Final Results of Expedited Sunset Review: Sebacic Acid from the People's Republic of China

[Federal Register Volume 64, Number 66 (Wednesday, April 7, 1999)]
[Notices]
[Pages 16910-16913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8622]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-825]


Final Results of Expedited Sunset Review: Sebacic Acid from the 
People's Republic of China

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

ACTION: Notice of Final Results of Expedited Sunset Review: Sebacic 
Acid from the People's Republic of China.

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SUMMARY: On December 2, 1998, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping order on 
sebacic acid from the People's Republic of China (63 FR 66527) 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 substantive 
comments filed on behalf of the domestic industry 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 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: Scott E. Smith 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-
6397 or (202) 482-1560, respectively.

EFFECTIVE DATE: April 7, 1999.

Statute and Regulations

    This review was conducted pursuant to sections 751(c) and 752 of 
the Act.

[[Page 16911]]

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''). 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 merchandise subject to this antidumping order is sebacic acid 
(all grades), a dicarboxylic acid with the formula 
(CH2)8(COOH)2, which include but are 
not limited to CP Grade (500ppm maximum ash, 25 maximum APHA color), 
Purified Grade (1000ppm maximum ash, 50 maximum APHA color), and Nylon 
Grade (500ppm maximum ash, 70 maximum ICV color). The principal 
difference between the grades is the quantity of ash and color. Sebacic 
acid contains a minimum of 85 percent dibasic acids of which the 
predominant species is the C10 dibasic acid. Sebacic acid is 
sold generally as a free-flowing powder/flake.
    Sebacic acid has numerous industrial uses, including the production 
of nylon 6/10 (a polymer used for paintbrush and toothbrush bristles 
and paper machine felts), plasticizers, esters, automotive coolants, 
polyamides, polyester castings and films, inks and adhesives, 
lubricants, and polyurethane castings and coatings.
    Sebacic acid is currently classifiable under subheading 
2917.13.00.30 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The HTSUS item number is provided for convenience and U.S. 
Customs purposes. The written product description of the scope of this 
order remains dispositive.
    This review covers imports from all manufacturers and exporters of 
Chinese sebacic acid.

Background

    On December 2, 1998, the Department initiated a sunset review of 
the antidumping order on sebacic acid from the People's Republic of 
China (63 FR 66527), pursuant to section 751(c) of the Act. The 
Department received a Notice of Intent to Participate on behalf of 
Union Camp Corporation (``Union Camp'') on December 8, 1998, within the 
deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations. Union Camp claimed interested party status under 19 U.S.C. 
1677(9)(C) as a domestic producer of sebacic acid. In addition, Union 
Camp indicated that it is the sole domestic producer of sebacic acid 
and was the original petitioner in the underlying investigation. We 
received a complete substantive response from Union Camp on January 4, 
1999, within the 30-day deadline specified in the Sunset Regulations 
under section 351.218(d)(3)(i). We did not receive a substantive 
response from any respondent interested party to this proceeding. As a 
result, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department 
determined to conduct an expedited, 120-day, review of this order.

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 margin are discussed 
below. In addition, parties' comments with respect to continuation or 
recurrence of dumping and the magnitude of the margin 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.3). 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 guidance on likelihood provided in the Sunset Policy 
Bulletin and legislative history, 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.
    The antidumping duty order on sebacic acid from the People's 
Republic of China was published in the Federal Register on July 14, 
1994 (59 FR 35909). Since this time, the Department has conducted three 
administrative reviews.1 The order remains in effect for all 
manufacturers and exporters of the subject merchandise.
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    \1\ See Sebacic Acid from The People's Republic of China; Final 
Results of Antidumping Duty Administrative Review, 62 FR 10530 
(March 7, 1997); Sebacic Acid from The People's Republic of China; 
Final Results of Antidumping Duty Administrative Review, 62 FR 65674 
(December 15, 1997); and Sebacic Acid from The People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 63 
FR 43373 (August 13, 1998).
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    In its substantive response, Union Camp argues that revocation of 
the order will likely lead to increased imports of sebacic acid from 
the PRC at dumped prices (see January 4, 1999 Substantive Response of 
Union Camp at 3). With respect to whether dumping continued at any 
level above de minimis after the issuance of the order, Union Camp 
states that for each of the participating companies, dumping has 
continued after the issuance of the order (see January 4, 1999 
Substantive Response of Union Camp at 4). Union Camp notes that during 
the first and second administrative reviews, Tianjin Chemicals Import & 
Export Corp.'s dumping margin was zero and, during the third 
administrative review, SINOCHEM International Chemical Co.'s dumping 
margin was de minimis.

[[Page 16912]]

Union Camp argues, however, as stated in the Sunset Policy Bulletin, 
that a zero or de minimis margin, in itself, will not require the 
Department to determine that continuation or recurrence is not likely.
    In addition, Union Camp asserts that Chinese sebacic acid is being 
dumped in the European market. By comparing Union Camp's current 
selling price in the European Union to the Chinese selling price (based 
on information received from Union Camp's European customers and 
publicly quoted unit prices), Union Camp believes that sebacic acid of 
Chinese origin is being dumped in Europe. Furthermore, Union Camp 
asserts that this fact suggests that if the U.S. dumping order on 
Chinese sebacic acid were revoked, Chinese exporters of sebacic acid 
would likely reduce their sales prices and increase their dumping in 
the U.S.
    With respect to whether imports of the subject merchandise ceased 
after the issuance of the order, Union Camp, citing Commerce IM145 
reports, argues that imports of Chinese sebacic acid dropped 
significantly with the imposition of dumping duties under the order in 
1994 and continued to decline in 1995. Union Camp notes that, during 
1996 and 1997, imports of the subject merchandise increased slightly, 
however, it asserts this increase can most likely be attributed to an 
increase in the domestic consumption of sebacic acid beginning in 1995.
    In conclusion, Union Camp argued that the Department should 
determine that there is a likelihood that dumping would continue were 
the order revoked because (1) dumping margins have existed for most 
known exporters of the subject merchandise during the entire life of 
the order, (2) it believes that Chinese sebacic acid is being dumped in 
Europe and (3) shipments of subject merchandise have also continued 
throughout the life of the order and this suggests that, if the U.S. 
order were revoked, dumping of subject merchandise would increase in 
the U.S.
    As discussed in Section II.A.3 of the Sunset Policy Bulletin, the 
SAA at 890, and the House Report at 63-64, if companies continue 
dumping with the discipline of an order in place, the Department may 
reasonably infer that dumping would continue if the discipline were 
removed. Although two of the four known Chinese producers have, at 
various times over the life of the order, received zero or de minimis 
margins, none has consistently eliminated dumping while increasing or 
maintaining market share. Dumping margins above de minimis levels 
continue to exist for shipments of the subject merchandise from three 
of the four known Chinese producers.2
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    \2\ See Sebacic Acid from The People's Republic of China; Final 
Results of Antidumping Duty Administrative Review, August 13, 1998 
(63 FR 43373).
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    Consistent with section 752(c) of the Act, the Department also 
considered the volume of imports before and after issuance of the 
order. The import statistics provided by Union Camp, and confirmed by 
the Department, on imports of the subject merchandise between 1992 and 
1997, demonstrate that, while imports of the subject merchandise fell 
sharply after the imposition of the order, they continue.
    Based on this analysis, the Department finds that the existence of 
dumping margins after the issuance of the order is highly probative of 
the likelihood of continuation or recurrence of dumping. Deposit rates 
above a de minimis level continue in effect for exports of the subject 
merchandise by three of the four known Chinese manufacturers/exporters. 
Therefore, given that dumping has continued over the life of the order, 
respondent interested parties have waived their right to participate in 
this review before the Department and, absent argument and evidence to 
the contrary, the Department determines that dumping is likely to 
continue if the order were revoked.
    Because the Department based this determination on the continued 
existence of margins above de minimis, the continuation of dumped 
imports and respondent interested parties' waiver of participation, it 
is not necessary to address Union Camp's arguments concerning possible 
dumping of Chinese sebacic acid in Europe.

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 weighted-average dumping margins for four Chinese 
producers/exporters of the subject merchandise ranging from 82.66 
percent to 243.40 percent (59 FR 28053, May 31, 1994).3 The 
Department also published an ``all others'' rate in this final 
determination.4 We note that, to date, the Department has 
not issued any duty absorption findings in this case.
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    \3\ Pursuant to court remand, several of the company-specific 
margins were changed (see Final Results of Redetermination Pursuant 
to Court Remand, Union Camp Corporation v. United States, Consol. 
Court No. 94-08-00480, Slip Op. 96-123 (August 5, 1996)).
    \4\ The Department actually published a ``PRC country-wide 
rate'' and defined this as the rate that applies to all PRC 
companies not specifically listed in the Federal Register notice 
(see Notice of Final Determination of Sales at Less Than Fair Value: 
Sebacic Acid from The People's Republic of The People's Republic of 
China, 59 FR 28053 (May 31, 1994)). This definition indicates that 
the ``PRC country-wide rate'', in this case, is the same as the 
``all others'' rate normally identified by the Department. In 
addition, pursuant to court remand, this ``all others'' rate was 
changed (see Final Results of Redetermination Pursuant to Court 
Remand, Union Camp Corporation v. United States, Consol. Court No. 
94-08-00480, Slip Op. 96-123 (August 5, 1996)).
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    In its substantive response, citing the Sunset Policy Bulletin, 
Union Camp states that the Department normally will provide the 
Commission with the dumping margins ``from the investigation, because 
that is the only calculated rate that reflects the behavior of 
exporters . . . without the discipline of the order . . . in place.'' 
Union Camp argues that the Department, consistent with the Sunset 
Policy Bulletin, should provide the Commission with the final margins 
from the original investigation as the magnitude of dumping margin 
likely to prevail if the order were revoked (see January 4, 1999 
Substantive Response of Union Camp at 7).
    The Department agrees with Union Camp's argument concerning the 
choice of the margin rate to report to the Commission. An examination 
of the margin history of the order as well as an examination of import 
statistics of the subject merchandise, as provided in U.S. Department 
of Commerce Trade Statistics data, confirms that imports of the subject 
merchandise continue to exist.
    Our review of the margin history over the life of the order 
demonstrates that there have been fluctuations in the margins for some 
producers/exporters of the subject merchandise. The Department, 
however, does not view these fluctuations as demonstrating a consistent 
pattern of behavior. Therefore, in accordance with the Sunset Policy 
Bulletin and absent an argument that a more recently

[[Page 16913]]

calculated margin is more indicative of the margin likely to prevail if 
the order were revoked, we determine that the original margins 
calculated in the Department's original investigation are probative of 
the behavior of Chinese producers and exporters of sebacic acid if the 
order were revoked. We will report to the Commission the company-
specific and all others rates 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: 5
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    \5\ The margins in this section of the notice reflect the 
changes to the original margins pursuant to court remand (see Final 
Results of Redetermination Pursuant to Court Remand, Union Camp 
Corporation v. United States, Consol. Court No. 94-08-00480, Slip 
Op. 96-123 (August 5, 1996)).

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                                                              Margin
                 Manufacturer/exporter                      (percent)
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SINOCHEM Jiangsu Import & Export Corp..................           141.97
Tianjin Chemical Import & Export Corp..................           118.00
SINOCHEM International Chemical Co.....................            82.66
Guangdong Chemical Import & Export Corp................           102.99
All Others.............................................           243.40
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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: April 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-8622 Filed 4-6-99; 8:45 am]
BILLING CODE 3510-DS-P