[Federal Register Volume 76, Number 179 (Thursday, September 15, 2011)]
[Notices]
[Pages 57017-57019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23681]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-827]


Certain Cased Pencils From the People's Republic of China: Notice 
of Court Decision Not in Harmony With Final Results of Administrative 
Review and Notice of Amended Final Results of Administrative Review 
Pursuant to Court Decision

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On August 30, 2011, the United States Court of International 
Trade (``CIT'') sustained the Department of Commerce's (``the 
Department'') results of redetermination as applied to respondent 
Shandong Rongxin Import & Export Co., Ltd. (``Rongxin'') pursuant to 
the CIT's remand order in Shandong Rongxin Import & Export Co., Ltd. v. 
United States, Court No. 09-00316, Slip Op. 11-45 (Ct. Int'l Trade 
April 21, 2011) (``Shandong Rongxin I''). See Final Results of 
Redetermination Pursuant to Remand, Court No. 09-00316, dated August 4, 
2011, available at http://ia.ita.doc.gov/remands (``Second Remand 
Results''); Shandong Rongxin Import & Export Co., Ltd. v. United 
States, Court No. 09-00316, Slip Op. 11-105 (Ct. Int'l Trade August 30, 
2011) (``Shandong Rongxin II''). Consistent with the decision of the 
United States Court of Appeals for the Federal Circuit (``CAFC'') in 
Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 1990) 
(``Timken''), as clarified by Diamond Sawblades Mfrs. Coalition v. 
United States, 626 F.3d 1374 (Fed. Cir. 2010) (``Diamond Sawblades''), 
the Department is notifying the public that the final judgment in this 
case is not in harmony with the Department's final determination and is 
amending the final

[[Page 57018]]

results of the administrative review of the antidumping duty order on 
certain cased pencils (``pencils'') from the People's Republic of China 
covering the period of review (``POR'') of December 1, 2006, through 
November 30, 2007 with respect to Rongxin. See Certain Cased Pencils 
from the People's Republic of China: Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 74 FR 33406 (July 
13, 2009) (``Final Results'') and accompanying Issues and Decision 
Memorandum (``I&D Memorandum''), as amended by Certain Cased Pencils 
from the People's Republic of China: Amended Final Results of 
Antidumping Duty Administrative Review, 74 FR 45177 (September 1, 
2009).

DATES: Effective Date: September 9, 2011

FOR FURTHER INFORMATION CONTACT: Alexander Montoro or Nancy Decker, AD/
CVD Operations, Office 1, Import Administration--International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC, 20230; telephone (202) 482-
0238 or (202) 482-0196.

SUPPLEMENTARY INFORMATION:

Background

    On July 13, 2009, the Department published its Final Results. In 
the Final Results, the Department valued lindenwood pencil slats used 
by the respondent Rongxin with publicly available, published U.S. 
prices for American basswood lumber. See Final Results and accompanying 
I&D Memorandum at Comment 4a. In China First Pencil Co., Ltd. v. United 
States, 721 F. Supp. 2d 1369 (Ct. Int'l Trade 2010) (``China First''), 
the CIT determined that the Department's surrogate value for pencils 
slats used in the Final Results was unsupported by substantial evidence 
and was not in accordance with law. The CIT remanded the Department to 
recalculate a surrogate value for pencil slats using data from ``Paper 
and Stationery,'' an Indian trade publication. See China First, 721 F. 
Supp. 2d at 1375-77. On first remand, the Department used ``Paper and 
Stationery'' data to recalculate the surrogate value for pencil slats. 
See Final Results of Redetermination Pursuant to Remand, Consol. Court 
No. 09-00325, dated December 20, 2010, at 3-4, available at http://ia.ita.doc.gov/remands (``First Remand Results''). This redetermination 
on slats was sustained with respect to Rongxin in Shangdong Rongxin I.
    Also in the Final Results, the Department valued black and color 
cores for Rongxin using World Trade Atlas data. See Final Results and 
accompanying I&D Memorandum at Comment 4b. In China First, the CIT 
determined that the Department's surrogate value for cores used in the 
Final Results was unsupported by substantial evidence and was not in 
accordance with law. The CIT remanded to the Department to identify 
separate surrogate values, supported by substantial evidence on the 
record, for black cores, color cores, thick black cores, and thick 
color cores. See China First, 721 F. Supp. 2d at 1379-1380. On first 
remand, the Department used ``Paper and Stationery'' data to 
recalculate the surrogate value for black and color cores. See First 
Remand Results at 4-6. The Department's redetermination on cores was 
sustained in Shangdong Rongxin I.
    Additionally, in the Final Results, the Department calculated a 
surrogate wage value for Rongxin in accordance with the regression-
based methodology set forth in 19 CFR 351.408(c)(3). See Final Results 
and accompanying I&D Memorandum at Comment 3. In Dorbest Ltd. v. United 
States, 604 F.3d 1363 (Fed. Cir. 2010) (``Dorbest''), the CAFC held 
that the Department's ``{regression-based{time}  method for calculating 
wage rates {as stipulated by 19 CFR 351.408(c)(3){time}  uses data not 
permitted by {the statutory requirements laid out in section 773 of the 
Tariff Act of 1930, as amended (``the Act'') (i.e. 19 U.S.C. 
1677b(c)){time} .'' Dorbest, 604 F.3d at 1372. Specifically, the CAFC 
interpreted section 773(c) of the Act to require the use of data from 
market economy countries that are both economically comparable to the 
non-market economy country at issue and significant producers of the 
subject merchandise, unless such data are unavailable. Because the 
Department's regulation requires the Department to use data from 
economically dissimilar countries and from countries that do not 
produce comparable merchandise, the CAFC invalidated the Department's 
labor regulation at 19 CFR 351.408(c)(3). Following Dorbest, the 
Department requested a voluntary remand for its wage rate calculations 
for Rongxin in the Final Results. The CIT granted that request and in 
China First remanded the Final Results with instructions that the labor 
wage value be recalculated in accordance with the decision in Dorbest. 
See China First, 721 F. Supp. 2d at 1373.
    On first remand, the Department adopted a wage calculation 
methodology with respect to Rongxin that averaged wages across 
countries that are both economically comparable and significant 
producers of merchandise comparable to the subject merchandise. See 
First Remand Results at 7-31. In Shandong Rongxin I, the CIT again 
remanded to the Department to address two issues concerning the 
surrogate value for labor applied with respect to Rongxin in the First 
Remand Results: (1) The Department's decision to omit certain labor 
data from its calculations because the data were reported under a 
previous revision of ISIC; \1\ and (2) the Department's methodology for 
determining whether a country is a significant producer of comparable 
merchandise within the meaning of section 773(c)(4) of the Act.
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    \1\ The International Standard Industrial Classification of all 
Economic Activities (``ISIC'') is ``a uniform, periodically updated 
system for the classification of economic activity, not unlike what 
the Harmonized Tariff Schedule is for the classification of imported 
merchandise.'' See Shangdong Rongxin I, Slip Op. 11-45 at 7, n.3.
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    On second remand, the Department revised its wage rate methodology 
to rely upon labor cost data from a single surrogate country. See 
Second Remand Results at 4-6 (citing Antidumping Methodologies in 
Proceedings Involving Non-Market Economies: Valuing the Factor of 
Production: Labor, 76 FR 36092 (June 21, 2011)). Through this revised 
approach, the Department's redetermination resulted in a change to 
Rongxin's margin from 11.48 percent in the Final Results to 0.72 
percent. The CIT sustained the Department's Second Remand Results in 
Shangdong Rongxin II.

Timken Notice

    In its decision in Timken, 893 F.2d at 341, as clarified by Diamond 
Sawblades, the CAFC has held that, pursuant to section 516A(e) of the 
Act, the Department must publish a notice of a court decision that is 
not ``in harmony'' with a Department determination and must suspend 
liquidation of entries pending a ``conclusive'' court decision. The 
CIT's August 30, 2011 judgment sustaining the Department's remand 
redetermination with respect to Rongxin constitutes a final decision of 
that court that is not in harmony with the Department's Final Results. 
This notice is published in fulfillment of the publication requirements 
of Timken. Accordingly, the Department will continue the suspension of 
liquidation of the subject merchandise pending the expiration of the 
period of appeal or, if appealed, pending a final and conclusive court 
decision. The cash deposit rate will remain the company-specific rate 
established for the subsequent and most recent period during which the 
respondent was

[[Page 57019]]

reviewed. See Certain Cased Pencils From the People's Republic of 
China: Final Results of the Antidumping Duty Administrative Review, 76 
FR 27988 (May 13, 2011).

Amended Final Results

    Because there is now a final court decision with respect to 
Rongxin, the revised dumping margin is as follows:

------------------------------------------------------------------------
                                                                Margin
                          Exporter                            (percent)
------------------------------------------------------------------------
Shandong Rongxin Import & Export Co., Ltd..................        0.72
------------------------------------------------------------------------

    In the event the CIT's ruling is not appealed or, if appealed, 
upheld by the CAFC, the Department will instruct U.S. Customs and 
Border Protection to assess antidumping duties on entries of the 
subject merchandise during the POR from Rongxin on the revised 
assessment rate calculated by the Department.
    This notice is issued and published in accordance with sections 
516A(e)(1), 751(a)(1), and 777(i)(1) of the Act.

    Dated: September 9, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-23681 Filed 9-14-11; 8:45 am]
BILLING CODE 3510-DS-P