that we should double the
margins calculated inclusive of reimbursement. We agree with CHP that
it is not appropriate to recalculate margins from the eleventh
administrative review in order to eliminate the effect of
reimbursement. Rather, we believe that the calculation in the eleventh
administrative review for reimbursement effectively approximates the
calculation we would make to account for duty absorption. Therefore,
consistent with the Sunset Policy Bulletin, for purposes of determining
the magnitude of the margin likely to prevail, we considered the
margins from the original investigation (i.e., the margins we would
otherwise report to the Commission) and the margins from the eleventh
review. As provided in section II.B.3.b, where we have found duty
absorption, we normally will report to the Commission the higher of the
margin that the Department otherwise would have reported to the
Commission or the most recent margin for that company adjusted to
account for findings on duty absorption. Because the margins as
calculated in the eleventh review are higher than those from the
original investigation, we are reporting those as the magnitude of the
margin likely to prevail were the order revoked.
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\1\ See Porcelain-on-Steel Cookware From Mexico: Preliminary
Results of Antidumping Duty Administrative Review, 64 FR 1592
(January 11, 1999), Porcelain-on-Steel Cookware From Mexico: Final
Results of Antidumping Duty Administrative Review, 64 FR 26934 (May
18, 1999), and Porcelain-on-Steel Cookware From Mexico: Amended
Final Results of Antidumping Duty Administrative Review, 64 FR 29262
(June 1, 1999).
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Final Results of 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 for the reasons set forth in the Preliminary
Results. Additionally, as discussed in the Preliminary Results and
above, we find that during the administrative review covering the
period December 1, 1986 through November 20, 1997, antidumping duties
were absorbed by Cinsa on 68.03 percent of its U.S. sales of subject
merchandise and by ENASA on 98.52 percent of its U.S. sales of subject
merchandise. Furthermore, for the reasons set forth in the Preliminary
Results and as discussed above, we find that the magnitude of the
margins likely to prevail if the order were revoked are as follows:
25.42 percent for Cinsa, 65.28 percent for ENASA, and 29.52 percent for
``all others.''
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 section 751(c), 752, and 777(i)(1) of the Act.
Dated: December 28, 1999.
Holly Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-98 Filed 1-3-00; 8:45 am]
BILLING CODE 3510-DS-P