[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Notices]
[Pages 49475-49481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20076]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-504]


Petroleum Wax Candles From the People's Republic of China: 
Preliminary Results of Request for Comments on the Scope of the 
Petroleum Wax Candles From the People's Republic of China Antidumping 
Duty Order

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

SUMMARY: On August 21, 2009, the Department solicited comments from the 
general public on the best method to consider whether novelty \1\ 
candles should or should not be included within the scope of the Order 
\2\ given the extremely large number of scope determinations requested 
by outside parties. See Petroleum Wax Candles from the People's 
Republic of China: Request for Comments on the Scope of the Antidumping 
Duty Order and the Impact on Scope Determinations, 74 FR 42230 (August 
21, 2009). The general public was given two options (as well as the 
choice to submit additional options and ideas):
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    \1\ The term ``novelty candle,'' as defined in Scope Comments 
and prior scope rulings, refers to candles that are in the shapes of 
identifiable objects, or are holiday-themed.
    \2\ See Antidumping Duty Order: Petroleum Wax Candles from the 
People's Republic of China, 51 FR 30686 (August 28, 1996) 
(``Order'').

    Option A: The Department would consider all candle shapes 
identified in the scope of the Order (i.e., tapers, spirals, and 
straight-sided dinner candles; rounds, columns, pillars, votives; 
and various wax-filled containers) to be within the scope of the 
Order, regardless of etchings, prints moldings or other artistic or 
decorative enhancements, including any holiday-related art. All 
other candle shapes would be considered outside of the scope of the 
Order.
    Option B: The Department would consider all candle shapes, 
including novelty candles, to be within the scope of the Order, 
including those not in the shapes listed in the scope of the Order, 
as that is not an exhaustive list of shapes, but simply an 
illustrative list of common candle shapes.

    The Department received comments from interested parties by the 
appropriate deadline. In examining these comments and the 
administrative

[[Page 49476]]

record since the less-than-fair value (``LFTV'') antidumping duty 
investigation, we have preliminarily developed a new interpretation for 
interpreting candle scope ruling requests. Moreover, we have 
preliminarily applied this new interpretation to all 388 pending scope 
determinations under the Order. See infra.

DATES: Parties may submit comments no later than 30 calendar days after 
date of publication of this notice and rebuttal comments 10 calendar 
days later.

FOR FURTHER INFORMATION CONTACT: Tim Lord, AD/CVD Operations, Office 9, 
Import Administration, U.S. Department of Commerce, 14th Street & 
Constitution Ave., NW., Washington, DC 20230, telephone: (202) 482-
7425.

Comments From Interested Parties

    On September 16, 2009, the Department received comments from the 
following interested parties: The National Candle Association 
(``NCA''); the National Retail Federation (``NRF''); HSE USA, Inc. 
(``HSE''); Universal Candle Company (``UC''); Sourcing International 
(``SI''); the Retail Industry Leaders of America (``RILA''); and Trade 
Associates Group, Ltd. (``TAG'').

Support for Option A \3\
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    \3\ With Option A, the Department would consider all candle 
shapes identified in the scope of the Order, (i.e., tapers, spirals, 
and straight-sided dinner candles; rounds, columns, pillars, 
votives; and various wax-filled containers) to be within the scope 
of the Order, regardless of etchings, prints, moldings or other 
artistic or decorative enhancements including any holiday-related 
art. All other candle shapes would be considered outside the scope 
of the Order.
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    NRF and SI urge the Department to adopt Option A in its un-altered 
form. NRF argues this option is most consistent with the original scope 
of the case that retailers have operated under for over 20 years. HSE 
argues that Option A is the best way to ensure that the scope 
interpretation be ``shape-based.'' That is, HSE maintains, Option A 
will guarantee that only candles in the shapes specifically enumerated 
in the scope of the Order--tapers, spirals, straight-sided dinner 
candles; rounds, columns, pillars; votives; and various wax-filled 
containers (``the enumerated shapes'')--be considered as within the 
scope. HSE also argues that the current scope language is exhaustive, 
not illustrative, and that Option A recognizes this fact.

Support for Option B \4\
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    \4\ With Option B, the Department would consider all candle 
shapes, including novelty candles, to be within the scope of the 
Order including those not in the shapes listed in the scope of the 
Order, as that is not an exhaustive list of shapes, but simply an 
illustrative list of common candle shapes.
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    UC specifically states that it is in favor of Option B, though it 
requests that its birthday and cake-top candles be considered outside 
of the scope because there is no domestic production of these candles.

Additional Proposals

    NCA proposes a combination of Options A and B whereby all candle 
shapes, regardless of embellishment or holiday theme, would be included 
within the scope of the Order.
    RILA argues that because much of the debate over what is or is not 
a holiday candle centers on what symbols or objects are specific to a 
holiday and how obvious those symbols or objects must be on the candle, 
the Department should develop objective criteria from prior rulings. 
Such criteria might include a list of symbols and objects that are 
specific to a holiday and numerical standards for what portion of the 
candle surface must be covered by such symbols. RILA also maintains the 
Department should engage more closely with U.S. Customs and Border 
Protection (``CBP'') to ensure that there is an accurate and consistent 
understanding of the scope of the Order and any guidelines established 
by the Department.
    TAG argues that neither option should be chosen, and that the 
Department's current practices should remain in effect. However, TAG 
maintains, the current practice that candles be recognizable from 
multiple angles is overly formalistic, and thus the identifiable object 
exception should be based on ``realistic guidelines.''
    NRF asserts that the Department should adopt some practices used by 
CBP, including having a designated Department employee whom importers 
can call to discuss scope issues.
    SI and NCA argue that the Department's regulations be amended to 
allow the Department to issue summary determinations so that the 
Department could issue a single ruling when there are multiple requests 
for what is essentially the same product. For instance, if an importer 
requests scope determinations on 25 pillar candles that differed only 
in their size, the Department would be able to issue one summary scope 
determination instead of 25.

Other Issues Raised by Parties

    Although NRF requests that we choose Option A, it also argues that 
the choice of either option would cause the Department to have to 
address prior decisions where items that have been previously found to 
be within the scope of the Order would now be considered outside the 
Order, and vice-versa for items previously found to be outside the 
scope of the Order.
    NCA asserts that the novelty candle exclusion established in the 
CBP Notice \5\ was baseless. NCA also maintains that the Department's 
LTFV investigation and the Antidumping Petition \6\ did not exclude any 
petroleum wax candles from the scope of the investigation requested.
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    \5\ The CBP Notice is discussed infra.
    \6\ The Antidumping Petition is discussed infra.
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    HSE argues that the Department's should abandon the ``JC Penney 
methodology,'' \7\ because this interpretation no longer considers the 
shape of the candle to be dispositive in determining whether it is 
covered by the scope, and should return to its prior practice of 
looking at the shape of the candle in evaluating the scope. HSE 
continues that the JC Penney methodology disregarded the history of the 
case and has also proven to be extremely burdensome by increasing the 
number of candle scope ruling requests.
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    \7\ The JC Penney ruling and JC Penney methodology are discussed 
infra.
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Background of the Order

    In determining whether it is appropriate to formulate a new 
interpretation for interpreting the scope of this Order, the Department 
must examine documents from the LFTV investigation and subsequent 
segments of this proceeding to understand the validity of its current 
practices and to re-examine the products originally covered by the 
scope of the LTFV investigation. See 19 CFR 351.225(k)(1). In 
particular, the Department puts much weight on the original intent of 
the injured domestic industry, in this case, represented by NCA. Below 
is the Department's analysis of these documents, which are included in 
the Memorandum to the File through Alex Villanueva, Program Manager, 
from Tim Lord, Case Analyst, Certain Petroleum Wax Candles from the 
People's Republic of China: Placing Documents on the Record (August 9, 
2010) (``Relevant Documents Memorandum'').

Petition

    The Petition illustrates that, contrary to its current assertions, 
NCA advocated for an exhaustive scope where those candles not 
specifically enumerated in the scope language, as well as figurine 
candles, ``household,'' ``utility,'' or ``emergency'' \8\ candles, were 
to be

[[Page 49477]]

excluded from the investigation. For instance, when discussing its 
choice of a surrogate country, NCA states, ``Korea was deemed a poor 
choice as a surrogate because its primary domestic production of 
candles consists of types of candles which are not similar to candles 
exported by the PRC. Korea produces mostly small, plain, white utility 
candles and hand-crafted novelty candles.'' See Antidumping Petition 
Submitted on Behalf of the National Candle Association in the Matter 
of: Petroleum Wax Candles from the People's Republic of China 
(September 3, 1985) (``Petition'') at 14; see also Relevant Documents 
Memorandum, at Tab A.
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    \8\ Those candles known as ``household,'' ``utility,'' 
``emergency,'' or ``household emergency candles'' will be termed 
``utility candles'' for purposes of this notice.
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    Additionally, NCA via a consulting firm, requested information from 
a market research firm in Malaysia on producers' prices for candles 
made and sold in Malaysia and stated that the candles they were 
concerned with were ordinary candles. NCA's consulting firm noted that 
they were uninterested in those candles not in the enumerated shapes. 
See Petition, at Exhibit 21; see also Relevant Documents Memorandum, at 
Tab A. Additionally, the Petition's like product definition itself 
indicates exclusivity:

    The imported PRC candles are made from petroleum wax and contain 
fiber or paper- cored wicks. They are {emphasis added{time}  sold in 
the following shapes: tapers, spirals, and straight-sided dinner 
candles; rounds, columns, pillars; votives; and various wax filled 
containers. These candles may be scented or unscented. While 
manufactured in the PRC, these candles are marketed in the United 
States and are generally used by retail consumers in the home or 
yard for decorative or lighting purposes.''

See Petition, at 6-7; see also Relevant Documents Memorandum, at Tab A.

Initiation

    The Initiation used language virtually identical to NCA's like 
product description:
    The products covered by this investigation 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 are classified under the Tariff Schedules of the United 
States (TSUS) item 755.25, Candles and Tapers.

See Petroleum Wax Candles From the People's Republic of China; 
Initiation of Antidumping Duty Investigation, 50 FR 39743 (September 
30, 1985) (``Initiation''); see also Relevant Documents Memorandum at 
Tab B.

ITC Preliminary Results

    The description of the International Trade Commission's (``ITC'') 
like product was nearly the same as NCA's like product definition and 
the Initiation. The ITC was silent with regard to novelty candles, 
although it devotes some discussion to Christmas candles.\9\ However, 
as noted infra, the ITC stated that there was no clear definition of a 
``Christmas/seasonal candle'' and used candle color (red, white, or 
green) as an indicator of whether a candle is a Christmas/seasonal 
candle or not. Thus, the ITC Preliminary Results are not dispositive 
with regard to novelty candles based on shape or seasonal nature.
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    \9\ The ITC deems the term ``Christmas candle'' as synonymous 
with ``seasonal candle'' and uses the terms interchangeably. For the 
purposes of this notice, the Department will use the term 
``Christmas/seasonal'' to refer to this type of candle. No other 
holidays or special events are mentioned or equated with the term 
``seasonal.'' See Candles from the People's Republic of China: 
Determination of the Commission in Investigation No. 731-TA-282 
(Preliminary) Under the Tariff Act of 1930, Together with the 
Information Obtained in the Investigation, USITC Publication 1768 
(October, 1985) (``ITC Preliminary Results'') at A-22; see also 
Relevant Documents Memorandum at Tab C.
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DOC Preliminary Results

    The Department's scope of the investigation remained unchanged from 
the Initiation, and novelty candles are not mentioned. See Petroleum 
Wax Candles From the People's Republic of China; Preliminary 
Determination of Sales at Less Than Fair Value, 51 FR 6016 (February 
19, 1986) (``DOC Preliminary Results''); see also Relevant Documents 
Memorandum at Tab D.

Memorandum Dated October 2, 1986

    Further insight into which candles NCA originally intended to be 
outside the scope of the investigation is found in a Departmental 
memorandum dated October 2, 1986. In this memorandum, the Department 
notes that on February 20, 1986 the Department issued instructions to 
the U.S. Customs Service (``Customs'') \10\ suspending liquidation on 
merchandise covered under Tariff Schedules of the United States 
(``TSUSA'') item 755.25, a basket category which included numerous 
different types of candles. The memorandum details subsequent 
clarifications issued after the initial February 20, 1986 instructions 
to the U.S. Customs Service:
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    \10\ On July 28, 2006, the United States Customs Service since 
was renamed as the United States Bureau of Customs and Border 
Protection. See Homeland Security Act of 2002, Public Law 107-296, 
Sec.  1502, 116 Stat. 2135, 2308-09 2002); Reorganization Plan 
Modification for the Department of Homeland Security, H.R. Doc. No. 
108-32, at 4 (2003).

    Subsequent telephone complaints by some importers prompted 
another telex to customs on March 20, 1986, in which `candles not 
described above, such as birthday, birthday numeral, and figurine-
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type candles,' are also outside the scope of this investigation.

See Memorandum to Bill Matthews through Bob Marenick from Elena 
Gonzalez, Subject: Scope of Investigation, Petroleum Wax Candles from 
the People's Republic of China (October 2, 1986) (``Memorandum Dated 
October 2, 1986''); see also Relevant Documents Memorandum at Tab E.

Memorandum Dated April 30, 1986

    A memorandum dated April 30, 1986, describes two conversations 
between the Department and NCA's counsel that illustrates that NCA did 
not intend for the scope of the Order to cover all petroleum wax 
candles:

    On March 20, 1986, Mr. Randolph Stayin of Taft, Stettinus & 
Hollister, who represents the petitioner, advised by telephone that 
candles described as household candles, household emergency candles, 
or utility candles, which are white in color and 5'' long x \3/4\'' 
diameter, do not fit the product description included in this 
petition and are therefore outside the scope of this investigation.
    Earlier, Ann King, of the same law firm, had told me that 
birthday candles, birthday numeral candles and figurine-type candles 
are also outside the scope of this investigation.

See Memorandum to the File, from Michael Ready, Subject: Petroleum Wax 
Candles from the PRC--Scope of the Investigation (April 30, 1986) 
(``Memorandum Dated April 30, 1986''); see also Relevant Documents 
Memorandum at Tab F.

Scope Clarification Communication

    Following the communications with NCA described above, the 
Department sent a telex to the U.S. Customs Service clarifying the 
scope of products subject to the LTFV investigation on March 20, 1986. 
See Communication to All U.S. Customs Field Officers from John Durant, 
Acting Director, Commercial Compliance Division: Petroleum Wax Candles 
from the People's Republic of China: Clarification of Scope of 
Investigation (``Scope Clarification Communication''):

    1. The scope of Investigation as defined in the Federal Register 
(February 19, 1986, page 6016) and referenced in our February 20, 
1986 telex is as follows: `Scope of Investigation: The products 
covered by this investigation are certain scented or unscented 
petroleum wax candles made from petroleum wax and having paper or 
fiber-cored wicks. They are sold in the following

[[Page 49478]]

shapes: tapers, spirals, and straight-sided dinner candles, rounds, 
columns, pillars, votives, and various wax-filled containers. The 
products are classified under the Tariff Schedules of the United 
States (TSUS) Item 755 25, Candles and Tapers.' 2. Candles not 
described above, such as birthday, birthday numeral, and figurine 
type candles are outside the scope of this investigation.

See Scope Clarification Communication; see also Relevant Documents 
Memorandum at Tab G.
    The Memorandum dated October 1986, indicates that conversations 
between the Department and importers were an impetus for the exclusions 
of the Scope Clarification Communication, and the timing of 
communications with NCA (detailed in the Memorandum Dated April, 1986) 
indicate that NCA endorsed these exclusions. However, while the 
Department adhered to NCA's opinion that candles not in the enumerated 
shapes and birthday candles were not covered by the scope of the 
investigation, it did not specifically state in the Scope Clarification 
Communication that utility candles were not covered.

DOC Final Results

    The scope of the Order listed in the DOC Final Results is the same 
as that of the Initiation. See Petroleum Wax Candles From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 51 FR 25085 (July 10, 1986) (``DOC Final Results''); see also 
Relevant Documents Memorandum at Tab H. Record evidence that NCA did 
not intend for certain candles to be covered can also be seen in the 
DOC Final Results. Specifically, when addressing respondents' comment 
that the Department should not have excluded candle imports from 
Jamaica in determining foreign market value, we defend our position by 
stating, ``At the preliminary determination we excluded imports from 
Jamaica from consideration because we received information from 
petitioner that the Jamaican candles were `household candles' not 
subject to this investigation.'' See Relevant Documents Memorandum at 
Tab H.

ITC Final Results

    The ITC lists ``novelties'' as among the types of candles it 
analyzed, although it gives no definition of the term. See 
Determination of the Commission in Investigation No. 731-TA-282 (Final) 
Under the Tariff Act of 1930, Together With the Information Obtained in 
the Investigation, USITC Publication 1888 (August, 1986) (``ITC Final 
Results'') at A-6; see also Relevant Documents Memorandum at Tab I.
    The ITC also included Christmas/seasonal candles as among the types 
of candles it analyzed, and in response to respondents' contention that 
seasonality is indicative of a lack of competition between domestic 
candles and Chinese imports, the Commission states:

    Data on seasonality should be used with caution, as no clear 
definition of `Christmas candle' has been offered. Some reporting 
companies indicated that all red, white, and green candles were 
reported as Christmas candles, whereas other companies indicated 
that they sell Christmas colors year round and reported sales for 
October through December as Christmas candles. See ITC Final Results 
at A-7, fn 1.

Thus, the ITC conceded that there was no concrete definition of a 
Christmas/seasonal candle, and noted that the most widely-used metric 
in determining whether a candle was Christmas/seasonal was based upon 
its color and/or the time of year in which it was sold. However, the 
ITC's indication of what is considered a Christmas/seasonal candle does 
not signify it advocated that Christmas/seasonal candles in any shape 
should be within the scope of the investigation. Rather, it indicates 
that the ITC advocated that those candles in the enumerated shapes 
should not be considered outside the scope of the investigation simply 
because they are in ``Christmas/seasonal colors.''

Order

    The Department published the Order, with scope language identical 
to the Department's Initiation, Preliminary Results, and Final Results. 
See Order; see also Relevant Documents Memorandum at Tab J.

Novelty Exclusion Scope Rulings

    The first novelty exclusion, issued in October 30, 1986, regarded a 
taper imported by Global Marketing Services' that had a Santa Claus 
figurine attached to the taper. The Department solicited comments from 
NCA before it made its final scope ruling. NCA agreed that the candle 
was outside of the scope, stating:

    This particular candle is considered borderline in our opinion 
because the only novelty is the wax Santa Claus which can be removed 
or added to the taper. Without the attached wax Santa Claus, the 
subject taper would clearly be within the scope of the order. 
However, we consent to the exclusion of this specific taper only on 
the basis that the hand-painted wax Santa Claus is attached to each 
taper entered through Customs.

See Letter to the Department on Behalf of NCA, dated October 15, 1986 
(``NCA's October 15, 1986 Letter''); see also Relevant Documents 
Memorandum at Tab K. In a letter explaining to Global Marketing 
Services why we excluded their candle, the Department stated:

    Your tapers have a hand-painted figurine {emphasis added{time}  
molded to the candle, which could not be removed without damage to 
the taper. This different physical characteristic precludes 
inclusion of these candles in the scope of the order.

See Letter from the Department to Global Marketing Services, dated 
October 30, 1986 (``Department's October 30, 1986 Letter''); see also 
Relevant Documents Memorandum at Tab L.
    It is therefore apparent from examining NCA's October 15, 1986, 
Letter and the Department's October 30, 1986, Letter that Global 
Marketing Service's Santa Claus candle was found outside of the scope 
not because of its Christmas/seasonal characteristics, but because of 
its figurine component.
    The second novelty exclusion, issued in July 13, 1987, regarded 
candles with raised Christmas motifs imported by Giftco Inc. The 
Department solicited comments from NCA before it made its final scope 
ruling. NCA agreed that the candles were outside of the scope, stating:

    {O{time} ur examination of the candles * * * revealed that they 
are novelty candles which are specially designed for Christmas. That 
is, they are holiday scenes and symbols. Both candles are square, 
four inches high, and have alternating raised motif scenes outlined 
by borders. The first candle is red and has the word `JOY' written 
in yellow letters surrounded by green pine branches. The alternate 
scene has a red cardinal sitting on yellow cornets. The second 
candle is light blue and has the words `Silent Night' surrounded by 
one large and several small stars painted yellow, blue, and white. 
The alternate scenes depict a yellow church with two green trees, 
green grass, and a snow-topped mountain in the background.
    These specific candles are Christmas novelty candles that are 
outside the scope of the order. They are similar to the hand-painted 
Santa Claus figure candles that we have already agreed should be 
excluded from the order. However, not all raised motif candles 
should be excluded from the order. We specifically included 
petroleum wax candles that have raised motifs in the investigation 
since several of the petitioners produce them. For example, Candle-
lite makes votive candles with raised flower motifs while Colonial 
Candle of Cape Cod attaches a small `CCCC' motif to all of its 
candles.

See Letter to the Department on Behalf of NCA, dated May 4, 1987 
(``NCA's May 4, 1987 Letter''); see also Relevant Documents Memorandum 
at Tab M. This statement may be interpreted in different ways. While 
one could argue this is evidence that NCA supported Christmas/seasonal 
candles being outside of the scope of the Order, one

[[Page 49479]]

could also contend that NCA supported these candles as outside of the 
scope because they were in the shape of squares--not one of the 
enumerated shapes. Furthermore, even if one were to interpret this 
statement as NCA supporting the exclusion of Christmas/holiday candles, 
this point is moot because as stated above, the Department must 
reasonably determine the products originally covered by the scope of 
the LTFV investigation as well as the original intent of the injured 
domestic industry before the issuance of the Order. This scope ruling, 
however, came after the completion of the investigation and issuance of 
the Order.

CBP Notice

    The Department issued instructions to the U.S. Customs Service in 
connection with the second novelty exclusion from the Order for 
Christmas/seasonal novelty candles (``CBP Notice''). While this notice 
included exclusions discussed during the course of the investigation 
(i.e., numeral and ``figurine-type'' candles), the notice also 
introduced the idea of a novelty candle exclusion that clarified the 
candle types excluded from the Order beyond those discussed during the 
investigation:

    The Department of Commerce has determined that certain novelty 
candles, such as Christmas novelty candles, are not within the scope 
of the antidumping duty order on petroleum wax candles from the 
People's Republic of China (PRC). Christmas novelty candles are 
candles specially designed for use only in connection with the 
Christmas holiday season. This use is clearly indicated by scenes or 
symbols depicted in the candle design. Other novelty candles not 
within the scope of the order include candles having scenes or 
symbols of other occasions (e.g., religious holidays or special 
events) depicted in their designs, figurine candles, and candles 
shaped in the form of identifiable objects (e.g., animals or 
numerals).

See CBP Notice; see also Relevant Documents Memorandum at Tab N. While 
this exception for Christmas/seasonal and special occasion-themed 
candles appears to be in response to the first two novelty scope 
rulings for Christmas/seasonal candles, there is no evidence on record 
from the investigation to indicate that any religious, holiday, or 
special occasion-themed candles, otherwise within the shapes outlined 
in the scope,\11\ were considered outside the scope of the 
investigation prior to the issuance of the Order.
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    \11\ As noted previously, the ITC's discussion of Christmas/
seasonal candles (i.e. those in red, white, or green) made no 
indication that these candles (if in one of the non-enumerated 
shapes) should be included within the scope.
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JC Penney

    In November 2001, the Department reconsidered its practice on the 
issue of candle shapes. See Final Scope Ruling Antidumping Duty Order 
on Petroleum Wax Candles From the People's Republic of China (A-570-
504); JC Penney Purchasing Corporation, (November 9, 2001) (``JC 
Penney''). In this ruling, the Department reviewed the text of the 
scope of the Order, beginning with the text of the first sentence of 
the scope which covers ``{c{time} ertain scented or unscented petroleum 
wax candles made from petroleum wax and having fiber or paper-cored 
wicks.'' See Order. The Department stated in JC Penney:

    {t{time} he text following this broad inclusive sentence 
provides a list of shapes, which list is not modified by any express 
words of exclusivity. The result of our prior practice of excluding 
candles of a shape other than those listed was arguably inconsistent 
with the fact that such candles were scented or unscented petroleum 
wax candles made from petroleum wax and having fiber or paper-cored 
wicks.'

See JC Penney at 4-5, fn 1; see also Relevant Documents Memorandum at 
Tab O. Furthermore, in JC Penney, the Department stated:

    We now determine that this practice was incorrect because it had 
the effect of narrowing the broad coverage of the first sentence of 
the Order's scope. The list of shapes in the second sentence of the 
Order's scope does not provide a textual basis for such a narrowing 
of the coverage of the first sentence of the Order's scope.

See JC Penney at 5, fn 1; see also Relevant Documents Memorandum at Tab 
O.

    Therefore, since 2001, the Department has followed the ``JC Penney 
methodology'' whereby it determines that if the candle is made from 
petroleum wax and has a fiber or paper-cored wick it falls within the 
scope of the Order regardless of shape unless the candle possesses the 
characteristics set out in the CBP Notice, in which case a candle falls 
within the Department's novelty candle exception and is not within the 
scope of the Order.
    However, a close review of the investigation record shows that, 
although addressing a key enforcement concern, the JC Penney 
methodology did not fully take into account record evidence from the 
investigation. While JC Penney stated that the scope of the Order was 
inclusive, the language of the Order indicates that the scope is 
exclusive, whereby only those candles in the enumerated shapes are 
considered inside the scope. For instance, the scope of the Order 
covers ``{c{time} ertain scented or unscented petroleum wax candles'' 
that ``are sold in the following shapes: tapers, spirals, and straight-
sided dinner candles; rounds, columns, pillars, votives; and various 
wax-filled containers'' (emphasis added). That is, the language of the 
scope is overt in its exclusivity. As discussed above, NCA's apparent 
concurrence with the scope clarifications issued to Customs further 
indicate that the scope was originally intended to include only those 
candle shapes described in the scope and to exclude birthday and 
utility candles).

Preliminary Determination

    A thorough review of the record clearly illustrates that NCA did 
not intend for the scope of the candles Order to include all candles. 
At the time of the LTFV investigation and the concomitant setting of 
the scope, NCA advocated a scope where only the enumerated shapes would 
be covered. For instance, NCA's agreement in the Memorandum Dated April 
30, 1986, that ``figurine'' candles were not within the scope of the 
Order indicates that candles in shapes other than those enumerated in 
the scope language were not included within the scope of the 
investigation. Furthermore, NCA also intended for the Order to exclude 
birthday candles and utility candles. While the Department adhered to 
the original intent of NCA in excluding birthday candles and candles 
not in the enumerated shapes through the Scope Clarification 
Communication and CBP Notice, we inadvertently did not specify that 
utility candles should also be excluded.
    Thus, after examining the historical record of this case to 
determine the original intent of NCA, and taking into consideration the 
comments of interested parties, the Department is taking this 
opportunity to clarify how it will analyze candle scope requests so as 
to best reflect the products covered by the LTFV investigation. The 
Department agrees with NCA that there is no basis in the record of the 
LTFV investigation for excluding candles based upon holiday 
characteristics. In addition, the Department notes that, in contrast to 
JC Penney, record evidence suggests that the scope of the Order is 
exclusive and that candles not in the shapes described in the scope 
fall outside the scope of the Order.
    Therefore, the Department's proposed new interpretation for 
interpreting candle scope determination requests would entail Option A, 
with the addition that two specific types of candles--utility candles 
and birthday candles--would be excluded. The proposed new 
interpretation would be

[[Page 49480]]

as follows: \12\ The Department will consider all candle shapes 
identified in the scope of the Order \13\ (i.e., tapers,\14\ 
spirals,\15\ and straight-sided dinner candles; \16\ rounds,\17\ 
columns,\18\ pillars,\19\ votives; \20\ and various wax-filled 
containers \21\) to be within the scope of the Order, regardless of 
etchings, prints, texture, moldings or other artistic or decorative 
enhancements including any holiday-related art. However, even if they 
are one of the shapes listed within the scope of the Order, two types 
of candles will be excluded: (1) those candles known variously as 
``household candles,'' ``emergency candles,'' or ``utility candles,'' 
(which are typically white in color, 5 inches long, .75 inch in 
diameter, and come in packs of two or more); and (2) birthday candles 
(which are typically small, thin, pillar-shaped candles that range in 
height from 2 inches to 3.5 inches, are .18 inch to .25 inch in width, 
and come in packs of 10 to 24), and birthday numeral candles (which are 
candles in the shape of numbers that typically range in height from 2 
to 4 inches). All other candle shapes and types will be considered 
outside the scope of the Order.
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    \12\ The definitions used in the proposed new interpretation 
were taken from a variety of sources: (1) Historical documents on 
record from the candles case, such as the Petition and Departmental 
memoranda; (2) past candle scope rulings; and (3) sources outside of 
the Department, including the NCA's Web site.
    \13\ Note: The term ``circumference'' as used below denotes the 
length of the perimeter of a candle, whether measured at the base, 
top, etc. It can be used in reference to candles that have 
cylindrical or polygonal (i.e., multi-sided, with all sides being 
relatively straight) bases and tops.
    \14\ A taper is a candle that has a circumference at its base of 
up to 5 inches, is typically six inches or longer and gradually 
decreases in width from base to top so that the width at the base is 
typically no more than 60 percent larger than the width at the top 
(the top of a taper candle is typically \1/6\ of the candle's height 
from the tip of the candle, excluding the wick). The decrease in 
width may be continuously straight or slightly convex.
    \15\ A spiral is a candle that has dimensions similar to a 
taper's and has helical indentations around its length.
    \16\ A straight-sided dinner candle has dimensions similar to a 
taper's, although its width is constant through the length of the 
candle.
    \17\ A round may come in two varieties: (1) A ``spherical 
round'' is one in which all points on the candle's surface (except 
for those on the base and top) are approximately equidistant from 
the candle's center; see Final Scope Ruling: Antidumping Duty Order 
on Petroleum Wax Candles from the People's Republic of China (A-570-
504): Wal-Mart Stores, Inc. (December 17, 2004) at 13. Thus, a 
spherical round does not contain multiple surface angles (or 
embellishments so prominent that it could not be considered 
approximately spherical); (2) a ``flattened round,'' is typically 
disc-shaped and has at its widest point an approximately circular 
circumference which is greater than it its height. All horizontal 
radii of this circumference are approximately equidistant from the 
circumference's center. Thus, a flattened round does not contain 
multiple surface angles (or embellishments so prominent that it does 
not exhibit an approximately circular circumference). The top, 
bottom, and side of a flattened round may be slightly convex or non-
convex.
    \18\ A column is a candle that is often free-standing, has a 
width of up to 8 inches and a height of up to 14 inches. It 
typically maintains a constant circumference throughout its length. 
The base and top may have a cylinder or polygon shape.
    \19\ A pillar is a candle that is often free-standing, has a 
width of up to 8 inches and a height of up to 12 inches. It 
typically maintains a constant circumference throughout its length. 
The base and top may have a cylinder or polygon shape.
    \20\ A votive candle is typically about 1.5 inches in diameter, 
2 to 2.5 inches high, and typically designed to be placed in a 
container.
    \21\ The exposed surface of the wax at the top of the container 
is typically horizontally flat. The container may be in any shape 
and be made of any material.
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Analysis of Parties' Comments

    RILA suggests that the Department use objective criteria to make 
scope rulings more efficient, such as a list of symbols and objects 
that are specific to a holiday. We have not adopted this suggestion 
because our proposed interpretation would not take into account holiday 
ornamentation when determining whether a candle is outside of the scope 
of the Order.
    TAG suggested that the identifiable object exclusion be based on 
``realistic guidelines.'' We have not adopted this suggestion either, 
as the Department's proposed interpretation would not take into account 
identifiability as a particular object, but rather candle shape and 
candle type in scope determinations.
    In response to NRF's suggestion that the Department should use 
practices such as utilizing a designated Department employee whom 
importers can call to discuss scope issues, the Department notes that 
it already has analysts who perform this function. However, while 
analysts may discuss scope issues with interested parties, no scope 
determination can be made by telephone. An official scope ruling can 
only be made when an interested party formally submits its scope ruling 
request to the Department. See 19 CFR 351.225.
    With regard to NCA's and SI's suggestion that the Department issue 
summary determinations, the Department notes that it already issues 
determinations that include multiples of what are essentially the same 
item. See, e.g., Antidumping Duty Order on Petroleum Wax Candles From 
the People's Republic of China: Final Scope Ruling, Fashion Craft-
Excello, Inc. (April 12, 2007).
    In response to the assertion by NRF and SI that a change in the 
Department's current practice would mean that it would have to address 
prior scope rulings, the Department notes that in previous instances 
where it has changed its scope ruling interpretation in the candles 
case, the Department has only applied the change to current and future 
scope rulings. See LDM Anticircumvention Determination \22\ and JC 
Penney.
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    \22\ 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) (``LDM Anticircumvention Determination'').
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Application of Interpretation

    Given the above, the Department hereby preliminarily applies this 
new interpretation to the 388 pending scope determinations before us. 
See Memorandum to the File through Alex Villanueva, Program Manager, 
from Tim Lord, Case Analyst, Certain Petroleum Wax Candles from the 
People's Republic of China: Candle Scope Request Preliminary 
Determinations (August 9, 2010). The 388 requests consisted of 269 
unique candles.\23\ Of those 269 unique candles, 250 were preliminarily 
determined to be outside of the scope of the Order, while 19 unique 
candles were preliminarily determined to be within of the scope of the 
Order.
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    \23\ ``Unique candles'' are those from a particular requestor 
that the Department deems identical. For example, if a requestor 
submitted three beach ball candles, and two of those were exactly 
the same size, shape, and color, while the third candle was not, the 
set of three candles would consist of two unique candles.
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Submission of Comments

    The Department invites interested parties to comment on these 
preliminary results and the proposed interpretation for analyzing scope 
requests under the Order. Persons wishing to comment should file one 
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 in reaching its final 
determination. Comments received after the end of the comment period 
may not be considered. All comments responding to this notice will be a 
matter of public record and will be available for inspection and 
copying at Import Administration's Central Records Unit, Room 1117. 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,

[[Page 49481]]

as comments submitted on diskette 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://www.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: August 6, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-20076 Filed 8-12-10; 8:45 am]
BILLING CODE 3510-DS-P