[Federal Register Volume 72, Number 59 (Wednesday, March 28, 2007)]
[Notices]
[Pages 14518-14521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5691]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-504


Petroleum Wax Candles From the People's Republic of China: 
Partial Termination of Circumvention Inquiry and Affirmative 
Preliminary Determination of Circumvention of the Antidumping Duty 
Order

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

ACTION: Notice of Partial Termination and Affirmative Preliminary 
Determination of Circumvention of the Antidumping Duty Order: Petroleum 
Wax Candles from the People's Republic of China.

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SUMMARY: On December 14, 2005, the Department of Commerce (the 
Department) received from the National Candle Association (NCA) an 
allegation of circumvention of the antidumping duty order on petroleum 
wax candles from the People's Republic of China (PRC). Pursuant to that 
allegation, the Department initiated an anticircumvention inquiry on 
May 11, 2006, with respect to four importers. We preliminarily 
determine that the importation by, or sale to, three U.S. importers 
(DECOR-WARE, Inc.; A&M Wholesalers, Inc.; and Albert E. Price) of 
wickless petroleum wax forms from the PRC, which subsequently undergo 
insertion of a wick and clip assembly in the United States, constitutes 
circumvention of the aforementioned order, within the meaning of 
section 781(a) of the Tariff Act of 1930, as amended (the Act). Because 
NCA withdrew its allegation with respect to the fourth importer, 
Northern Lights Enterprises, the Department is terminating the inquiry 
with respect to Northern Lights Enterprises.

EFFECTIVE DATE: March 28, 2007.

FOR FURTHER INFORMATION CONTACT: Steve Bezirganian or Robert James, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone: 202-482-1131 
and 202-482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 14, 2005, the NCA requested that the Department conduct 
an anticircumvention inquiry pursuant to section 781(a) of the Act to 
determine whether candles assembled in the United States from certain 
wax forms produced in the PRC are circumventing the antidumping duty 
order on petroleum wax candles from the PRC. See Antidumping Duty 
Order: Petroleum Wax Candles From the People's Republic of China, 51 FR 
30686 (August 28, 1986) (Candles Order). NCA asserted that the molded 
or carved articles of wax from the PRC are essentially wickless wax 
candles, and that producers in the PRC are shipping these wickless wax 
forms to the United States, with or without a pre-drilled hole in the 
center, for final assembly of the candle through insertion of a wick 
and clip assembly. Such assembly in the United States, NCA stated, 
constitutes circumvention of the order on petroleum wax candles from 
the PRC. See Request for Determination of Circumvention - Wickless Wax 
Candles Petroleum Wax Candles from the People's Republic of China (A-
570-504), dated December 14, 2005 (NCA Request).
    On April 3 and 4, 2006, NCA supplemented the record with additional 
information. The April 3, 2006, submission contained a revised list of 
names of alleged PRC producers/exporters and alleged U.S. importers/
assemblers of the wickless wax candles; the April 4, 2006, submission 
contained copies of Customs Tariff Classification Rulings that NCA had 
identified in its original December 14, 2005, request.
    On May 11, 2006, the Department initiated the anticircumvention 
inquiry with respect to four importers. See Petroleum Wax Candles from 
the People's Republic of China: Initiation of Anticircumvention Inquiry 
on Antidumping Duty Order, 71 FR 28661 (May 17, 2006) (Notice of 
Initiation).
    The Department issued questionnaires to each of the four importers: 
Northern Lights Enterprises (on June 20, 2006); A&M Wholesalers, Inc. 
(on June 20, 2006); DECOR-WARE, Inc. (on June 21, 2006); and Albert E. 
Price (on June 22, 2006). Responses to those questionnaires were 
originally due on July 11, 2006. Northern Lights Enterprises requested, 
and was granted, an extension for responding to the original 
questionnaire, and submitted its response on August 12, 2006. The 
remaining three importers (DECOR-WARE, Inc.; A&M Wholesalers, Inc.; and 
Albert E. Price) failed to respond by the deadline of July 11, 2006. 
Each of these remaining three importers was sent a letter on July 27, 
2006, requesting each to respond to the questionnaire by July 31, 2006, 
and indicating that further delays or lack of response may result in 
the Department proceeding with results based on facts available 
including, where appropriate, facts adverse to the importer. All three 
failed to respond.
    On May 17, 2006, the Department indicated to NCA that any request 
to add additional importers to the inquiry needed to be filed by July 
5, 2006. See Memorandum from Robert James for the

[[Page 14519]]

File, dated June 30, 2006. NCA submitted a letter on July 5, 2006 
requesting that the Department add to the inquiry an entity identified 
as Indulgence Candles and Home; however, the request did not contain 
sufficient evidence that the firm in question was importing wax forms 
for completion into finished candles in the United States. On September 
11, 2006, NCA submitted a letter requesting that the Department add to 
the inquiry an entity identified as Deluxe in Commerce.\1\
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    \1\ As this submission was untimely, the Department did not 
consider adding Deluxe in Commerce to this inquiry.
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    On February 21, 2007, NCA submitted a letter withdrawing its 
request with respect to Northern Lights Enterprises. On March 2, 2007, 
the Department extended the deadline for the final determination to 
June 5, 2007. See Letter from Robert James to All Interested Parties, 
dated March 2, 2007.

Scope of the Order

    The products covered by this order are certain scented or unscented 
petroleum wax candles made from petroleum wax and having fiber or 
paper-cored wicks. They are sold in the following shapes: tapers, 
spirals, and straight-sided dinner candles; rounds, columns, pillars, 
votives; and various wax-filled containers.
    The products were classified in the original investigation under 
the Tariff Schedules of the United States item 755.25, Candles and 
Tapers. The products covered are currently classified under the 
Harmonized Tariff Schedule of the United States (HTSUS) subheading 
3406.00.00. Although the HTSUS subheading is provided for convenience 
purposes, the written description remains dispositive.
    In addition, the Department has determined that mixed-wax candles 
containing any amount of petroleum wax are later-developed merchandise 
and are within the scope of the Candles Order. See Later-Developed 
Merchandise Anticircumvention Inquiry of the Antidumping Duty Order on 
Petroleum Wax Candles from the People's Republic of China: Affirmative 
Final Determination of Circumvention of the Antidumping Duty Order, 71 
FR 59075 (October 6, 2006).

Scope of the Anticircumvention Inquiry

    The products covered by this inquiry are certain scented or 
unscented petroleum wax forms that do not incorporate a wick within the 
wax, whether or not having pre-drilled wick holes (wickless petroleum 
wax forms) that are imported into the United States and assembled into 
petroleum wax candles, and are currently classifiable under HTSUS 
subheading 9602.00.40. Wickless petroleum wax forms are sold in the 
following shapes: tapers, spirals, straight-sided wax forms; rounds, 
columns, pillars, votives; and various wax-filled containers. This 
inquiry only covers such products that are imported by, or sold to 
Northern Lights Enterprises, DECOR-WARE, Inc., A&M Wholesalers, Inc., 
or Albert E. Price.

Applicable Statute

    Section 781 of the Act addresses circumvention of antidumping or 
countervailing duty orders. With respect to merchandise assembled or 
completed in the United States, section 781(a)(1) of the Act provides 
that if: (A) the merchandise sold in the United States is of the same 
class or kind as any other merchandise that is the subject of an 
antidumping duty order; (B) such merchandise sold in the United States 
is completed or assembled in the United States from parts or components 
produced in the foreign country with respect to which such order 
applies; (C) the process of assembly or completion in the United States 
is minor or insignificant; and (D) the value of the parts or components 
produced in the foreign country is a significant portion of the total 
value of the merchandise, then the Department may include within the 
scope of the order the imported parts or components produced in the 
foreign country used in the completion or assembly of the merchandise 
in the United States, after taking into account any advice provided by 
the United States International Trade Commission (ITC) under section 
781(e) of the Act.
    In determining whether the process of assembly or completion in the 
United States is minor or insignificant, section 781(a)(2) of the Act 
directs the Department to consider: (A) the level of investment; (B) 
the level of research and development; (C) the nature of the production 
process; (D) the extent of production facilities and (E) whether the 
value of processing performed in the United States represents a small 
proportion of the value of the merchandise sold in the United States.
    Section 781(a)(3) sets forth the factors to consider in determining 
whether to include parts or components in an antidumping duty order. 
The Department shall take into account: (A) the pattern of trade, 
including sourcing patterns; (B) whether the manufacturer or exporter 
of the parts or components is affiliated with the person who assembles 
or completes the merchandise sold in the United States; and (C) whether 
imports into the United States of the parts or components produced in 
the foreign country have increased after the initiation of the 
investigation which resulted in the issuance of the order.

Partial Termination of the Anticircumvention Inquiry

    As noted above, NCA withdrew its inquiry request with respect to 
Northern Lights Enterprises. Accordingly, we are terminating this 
inquiry with respect to Northern Lights Enterprises. Regarding the 
remaining three importers (DECOR-WARE, Inc.; A&M Wholesalers, Inc.; and 
Albert E. Price), see the Facts Available section below.

Affirmative Preliminary Determination of Circumvention

    For the reasons described below, we preliminarily determine that 
circumvention of the antidumping duty order on petroleum wax candles 
from the PRC is occurring by reason of exports of wickless petroleum 
wax forms from the PRC imported by, or sold to, DECOR-WARE, Inc., A&M 
Wholesalers, Inc., and Albert E. Price, and which subsequently undergo 
insertion of a wick and clip assembly in the United States.

Facts Available

    DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price failed 
to respond to the Department's requests for information. The 
questionnaires the Department issued to these importers were designed 
to elicit information for purposes of conducting both qualitative and 
quantitative analyses in accordance with the criteria enumerated in 
section 781(a) of the Act as outlined above. This approach is 
consistent with our analysis in previous anticircumvention inquiries. 
See, e.g., Circumvention and Scope Inquiries on the Antidumping Duty 
Order on Certain Frozen Fish Fillets from the Socialist Republic of 
Vietnam: Partial Affirmative Final Determination of Circumvention of 
the Antidumping Duty Order, Partial Final Termination of Circumvention 
Inquiry and Final Rescission of Scope Inquiry, 71 FR 38608 (July 7, 
2006); Hot-Rolled Lead and Bismuth Carbon Steel Products from Germany 
and the United Kingdom; Negative Final Determinations of Circumvention 
of Antidumping and Countervailing Duty Orders, 64 FR 40336 (July 26, 
1999).
    Without this information the Department has no choice but to resort 
to the use of facts available in making its determination pursuant to 
section 776(a)(2) of the Act. In selecting from among the facts 
available, the

[[Page 14520]]

Department determined that an adverse inference is warranted, pursuant 
to section 776(b) of the Act, because these importers failed to comply 
with the Department's requests for information to the best of their 
ability.
    Section 776(a) of the Act requires the Department to resort to 
facts otherwise available if necessary information is not available on 
the record or when an interested party or any other person fails to 
provide (requested) information by the deadlines for submission of the 
information or in the form and manner requested, subject to subsections 
(c)(1) and (e) of section 782. See sections 776(a)(1) and 776(a)(2)(B) 
of the Act. As provided in section 782(c)(1) of the Act, if an 
interested party, promptly after receiving a request from the 
Department for information, notifies the Department that such party is 
unable to submit the information requested in the requested form and 
manner, the Department may modify the requirements to avoid imposing an 
unreasonable burden on that party. However, neither DECOR-WARE, Inc., 
A&M Wholesalers, Inc., nor Albert E. Price notified the Department that 
they were unable to comply with the Department's requests. 
Consequently, because these importers failed to respond to the 
Department's questionnaire, we must base the preliminary determination 
in this inquiry on the facts otherwise available.
    Section 776(b) of the Act permits the Department to use an 
inference that is adverse to the interests of an interested party if 
that party fails to cooperate by not acting to the best of its ability 
to comply with a request for information. Because DECOR-WARE, Inc., A&M 
Wholesalers, Inc., and Albert E. Price refused to comply with the 
Department's request for information, we find that these importers 
failed to cooperate by not acting to the best of their ability. The 
refusals by DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. 
Price to respond to our questionnaire precludes the Department from 
making an informed determination based on record evidence as to whether 
they are (or are not) circumventing the antidumping duty order. In 
addition, because these importers failed to provide the Department with 
any information, we are also unable to distinguish between their 
imports or purchase of wickless petroleum wax forms for purposes other 
than U.S. assembly into merchandise covered by the Candles Order. 
Accordingly, we are making an adverse inference pursuant to section 
776(b) of the Act that wickless petroleum wax forms imported by, or 
sold to, DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price 
are completed or assembled in the United States by the insertion of a 
wick and clip assembly within the meaning of section 781(a) of the Act. 
Therefore, we preliminarily find that these wickless petroleum wax 
forms are subject merchandise.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, the Department shall, to the 
extent practicable, corroborate that information from independent 
sources that are reasonably at its disposal. The Statement of 
Administrative Action (SAA), which accompanied the Uruguay Round 
Agreements Act, H.R. Doc. No. 316, 103rd Congress, 2nd Session (1994), 
states that the independent sources may include published price lists, 
official import statistics and customs data, and information obtained 
from interested parties during the investigation or review. SAA at 870. 
The SAA also clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value. Id. To the extent practicable, the Department will 
examine the reliability and relevance of the information used. See, 
e.g., Circumvention and Scope Inquiries on the Antidumping Duty Order 
on Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: 
Partial Affirmative Final Determination of Circumvention of the 
Antidumping Duty Order, Partial Final Termination of Circumvention 
Inquiry and Final Rescission of Scope Inquiry, 71 FR 38608 (July 7, 
2006) and accompanying decision memorandum, dated June 30, 2006 (at 
Comment 2B).
    We reviewed all information on the record including NCA's December 
14, 2005, application for this anticircumvention inquiry, its 
subsequent submissions, and the Department's initiation of this 
inquiry. See Notice of Initiation. NCA presented information 
demonstrating an increase in imports of wax forms that may be used in 
the assembly of finished candles within the United States. Id. NCA also 
provided evidence that the wick and clip assembly process in the United 
States is minor or insignificant. Id. Although NCA did not have direct 
and specific information from U.S. assemblers, it was able to provide 
information based on the actual experience of its constituent members, 
U.S. domestic candle producers, that provided significant information 
on wick and clip assembly in particular, and commercial candle 
production in general. Id. With respect to whether the value of the 
parts or components produced in the PRC (the wickless petroleum wax 
forms) is a significant portion of the total value of the candle, NCA 
was able to provide information from the domestic candle industry 
indicating the value of the wax form is typically a significant portion 
of the total value of the finished candle.\2\ Thus, we conclude that 
NCA identified the elements required by 781(a) of the Act and supported 
its allegations with reliable and relevant information that continue to 
be of probative value.
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    \2\ Id. NCA did acknowledge, in its February 21, 2007, letter 
withdrawing its request with respect to the importer Northern Lights 
Enterprises, that this importer ``does more than just drill a hole 
and insert a wick'' in the imported wickless petroleum wax forms.
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Suspension Of Liquidation

    Section 351.225(l)(2) of the Department's regulations states that, 
``{i{time} f the Secretary issues a preliminary scope ruling under 
paragraph (f)(3)'' and ``{i{time} f liquidation has not been suspended, 
the Secretary will instruct the Customs Service to suspend liquidation 
and to require a cash deposit of estimated duties, at the applicable 
rate, for each unliquidated entry of the product entered, or withdrawn 
from warehouse, for consumption on or after the date of initiation of 
the scope inquiry.'' In accordance with section 351.225(l)(2) of the 
Department's regulations, we will instruct U.S. Customs and Border 
Protection (CBP) to suspend liquidation of all wickless petroleum wax 
forms (as defined in the Scope of the Anticircumvention Inquiry section 
above) from the People's Republic of China imported by, or sold to 
DECOR-WARE, Inc., A&M Wholesalers, Inc., or Albert E. Price that were 
entered, or withdrawn from warehouse, for consumption on or after May 
11, 2006, the date of initiation of this anticircumvention inquiry. See 
Anti-circumvention Inquiry of the Antidumping Duty Order on Certain 
Pasta From Italy: Affirmative Preliminary Determination of 
Circumvention of the Antidumping Duty Order, 63 FR 18364, 18366 (April 
15, 1998); Anti-Circumvention Inquiry of the Antidumping Duty Order on 
Certain Pasta From Italy: Affirmative Final Determination of 
Circumvention of the Antidumping Duty Order, 63 FR 54672, 54675-6 
(October 13, 1998). CBP shall require cash deposits in accordance with 
those rates prevailing at the time of entry, depending upon the 
exporter in question.

[[Page 14521]]

Notification to the International Trade Commission

    The Department, consistent with section 781(e) of the Act, is 
notifying the ITC of this affirmative preliminary determination to 
include the merchandise subject to this inquiry within the antidumping 
duty order on petroleum wax candles from the PRC. Pursuant to section 
781(e) of the Act, the ITC may request consultations concerning the 
Department's proposed inclusion of the subject merchandise. These 
consultations must be concluded within 15 days after the date of the 
request. If, after consultations, the ITC believes that a significant 
injury issue is presented by the proposed inclusion, it will have 60 
days to provide written advice to the Department.

Public Comment

    Interested parties may request a hearing within 10 days from the 
date of publication of this notice. Comments from interested parties 
may be submitted no later than 20 days from the publication of this 
notice. Rebuttals limited to issues raised in the initial comments may 
be filed no later than 27 days after publication of this notice. Any 
hearing, if requested, will be held no later than 34 days after 
publication of this notice. The Department will publish the final 
determination with respect to this anticircumvention inquiry, including 
the results of its analysis of any written comments. The deadline for 
the final determination is currently June 5, 2007. See Letter from 
Robert James to All Interested Parties, dated March 2, 2007.
    This affirmative preliminary circumvention determination is in 
accordance with section 781(a) of the Act and 19 CFR 351.225.

    Dated: March 22, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-5691 Filed 3-27-07; 8:45 am]
BILLING CODE 3510-DS-S