E8-29225. Withdrawal of the Regulatory Provisions Governing Targeted Dumping in Antidumping Duty Investigations

AGENCY:

International Trade Administration, Import Administration.

ACTION:

Interim final rule.

SUMMARY:

Import Administration issues this interim final rule for the purpose of withdrawing the regulatory provisions governing the targeted dumping analysis in antidumping duty investigations.

DATES:

This interim final rule is effective for all antidumping duty investigations initiated on or after December 10, 2008. Although the amendment made by this Interim Final Rule is effective on December 10, 2008, Import Administration seeks public comments. To be assured of consideration, written comments must be received not later than January 9, 2009.

ADDRESSES:

Comments on this Interim Final Rule must be sent to David M. Spooner, Assistant Secretary for Import Administration, Central Records Unit, Room 1870, U.S. Department of Commerce, Pennsylvania Avenue.

FOR FURTHER INFORMATION CONTACT:

Michael Rill, telephone [phone].

SUPPLEMENTARY INFORMATION:

The Uruguay Round Agreements Act (“URAA”), enacted into law in 1994, changed the methodology used to determine whether a company is selling foreign merchandise into the United States at dumped prices in antidumping investigations. Prior to the URAA, the Department usually compared the six-month period of investigation average normal value to individual U.S. transaction prices to determine the margin of dumping (known as the average-to-transaction method). The URAA, however, directed the Department normally to calculate dumping margins by one of two methods: (1) By comparing weighted-average normal values to the weighted average of the export prices for comparable merchandise (known as the average-to-average method); or (2) by comparing the normal values of individual transactions to the export prices of individual transactions for comparable merchandise (known as the transaction-to-transaction method). See 19 U.S.C. 1677f-1(d)(1)(A). Congress, however, was aware that these methodologies could mask certain types of dumping. “In such situations, the exporter may sell at a dumped price to particular customers or regions, while selling at higher prices to other customers or regions.” Uruguay Round Agreements Act, H.R. 103-826, Oct. 3, 1994, p. 98.

To address this possibility, Congress enacted a statutory provision that allows an exception to the above two comparison methodologies. Specifically, when the Department finds that there is a pattern of export prices for comparable merchandise that differ significantly among purchasers, regions, or periods of time, and where such differences cannot be taken into account using one of the preferred methods referred to above, the Department could compare the weighted average of the normal values to the export price of individual transactions for comparable merchandise (i.e., average-to-transaction comparisons). See 19 U.S.C. 1677f-1(d)(1)(B).

Sections 19 CFR 351.414(f) and (g) of the Department's regulations establish certain criteria for analyzing allegations and making targeted dumping determinations in antidumping duty investigations. Section 19 CFR 351.301(d)(5) provides that an allegation of targeted dumping is due no later than 30 days before the scheduled date of the preliminary determination. The Department promulgated these provisions (i.e., 19 CFR 351.414(f), (g), and 351.301(d)(5)) on May 19, 1997 (Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27374-76 (May 19, 1997)). At that time, the Department had never performed a targeted dumping analysis. Therefore, the provisions were promulgated without the benefit of any departmental experience on the issue of targeted dumping. Until recently, there have been very few allegations or findings of targeted dumping. This situation has caused the Department to question whether, in the absence of any practical experience, it established an appropriate balance of interests in the provisions. The Department believes that withdrawal of the provisions will provide the agency with an opportunity to analyze extensively the concept of targeted dumping and develop a meaningful practice in this area as it gains experience in evaluating such allegations.

The Department may have established thresholds or other criteria that have prevented the use of this comparison methodology to unmask dumping, contrary to the Congressional intent. In that case, these provisions would act to deny relief to domestic industries suffering material injury from unfairly traded imports. Accordingly, immediate revocation of the provisions will facilitate the proper and efficient operation of the antidumping law.

The Department believes the withdrawal of this rule is not significant. Withdrawal will allow the Department to exercise the discretion intended by the statute and, thereby, develop a practice that will allow interested parties to pursue all statutory avenues of relief in this area.

The Department is not replacing these provisions with new provisions. Instead, the Department is returning to a case-by-case adjudication, until additional experience allows the Department to gain a greater understanding of the issue.

Parties are invited to comment on the Department's withdrawal of the regulatory provisions governing targeted dumping in antidumping duty investigations. Parties should submit to the address under the ADDRESSES heading a signed original and two copies of each set of comments including reasons for any recommendation, along with a cover letter identifying the commentator's name and address. To be assured of consideration, written comments must be received not later than January 9, 2009.

Classification

Executive Order 12866

It has been determined that this interim final rule is not significant for purposes of Executive Order 12866 of September 30, 1993 (“Regulatory Planning and Review”) (58 FR 51735 (October 4, 1993)).

Paperwork Reduction Act

This interim final rule contains no new collection of information subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

Executive Order 13132

This rule does not contain policies with federalism implications as that term is defined in section 1(a) of Executive Order 13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).

Administrative Procedure Act

The Assistant Secretary for Import Administration finds good cause to waive the requirement to provide prior notice and opportunity for public comment, pursuant to the authority set forth at 5 U.S.C. § 553(b)(B), as such requirement is impracticable and contrary to the public interest. Courts have determined that notice and comment is impracticable when “the agency could both follow section 553 and execute its statutory duties.” Lavesque v. Block, 723 F.2d 175, 184 (5th Cir. 1980). It went further to clarify that the Administrative Procedure Act good cause waiver authorizes departures from the requirements “only when compliance would interfere with the agency's ability to carry out its mission.” Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1485 (9th Cir. 1992).

Here, under the Tariff Act of 1930, as amended, the Department may employ the average-to-transaction comparison method in an investigation if: (i) There is a pattern of export prices (or constructed export prices) for comparable merchandise that differ significantly among purchasers, regions, or periods of time, and (ii) the agency explains why such differences cannot be taken into account using one of the preferred methods. See 19 U.S.C. 1677f-1(d)(1)(B)(i) and (ii). Sections 19 CFR 351.414(f) and (g) of the Department's regulations establish certain criteria for analyzing targeted dumping allegations in antidumping investigations. These provisions were intended to clarify when the Department would use the average-to-transaction comparison method in antidumping duty investigations. As the provisions were promulgated without the benefit of any experience on the issue of targeted dumping, the Department may have established thresholds or other criteria that have prevented the use of this comparison methodology to unmask dumping. Likewise, 19 CFR 351.301(d)(5), the provision that establishes the deadline for submitting allegations, was promulgated without the benefit of any experience on the issue of targeted dumping. Consequentially, the Department may have established an impractical deadline for submitting such allegations. Given the above, sections 19 CFR 351.414(f), (g), and 351.301(d)(5) would act to deny relief to domestic industries suffering material injury from unfairly traded imports. This effect is contrary to the Department's intention in promulgating the provisions, and inconsistent with the Department's statutory mandate to provide relief to domestic industries materially injured by unfairly traded imports. Because the provisions are applicable to ongoing antidumping investigations, and because the application of the provisions can act to deny relief to domestic industries suffering material injury from unfairly traded imports, immediate revocation is necessary to ensure the proper and efficient operation of the antidumping law and to provide the relief intended by Congress.

The Assistant Secretary for Import Administration also finds good cause to waive the 30-day delay in effectiveness, pursuant to the authority set forth at 5 U.S.C. 553(e), for the reasons given above. Significantly, the Department may employ the average-to-transaction comparison method in an antidumping duty investigation if certain conditions are met. See 19 U.S.C. 1677f-1(d)(1)(B)(i) and (ii). Sections 19 CFR 351.414(f) and (g) of the Department's regulations may have established thresholds or other criteria that have prevented the use of this comparison methodology to unmask dumping, contrary to the Congressional intent. Likewise, the Department may have established an impractical deadline when it promulgated section 351.301(d)(5). Given that the provisions are applicable to ongoing antidumping investigations, and because the application of the provisions can act to deny relief to domestic industries suffering material injury from unfairly trade imports, immediate revocation is necessary to ensure the proper and efficient operation of the antidumping law and to provide the relief intended by Congress.

Regulatory Flexibility Act

Because a notice and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, a regulatory flexibility analysis has not been prepared.

List of Subjects in 19 CFR Part 351

• Administrative practice and procedure
• Antidumping duties
• Business and industry
• Cheese
• Confidential business information
• Investigations
• Reporting and recordkeeping requirements

For the reasons stated above, amend 19 CFR part 351 as follows:

PART 351—ANTIDUMPING AND COUNTERVAILING DUTIES

1. The authority citation for part 351 continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303 note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.

§ 351.301.

[Amended]

2. Amend § 351.301 by removing and reserving paragraph (d)(5).

§ 351.414

[Amended]

3. Amend § 351.414 by removing and reserving paragraphs (f) and (g).

Dated: November 24, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.