[Federal Register Volume 73, Number 91 (Friday, May 9, 2008)]
[Notices]
[Pages 26371-26372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10528]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration


Proposed Methodology for Identifying and Analyzing Targeted 
Dumping in Antidumping Investigations; Request for Comment

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') seeks public 
comment on its proposed targeted dumping methodology (described below) 
and related issues.

DATES: Comments must be submitted within 30 days from the publication 
of this notice.

ADDRESSES: Written comments (original and six copies) should be sent to 
David Spooner, Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Central Records Unit, Room 1870, 14th Street & 
Constitution Ave., NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Anthony Hill, International Economist, 
Office of Policy, or Michael Rill, Director, Antidumping Policy, Import 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: 202-482-1843 
or 202-482-3058, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to section 777A(d)(1)(A) of the Tariff Act of 1930 (the 
``Act''), the Department normally will calculate dumping margins in 
investigations by comparing weighted-average export prices to weighted-
average normal values or transaction-specific export prices to 
transaction-specific normal values. Section 777A(d)(1)(B) of the Act 
allows the Department to use, under certain circumstances, an 
alternative methodology for determining the extent of dumping in an 
investigation. The alternative methodology is a comparison of 
transaction-specific export prices to weighted-average normal values. 
In order to use this alternative methodology, the Act requires the 
Department to find that there is a pattern of export prices (or 
constructed export prices) that differ significantly among purchasers, 
regions, or periods of time. See section 777A(d)(1)(B)(i) of the Act. 
In addition, the Act requires the Department to explain why the 
differences cannot be taken into account using one of the normal 
calculation methodologies. See section 777A(d)(1)(B)(ii) of the Act.
    The Department's experience with regard to analyzing targeted 
dumping claims is limited and to date, no standard targeted dumping 
test for general application has been adopted. In response to a 1999 
remand in the antidumping investigation of certain pasta from Italy, 
the Department created and utilized a targeted dumping test (the 
``Pasta Test'') to analyze U.S. price data in that case, and found no 
targeted dumping. See Borden, Inc. v. U.S., 1999 WL 397968, *2 (CIT 
June 4, 1999) (``Borden Remand'') (citing Department's Remand 
Redetermination at 17 (``Remand Redetermination'')). The Department 
noted that it reserved the discretion to alter its methodology in 
future cases. See Borden Remand, 1999 WL at *1 (citing Remand 
Redetermination at 15).
    In the antidumping investigation of coated free sheet paper from 
the Republic of Korea (``CFS paper''), the Department accepted 
petitioner's allegation for purposes of undertaking a targeted dumping 
analysis in that proceeding. Based on that allegation, the Department 
found that there was a pattern of prices that differed significantly 
among purchasers and regions and that those differences could not be 
taken into account using the average-to-average or transaction-to-
transaction methodology. See Notice of Final Determination of Sales at 
Less Than Fair Value: Coated Free Sheet Paper from the Republic of 
Korea, 72 FR 60630 (October 25, 2007), accompanied by Issues and 
Decision Memorandum, Comments 2, 4, and 5. Again, the Department also 
acknowledged that it had not yet established a general set of standards 
for accepting and analyzing a targeted dumping allegation. See 
Memorandum to David M. Spooner entitled ``Antidumping Duty 
Investigation of Coated Free Sheet Paper from the Republic of Korea--
Targeted Dumping,'' from Stephen J. Claeys, dated September 7, 2007.
    More recently, in the preliminary determinations in the antidumping 
investigations of certain steel nails from the United Arab Emirates and 
the People's Republic of China, the Department preliminarily accepted 
petitioner's targeted dumping allegations but noted that it was still 
in the process of developing a new test. See Certain Steel Nails from 
the United Arab Emirates: Notice of Preliminary Determination of Sales 
at Less Than Fair Value and Postponement of Final Determination, 73 FR 
3945 (January 23, 2008) and Certain Steel Nails from the People's 
Republic of China: Preliminary Determination of Sales at Less Than Fair 
Value and Partial Affirmative Determination of Critical Circumstances 
and Postponement of Final Determination, 73 FR 3928 (January 23, 2008).
    In order to establish a standard test for general application in 
analyzing a targeted dumping allegation, the Department solicited and 
received a first round of comments on the principles and standards that 
should be employed as part of a targeted dumping test. See Targeted 
Dumping in Antidumping Investigations; Request for Comment, 72 FR 60651 
(October 25, 2007). The Department received nineteen sets of comments 
in response to that request.

[[Page 26372]]

Proposed Methodology

    In the recent post-preliminary determination memorandum in the 
antidumping investigations of certain steel nails from the United Arab 
Emirates and from the People's Republic of China, the Department 
announced and applied a new targeted dumping standard and methodology 
for analyzing a targeted dumping allegation. See Memorandum to David M. 
Spooner entitled ``Post-Preliminary Determinations on Targeted 
Dumping,'' from Stephen J. Claeys, dated April 21, 2008.
    For future investigations, the Department proposes to adopt this 
new methodology for determining whether targeted dumping exists. The 
methodology involves a two-stage test: the first of which addresses the 
pattern requirement and the second addresses the significant difference 
requirement. All price comparisons would be done on the basis of 
identical merchandise. The test procedures described below are the same 
for customer, region or time-period targeting, even though the example 
given below involves customer targeting. The first stage of the test, 
referred to as the ``standard deviation test,'' would provide that the 
Department determine, on an exporter-specific basis, the share of the 
allegedly targeted customer's purchases of subject merchandise, by 
sales value, that are at prices more than one standard deviation below 
the weighted-average price to all customers of that exporter, targeted 
and non-targeted. If that share exceeds 33 percent of the total value 
of the exporter's sales of subject merchandise to the allegedly 
targeted customer, then the pattern requirement is met. The calculation 
of the standard deviation would be done product-by-product (i.e., 
``control number'' by ``control number'') using period of investigation 
(``POI'')-wide average prices (weighted by sales value) for each 
allegedly targeted customer and each distinct non-targeted customer.
    If the first test is met, in the second stage, the Department would 
examine all the sales of identical merchandise by that exporter to the 
allegedly targeted customer for which the standard deviation 
requirement is met and determine the total sales value for which the 
difference between (i) the sales-weighted average price to the 
allegedly targeted customer and (ii) the next higher sales-weighted 
average price to a non-targeted customer exceeds the average price gap 
(weighted by sales value) for the non-targeted group. Each of the price 
gaps in the non-targeted group would be weighted by the combined sales 
associated with the pair of prices to non-targeted customers that make 
up the gap. If the share of the sales that meet this test exceeds 5 
percent of the total value of sales of subject merchandise to the 
allegedly \1\targeted customer, the significant difference requirement 
is met and the Department would determine that customer targeting has 
occurred.
---------------------------------------------------------------------------

    \1\ For example: If non-target A's weighted-average price is 
$1.00 with total value of $100 and non-target B's weighted-average 
price is $.95 with total value of $120, then the difference of $.05 
($1.00-.95) would be weighted by $220 ($100 + 120).
---------------------------------------------------------------------------

Request for Comments

    In addition to comments on the methodology described above, the 
Department requests comments on appropriate criteria and standards for 
the definitions of ``region'' and ``time period.'' Please comment on 
the extent to which the definitions for region and time period in a 
targeted dumping allegation should be reflective of the industry and 
commercial market in the United States.
    Also, as the statute allows targeted dumping allegations with 
respect to customers, regions, or time periods, the Department requests 
comment on how it should handle multiple allegations made with respect 
to one respondent, (i.e. a respondent is allegedly targeting certain 
customers and certain regions). For example, when calculating non-
targeted customer weighted-average sales prices in the second stage 
(the gap test), should the Department exclude sales to an allegedly 
targeted region? Please also comment on what standards, if any, the 
Department should adopt for accepting an allegation of targeted 
dumping. For example, should some type of de minimis threshold apply to 
the sales on which an allegation is based, either in terms of the 
quantity of control numbers or share of sales covered? Finally, the 
Department requests comment on the application of the alternative 
calculation methodology (average-to-transaction comparison) and the 
conditions, if any, under which the alternative methodology should 
apply to all sales to the target even if some sales of a control number 
do not pass the targeted dumping test.

Submission of Comments

    Persons wishing to comment should file a signed original and six 
copies of each set of comments within 30 days of publication of this 
notice. The Department will consider all comments received by 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 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 its development 
of a targeted dumping analysis. The Department requires that comments 
be submitted in written form. The Department also requests 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 website 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, email address: [email protected].

    Dated: May 6, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-10528 Filed 5-8-08; 8:45 am]
BILLING CODE 3510-DS-S