[Federal Register Volume 69, Number 85 (Monday, May 3, 2004)]
[Notices]
[Pages 24119-24121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9999]


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DEPARTMENT OF COMMERCE

International Trade Administration


Separate Rates Practice in Antidumping Proceedings Involving Non-
Market Economy Countries

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

ACTION: Request for comments.

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SUMMARY: The Department of Commerce has a long-standing policy in 
antidumping proceedings of presuming that all firms within a non-market 
economy country (``NME'') are subject to government control and thus 
should all be assigned a single, country-wide rate unless a respondent 
can demonstrate an absence of both de jure and de facto control over 
its export activities. In that case, the Department assigns the 
respondent its own individually calculated rate or, in the case of a 
non-investigated or non-reviewed firm, a weighted-average of the rates 
of the fully analyzed companies, excluding any rates that were zero, de 
minimis, or based entirely on facts available. The Department is 
considering options to change certain aspects of its current separate 
rates policy and practice. This notice describes various options for 
such changes, in order to provide the public with an opportunity to 
comment on whether those changes would be consistent with the statute 
and would appropriately redress problems that have been identified 
concerning separate rates. The Department intends to consider 
additional modifications to its NME practice and may solicit additional 
public comment on other potential changes, as appropriate.

[[Page 24120]]


DATES: Comments must be submitted by June 1, 2004.

ADDRESSES: Written comments (original and six copies) should be sent to 
James J. Jochum, Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Central Records Unit, Room 1870, Pennsylvania 
Avenue and 14th Street NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Lawrence Norton, Policy Analyst, or 
Anthony Hill, Senior International Economist, Office of Policy, Import 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington DC, 20230, (202) 482-1579 or (202) 
482-1843.

SUPPLEMENTARY INFORMATION:

Background

    In an NME antidumping proceeding, the Department presumes that all 
companies within the country are subject to governmental control and 
should be assigned a single antidumping duty rate unless an exporter 
demonstrates the absence of both de jure and de facto governmental 
control over its export activities. See Final Determination of Sales at 
Less Than Fair Value: Bicycles from the People's Republic of China, 61 
FR 19026, 19027 (April 30, 1996). The Department's separate rates test 
is not concerned, in general, with macroeconomic border-type controls 
(e.g., export licenses, quotas, and minimum export prices), 
particularly if these controls are imposed to prevent the dumping of 
merchandise in the United States. Rather, the test focuses on controls 
over the decision-making process on export-related investment, pricing, 
and output decisions at the individual firm level. See Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from Ukraine, 62 FR 61754, 61757 (November 19, 
1997); Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 
17, 1997); and Preliminary Determination of Sales at Less Than Fair 
Value: Honey from the People's Republic of China, 60 FR 14725, 14727 
(March 20, 1995).
    To establish whether a firm is sufficiently independent from 
government control in its export activities to be entitled to a 
separate rate, the Department analyzes each exporting entity under a 
test arising from the Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991), as modified in the Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 
22585, 22587 (May 2, 1994) (Silicon Carbide). Under this test, the 
Department assigns separate rates in NME cases only if an exporter can 
demonstrate the absence of both de jure and de facto governmental 
control over its export activities. See Silicon Carbide and Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). In 
order to request and qualify for a separate rate, a company must have 
exported the subject merchandise to the United States during the period 
of investigation or review, and provide information responsive to the 
following considerations:
    1. Absence of De Jure Control: The Department considers the 
following de jure criteria in determining whether an individual company 
may be granted a separate rate: (1) An absence of restrictive 
stipulations associated with an individual exporter's business and 
export licenses; (2) any legislative enactments decentralizing control 
of companies; and (3) any other formal measures by the government 
decentralizing control of companies.
    2. Absence of De Facto Control: Typically, the Department considers 
four factors in evaluating whether each respondent is subject to de 
facto governmental control of its export functions: (1) Whether the 
export prices are set by, or subject to, the approval of a governmental 
authority; (2) whether the respondent has authority to negotiate and 
sign contracts and other agreements; (3) whether the respondent has 
autonomy from the government in making decisions regarding the 
selection of its management; and (4) whether the respondent retains the 
proceeds of its export sales and makes independent decisions regarding 
disposition of profits or financing of losses.
    In an antidumping investigation or review, we assign a weighted-
average of the individually calculated rates, excluding any rates that 
were zero, de minimis, or based entirely on facts available, to 
exporters fulfilling two requirements. Firstly, they must submit a 
request for separate rates treatment, along with a timely response to 
section A of the Department's questionnaire, but not have been selected 
as mandatory respondents. Secondly, the Department must determine, 
after reviewing the requesting companies' submissions, that separate 
rates treatment is warranted. See Final Determination of Sales at Less 
Than Fair Value: Certain Circular Welded Carbon-Quality Steel Pipe from 
the People's Republic of China, 67 FR 36570, 36571 (May 24, 2002).
    The Department is considering changes to the practice detailed 
above, in particular with respect to the treatment of exporters 
submitting only section A responses and requesting separate rate 
treatment, but that are not individually investigated or reviewed 
(hereafter referred to as ``Section A respondents''). The Department 
has received increasing numbers of requests for separate rates from 
section A respondents in recent years and is facing an exceptionally 
large number of such requests in two ongoing investigations. See 
Initiation of Certain Frozen and Canned Warmwater Shrimp from Brazil, 
Ecuador, India, Thailand, the People's Republic of China, and the 
Socialist Republic of Vietnam 69 FR 3876 (January 27, 2004) and 
Initiation of Wooden Bedroom Furniture from the People's Republic of 
China 68 FR 70228 (December 17, 2003). These developments have led 
parties to raise two concerns. The first is that the Department lacks 
the resources to evaluate the typically large number of section A 
respondents which request a separate rate. The second concern parties 
now have raised is that, independent of the number of separate rate 
requests the Department receives in any given case, current 
implementation of the separate rates test may not offer the most 
effective means of determining whether exporters act, de facto, 
independently of the government in their export activities.
    In order to address these concerns, the Department is considering 
changes to its practice in these areas. Therefore, we are providing an 
opportunity for the public to participate through comments which should 
be submitted by the date specified above. The Department is 
particularly interested in comments relating to the possible approaches 
set forth in the Appendix to this notice, including comments on their 
consistency with the statute.

Comments

    Persons wishing to comment should file a signed original and six 
copies of each set of comments by the date specified above. The 
Department will consider all comments received before the close of the 
comment period. Comments received after the end of the comment period 
will be considered, if possible, but their consideration cannot be 
assured. The Department will not accept comments accompanied by a 
request that a part or all of the material be treated confidentially 
because of its

[[Page 24121]]

business proprietary nature or for any other reason. The Department 
will return such comments and materials to the persons submitting the 
comments and will not consider them in development of any changes to 
its practice. All comments responding to this notice will be a matter 
of public record and will be available for public inspection and 
copying at Import Administration's Central Records Unit, Room B-099, 
between the hours of 8:30 a.m. and 5 p.m. on business days. The 
Department requires that comments be submitted in written form. The 
Department recommends submission of comments in electronic form to 
accompany the required paper copies. Comments filed in electronic form 
should be submitted either by e-mail to the webmaster below, or on CD-
ROM, as comments submitted on diskettes are likely to be damaged by 
postal radiation treatment.
    Comments received in electronic form will be made available to the 
public in Portable Document Format (PDF) on the Internet at the Import 
Administration Web site at the following address: http://ia.ita.doc.gov/.
    Any questions concerning file formatting, document conversion, 
access on the Internet, or other electronic filing issues should be 
addressed to Andrew Lee Beller, Import Administration Webmaster, at 
(202) 482-0866, e-mail address: [email protected].

    Dated: April 27, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.

Appendix

    (1) Is Section A of the NME questionnaire sufficiently detailed 
to allow the Department to make complete, accurate, and informed 
determinations regarding exporters' eligibility for separate rates? 
If not, what would you recommend that the Department change with 
respect to its section A questionnaire? For example, should the 
Department request further information pertaining to de jure 
control, or lack of control, by the NME entity?
    (2) What new procedures or approaches should be followed at 
verification to ensure a rigorous examination of whether a 
respondent qualifies for a separate rate?
    (3) Due to the number of possible section A respondents in many 
cases and the Department's resource constraints, should the 
Department establish a process whereby exporters seeking a separate 
rate must prepare a request and satisfy established requirements 
before the Department seeks additional information through the 
questionnaire process? What requirements would you recommend the 
Department establish?
    (4) Should the Department institute an earlier deadline for 
parties filing section A submissions who are requesting only a 
separate rate (as opposed to a full review), in relation to the 
deadline for mandatory respondents? When should this deadline be?
    (5) In light of the Department's limited resources, should the 
number of section A respondents be limited and, if so, upon what 
basis should the Department limit its examination? For example, 
should the Department limit the examination to a specific number of 
parties, base this decision upon a percentage of the number of 
overall respondents requesting separate rates treatment, or develop 
an entirely different test to limit its examination?
    (6) Under current practice, the Department maintains three rate 
categories: country-wide, individually calculated, and the average 
of the non-zero, non-de minimis, non-adverse rates. Does the 
Department have the authority to eliminate entirely the rate 
category that is based on the average of the calculated non-zero, 
non-adverse, and non-de minimis margins? This rate category is 
currently applicable to section A respondents, as well as to non-
investigated respondents providing full questionnaire responses. If 
the Department has authority, should it eliminate this category and 
upon what basis?
    (7) Should the Department develop an additional rate category 
beyond country-wide, individually calculated, and the average of the 
non-zero, non-de minimis, non-adverse rates? This additional rate 
category could be assigned to cooperative firms denied a separate 
rate under options (5) or (6) above, as an alternative to assigning 
them the country-wide rate. How should the duty rate for this fourth 
rate category be calculated?
    (8) Once a separate rate has been awarded, should the Department 
apply it only to merchandise from producers that supplied the 
exporter when the rate was granted? In that case, should merchandise 
from all other suppliers shipped through an exporter with a separate 
rate receive the country-wide rate, the average of the non-zero, 
non-de minimis, non-adverse reviewed respondents' margins, or 
another duty rate altogether?
    (9) Should the Department extend its separate-rates analysis to 
exporter-producer combinations, i.e., should the Department consider 
any government control exercised on an exporter through a producer?
    (10) Please provide any additional views on any other matter 
pertaining to the Department's practice pertaining to separate 
rates.

[FR Doc. 04-9999 Filed 4-30-04; 8:45 am]
BILLING CODE 3510-DS-P