Final Results of Expedited Sunset Review: Industrial Nitrocellulose From Germany

[Federal Register Volume 64, Number 207 (Wednesday, October 27, 1999)]
[Notices]
[Pages 57843-57845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28062]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-428-803]


Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose From Germany

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

ACTION: Notice of final results of expedited sunset review: industrial 
nitrocellulose from Germany.

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SUMMARY: On June 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping order on 
industrial nitrocellulose from Germany (64 FR 29261) pursuant to 
section 751(c) of the Tariff Act of 1930, as amended (the ``Act''). On 
the basis of a notice of intent to participate and adequate substantive 
response filed on behalf of a domestic interested party and inadequate 
response (in this case, no response) from respondent interested 
parties, the Department determined to conduct an expedited review. As a 
result of this review, the Department finds that revocation of the 
antidumping duty order would be likely to lead to continuation or 
recurrence of dumping at the levels indicated in the Final Results of 
Review section of this notice.

For Further Information Contact: Eun W. Cho or Melissa G. Skinner, 
Office of Policy for Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, D.C. 20230; telephone: (202) 482-
1698 or (202) 482-1560, respectively.

Effective Date: October 27, 1999.

Statute and Regulations

    This review was conducted pursuant to sections 751(c) and 752(c) of 
the Act. The Department's procedures for the conduct of sunset reviews 
are set forth in Procedures for Conducting Five-Year (``Sunset'') 
Reviews of Antidumping and Countervailing duty Orders, 63 FR 13516 
(March 20, 1998) (``Sunset Regulations'') and 19 CFR Part 351 (1998) in 
general. Guidance on methodological or analytical issues relevant to 
the Department's conduct of sunset reviews is set forth in the 
Department's Policy Bulletin 98:3--Policies Regarding the Conduct of 
Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty 
Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy 
Bulletin'').

Scope

    The product covered by this order is industrial nitrocellulose 
(``nitrocellulose'') from Germany. Industrial nitrocellulose is a dry, 
white, amorphous synthetic chemical with a nitrogen content between 
10.8 and 12.2 percent, and is produced from the reaction of cellulose 
with nitric acid. Industrial nitrocellulose is used as a film-former in 
coatings, lacquers, furniture finishes, and printing inks. The scope of 
this order does not include explosive grade nitrocellulose, which has a 
nitrogen content greater than 12.2 percent. Industrial nitrocellulose 
is currently classifiable under Harmonized Tariff Schedule (``HTS'') 
item number 3912.20.00. The HTS item number is provided for convenience 
and customs purposes only. The written description remains dispositive.

History of the Order

    The antidumping duty order on nitrocellulose from Germany was 
published in the Federal Register on July 10, 1990 (55 FR 
28270).1 In that order, the Department determined that the 
weighted-average dumping margin for all entries of the subject 
merchandise was 3.84 percent.2 Since that time, the 
Department has completed one administrative review.3 We note 
that, to date, the Department has not issued any duty absorption 
findings in this case. The order remains in effect for all 
manufacturers and exporters of the subject merchandise.
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    \1\ See Antidumping Duty Order: Industrial Nitrocellulose from 
Germany, 55 FR 28271 (July 10, 1990).
    \2\ However, the underlying investigation and the subsequent 
review dealt with only one German company, Wolff Walsrode AG 
(``Wolff'').
    \3\ See Industrial Nitrocellulose From Germany: Final Results of 
Antidumping Duty Administrative Review, 63 FR 43372 (August 13, 
1998).
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Background

    On June 1, 1999, the Department initiated a sunset review of the 
antidumping duty order on nitrocellulose from Germany (64 FR 29261), 
pursuant to section 751(c) of the Act. The Department received a Notice 
of Intent to Participate on behalf of Hercules Incorporated 
(``Hercules'') on June 9, 1999, within the deadline specified in 
section 351.218(d)(1)(i) of the Sunset Regulations. Hercules asserts 
that it is not related to a foreign producer, foreign exporter, or 
domestic importer of the subject merchandise and that it is not an 
importer of the subject merchandise except on an occasional spot basis. 
(See Hercules' June 9, 1999 Intent to Participate at 2.)
    We received a complete substantive response from Hercules on July 
1, 1999, within the 30-day deadline specified in the Sunset Regulations 
under section 351.218(d)(3)(i). Hercules claims interested party status 
under section 771(9)(C) of the Act as a U.S. manufacturer, producer, 
and wholesaler of the subject merchandise. In its substantive response, 
Hercules indicates that it is the sole remaining U.S. producer of 
nitrocellulose, was the petitioner in the original investigation, and 
has participated in the administrative review proceeding. (See 
Hercules' July 1, 1999 Substantive Response at 1-2.)
    We did not receive a substantive response from any respondent 
interested party to this proceeding. Consequently, pursuant to section 
351.218(e)(1)(ii)(C) of the Sunset Regulations, the Department 
determined to conduct an expedited, 120-day, review of this order.
    In accordance with section 751(c)(5)(C)(v) of the Act, the 
Department may treat a review as extraordinarily complicated if it is a 
review of a transition order--an order which was in effect on January 
1, 1995. See section 751(c)(6)(C) of the Act. The Department determined 
that the sunset review of the antidumping duty order on industrial 
nitrocellulose from Germany is extraordinarily complicated. Therefore, 
on October 12, 1999, the Department extended the time limit for 
completion of the preliminary results of this review until not later 
than December 28, 1999, in accordance with section 751(c)(5)(B) of the 
Act.4
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    \4\  See Extension of Time Limit for Final Results of Five-Year 
Reviews, 64 FR 55233 (October 12, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department 
conducted this review to determine whether revocation of the 
antidumping order would be likely to lead to continuation or recurrence 
of dumping. Section 752(c) of the Act provides that, in making this 
determination, the Department shall consider the weighted-average 
dumping margins determined in the investigation and subsequent reviews 
and the volume of imports of the subject merchandise for the period

[[Page 57844]]

before and the period after the issuance of the antidumping order, and 
shall provide to the International Trade Commission (``the 
Commission'') the magnitude of the margin of dumping likely to prevail 
if the order is revoked.
    The Department's determinations concerning continuation or 
recurrence of dumping and the magnitude of the margins are discussed 
below. In addition, Hercules' comments with respect to continuation or 
recurrence of dumping and the magnitude of the margins are addressed 
within the respective sections below.

Continuation or Recurrence of Dumping

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the Statement of Administrative Action (``the SAA''), H.R. Doc. No. 
103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the 
Department issued its Sunset Policy Bulletin providing guidance on 
methodological and analytical issues, including the bases for 
likelihood determinations. In its Sunset Policy Bulletin, the 
Department indicated that determinations of likelihood will be made on 
an order-wide basis (see section II.A.2). In addition, the Department 
indicated that normally it will determine that revocation of an 
antidumping order is likely to lead to continuation or recurrence of 
dumping where (a) dumping continued at any level above de minimis after 
the issuance of the order, (b) imports of the subject merchandise 
ceased after the issuance of the order, or (c) dumping was eliminated 
after the issuance of the order and import volumes for the subject 
merchandise declined significantly (see section II.A.3).
    In addition to considering the guidance on likelihood cited above, 
section 751(c)(4)(B) of the Act provides that the Department shall 
determine that revocation of an order is likely to lead to continuation 
or recurrence of dumping where a respondent interested party waives its 
participation in the sunset review. In the instant review, the 
Department did not receive a response from any respondent interested 
party. Pursuant to section 351.218(d)(2)(iii) of the Sunset 
Regulations, this constitutes a waiver of participation.
    In its substantive response, Hercules asserts that the likelihood 
of continuation or recurrence of dumping is high if the order is 
revoked. (See July 1, 1999 substantive response of Hercules at 3-5). In 
support of its assertion, Hercules stresses that dumping of the subject 
merchandise continued above the de minimis level after the issuance of 
the order. Id. Citing the Sunset Policy Bulletin, 63 FR at 18872, 
Hercules argues that continued dumping at any level above de minimis 
after the issuance of the order is highly probative of a likelihood of 
future dumping. Id. Furthermore, Hercules argues that an increase of 
weighted-average dumping margins of the subject merchandise in the most 
recent review clearly manifests Wolff's willingness to dump at an 
increasing rate in order to hold onto its U.S. market 
share.5 Id.
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    \5\ See footnote 1 and 3, supra. The rate from the antidumping 
duty order was 3.84 percent; the rate from the final results of the 
only administrative review, covering the period July 1996 through 
June 1997, was 7.18 percent for Wolff, which was the only company 
reviewed.
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    Consistent with section 752(c) of the Act, the Department 
considered the import volumes of the subject merchandise before and 
after the issuance of the order. The data supplied by Hercules and 
those of the United States Census Bureau IM146s and the United States 
International Trade Commission indicate that, since the imposition of 
the order, the import volumes of the subject merchandise have declined 
slightly.6 Therefore, the Department determines that the 
import volumes of the subject merchandise were reduced slightly after 
the issuance of the order.
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    \6\ The import volumes of the subject merchandise are as follows 
(the order was issued in June of 1990): 1989--2,331; 1990--2,576; 
1991--1,800; 1992--2,824; 1993--2,357; 1994--1,787; 1995--2,298; 
1996--2,173; 1997--2,021; 1998--2,095. These numbers correspond 
exactly with the U.S. International Trade Commission Data. Although 
the imports volumes remained relatively steady throughout the 
period, they declined immediately after the issuance of the order: 
2,331 in 1989 compared to 1,800 in 1991. Also, the average volume of 
imports during the period 1994 through 1998 (2,074.8) is slightly 
less than that of 1989 (2,331).
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    As indicated in section II.A.3 of the Sunset Policy Bulletin, the 
SAA at 890, and House Report at 63-64, the Department also considered 
whether dumping continued at any level above de minimis after the 
issuance of the order. If companies continue dumping with the 
discipline of an order in place, the Department may reasonably infer 
that dumping would continue were the discipline removed. After 
examining the published findings with respect to weighted-average 
dumping margins in the original investigation and from the previous 
administrative review,7 the Department determines that, 
since the issuance of the order, weighted-average dumping margins for 
the subject merchandise have continued at above the de minimis level.
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    \7\ See footnote 6, supra.
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    Given that dumping of the subject merchandise continued above the 
de minimis level after the issuance of the order and that respondent 
interested parties have waived their right to participate in this 
review, the Department agrees with Hercules' contention that dumping is 
likely to continue if the order is revoked.

Magnitude of the Margin

    In the Sunset Policy Bulletin, the Department stated that it will 
normally provide to the Commission the margin that was determined in 
the final determination in the original investigation. Further, for 
companies not specifically investigated or for companies that did not 
begin shipping until after the order was issued, the Department 
normally will provide a margin based on the ``all others'' rate from 
the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) 
Exceptions to this policy include the use of a more recently calculated 
margin, where appropriate, and consideration of duty absorption 
determinations. (See sections II.B.2 and 3 of the Sunset Policy 
Bulletin.)
    The Department, in its final determination of sales at less-than-
fair-value, published a weighted-average dumping margin for Wolff and 
all-others: 3.84 percent.8 We note that, to date, the 
Department has not issued any duty absorption findings in this case.
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    \8\ See Final Determination of Sales at Less Than Fair Value: 
Industrial Nitrocellulose from Germany, 55 FR 21058 (May 22, 1990).
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    In its substantive response, while acknowledging that the 
Department normally will provide the Commission with the dumping 
margins from the original investigation, Hercules argues that, in the 
instant review, the Department, nevertheless, should report to the 
Commission a more recently calculated margin because Wolff increased 
its dumping in order to hold onto its market share in the United 
States. (See the July 1, 1999 Substantive Response of Hercules at 5-6.) 
Hercules urges, the Department, therefore, should provide to the 
Commission the more recent, increased margin, because that margin is 
the better indicator of the Wolff's likely behavior in the event the 
order is revoked.
    The Department disagrees with Hercules' suggestion pertaining to 
the margin that is likely to prevail were the order revoked. In the 
Sunset Policy Bulletin, the Department indicated that when a company 
chooses to increase dumping in order to maintain or

[[Page 57845]]

increase its market share, the Department may report a more recently 
calculated margin to the Commission if dumping margins increased after 
the issuance of the order. (See section II.B.2 of the Sunset Policy 
Bulletin.) In the instant case, however, the Department's latest 
finding of an increased weighted-average dumping margin did not 
coincide with increased import volumes of the subject merchandise. Nor 
was the increased dumping associated with steady market share. On the 
contrary, our review of imports shows that the higher margin was 
associated with decreased volumes of imports and slightly declined 
market share.9 Therefore, the Department determines that it 
is inappropriate for the Department to report a more recently 
calculated rate to the Commission. Instead, because the margins from 
the original investigation reflect the behavior of German producers and 
exporters without the discipline of an order in place, the Department 
will provide to the Commission the margins found in the original 
investigation. We will report to the Commission the company-specific 
and all-others rate contained in the Final Results of Review section of 
this notice.
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    \9\ The only review in which the Department found a higher 
weighted-average dumping margin covered the period between July 1996 
and June 1997. See footnote 3, supra. Both the import volumes and 
market shares of the subject merchandise between 1996 and 1998 are 
lower than those of 1995, and lower than the five-year averages of 
the import volumes and market shares between 1991--1995. See 
Hercules' July 1, 1999 Substantive Response Attachment 2.
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Final Results of Review

    As a result of this review, the Department finds that revocation of 
the antidumping order would likely lead to continuation or recurrence 
of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
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Wolff Walsrode AG...........................................        3.84
All Others..................................................        3.84
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    This notice serves as the only reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305 of the Department's regulations. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This five-year (``sunset'') review and notice are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: October 21, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-28062 Filed 10-26-99; 8:45 am]
BILLING CODE 3510-DS-P