[Federal Register Volume 65, Number 4 (Thursday, January 6, 2000)]
[Notices]
[Pages 735-742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-285]


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 Notices
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  Federal Register / Vol. 65, No. 4 / Thursday, January 6, 2000 / 
Notices  

[[Page 735]]


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DEPARTMENT OF COMMERCE

International Trade Administration


Final Results of Full Sunset Review: Brass Sheet and Strip From 
the Netherlands

[A-421-701]
AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final results of full sunset review: Brass sheet and 
strip from the Netherlands.

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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 brass sheet and strip 
from the Netherlands (64 FR 46637) 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: 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: January 6, 2000.

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 (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

    Imports covered by this order are brass sheet and strip, other than 
leaded and tin brass sheet and strip, from the Netherlands. The 
chemical composition of the products under order is currently defined 
in the Copper Development Association (``CDA'') 200 Series or the 
Unified Numbering System (``UNS'') C20000 series. This order does not 
cover products the chemical composition of which are defined by other 
CDA or UNS series. The physical dimensions of the products covered by 
this order are brass sheet and strip of solid rectangular cross section 
over 0.006 inch (0.15 millimeter) through 0.188 inch (4.8 millimeters) 
in gauge, regardless of width. Coiled, wound-on-reels (traverse-wound), 
and cut-to-length products are included. The merchandise subject to 
this order is currently classifiable under items numbers 7409.21.00 and 
7409.29.20 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise subject to this order is dispositive.

History of the Order

    The antidumping duty order on brass sheet and strip (``BSS'') from 
the Netherlands was published in the Federal Register on August 12, 
1988 (53 FR 30455).1 In that order, the Department 
determined that weighted-average dumping margins for the Metallverken 
Nederland B.V. and all others were 16.99 percent.2
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    \1\ See Antidumping Duty Order of Sales at Less Than Fair Value; 
Brass Sheet and Strip From the Netherlands, 53 FR 30455 (August 12, 
1988).
    \2\ In the original investigation, Outokumpu Copper Strip, B.V. 
(``OBV'') was doing business under the name, Metallverken Nederland 
B.V. (See March 4, 1999, Substantive Response of OBV at 5 (footnote 
4); see also March 3, 1999, Substantive Response of the domestic 
interested parties at 24.)
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    The Department has conducted several administrative reviews since 
that time.3 The order remains in effect for all producers 
and exporters of BSS from the Netherlands. We note that the Department 
has not conducted any investigation with respect to duty absorption 
regarding the exports of the subject merchandise.
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    \3\ See Brass Sheet and Strip From the Netherlands; Final 
Results of Antidumping Duty Administrative Reviews (Corrections), 57 
FR 11352 (April 2, 1992); Brass Sheet and Strip From the 
Netherlands; Final Results of Antidumping Administrative Reviews, 57 
FR 9534 (March 19, 1992) (this review consolidated first and second 
reviews); Brass Sheet and Strip From the Netherlands; Final Results 
of Antidumping Duty Administrative Review, 61 FR 1324 (January 19, 
1996); Brass Sheet and Strip From the Netherlands; Amendment to 
Final Results of Antidumping Duty Administrative Review, 62 FR 33395 
(June 19, 1997); Brass Sheet and Strip From the Netherlands; Final 
Results of Antidumping Duty Administrative Review, 61 FR 1324 
(January 19, 1996); Brass Sheet and Strip From the Netherlands; 
Final Results of Antidumping Duty Administrative Review, 62 FR 51449 
(October 1, 1997); and Brass Sheet and Strip From the Netherlands; 
Final Results of Antidumping Duty Administrative Review, 63 FR 49544 
(September 16, 1998). See also the final results of the latest 
administrative review, covering the period 1997-1998, which should 
be published concurrently with this publication.
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Background

    On August 26, 1999, the Department published the preliminary 
results of the sunset review on BSS from the Netherlands.4 
Notwithstanding a finding of a significant decline in the import 
volumes of the subject merchandise after the issuance of the order, the 
Department preliminarily determined that revocation of the order would 
not be likely to lead to continuation or recurrence of dumping. The 
Department stated that although import volumes of the subject 
merchandise declined significantly after the issuance of the order, 
since the two most recent administrative reviews indicate that dumping 
of the subject merchandise has been eliminated, and since Outokumpu 
Copper Strip, B.V. (``OBV'') presents effective other relevant 
information and arguments explaining why it is unlikely that OBV would 
resume dumping in the United States, the Department preliminarily 
determines that

[[Page 736]]

recurrence of dumping is not likely if the order were revoked.
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    \4\ See Preliminary Results of Full Sunset Review: Brass Sheet 
and Strip From the Netherlands, 64 FR 46637 (August 26, 1999).
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    On October 13, 1999, both the domestic and respondent interested 
parties submitted additional information.5 Also, on October 
25, 1999, we received case briefs from the domestic interested parties 
and OBV.6 On November 1, 1999, within the deadline specified 
in the Department's memorandum,7 both domestic and 
respondent parties submitted reply briefs. The Department held a public 
hearing on November 3, 1999. As a result of the aforementioned 
additional documents and comments, we have changed our determination.
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    \5\ Following the Department's publication of its preliminary 
results of the instant sunset review, on October 5, 1999, counsel to 
the domestic interested parties, submitted a letter requesting the 
Department to allow the domestic interested parties to augment the 
existing record with additional information. The Department allowed 
both domestic and respondent interested parties to submit relevant 
information until October 13, 1999. (See the Department's memorandum 
to Mr. Jeffrey S. Beckington.) The domestic interested parties 
submitted Mr. Baker's affidavit and three different portions of the 
Department's Sales Verification Report (``Verification Report'') 
which was completed in the concurrent administrative review of the 
order. Also, OVB submitted two portions of the Verification Report. 
Consequently, Mr. Baker's affidavit and the portions of the 
Verification Report submitted by interested parties are now on the 
record in this review.
    \6\ On September 27, 1999, while requesting a public hearing, 
the domestic interested parties requested extensions of the 
deadlines for the case and rebuttal briefs and a postponement of the 
hearing. The Department extended the deadlines for case brief and 
rebuttal brief until and not later than October 25, 1999, and 
November 1, 1999, respectively. Also, at the same time, the 
Department postponed the hearing to November 3, 1999.
    \7\ See footnote 6, supra.
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Department's Determination

    Based upon arguments raised by interested parties in case and 
rebuttal briefs, we have re-examined the facts and statements on the 
record in this case and determined that revocation of the antidumping 
duty order on brass sheet and strip from the Netherlands pursuant to 
section 751(c) of the Act would be likely to lead to recurrence of 
sales of subject merchandise at less than fair value.
    In its Sunset Policy Bulletin, the Department established that it 
will normally determine that revocation of an antidumping duty order 
would be likely to lead to continuation or recurrence of sales of the 
subject merchandise at less than fair value 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 this case, consistent with section 752(c) of the Act, the 
Department considered whether dumping continued at any level above de 
minimis after the issuance of the antidumping duty order; whether the 
imports ceased after the issuance of the order; and whether dumping was 
eliminated and import volumes declined significantly after the issuance 
of the order. We found that dumping of the subject merchandise 
continued after the issuance of the order, through the first, second 
and third administrative reviews.8 We also found that OBV's 
imports of subject merchandise ceased after the issuance of the order 
for four administrative review periods,9 but resumed in 
1995. Further, we found that OBV did not dump subject merchandise, at a 
level above de minimis, during the periods 1995-1996 and 1996-1997 
(last two administrative review periods).
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    \8\ See footnote 3.
    \9\ Id.
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    With respect to import volumes of the subject merchandise, the data 
reported by both OBV and the domestic interested parties in this case 
indicate that, since the imposition of the order, import volumes of 
subject merchandise have declined significantly. In addition, data in 
the United States Customs Census Bureau IM-146s and import data from 
the U.S. International Trade Commission indicate that imports of 
subject merchandise have declined over the life of the order. No party 
in this case disputes that import volumes of subject merchandise 
declined significantly since the issuance of the order. Rather, the 
parties have argued over the significance of the acquisition of the 
U.S. producer, American Brass, by OBV's parent company, and the 
corporate decision to have American Brass play the primary role in 
supplying subject merchandise to the U.S. market.
    In the preliminary results, we agreed with OBV that the acquisition 
of American Brass makes OBV's position in the U.S. market rather unique 
because it appeared that OBV no longer had to dump subject merchandise 
in order to supply the U.S. market, and because American Brass had more 
than adequate capacity to meet the demand in the U.S. market for BSS. 
Given these apparent facts, we preliminarily found persuasive OBV's 
argument that it would not make sense for OBV to jeopardize the 
economic well being of American Brass by undercutting the prices of its 
U.S.-produced BSS by resumption of dumping. Because we preliminarily 
found that American Brass was to bear the primary responsibility of 
satisfying U.S. customers' needs for BSS, we preliminarily determined 
that, despite the significant decline in import volumes of subject 
merchandise after the issuance of the order, the two most recent 
reviews were probative of the behavior of the company absent the 
discipline of the order.
    As noted in the SAA, at 883, the determination called for in this 
type of review is inherently predictive and speculative. Therefore, we 
have established a policy of relying on past behavior as a predictor of 
future behavior. In light of OBV's announced resumption of import 
volumes at pre-order levels, we now find that the company's behavior 
during the most recent administrative reviews can no longer be 
considered probative of OBV's behavior absent the discipline of the 
order.10 In the two most recent administrative reviews, 
OBV's import volumes were abnormally small by any measure.11 
If the transfer of production and sales of subject radiator strip to 
American Brass were permanent, then these small import volumes could be 
considered normal for the company and the margins for the two recent 
reviews could be reflective of the company's future behavior. By 
contrast, where, as here, a company will resume imports of the subject 
merchandise at levels expected to exceed nearly 65 times the import 
volumes in the two most recent reviews, the Department is compelled to 
conclude that the company's pricing behavior during these previous 
periods in which import volumes were small has little or no probative 
value. Due to the transfer of production and sales of subject radiator 
strip back to OBV, the company will import subject merchandise in 
volumes that equal or exceed the volume of imports during the pre-order 
period. Accordingly, we determine that, consistent with established 
policy, the margin likely to prevail must be measured based on the 
company's behavior at the time of the original investigation. 
Therefore, we determine that revocation of the antidumping duty order 
on brass sheet and strip from the Netherlands under section 751(c) 
would be likely to lead to recurrence of sales of subject merchandise 
at less than fair value. We have addressed the comments received below.
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    \10\ See Sales Verification Report at 39.
    \11\ See Comment 1 below.

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[[Page 737]]

Likelihood of Continuation or Recurrence of Dumping

    Comment 1: The domestic interested parties contend that the factual 
premises underlying the Department's preliminary results are in error; 
namely, OBV was dumping during the most recent administrative review. 
The domestic interested parties claim that had the Department not 
allowed OBV the start-up adjustment and quarterly (instead of yearly) 
calculation of its cost, OBV would have been found to be dumping during 
1997-1998 review period. Assuming, arguendo, OBV was not dumping, the 
domestic interested parties further argue that because such a finding 
was based on a small, unrepresentative volume of sales when compared 
to: (1) OBV's pre-order exports of the subject merchandise; (2) the 
current size of the U.S. market for the subject merchandise; (3) OBV's 
shipments of non-subject merchandise; (4) OBV's shipments in its home 
market; (5) OBV's shipments to other countries; or (6) OBV's projected 
volume of shipments to the United States, those few sales should not 
serve as the basis for a finding that dumping is not likely to occur in 
the future. (See the domestic interested parties' brief at 2 and 8-27, 
and the hearing transcript at 10-49 and 97-108.)
    OBV argues that the start-up cost adjustment is a relatively new 
concept and, as a result, there have not been many applications of the 
adjustment. However, OBV contends that the rarity alone should not be 
considered as a determining factor in finding whether the adjustment is 
warranted. OBV further argues that a potential distortive effect of 
metal prices on margin calculation was recognized by the Department 
from the beginning (in the original investigation) and, therefore, 
allowing a cost calculation based on quarterly data is not unusual at 
all. (See OBV's reply brief at 24-26, and brief transcript at 56-97.)
    OBV contends that its export volumes of the subject merchandise 
were low during the last three administrative review periods due to the 
acquisition of American Brass. OBV asserts that it never stated that 
the order was even a reason for stopping shipments. In other words, OBV 
claims that it could have sold a substantial amount of subject 
merchandise with the discipline of the order in place had OYJ not 
purchased American Brass. OBV further argues that, at any rate, the 
Department determined, in its most recent preliminary results of 
administrative review, that the import volumes in the recent 
administrative reviews constitute commercial quantities. In addition, 
OBV asserts that the comparison between pre-order and post-order 
volumes is meaningless because OBV will never return to pre-order 
levels on account of American Brass's presence in the U.S. market. OBV 
basically dismisses the domestic interested parties' various 
comparisons of OBV's post-order export volumes of the subject 
merchandise as meaningless by resorting to the fact that the much 
larger American Brass's production replaced OBV's exports of the 
subject merchandise to the United States. Furthermore, OBV argues that 
its recent shipment levels are not aberrational or abnormally small in 
the first place, and to the extent they are deemed small, they are due 
to OYJ's purchase of American Brass. (See OBV's reply brief at 2 and 
24-40.)
    Department's Position: With respect to arguments raised regarding 
the results of the administrative review, we refer interested parties 
to the final results of the administrative review.12
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    \12\ See footnote 3, supra.
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    Further, in light of the arguments raised in this sunset review, we 
do not agree with OBV that the comparison between OBV's pre-and post-
order import volumes of the subject merchandise to the United States is 
meaningless. The Act, the SAA, the House Report, the Senate Report, the 
Department's Regulations, and the Sunset Policy Bulletin provide that, 
in making its determinations of likelihood of continuation or 
recurrence of dumping, the Department compare the import volumes of the 
subject merchandise for the period before and the period after the 
issuance of the order. In our preliminary results we compared the 
import volumes for the period before and the period after the issuance 
of the order and found, on the basis of uncontroverted evidence, that 
there was a significant decline in the volume of imports of the subject 
merchandise after the issuance of the order. However, as noted above, 
on the basis of additional information and argument provided by OBV, we 
preliminarily determined that the elimination of dumping in recent 
administrative reviews was, nonetheless, probative of the behavior of 
OBV without the discipline of the order. For the purposes of these 
final results we have reconsidered the weight to be accorded the more 
recently calculated margins and have determined, in light of OBV's 
stated intent to begin importing subject merchandise into the United 
States at pre-order levels once the order is revoked, that the more 
recently calculated margins are not probative of the behavior of OBV 
were the order revoked.
    Comment 2: The domestic interested parties insist that OYJ's 
ownership of American Brass is by no means unique; rather, such 
acquisition is a standard practice for foreign respondents to avoid the 
dumping laws. Essentially, the domestic interested parties claim that 
OYJ's acquisition of American Brass does not mean that OBV is not 
likely to dump. The domestic interested parties further note that the 
purchase of American Brass never demonstrated that OBV stopped dumping. 
(See the domestic interested parties brief at 3 and 29-30, and the 
hearing transcript at 10-49 and 97-108.)
    OBV contends that the domestic interested parties misunderstood the 
rationale with respect to OBV's uniqueness argument. Specifically, OBV 
contends that its unique position is derived from the fact that: (1) 
OBV is the sole producer of the subject merchandise in the Netherlands; 
(2) the ownership of American Brass by OBV's parent company; (3) the 
size of American Brass vis-a-vis OBV; and (4) the relative roles of OBV 
and American Brass in the OYJ Group. In any case, OBV argues that the 
cases cited by the domestic interested parties were based on sparse, 
limited facts available and that the Department never addressed a 
uniqueness issue in these cases. (See OBV's reply brief at 3 and 40-50, 
and the hearing transcript at 56-97.)
    Department's Position: The Department's preliminary results that 
the recently calculated margins were, despite the significant decrease 
between pre- and post-order import volumes, nonetheless probative of 
OBV's behavior without the discipline of the order was based on OBV's 
representation that the acquisition of American Brass enabled American 
Brass to meet the U.S. demand for BSS, thereby replacing OBV's exports 
of the subject merchandise to the United States. In part on this basis, 
we stated in our preliminary results that the cessation of imports from 
OBV after the purchase ``buttresses the notion that American Brass 
basically took over OBV's exports of the subject merchandise.'' 
13
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    \13\ See footnote 4, 64 FR at 46641, supra.
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    Once it became evident that OBV will take over the entire 
production of radiator strip from American Brass and export that 
subject merchandise to the United States from the Netherlands, OBV 
undermined its uniqueness contention. With the proposed production 
shift from American Brass to OBV, OBV's contention that the purchase of 
American Brass and

[[Page 738]]

subsequent presence of American Brass in the U.S. market eliminated any 
likelihood of future dumping is diminished (i.e., the existence of 
American Brass no longer has any bearing on whether the more recently 
calculated margins are probative of the behavior of OBV without the 
disciple of the order OBV and whether OBV would be likely to resume 
dumping subject merchandise, in general,14 and radiator 
strip, in particular).
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    \14\ As it proposed to do with radiator strip, OYJ can shift 
production of any other type of BSS from American Brass to OBV and 
start dumping that subject merchandise without necessarily competing 
with American Brass.
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    Therefore, for purposes of these final results, we agree 
15 with the domestic interested parties that OYJ's purchase 
of American Brass after the imposition of the order, no longer provides 
sufficient reason and/or evidence to negate the presumption expressed 
in the Sunset Policy Bulletin and the SAA that the elimination of 
dumping coupled with a significant decrease in the volume of imports 
may be probative of the fact that producers/exporters may need to dump 
in order to maintain market share in the United States. Therefore, for 
the final results of this sunset review we have considered OBV's past 
histories pertaining to import volumes and weighted-average dumping 
margins.
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    \15\ As noted in the previous paragraphs, however, we agree with 
the domestic interested parties for different reasons. The domestic 
interested parties cite five cases in their case brief (at 21-29). 
In Brass Sheet and Strip From Germany; Final Results of Antidumping 
Duty Administrative Review and Determination Not To Revoke in Part, 
61 FR 49727 (September 23, 1996), the Department rejected Wieland's 
attempt to make a relevant issue out of its purchase of a U.S. 
production facility because the U.S. facility used imports of the 
subject merchandise as a feed product. The Department determined 
that had the order not been in place, Wieland would have used its 
dumped subject merchandise rather than U.S. produced domestic like 
product as its raw material; hence, Wieland's purchase of a U.S. 
production facility can be distinguished from the instant case. In 
the other four cited cases, also, the ownership of U.S. production 
facilities by foreign respondent interested parties was never an 
issue. In other words, the domestic interested parties reliance on 
the above-referenced cases to discredit OBV's uniqueness argument is 
misplaced.
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    With respect to import volumes of the subject merchandise, the data 
supplied by both OBV and the domestic interested parties indicate that, 
since the imposition of the order, import volumes of the subject 
merchandise have declined significantly. Moreover, data in United 
States Census Bureau IM146s and import data from the United States 
Commission clearly indicate that imports of the subject merchandise 
have declined over the life of the order. In 1986 (a year prior to the 
initiation of the original investigation), import volumes of brass 
sheet and strip exceeded 15 million pounds; whereas, in 1998 import 
volumes have been well under 1 million pounds. In addition, OBV does 
not negate the statistics which show that OBV's import volumes of the 
subject merchandise decreased significantly after the issuance of the 
order. Consequently, we determine that the import volumes of the 
subject merchandise declined substantially after the issuance of the 
order.
    In conclusion, although the three most recent reviews indicate that 
dumping of the subject merchandise has been eliminated,16 
since import volumes of the subject merchandise declined significantly, 
we determine that recurrence of dumping of subject merchandise from the 
Netherlands is likely if the order were revoked.
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    \16\ See footnote 3, supra.
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    Comment 3: The domestic interested parties assert that the 
Department's preliminary results reflect a marked departure from the 
standards established in the statute, the SAA, and the Sunset Policy 
Bulletin, based on which the Department determines whether continuation 
or recurrence of dumping is likely should the order be revoked. 
Specifically, the domestic interested parties contend that, in its 
preliminary results, the Department ignored the facts that dumping 
continued at levels above de minimis after the issuance of the order 
and that the import volumes of the subject merchandise ceased and 
declined substantially when dumping was eliminated. The domestic 
interested parties further argue that the Department should rely upon 
what OBV did in conjunction with the order and not upon what OBV says 
it will do in the future if the order were revoked. (See October 26, 
1999, the domestic interested parties' case brief at 1 and 4-7, and the 
hearing transcript at 10-49 and 97-108.)
    OBV claims that the Department's preliminary decision is fully 
consistent with and supported by a plain reading of the statute, the 
Department's Regulations, and the Sunset Policy Bulletin. OBV contends 
that the Department's ultimate mandate in a sunset review is to 
determine whether revocation of an order is likely to lead to a 
continuation or recurrence of dumping, and as such, the Department is 
free to consider all record evidence in carrying out its ultimate 
mandate in a sunset review. OBV claims that the Department stated that 
it makes no sense to conclude that Outokumpu is going to permit OBV to 
dump the subject merchandise in the United States. (See November 1, 
1999, OBV's reply brief at 1 and 4-17, and the hearing transcript at 
56-97.)
    Department's Position: We do not agree with the domestic interested 
parties' characterization that the Department ignored the facts that 
dumping continued at levels above de minimis and that the import 
volumes of the subject merchandise declined substantially after the 
issuance of the order. In the preliminary results, the Department noted 
that dumping continued for a period after the issuance of the order and 
further, that the import volumes of the subject merchandise decreased 
significantly after the issuance of the order.
    As noted by OBV, in a sunset review, consistent with our 
regulations, interested parties are invited to submit any other 
relevant information or arguments that the party would like the 
Department to consider. (See section 351.218(d)(3)(iv)(B) of the Sunset 
Regulation.) In this review, OBV submitted additional information and 
argument to support its assertion that the significant decrease in the 
post-order volume of imports was not dispositive of the likelihood 
issue. We agree with OBV that the Department has the discretion to 
consider these arguments in the course of determining whether to 
deviate from the general policy. Specifically, our Sunset Policy 
Bulletin enunciates that, with a given set of facts, the Department 
normally will determine whether revocation of the order is likely to 
lead to continuation. (See section II.A.3 of the Sunset Policy 
Bulletin.) Nowhere do we state that the Department will always find 
that dumping is likely to continue or recur when dumping has been 
eliminated and there has been a significant decline in the volume of 
imports.
    Comment 4: The domestic interested parties state that the 
Department erred in basing its preliminary results, without invoking 
good cause, on OBV's unsolicited, unilateral, uninvestigated, and self-
serving representations regarding matters which would more properly 
fall within the purview of the sunset analysis of the International 
Trade Commission (``Commission''). The domestic interested parties 
argue that OBV's claims pertaining to the role it will play in the U.S. 
market (in terms of volumes and nature of the products it will supply, 
and the price it will charge) and pertaining to the competitive 
conditions of the U.S. market of the subject merchandise, were 
unsolicited, not subject to follow-up questioning, and not subject to 
verification by the Department. Since the Department did not have an

[[Page 739]]

affirmative showing of good cause, as required by the statute, the 
domestic interested parties conclude that the Department should exclude 
the aforementioned other factors and make its final determination based 
solely on the three-pronged test set forth in its Sunset Policy 
Bulletin. (See the domestic interested parties brief at 1 and 8-12, and 
the hearing transcript at 10-49 and 97-108.)
    OBV notes that since OBV filed its substantive response on March 3, 
1999, the domestic interested parties have had an ample opportunity to 
request follow-up questions, but did not do so. OBV claims that its 
substantive response is basically a questionnaire response; that there 
is nothing improper about the Department revoking an order prior to the 
Commission's decision; and that the factors considered are identical to 
the factors typically considered by the Commission in making its injury 
determination. (See OBV's reply brief at 13-17 and the hearing 
transcript at 56-97.)
    Department's Position: We disagree with the domestic interested 
parties' argument that the Department erred in basing our preliminary 
results on unsolicited, unilateral, un-investigated, and self-serving 
representations made by OBV pertaining to the competitive conditions of 
the U.S. market. Consistent with the Sunset Regulations (section 
351.218(d)(3)(iv)(B)), a party may submit in its substantive response 
other information or argument the party would like the Secretary to 
consider. Other parties (that filed substantive responses) may then 
rebut those arguments and information. Nothing precludes the Department 
from considering the type of information OBV submitted in its 
substantive response and the Department properly considered this 
information and the domestic interested parties' rebuttals thereto in 
its preliminary results.
    Comment 5: The domestic interested parties note that the 
Department's finding that American Brass would bear the primary 
responsibility of satisfying the U.S. customers of radiator strip is 
contrary to OBV's acknowledgment that OBV will eventually assume the 
primary responsibility of satisfying its U.S.-based customers by 
exporting more than 15.8 million pounds of subject radiator strip in 
the future. Specifically, the domestic interested parties point out 
inconsistent claims by OBV: on one hand, OBV states that it never will 
rreturn to pre-order export level while, on the other hand, OBV 
stipulates that it will eventually take over American Brass' entire 
production of radiator strip, which will result in OBV exporting the 
subject merchandise to the United States at levels greater than pre-
order export volumes of the subject merchandise to the United States.
    The domestic interested parties assert that since OBV readily 
changed its position (production shift from OBV to American Brass and 
then back to OBV), nothing precludes the parent company of OBV, OYJ, 
from changing its mind again in the near future. Namely, the domestic 
interested parties claim that it is possible for OBV to start shipping 
other subject merchandise to the United States--and this production 
shift can rather easily be accomplished with only minor adjustment in 
OBV's current production process. According to the domestic interested 
parties, this possibility is looming especially large in light of 
shrinking radiator strip market. Domestic interested parties point out 
that OBV may start shipping electrostrip products, and that OBV can do 
this without competing with American Brass by utilizing a creative 
product mix. Inasmuch as the instant review covers all subject 
merchandise (not just radiator strip), the domestic interested parties 
further contend that should the order be revoked, OYJ can easily have 
OBV export other subject merchandise, besides radiator strip, to the 
United States. (See the domestic interested parties brief at 2 and 27-
30, and the hearing transcript at 10-49 and 97-108.)
    OBV argues that it informed the Department of OBV's plans to 
gradually increase shipments of subject radiator strip in its March 3, 
1999, response to the notice of initiation in the instant review. OBV 
claims that the Department clearly contemplated that OBV will continue 
to ship the subject radiator strip and that the fact that the tonnage 
is not mentioned is by no means evidence that the Department was 
unaware of, or did not consider, this fact in reaching its preliminary 
results. OBV notes that the proposed shift of production of the 
radiator strip is only a minor portion of American Brass' 1998 
production capacity and of American Brass' 1998 shipments within the 
United States. (See OBV's reply brief at 3, 45-50, and 52, and the 
hearing transcript at 96-97.)
    Department's Position: We agree with the domestic interested 
parties that there is conflicting information on the record regarding 
OBV's intent to export subject merchandise to the United States. 
Although OBV states that American Brass permanently replaced OBV's 
exports of BSS to the United States, OBV also expresses its intention 
of resuming significant exports to the United States when and if the 
order were revoked (see OBV's substantive response, Exhibit 1 (LECG 
Report at 41-42). Therefore, for the purposes of the final results of 
this review, as noted above, we consider the planned resumption of 
imports at pre-order volumes to be probative of the behavior of OBV 
without the discipline of the order.
    Comment 6: The domestic interested parties further note that when 
OBV was selling substantial volumes of the subject merchandise to the 
United States, the Department found margins at levels above de minimis. 
In other words, the domestic interested parties claim, according to 
facts of record, that OBV always dumped when shipping commercial 
quantities of the subject merchandise to the United States. Knowing 
that OBV has been an aggressive and a significant supplier of connector 
products in the European market and that the U.S. radiator-strip market 
is highly competitive, the domestic interested parties assert that 
OBV's self-imposed moratorium of not exporting other subject 
merchandise to the United States will not continue in the future. While 
arguing that OBV is likely to dump in the United States where it 
imports a large volume and a wide range of products to the United 
States if the order were revoked, the domestic interested parties try 
to illustrate its contention with the fact that OBV did not provide to 
the Department American Brass's price data regarding the domestic like 
product. The domestic interested parties also claim that in certain 
instances, the prices of some non-subject merchandise, which are more 
costly to produce than subject merchandise, were lower than the prices 
of the subject merchandise. The domestic interested parties also 
suggest that the Department postpone revocation until a later 
administrative review because revocation would result in serious 
prejudice to the domestic industry; whereas, the postponement would not 
prejudice OBV because its current cash deposit rate is zero, and if 
such is the finding in the instant review, OBV will not only be 
absolved from any duty liability, but will remain eligible for 
revocation; i.e., OBV's ability to obtain revocation would in no way be 
prejudiced by delaying revocation. (See the domestic interested parties 
case brief at 3 and 30-36 and, the hearing transcript at 10-49 and 97-
108.)
    OBV indicates that in the last three administrative reviews, the 
Department found that OBV has shipped in commercial quantities without 
dumping. OBV claims that its sponsored LECG Report indicated that OBV 
would not resume dumping if the order were revoked. OBV contends that 
its future

[[Page 740]]

exports of the subject merchandise will be limited to brass radiator 
strip. OBV claims that, as a matter of law, the Department cannot delay 
revocation in this sunset review just to determine whether OBV would 
dump in the next five years. OBV states that the Department did not 
request OBV to provide American Brass pricing data in this review, and 
thus it cannot be accused of not supplying something when not asked to 
do so. Further, OBV argues that unlike a small, ``stand alone'' 
company, OBV is not forced into dumping the subject merchandise for its 
own survival. OBV indicates that, even with antidumping duty orders in 
effect on the subject merchandise from numerous countries, the domestic 
interested parties, so far, do not find it profitable to manufacture 
radiator strip. Stated differently, based on the fact that OBV will not 
have any domestic competition in the radiator strip market, OBV 
forecasts that there will be no downward pricing pressure exerted on 
OBV by the domestic industries. Thus, OBV concludes that it is unlikely 
to resume dumping in the near future. (See OBV's reply brief at 4, 50-
61, and 64-83, and the hearing transcript at 56-97.)
    Department's Comment: We agree with the domestic interested parties 
that OBV has never attained a zero or de minimis margin when ever it 
exported more than a small amount of subject merchandise to the United 
States.17 However, we disagree with the domestic interested 
parties' contention that a postponement of revocation, where revocation 
is appropriate, would not prejudice OBV. We agree with OBV that the 
Department is required to revoke the order if, based on the record of 
the proceeding, the Department determines that dumping is not likely to 
recur.
---------------------------------------------------------------------------

    \17\ The lowest weighted-average dumping margin associated with 
a significant import volume (2,284 metric tons) was 2.03 percent for 
August 1990-July 1991. When OBV was assessed with zero (0) percent 
or de minimis dumping margin for the last three administrative 
reviews, its imports of subject merchandise were significantly 
lower. Thus, we agree with the domestic interested parties that when 
OBV was exporting substantial volumes of the subject merchandise to 
the United States, it was dumping. This is especially true in light 
of the final results of the most recent administrative review, in 
which the Department found that the import volumes of the subject 
merchandise associated with OBV's zero or de minimis weighted-
average dumping margins did not constitute commercial quantities. 
(See footnote 4, supra.)
---------------------------------------------------------------------------

    As to the pricing data from American Brass, because we have 
determined that revocation of the order would be likely to result in 
the continuation or recurrence of dumping, this issue is moot. Further, 
because the scope of the order includes merchandise other than radiator 
strip and our determination is based on OBV's historical behavior at a 
time when it exported significant volumes of subject merchandise to the 
United States, OBV's assertions with respect to the lack of domestic 
competition and downward pricing pressure are also moot.
    Finally, with respect to OBV's contention that in three 
administrative reviews, the Department has found that OBV has shipped 
in commercial quantities without dumping, we refer interested parties 
to the notice of final results of the most recent administrative 
review, issued concurrently with this notice, in which the Department 
determined that OBV did not sell in commercial quantities for any of 
the three consecutive reviews that formed the basis of OBV's revocation 
request in that proceeding.
    Comment 7: The domestic interested parties urge the Department not 
to revoke the order without first performing a verification because the 
Department made its preliminary findings based on other relevant 
information and arguments OBV has submitted. They further argue that a 
verification is mandated by statute and the Department's Regulation; 
thus, the phrase, ``only where needed,'' in the Sunset Policy Bulletin 
is questionable since it is contrary to statue and regulations (782(i) 
of the Act and section 351.307(b) of the Department's Regulations). The 
domestic interested parties insist that the Department cannot rely on 
the verification report that was issued in the concurrent 
administrative review of the order because the verification report did 
not involve the relevant facts upon which the agency is relying in this 
case. The domestic interested parties list factors, based on which the 
Department purportedly made its preliminary determination yet to which 
the verification did not address: the historical nature of OBV's and 
American Brass's sales of the subject merchandise in the United States 
and the reasons therefor; the prices at which OBV is likely to sell 
radiator strip as compared to the prices charged by American Brass; the 
capacity of American Brass; the size of and competition in the U.S. 
radiator strip market; and the corporate relationship between OBV and 
American Brass and the effects thereof upon their future business and 
sales operations. The domestic interested parties further claim that 
OBV itself discredited the findings of the verification report in the 
concurrent administrative review. In conclusion, the domestic 
interested parties argue that the Department should not rely on the 
voluntary and self-serving representations made by the OBV. Instead, 
domestic interested parties insist, the Department should issue a 
questionnaire and a supplemental questionnaire to elicit relevant 
information, and verify the information thereof so long as the 
Department continues to rely upon any of the factual representations 
proffered by OBV. (See the domestic interested parties brief at 3 and 
12-18, and the hearing transcript at 10-49 and 97-108.)
    OBV asserts that a verification is unnecessary in the instant 
review. OBV claims that, first, the Department based its preliminary 
results upon, inter alia, the dumping margins in the most recently 
completed administrative reviews. OBV argues that, second, where the 
Department recently verified OBV's data, which included information 
supporting revocation of the dumping order and which was placed on the 
record of this review, the current situation would fall under the 
``other situations'' in which the Department need not conduct a 
verification (see Sunset Regulations, 63 FR at 13519) because standards 
for two reviews are basically the same. OBV claims that many items 
which the domestic interested parties request the Department verify 
were either verified by the Department during the 1997-1998 
administrative review or were not relied upon by the Department in 
making its preliminary results in this sunset review. OBV denies that 
it alleged the verification report issued in the administrative review 
is meaningless or challenged the accuracy of the numbers. OBV 
indicates, nonetheless, that it opposes unjustified extrapolation of 
numbers or leaps of logic based upon those numbers. Given the vast 
amounts of verified information already on the record in this review, 
an additional verification would be unnecessary and of little value to 
the Department in this review. (See OBV's reply brief at 17-24, the 
hearing transcript at 69-97.)
    Department's Position: Because we have determined that dumping is 
likely to continue or recur were the order revoked, the issue of 
verification is moot.

Magnitude of the Margin

    Because the magnitude of likely-to-prevail margin was not discussed 
in the preliminary results of this review, we incorporate interested 
parties' arguments in our determination as follows.
    Comment 1: The domestic interested parties, in their substantive 
response and in the hearing transcript, simply state that the 
Department should select

[[Page 741]]

a margin from the investigation according to the principle set forth in 
the SAA at 890 and the Sunset Policy Bulletin, 63 FR at 18873. (See the 
domestic interested parties' March 3, 1999 substantive response of at 
45-46, March 12, 1999, rebuttal response at 25-26, and the hearing 
transcript at 10.) The domestic interested parties note that the margin 
from the original investigation is the only calculated rate that 
reflects the behavior of OBV without the discipline of the order. 
Therefore, the domestic interested parties argue that the Department 
should abide by its stated policy and provide to the Commission the 
rate set forth in the original investigation, which is 16.99 percent. 
Id.
    Citing the same policy, but with a different emphasis, OBV argues 
that the Department can, and should, exercise its discretion, as 
allowed by the SAA.18 (See OBV's substantive response at 
39.) OBV urges that the Department determine the margin likely to 
prevail if the order were revoked to be zero percent, which is the 
margin determined for sales by OBV in the last two administrative 
reviews, or, in the alternative, 2.03 percent, which is the margin from 
the third administrative review that is associated with a sales volume 
that is larger than the sales volume examined by the Department during 
the original investigation.
---------------------------------------------------------------------------

    \18\ OBV infers this discretion from the word ``normally.'' (See 
Substantive Response of OBV at 39.)
---------------------------------------------------------------------------

    OBV further states that it came forth with data which support the 
selection of a margin other than the margin in the original 
investigation. OBV argues that the weighted-average dumping margin 
assigned to OBV in the original investigation is the least probative of 
the magnitude of the dumping margin likely to prevail were the order 
revoked. OBV bases its argument on the assertions that the margin from 
the original investigation is inherently unreliable and does not 
reflect the current circumstances surrounding the order. Specifically, 
the margin from the original investigation as well as those from the 
first two administrative reviews are skewed in OBV's view because the 
Department employed an old, and since-discarded, method in deriving 
such margins.19 OBV argues that the Exporter's Sales Price 
(now called Constructed Export Price, CEP) used in the original 
investigation was deflated because some sales of the subject 
merchandise were made to an OBV affiliated U.S. company at a lower 
price. Id. at 41-45.20 Therefore, OBV contends, the 
Department should reject the margins from original investigation and 
from the final results of the first two reviews because weighted-
average margins therefrom are unreliable indicators of the magnitude of 
the margin that would be likely to prevail if the order were revoked. 
Instead, OBV argues that the Department should report to the Commission 
a zero or, at the most, a 2.03 percent as the likely-to-prevail margin 
were the order revoked.
---------------------------------------------------------------------------

    \19\ The original investigation was based on the U.S. sale price 
compared to a weighted-average foreign market value. In 
investigations, the Department now employs an average-to-average 
method--a comparison of the weighted-average of the normal values 
with the weighted-average of the export prices (and constructed 
export prices) for comparable merchandise. (See 19 CFR 351.414(b) 
and (c).)
    \20\ During the original investigation, OBV had an affiliated 
U.S. company, Outokumpu Metallverken (``MINC''), which bought the 
subject merchandise at a bargain price and further processed it 
according to U.S. customers' specification. OBV implies that, in the 
process of calculating dumping margins, the cost associated with the 
process done by MINC was inflated, consequently further lowing OBV's 
export price to MINC.
---------------------------------------------------------------------------

    In its rebuttal, OBV reiterates its arguments that there is no 
justification for the Department to use the margin from the original 
investigation because that margin is the least probative and inherently 
unreliable. Also, OBV states that it no longer has the capacity to and, 
in any case, will not further process the subject merchandise in the 
United States, thereby eliminating the adjustment for further-
manufacturing, which OBV perceives resulted in an upward distortion of 
dumping margin.21
---------------------------------------------------------------------------

    \21\ OBV is indicating that it no longer has an affiliated U.S. 
company which further processes the subject merchandise on behalf of 
OBV, see footnote 30, supra. Also, due to the OYJ's purchase of 
American Brass, OBV feels that further processing of the subject 
merchandise in the United States is no long necessary. (See OBV's 
reply brief at 55-59.)
---------------------------------------------------------------------------

    Department's Position: 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 because that is the only margin that reflects the 
behavior of producers/exporters without the discipline of the order in 
place. 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.)
    We note that, to date, the Department has not issued any duty 
absorption findings in this case.
    The SAA at 890-891 and House Report at 63, provide that declining 
(or no) dumping margins accompanied by steady or increasing import 
volumes of the subject merchandise may be indicative of a situation in 
which respondent interested parties do not have to dump in order to 
maintain market share in the United States and that dumping is less 
likely to recur. To appropriately reflect such situation, the 
Department may, in response to argument from an interested party, 
provide to the Commission a more recently calculated margin in cases 
where: (1) The dumping margin was reduced or eliminated after the 
issuance of the order and (2) import volumes remained steady or 
increased. (See section II.B.2 of Sunset Policy Bulletin.)
    However, in the instant review, as discussed above, immediately 
after the imposition of the order, import volumes of the subject 
merchandise fell substantially and ceased altogether for a period. 
Furthermore, for the last five years (1994-1998), the import volumes of 
the subject merchandise have remained at levels that can be 
characterized as negligible vis a vis pre-order volumes. These facts 
coupled with OBV's statement that it plans to resume exports from the 
Netherlands at pre-order volumes 22 leads us to determine 
that the use of a more recently calculated margin is inappropriate. 
Therefore, we disagree with OBV's argument that we should report to the 
Commission a more recently calculated margin. Instead, because it is 
the only rate which reflects the behavior of producers/exporters 
without the discipline of the order, the Department determines that the 
margin from the original investigation is probative of the behavior of 
OBV without the discipline of the order and will provide to the 
Commission the weighted-average margin from the original investigation.
---------------------------------------------------------------------------

    \22\  See OBV Substantive Response at Exhibits 1 (at 41-42), 8, 
and 15.
---------------------------------------------------------------------------

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 at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
OBV.........................................................       16.99
All Others..................................................       16.99
------------------------------------------------------------------------


[[Page 742]]

    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: December 28, 1999.
Holy Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-285 Filed 1-5-00; 8:45 am]
BILLING CODE 3510-DS-P