05-21468. Procedures for Conducting Five-Year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Final rule.

SUMMARY:

The Department of Commerce (“the Department”) is amending its regulations related to sunset reviews to conform the existing regulation to the United States' obligations under Articles 6.1, 6.2, and 11.3 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Antidumping Agreement”). The regulations amend the “waiver” provisions which govern treatment of interested parties who do not provide a substantive response to the Department's notice of initiation of a sunset review and clarify the basis for parties' participation in a public hearing in an expedited sunset review.

DATES:

The effective date of this final rule is October 31, 2005. The final rule will be applied in sunset reviews initiated on or after the effective date.

FOR FURTHER INFORMATION CONTACT:

Stacy J. Ettinger or Patrick V. Gallagher, Office of the Chief Counsel for Import Administration, room 3622, U.S. Department of Commerce, Pennsylvania Avenue and 14th Street NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On March 20, 1998, the Department published regulations addressing the procedures for participation in, and conduct of, sunset reviews. See 63 FR 13516. On December 17, 2004, the Dispute Settlement Body (“DSB”) of the World Trade Organization adopted the reports of the Appellate Body and the dispute settlement panel in United States—Sunset Reviews of Anti-dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R (November 29, 2004) and WT/DS268/R (July 16, 2004), respectively. The AB and the dispute settlement panel found that the waiver provisions of section 751(c)(4)(B) of the Tariff Act of 1930 and section 351.218(d)(2)(iii) of Commerce's sunset regulations are inconsistent with Articles 6.1, 6.2, and 11.3 of the Antidumping Agreement.

Section 123 of the URAA governs the process for changes to the Department's regulations where a dispute settlement panel and/or the Appellate Body finds a regulatory provision to be inconsistent with any of the WTO agreements. Consistent with section 123(g)(1)(C), on August 15, 2005, the Department published proposed amendments to its regulations related to sunset reviews to conform the existing regulations to the United States' obligations under Articles 6.1, 6.2, and 11.3 of the Antidumping Agreement. The Department received four sets of written public comments on the proposed amendments. The Department has carefully considered each of the comments it received, and has adopted a drafting suggestion from one commenter related to the issue of the basis for parties' participating in a hearing in an expedited sunset review. This final rule is published pursuant to section 123(g)(1)(F) of the URAA. The final rule amends the “waiver” provisions which govern treatment of interested parties who do not provide a complete substantive response to the Department's Notice of Initiation of a sunset review and clarifies the basis for parties' participation in a public hearing in an expedited sunset review.

Explanation of Amendments

In finalizing the amendments to the Department's regulations addressing the procedures for participation in, and conduct of, sunset reviews, the Department carefully considered each of the comments it received. The following is an explanation of the amendments, as well as a summary of the comments received and the Department's responses to those comments.

Section 351.218

Section 751(c)(4)(B) of the Tariff Act provides that where an interested party “waives” its participation in a sunset review, the Department “shall conclude that revocation of the order * * * would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the case may be) with respect to that interested party.” Paragraph (d)(2) of 19 CFR 351.218 deals with the procedure for waiving participation in a sunset review before the Department. Specifically, paragraph (d)(2)(i) provides for filing a “statement of waiver” for parties electing not to participate in the Department's sunset review (so-called “affirmative waiver”), and paragraph (d)(2)(iii) provides that failure to file a complete substantive response to a notice of initiation also will be treated as a waiver of participation (so-called “deemed waiver”). The panel and Appellate Body found that the operation of the statutory and regulatory waiver provisions was inconsistent with the obligation under Article 11.3 to arrive at a “reasoned conclusion” because the Department's order-wide likelihood determination would be based, at least in part, on statutorily-mandated “assumptions” about a company's likelihood of dumping. The AB and panel also found that the operation of paragraph (d)(2)(iii) was inconsistent with “due process rights” of Articles 6.1 and 6.2, because the Department could assume likelihood with respect to a particular company even though that party had filed a substantive response to the notice of initiation, albeit an “incomplete” response.

To implement the AB and panel findings with respect to the operation of the waiver provisions, the Department has modified its regulations to eliminate the possibility that the Department's order-wide likelihood determinations would be based on assumptions about likelihood of continuation or recurrence of dumping or a countervailable subsidy due to interested parties' waiver of participation in sunset reviews. Specifically, the Department has made the following three modifications to paragraph (d)(2) of 19 CFR 351.218. First, with respect to so-called “affirmative waivers” set forth in paragraph (d)(2)(i)—which provides that a party may elect not to participate in the Department's sunset review by filing a “statement of waiver” within 30 days of initiation of the sunset review—the Department has amended the contents of a “statement of waiver” which are set forth in paragraph (d)(2)(ii). Paragraph (d)(2)(ii) now requires that a party filing a Statement of Waiver include a statement that it is likely to dump or benefit from a countervailable subsidy (as the case may be) or, in the case of a foreign government in a CVD sunset review, provide a countervailable subsidy, if the order is revoked or the investigation is terminated. Second, we have eliminated paragraph (d)(2)(iii)—which provided that an interested party is “deemed” to have waived participation in the sunset review by failing to file a complete substantive response to a notice of initiation. Thus, the Department will no longer make company-specific likelihood findings for companies that fail to file a statement of waiver and fail to file a substantive response to the notice of initiation. Finally, we modified paragraphs (d)(2)(iv)(C) and (e)(1)(ii)(B)(3)—which address waiver of participation by a foreign government in a CVD sunset review—to eliminate cross-references to paragraph (d)(2)(iii) and to eliminate certain language that might suggest the possibility that the Department's order-wide likelihood determination in a CVD sunset review would be based on assumptions about likelihood of continuation or recurrence of a countervailable subsidy. In sum, these three modifications to the waiver provisions of the Department's sunset regulations ensure that there is no longer the possibility that the Department's order-wide likelihood determinations might be based on assumptions about likelihood of continuation or recurrence of dumping or a countervailable subsidy. The Department will make its order-wide likelihood determinations on the basis of the facts and information available on the record of the sunset review.

Two commenters argue that amendment or withdrawal of the statutory provision (section 751(c)(4)(B) of the Act) found to be WTO-inconsistent was required in order to implement the AB/panel findings. We disagree. By modifying its regulatory waiver provisions, the Department has eliminated the possibility that its order-wide likelihood determinations would be based on assumptions about likelihood of continuation or recurrence of dumping or a countervailable subsidy due to interested parties' waiver of participation in sunset reviews. Section 751(c)(4)(B) of the Act only mandates an affirmative company-specific likelihood finding as a consequence of a party electing to waive its participation in the sunset review. Thus, the modified regulatory waiver requirements result in elimination of any assumptions about likelihood because a party waiving participation would have already indicated to the Department that it was likely to dump or benefit from a countervailable subsidy if the order were revoked.

Two commenters also noted that the regulations would not longer specify how the Department will address the situation where a producer/exporter does not participate in a sunset review. The commenters are correct in part. While it is the statute that provides for determinations on the basis of facts available where, inter alia, a party does not provide requested information (section 776 of the Act), there are specific provisions in the Department's regulations concerning use of facts available in a sunset review (19 CFR 351.308(f)). As a general matter, the Department will make its order-wide likelihood determination on the basis of the facts and information available on the record of the sunset review which may include, where appropriate, use of facts available as provided for in the statute and regulations.

Section 351.309

The Appellate Body upheld the panel's finding that the operation of paragraph (d)(2)(iii) of 19 CFR 351.218 was inconsistent with Article 6.2 in that it allegedly denies an interested party that is deemed to have waived its right to participate in a sunset review by submitting an incomplete substantive response the right to participate in a hearing. Paragraph (d)(2)(iii) does not explicitly address the issue of hearings; nor do the regulations preclude hearings in expedited sunset reviews resulting from the application of the waiver provisions. Nevertheless, in the interest of alleviating any perceived confusion with respect to participation in a hearing in an expedited sunset review, the Department is modifying paragraph (c)(1)(iii) of 19 CFR 351.309 to clarify that the Secretary will specify a due date for case briefs in an expedited sunset review. Case briefs provide the basis for parties' affirmative presentations at a hearing. In addition, as discussed above, for other reasons we have eliminated paragraph (d)(2)(iii) in its entirety.

One commenter argued that providing for filing of case briefs in expedited reviews could eliminate the distinction between expedited and full sunset reviews. The commenter proposed, instead, that the regulations provide respondents with an opportunity to supplement their substantive responses to correct identified deficiencies. We have not adopted this suggestion. The central distinction between an expedited and full sunset review remains. In a full sunset review, the regulations provide that the Department will issue a preliminary determination and allow comments on that determination; there is no provision for issuance of a preliminary determination in an expedited sunset review. Clarifying the basis for parties' participation in a public hearing in an expedited sunset review does not change this distinction. The commenter also suggested that if the Department permits the filing of case briefs in an expedited review, it should make a corresponding amendment to paragraph (e)(1)(ii)(C)(2) of 19 CFR 351.218. We agree and have eliminated certain language in paragraph (e)(1)(ii)(C)(2) that could be construed as inconsistent with permitting parties to file case briefs in expedited sunset reviews.

Classification

E.O. 12866

This final rule has been determined to be not significant under E.O. 12866.

Administrative Procedures Act

The Department finds good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(3) in order to complete requirements mandated by the World Trade Organization (“WTO”) Appellate Body by December 17, 2005. On December 17, 2004, the WTO Appellate Body (“AB”) issued its findings regarding the sunset review of the antidumping duty order on Oil Country Tubular Goods (“OCTG”) from Argentina. The WTO-appointed arbitrator determined, with reference to the Appellate Body report, that the United States must bring its laws into compliance with the Antidumping Agreement and complete another sunset review of the antidumping duty order on OCTG from Argentina not later than December 17, 2005. The Department was informed of this deadline date on June 7, 2005. On August 15, 2005 (70 FR 47738), the Department published a proposed rule to solicit comments on proposed revisions to its regulations related to sunset reviews. In addition, the Department initiated consultations for 60 days with the relevant congressional committees in accordance with section 123 of the Uruguay Round Agreements Act. After the publication of this final rule, the Department still must initiate the sunset review, provide interested parties with 30 days to submit their responses to the Department's sunset questionnaire, analyze the responses, and make a final likelihood determination in the sunset review before December 17, 2005. Thus, in order to meet the WTO-mandated implementation date and to ensure that interested parties have an opportunity to participate fully in the sunset review, the Department finds good cause to waive the 30-day delay in effectiveness of the final rule and makes these regulations effective on October 31, 2005, upon conclusion of the 60-day congressional consultation period required by the Uruguay Round Agreements Act.

Paperwork Reduction Act

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for a failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid Office of Management and Budget (OMB) control number. This final rule involves collection-of-information requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. The requirements have been approved by OMB under control numbers 0625-0105 and 0625-0148.

E.O. 12612

This final rule does not contain federalism implications warranting the preparation of a Federalism Assessment.

Regulatory Flexibility Act

The Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this final rule will not have a significant impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding the economic impact of this action. As a result, a regulatory flexibility analysis was not prepared.

List of Subjects in 19 CFR Part 351

• Administrative practice and procedure
• Antidumping duties
• Business and industry
• Cheese
• Confidential business information
• Countervailing duties
• Investigations,

Dated: October 20, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

For the reasons stated, 19 CFR part 351 is amended as follows:

PART 351—ANTIDUMPING AND COUNTERVAILING DUTIES

Subpart B—Antidumping and Countervailing Duty Procedures

1. Section 351.218 is amended by revising paragraphs (d)(2)(ii) introductory text, (d)(2)(iv)(C), (e)(1)(ii)(B) introductory text, (e)(1)(ii)(B)( 3), and (e)(1)(ii)(C)(2), and removing and reserving paragraph (d)(2)(iii), as follows:

§ 351.218

Sunset reviews under section 751(c) of the Act.

* * * * *

(d) * * *

(2) * * *

(ii) Contents of statement of waiver. Every statement of waiver must include a statement indicating that the respondent interested party waives participation in the sunset review before the Department; a statement that the respondent interested party is likely to dump or benefit from a countervailable subsidy (as the case may be) if the order is revoked or the investigation is terminated; in the case of a foreign government in a CVD sunset review, a statement that the government is likely to provide a countervailable subsidy if the order is revoked or the investigation is terminated; and the following information:

* * * * *

(iv) * * *

(C) Base the final results of review on the facts available in accordance with 351.308(f).

* * * * *

(e) Conduct of sunset review—(1) * * *

(ii) * * *

(B) Failure of a foreign government to file a substantive response to a notice of initiation in a CVD sunset review. If a foreign government fails to file a complete substantive response to a notice of initiation in a CVD sunset review under paragraph (d)(3)(v) of this section or waives participation in a CVD sunset review under paragraph (d)(2)(i) of this section, the Secretary will: * * *

(3) Base the final results of review on the facts available in accordance with 351.308(f).

(C) * * *

(2) Normally will conduct an expedited sunset review and, not later than 120 days after the date of publication in the Federal Register of the notice of initiation, issue final results of review based on the facts available in accordance with § 351.308(f) (see section 751(c)(3)(B) of the Act and § 351.221(c)(5)(ii)).

* * * * *

Subpart C—Information and Argument

2. Section 351.309 is amended by revising paragraph (c)(1)(iii) to read as follows:

§ 351.309

Written argument.

* * * * *

(c) Case brief. (1) * * *

(iii) For the final results of an expedited sunset review, expedited antidumping review, Article 8 violation review, Article 4/Article 7 review, or section 753 review, a date specified by the Secretary.

* * * * *