2011-1398. 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On January 3, 2011, the United States Court of International Trade (“CIT”) sustained in an unpublished judgment the Department of Commerce's (“the Department”) results of redetermination as applied to respondents China First Pencil Co., Ltd. (“China First”) and Shanghai Three Star Stationery Industry Corp. (“Three Star”) and separate rate company Orient International Holding Shanghai Foreign Trade Co., Ltd. (“SFTC”) pursuant to the CIT's remand order in China First Pencil Co., Ltd. v. United States, 721 F. Supp. 2d 1369 (Ct. Int'l Trade 2010) (“China First”). See Final Results of Redetermination Pursuant to Remand, Court No. 09-00325, dated December 20, 2010, available at http://ia.ita.doc.gov/​remands (“Remand Results”); China First Pencil Co., Ltd. v. United States, Court No. 09-00325 (Ct. Int'l Trade January 3, 2011) (judgment). 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,—F.3d—Court No. 2010-1024, -1090 (Fed. Cir. December 9, 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 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 China First, Three Star, and SFTC. 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: January 13, 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 [phone] or [phone].

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 respondents China First, Three Star, and Shandong Rongxin Import & Export Co., Ltd. (“Rongxin”), with publicly available, published U.S. prices for American basswood lumber.^[1] In 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.

Moreover, in the Final Results, the Department valued black and color cores for China First, Three Star, and Rongxin using World Trade Atlas data.^[2] 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.

Additionally, in the Final Results, the Department calculated a surrogate wage value in accordance with the regression-based methodology set forth in 19 CFR 351.408(c)(3).^[3] In Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (“Dorbest”), the CAFC held that the Department's “{regression-based} method for calculating wage rates {as stipulated by 19 CFR 351.408(c)(3)} 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))}.” 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 China First, Three Star, and 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 December 20, 2010, the Department issued its final results of redetermination pursuant to China First. Pursuant to the Dorbest ruling and the remand in China First, we revised the wage rate calculation methodology to comply with the CAFC's interpretation of section 773 of the Act and have recalculated the pencil slats and cores surrogate values using prices from “Paper and Stationery.” The Department's redetermination resulted in changes to the Final Results for China First's margin from 10.41 percent to 1.13 percent; for Three Star's margin from 59.62 percent to 3.06 percent; and for Rongxin's margin from 11.48 percent to 1.55 percent. Based on these revisions, the margin of SFTC has been revised from 32.21 percent to 1.66 percent. The CIT sustained the Department's remand redetermination with respect to China First, Three Star, and SFTC on January 3, 2011. See China First Pencil Co., Ltd. v. United States, Court No. 09-00325 (Ct. Int'l Trade January 3, 2011) (judgment). The CIT has not yet ruled on the Department's remand redetermination with respect to Rongxin.

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 January 3, 2011 judgment sustaining the Department's remand redetermination with respect to China First, Three Star, and SFTC 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 respondents were reviewed. See Certain Cased Pencils From the People's Republic of China: Final Results of the Antidumping Duty Administrative Review, 75 FR 38980 (July 7, 2010).

Amended Final Results

Because there is now a final court decision with respect to China First, Three Star, and SFTC, revised dumping margins are as follows:

Manufacturer/Exporter	Margin (percent)
China First Pencil Company, Ltd. (which includes subsidiaries Shanghai First Writing Instrument Co., Ltd.; Shanghai Great Wall Pencil Co., Ltd.; and China First Pencil Fang Zheng Co., Ltd.)	1.13
Shanghai Three Star Stationery Industry Co., Ltd	3.06
Orient International Holding Shanghai Foreign Trade Corporation	1.66

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 China First, Three Star, and SFTC based on the revised assessment rates 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: January 11, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  See Final Results and accompanying I&D Memorandum at Comment 4a.

2.  See Final Results and accompanying I&D Memorandum at Comment 4b.

3.  See Final Results and accompanying I&D Memorandum at Comment 3.