Final Results of Expedited Sunset Review: Industrial Nitrocellulose From People's Republic of China

[Federal Register Volume 64, Number 207 (Wednesday, October 27, 1999)]
[Notices]
[Pages 57857-57859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28068]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-802]


Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose From People's Republic of China

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

ACTION: Notice of Final Results of Expedited Sunset Review: Industrial 
Nitrocellulose from People's Republic of China.

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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 People's Republic of China (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 the People's Republic of China (``China''). 
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 China was 
published in the Federal Register on July 10, 1990 (55 FR 
28267).1 In that order, the Department indicated that the 
weighted-average dumping margins for all entries of the subject 
merchandise is 78.40 percent. Since that time, the Department has 
completed only one administrative review. In that review, covering July 
1, 1995 through June 30, 1996, we found that China North Industries 
Guangzhou Corp. (``CNIGC'') was the only exporter. In that review, the 
Department determined not to grant CNIGC a separate rate; instead, we 
established a rate of zero for all entries from the People's Republic 
of China (``PRC-wide rate'') based on information submitted by 
CNIGC.2 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 
the People's Republic of China, 55 FR 28267 (July 10, 1990).
    \2\ See Industrial Nitrocellulose From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 62 
FR 65667 (December 15, 1997). In the review, the Department found 
that the PRC-wide rate was zero for the period of review.

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[[Page 57858]]

Background

    On June 1, 1999, the Department initiated a sunset review of the 
antidumping duty order on nitrocellulose from China (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; nor is it 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. domestic producer 
of nitrocellulose, was the petitioner in the original investigation, 
and has participated in all contested review proceedings. (See 
Hercules' July 1, 1999 Substantive Response at 1-2.)
    We did not receive a substantive response from any respondent 
interested parties 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 China 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.3
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    \3\ 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 
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 is high if were the order revoked. (See 
July 1, 1999 substantive response of the Hercules at 3-6). To buttress 
its contention, Hercules points out a drastic decline in import volumes 
of the subject merchandise immediately after the issuance of the order. 
According to Hercules, after the imposition of the antidumping order, 
imports of the subject merchandise all but disappeared.4 Id. 
The virtual cessation of imports immediately after the issuance of the 
order, Hercules further argues, is highly probative of the likelihood 
of future dumping. Id.
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    \4\ In 1989 and 1990, imports of the subject merchandise were 
508 and 237 metric tons, respectively; however, during the period 
1991 through 1998, imports volumes were as follows: 1991--2; 1992--
0; 1993--17; 1994--0; 1995--0; 1996--9; 1997--0; and 1998--27 metric 
tons. (See July 1, 1999 substantive response of Hercules, Attachment 
2.)
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    Moreover, Hercules indicates that, for the past five years, imports 
of the subject merchandise have been at or near zero. Id. According to 
Hercules, the-- small scale of imports of the subject merchandise in 
1996 was just the Chinese producers/exporters' attempt to attain a 
reduced cash deposit rate in a pending administrative 
review.5 Id. Hercules further notes that even after 
weighted-average dumping margin for the subject merchandise was reduced 
to zero (from 78.40 percent), Chinese producers/exporters could not 
sustain the exports of the subject merchandise. Id. As a result, 
Hercules concludes, dumping of the subject merchandise will continue if 
the order were revoked.
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    \5\ See footnote 4, supra. In the 1995-1996 review, the 
Department found a 0% weighted-average dumping margin for entries of 
nitrocellulose from China.
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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 considers 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. Since publication of the final 
results of the 1995-1996 administrative review, the cash deposit rate 
has remained zero.
    However, consistent with section 752(c) of the Act, the Department 
also considered the import volumes of the

[[Page 57859]]

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, import volumes of the subject 
merchandise have declined substantially.6 Moreover, for the 
period 1994-1998, although Census Bureau IM 146 data do not reflect any 
annual imports of the subject merchandise, the United States 
International Trade Commission Data show rather insignificant imports 
of the subject merchandise during the period.7 Therefore, 
the Department determines that the import volumes of the subject 
merchandise decreased significantly after the issuance of the order.
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    \6\ See id. The numbers supplied by Hercules exactly correspond 
with those of the U.S. International Trade Commission Data.
    \7\ See id. During 1994-1998, the average import volume of the 
subject merchandise was 7.2 metric tons, which is a mere 1.93 
percent of 1989 and 1990 pre-order import levels.
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    Given that the import volumes of the subject merchandise decreased 
significantly 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 CNIGC and 
all-others: 78.40 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 the People's Republic of China, 55 FR 
21051 (May 22, 1999).
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    In its substantive response, citing the SAA at 890 and the Sunset 
Policy Bulletin at 18873, Hercules states that the Department normally 
will provide the Commission with the dumping margins from the 
investigation unless the import volumes increase while at the same time 
dumping margins decrease after the issuance of the order. (See the July 
1, 1999 Substantive Response of the Hercules at 6-7.) Hercules points 
out that, in the instant case, however, the reduced weighted-average 
dumping margin for Chinese producers/exporters coincides with a greatly 
declined import volume of the subject merchandise. Id. In other words, 
Hercules states that Chinese producers/exporters are incapable of 
reducing weighted-average dumping margins while at the same time 
increasing exports of the subject merchandise to the United States. Id. 
Therefore, Hercules urges, the Department should abide by its practice, 
as set forth in the Sunset Policy Bulletin, and report to the 
Commission the margin set forth in the original investigation.
    The Department agrees with Hercules' suggestion pertaining to the 
margin that is likely to prevail if the order were revoked. Because the 
margins from the original investigation reflect the behavior of Chinese 
producers and exporters without the discipline of an order in place, 
the Department will provide to the Commission the margin found in the 
original investigation. Absent argument and evidence to the contrary, 
the Department sees no reason to change its usual practice of selecting 
the rate from the original investigation. We will report to the 
Commission the PRC-wide rate contained in the Final Results of Review 
section of this notice.

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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PRC-wide...................................................        78.40
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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. 99-28068 Filed 10-26-99; 8:45 am]
BILLING CODE 3510-DS-P