[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Notices]
[Pages 78676-78678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31644]


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

DEPARTMENT OF COMMERCE

International Trade Administration


De Facto Criteria for Establishing a Separate Rate in Antidumping 
Proceedings Involving Non-Market Economy Countries

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

ACTION: Request for comments.

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

SUMMARY: In antidumping proceedings involving non-market economy 
(``NME'') countries,\1\ the Department of Commerce (``the Department'') 
has a rebuttable presumption that the export activities of all 
companies within the country are subject to government control and, 
thus, should be assessed a single antidumping duty rate (i.e., the NME-
Entity rate). It is the Department's policy to assign to all exporters 
of merchandise subject to investigation in an NME country this single 
rate unless an exporter can demonstrate that it is sufficiently 
independent so as to be entitled to a ``separate rate'' (i.e., a

[[Page 78677]]

dumping margin separate from the margin assigned to the NME-Entity). 
Exporters can demonstrate this independence through the absence of both 
de jure and de facto governmental control over their export activities.
---------------------------------------------------------------------------

    \1\ The Department currently considers the following countries 
to be non-market economy countries--Armenia, Belarus, Georgia, 
Kyrgyzstan Republic, Moldova, the People's Republic of China, the 
Republic of Azerbaijan, the Socialist Republic of Vietnam, 
Tajikistan, Turkmenistan and Uzbekistan.
---------------------------------------------------------------------------

    The Department is now considering revising its current policy and 
practice with respect to the de facto criteria examined for purposes of 
determining whether to grant separate rate status to individual 
exporters in antidumping proceedings involving NME countries. Through 
this notice, the Department invites the public to comment on amending 
the test as discussed below. Interested parties are invited to comment 
on this proposal.

DATES: To be assured of consideration, comments must be received no 
later January 31, 2011.\2\
---------------------------------------------------------------------------

    \2\ The Department typically allows 30 days for filing comments 
in instances such as this. However, due to the intervening holiday 
season, the Department is allowing 45 days in this particular 
instance to ensure that all parties have adequate time to comment.

FOR FURTHER INFORMATION CONTACT: Albert Hsu, Senior International 
Economist, Office of Policy or Eugene Degnan, Program Manager, Office 
8, Office of Antidumping and Countervailing Duty Operations, Import 
Administration, U.S. Department of Commerce, at 202-482-4491 or 202-
---------------------------------------------------------------------------
482-0414, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that the export activities of all companies 
within the country are subject to government control and, thus, should 
be assessed a single antidumping duty rate (i.e., the NME-Entity rate). 
It is the Department's policy to assign all exporters of merchandise 
subject to an antidumping investigation or review in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a ``separate rate'' 
(i.e., a dumping margin separate from the margin assigned to the NME-
Entity). Exporters can demonstrate this independence through the 
absence of both de jure and de facto governmental control over their 
export activities. The Department analyzes each entity exporting the 
subject merchandise that applies for a separate rate under a test first 
articulated in Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991) (``Sparklers''), as further developed in Final Determination of 
Sales at Less Than Fair Value: Silicon Carbide from the People's 
Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide'').\3\ 
However, if the Department determines that an exporter of NME-produced 
merchandise is wholly foreign-owned or located in a market economy 
country, under current practice a separate-rate analysis is not 
necessary to determine whether it is independent from government 
control.
---------------------------------------------------------------------------

    \3\ See also Policy Bulletin 05.1, which states: ``[w]hile 
continuing the practice of assigning separate rates only to 
exporters, all separate rates that the Department will now assign in 
its NME investigations will be specific to those producers that 
supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period 
of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.''
---------------------------------------------------------------------------

    The Department is not revisiting the de jure criteria currently 
examined for purposes of establishing a company's separate rate. The 
Department is considering, however, the extent to which it might 
incorporate additional de facto criteria into its analysis when 
assessing and verifying whether a foreign producer/exporter in a non-
market economy is sufficiently free of government control to be granted 
separate rate status.
    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto governmental control of its 
export functions. They are: (1) Whether the export prices are set by or 
are subject to the approval of a governmental agency; (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 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.\4\ The Department has determined that an analysis 
of de facto control is critical in determining whether exporters or 
producers are, in fact, subject to a degree of governmental control 
which would preclude the Department from assigning separate rates.
---------------------------------------------------------------------------

    \4\ See Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 
(May 2, 1994); see also Notice of 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).
---------------------------------------------------------------------------

    Currently, when conducting its de facto separate rate analysis, the 
Department asks of those being considered for separate rate status 
questions regarding: (1) Ownership and whether any individual owners 
hold office at any level of the NME government; (2) export sales 
negotiations and prices; (3) selection of company management and 
whether any managers held government positions; (4) disposition of 
profits; and (5) affiliations with any companies involved in the 
production or sale in the home market, third-country markets, or the 
United States of merchandise which would fall under the description of 
merchandise covered by the scope of the proceeding. The Department's 
full Separate Rate Status Application is available on the Department's 
Web site at http://www.trade.gov/ia.
    The Department's current practice focuses on direct government 
involvement in a firm's export activities and, to that extent, it may 
not take sufficient account of the government's role in the NME and how 
that role may impact an exporter's behavior with regard to its export 
activities and setting prices. For this reason, the Department is 
considering modifying the de facto criteria to look beyond direct 
government control of export activities in assessing whether an entity 
should be granted separate rate status. The Department welcomes 
comments on this proposed reassessment of its current practice. 
Further, the Department invites comments and suggestions regarding 
additional de facto criteria to examine in assessing a company's 
eligibility for separate rate status. Comments should include a 
description of the criteria parties propose the Department examine, 
specific questions the Department might ask a separate rate applicant, 
and the type of documentation the Department would expect to review, 
and procedures followed, at verification.
    Submission of Comments:
    As specified above, to be assured of consideration, comments must 
be received no later than January 31, 2011. All comments must be 
submitted through the Federal eRulemaking Portal at http://www.regulations.gov, Docket No. ITA-2010-0010, unless the commenter 
does not have access to the Internet. Commenters that do not have 
access to the Internet may submit the original and two copies of each 
set of comments by mail or hand delivery/

[[Page 78678]]

courier. All comments should be addressed to the Secretary of Commerce, 
Attention: Wendy J. Frankel, Director, Office 8, Antidumping and 
Countervailing Duty Operations, Room 1870, Import Administration, U.S., 
Department of Commerce, 14th Street and Constitution Ave., NW., 
Washington, DC 20230.
    The Department will consider all comments received before the close 
of the comment period. The Department will not accept comments 
accompanied by a request that part or all of the material be treated 
confidentially because of its business proprietary nature or for any 
other reason. All comments responding to this notice will be a matter 
of public record and will be available for inspection at Import 
Administration's Central Records Unit (Room 7046 of the Herbert C. 
Hoover Building) and on the Department's Web site at http://www.trade.gov/ia/.
    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: December 10, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-31644 Filed 12-15-10; 8:45 am]
BILLING CODE 3510-DS-P