E8-26032. Polychloroprene Rubber from Japan: Final Results of Changed Circumstances Review and Determination to Revoke Antidumping Duty Finding in Part

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On March 11, 2008, the Department of Commerce (the Department) published a notice of initiation and preliminary results of a changed circumstances review with intent to revoke, in part, the antidumping duty (AD) finding on polychloroprene rubber from Japan. See Polychloroprene Rubber From Japan: Notice of Initiation and Preliminary Results of Changed Circumstances Review, and Intent To Revoke Antidumping Duty Finding in Part, 73 FR 12954 (March 11, 2008) (Initiation and Preliminary Results). We are now revoking this AD finding, in part, with regard to certain polychloroprene rubber products from Japan, as described in the “Scope of Changed Circumstances Review” section of this notice, based on the fact that domestic parties have expressed no further interest in the relief provided by the AD finding with respect to the imports of such products.

EFFECTIVE DATE:

October 31, 2008.

FOR FURTHER INFORMATION CONTACT:

Scott Lindsay or Summer Avery, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington DC 20230; telephone [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 23, 2008, the Department received a request on behalf of the petitioner, DuPont Performance Elastomers L.L.C. (DPE),¹ for revocation in part of the AD finding on polychloroprene rubber from Japan pursuant to sections 751(b)(1) and 782(h) of the Tariff Act of 1930, as amended (the Act). DPE requested partial revocation of the AD finding with respect to certain polychloroprene rubber products, listed below in the section entitled “Scope of Changed Circumstances Review.” In its January 23, 2008, submission, DPE stated that it no longer has any interest in antidumping relief from imports of such polychloroprene rubber from Japan. On March 11, 2008, the Department published a notice of initiation and preliminary results of a changed circumstances review with intent to revoke, in part, the AD finding on polychloroprene rubber from Japan. See Initiation and Preliminary Results. The Department provided interested parties with a deadline to submit written comments no later than 30 days after the date of publication of the Initiation and Preliminary Results. Id. The Department received timely comments on the Department's preliminary results from The Adhesive and Sealant Council, Inc. (ASC), Clifton Adhesive, Inc. (Clifton), Royal Adhesives & Sealants, LLC (RAS), Showa Denko America, Inc. (Showa Denko), The W.W. Henry Company (W.W. Henry), and DPE. The comments by these parties are discussed below in the section entitled “Summary of Comments Received.”

Scope of Changed Circumstances Review

The merchandise subject to DPE's request and covered by this changed circumstances review is polychloroprene rubber from Japan with solid polychloroprenes that are dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer content in the 1.0 percent to 5.0 percent range (this category does not include aqueous chloroprene/methacrylic acid dipolymer dispersion products or solvent solutions of chloroprene/methacrylic acid dipolymers). This changed circumstances review covers polychloroprene rubber from Japan meeting the specifications as described above. Effective upon publication of these final results of changed circumstances review in the Federal Register, the amended scope of the AD finding will read as identified in the “Scope of the Finding (As Amended By These Final Results of Changed Circumstances)” section of this notice.

Summary of Comments Received

After the Department issued its Initiation and Preliminary Results, we received timely comments from several parties. On April 3, 2008, we received comments from Clifton, a domestic industrial user of polychloroprene rubber, and on April 8, 2008, we received comments from ASC, an international trade association representing 125 manufacturers of adhesives and sealants. Both Clifton and ASC argued that the proposed scope amendment by the changed circumstances review would not provide any relief to the affected U.S. industries because their Japanese supplier provides polychloroprene rubber that contains dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer at less than 1.0 percent. Clifton and ASC contended that imports of this product would still be within the proposed amended scope of the AD finding. Therefore, they proposed that the excluded subject merchandise include “dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer content of less than 5.0 percent.”

On April 9, 2008, the Department received comments from Showa Denko, a Japanese producer and U.S. importer of polychloroprene rubber. Showa Denko indicated that DPE had requested this changed circumstances review because DPE has ceased domestic production of its product, Neoprene AF^TM, which falls within the category of products for which DPE has requested revocation. Showa Denko also pointed out that its product that competed with Neoprene AF^TM has a methacrylic acid comonomer content of less than 1.0 percent. Therefore, Showa Denko argued, in order to make possible antidumping duty-free imports from Japan of a product that is competitive with DPE's former product, the revocation needs to include dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer content of less than 1.0 percent. As such, Showa Denko recommended the range for methacrylic acid comonomer content be changed to read “0.1 percent to 5.0 percent.”

The Department also received comments from RAS, a domestic manufacturer of, inter alia, adhesives and sealants, and W.W. Henry, a domestic manufacturer of flooring adhesives and installation products. The comments submitted by RAS and W.W. Henry were timely received and subsequently placed on the record by the Department on August 20, 2008. See Memorandum to File, “Polychloroprene Rubber from Japan: Changed Circumstances Review: Comments from Royal Adhesives and Sealants and The W.W. Henry Company,” dated August 20, 2008. In their comments, both parties stated their understanding that a true replacement for the products to be removed from the scope of the AD finding (i.e. solid polychloroprenes that are dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer content in the 1.0 percent to 5.0 percent range) actually contains 0.2-0.3 percent methacrylic acid comonomer content and thus requested that the scope of formulation definition be modified accordingly in the final AD finding.

On April 14, 2008, and again on August 25, 2008, DPE responded to the above comments. DPE partially agreed that, in general, the scope language needed to be expanded from its January 23, 2008 request to allow certain Japanese products to be excluded from the AD finding. However, DPE disagreed with the comments from ASC, Clifton, and Showa Denko that the lower limit be set below 0.2 percent. Rather, DPE agreed with the comments from RAS and W.W. Henry that the range for methacrylic acid comonomer content should be amended to read “0.2 percent to 5.0 percent,” rather than “1.0 percent to 5.0 percent,” as stated in the Initiation and Preliminary Results. According to DPE, this change will have the desired effect of excluding the specified Japanese products from the scope of the AD finding, while still providing the antidumping relief necessary to the continued health and well-being of the domestic industry.

Analysis of Comments Received

The commenting parties are in agreement with DPE's original request to amend the scope language to exclude certain polychloroprene rubber from the AD finding. The comments received only address the issue of the specific language to be used in making this exclusion. Clifton and ASC recommend that the range for methacrylic acid comonomer content be changed to read “less than 5.0 percent,” rather than “1.0 percent to 5.0 percent.” Showa Denko recommends that the range be “0.1 percent to 5.0 percent.” RAS, W.W. Henry, and DPE all recommend that the range be “0.2 percent to 5.0 percent.”

In initiating this review, the Department found that, as the sole domestic producer accounting for substantially all of the production of the domestic like product, DPE's expression of no interest in the continued application of the AD finding on certain polychloroprene rubber was sufficient to both initiate and preliminarily revoke, in part, the AD finding as it relates to imports of certain polychloroprene rubber products from Japan. See Initiation and Preliminary Results. DPE, as the sole domestic producer, is the only party in this proceeding in a position to determine the products for which it no longer has any interest in being provided antidumping relief. Therefore, the Department finds that it will make DPE's recommended changes to the exclusion language found in the Initiation and Preliminary Results.

Changes Since the Preliminary Results

Based on our analysis of the comments received, we have made a change in these final results from our Initiation and Preliminary Results. We are incorporating DPE's requested amendment to the scope language regarding the subject merchandise excluded from this AD finding. Specifically, for these final results, the methacrylic acid comonomer content range will be expanded from “1.0 percent to 5.0 percent” to “0.2 percent to 5.0 percent.”

Scope of the Finding (As Amended By These Final Results of Changed Circumstances)

The merchandise covered are shipments of polychloroprene rubber, an oil resistant synthetic rubber also known as polymerized chlorobutadiene or neoprene, currently classifiable under items 4002.41.00, 4002.49.00, and 4003.00.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Although HTSUS item numbers are provided for convenience and customs purpose, the Department's written description of the scope remains dispositive.

The following types of polychloroprene rubber from Japan are excluded from the scope: (1) aqueous dispersions of polychloroprenes that are dipolymers of chloroprene and methacrylic acid, where the dispersion has a pH of 8 or lower (this category is limited to aqueous dispersions of these polymers and does not include aqueous dispersions of these polychloroprenes that contain comonomers other than methacrylic acid); (2) aqueous dispersions of polychloroprenes that are dipolymers of chloroprene and 2,3-dichlorobutadiene-1,3 modified with xanthogen disulfides, where the dispersion has a solids content of greater than 59 percent (this category is limited to aqueous dispersions of these polymers and does not include aqueous dispersions of polychloroprenes that contain comonomers other than 2,3-dichlorobutadiene-1,3); and (3) solid polychloroprenes that are dipolymers of chloroprene and 2,3-dichlorobutadiene-1,3 having a 2,3-dichlorobutadiene-1,3 content of 15 percent or greater (this category is limited to polychloroprenes in solid form and does not include aqueous dispersions).

In addition, the following type of polychloroprene rubber is excluded from the scope: solid polychloroprenes that are dipolymers of chloroprene and methacrylic acid having methacrylic acid comonomer content in the 0.2 percent to 5.0 percent range (this category does not include aqueous chloroprene/methacrylic acid diploymer dispersion products or solvent solutions of chloroprene/methacrylic acid dipolymers).

Final Results of Review: Partial Revocation of Antidumping Duty Finding

The affirmative statement of no interest by the petitioner concerning certain polychloroprene rubber from Japan, as described herein, constitutes changed circumstances sufficient to warrant revocation of this AD finding in part. The Department has considered the comments found above in making its determination. Therefore, the Department is partially revoking the AD finding with respect to certain polychloroprene rubber from Japan with regard to products which meet the specifications detailed above, in accordance with sections 751(b) and (d) and 782(h) of the Act and 19 CFR 351.216(d) and 351.222(g). We will instruct the U.S. Customs and Border Protection to liquidate without regard to antidumping duties, as applicable, and to refund any estimated antidumping duties collected for all unliquidated entries of certain polychloroprene rubber, meeting the specifications indicated above, as of the date of publication in the Federal Register of the final results of this changed circumstances review in accordance with 19 CFR 351.222(g)(4).

This notice serves as a 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 351.306. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply is a violation of the APO which may be subject to sanctions.

The Department is issuing this changed circumstances review, partial revocation of the AD finding and notice in accordance with sections 751(b) and (d), 777(i), and 782(h) of the Act and 19 CFR 351.216(e) and 351.222(g).

Dated: October 24, 2008.

Stephen J. Claeys,

Acting Assistant Secretary for Import Administration.

Footnotes

1.  DPE is the sole petitioner in this antidumping proceeding. See Polychloroprene Rubber From Japan: Final Results of the Expedited Sunset Review of the Antidumping Duty Finding, 69 FR 64276 (November 4, 2004). DPE has been the sole U.S. producer of polychloroprene rubber since 1998, when Bayer Group closed its polychloroprene rubber plant in Houston, Texas. See Polychloroprene Rubber from Japan, Inv. No. AA-1921-129 (Second Review), U.S. ITC Pub. 3786 (June 2005), at 4-5.