03-3591. Notice of Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, and Intent To Revoke Order in Part: Certain Cased Pencils From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of initiation and preliminary results of changed circumstances antidumping duty administrative review and intent to revoke order in part.

SUMMARY:

In accordance with section 751(b) of the Tariff Act of 1930, as amended (the Act), and section 351.216(b) of the Department of Commerce's (the Department's) regulations, The Smencil Company (Smencil Co.) filed a request for a changed circumstances review of the antidumping duty (AD) order on certain cased pencils from the People's Republic of China (PRC). Specifically, Smencil Co. requests that the Department revoke the AD order with respect to the specialty pencil it produces, which is described below. The domestic industry has affirmatively expressed a lack of interest in the continuation of the order with respect to this product. In response to the request, the Department is initiating a changed circumstances review and issuing a notice of preliminary intent to revoke, in part, the AD order on certain cased pencils from the PRC. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

February 13, 2003.

FOR FURTHER INFORMATION CONTACT:

Jack K. Dulberger or Howard Smith, AD/CVD Enforcement, Group II, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone [phone] and [phone], respectively.

Background

On December 23, 2002, Smencil Co. filed a request with the Department to revoke the AD order on certain cased pencils from the PRC with respect to the patented, scent-infused pencils produced in the PRC that it imports. See Smencil Co.'s letter to the Secretary, dated December 10, 2002 (Smencil Co. Request Letter). Specifically, Smencil Co. requested that the Department revoke the AD order with respect to imports meeting the following description: scent-infused pencils manufactured in the PRC under U.S. patent number 6,217,242,^[1] (Patent) that are made from rolled sheets of paper, namely rolled sheets of recycled newspaper, and infused with various scents so as to create scented pencils named Smencils. See Smencil Co. Request Letter at 1-2.

Smencil Co. attached to its request a letter dated December 10, 2002 from the petitioners in the pencils AD proceeding,^[2] stating that they are not interested in having the AD order on certain cased pencils from the PRC apply to pencils manufactured in the PRC under patent number 6,217,242 that are made from rolled sheets of recycled newspaper that are infused with various scents, thereby creating products with odors distinct from those that may emanate from pencils made without the scent infusion. The petitioners indicated that the exclusion of the above-described pencils from the order should be narrowly drawn and not encompass pencils manufactured from recycled paper products without the scent infusion or with odors infused by means not covered by the Patent.

Scope of the Order

Imports covered by this order are shipments of certain cased pencils of any shape or dimension which are writing and/or drawing instruments that feature cores of graphite or other materials, encased in wood and/or man-made materials, whether or not decorated and whether or not tipped (e.g., with erasers, etc.) in any fashion, and either sharpened or unsharpened. The pencils subject to the order are classified under subheading 9609.10.00 of the Harmonized Tariff Schedules of the United States (HTSUS). Specifically excluded from the scope of the order are mechanical pencils, cosmetic pencils, pens, non-cased crayons (wax), pastels, charcoals, and chalks. Although the HTSUS subheading is provided for convenience and for U.S. Customs Service (Customs) purposes, our written description of the scope of the order is dispositive.

Initiation and Preliminary Results of Changed Circumstances AD Administrative Review, and Intent To Revoke in Part

Section 751(d)(1) of the Act and section 351.222 (g) of the Department's regulations provide that the Department may revoke an AD or countervailing duty order, in whole or in part, after conducting a changed circumstances review and concluding from the available information that changed circumstances sufficient to warrant revocation or termination exist. The Department may conclude that changed circumstances sufficient to warrant revocation (in whole or in part) exist when producers accounting for substantially all of the production of the domestic like product to which the order pertains have expressed a lack of interest in the order, in whole or in part. See section 782(h) of the Act and section 351.222 (g)(1) of the Department's regulations. Based on an affirmative statement by domestic producers of the like product, we find that no interest exists in continuing the AD order with respect to the pencils described above in the “Background,” section. Therefore, we are hereby notifying the public of our preliminary intent to revoke, in part, the AD order on certain cased pencils from the PRC with respect to imports of pencils that meet the above-mentioned description. We intend to modify the scope of the AD order to read as follows:

Imports covered by this order are shipments of certain cased pencils of any shape or dimension which are writing and/or drawing instruments that feature cores of graphite or other materials, encased in wood and/or man-made materials, whether or not decorated and whether or not tipped (e.g., with erasers, etc.) in any fashion, and either sharpened or unsharpened. The pencils subject to the order are classified under subheading 9609.10.00 of the Harmonized Tariff Schedules of the United States (HTSUS). Specifically excluded from the scope of the order are mechanical pencils, cosmetic pencils, pens, non-cased crayons (wax), pastels, charcoals, chalks, and pencils produced under U.S. patent number 6,217,242, from paper infused with scents by the means covered in the above-referenced patent, thereby having odors distinct from those that may emanate from pencils lacking the scent infusion.

Although the HTSUS subheading is provided for convenience and customs purposes our written description of the scope of the order is dispositive.

Furthermore, pursuant to section 351.221(c)(3)(ii) of the Department's regulations, because domestic producers have expressed a lack of interest, we determine that expedited action is warranted and have combined the notices of initiation and preliminary results.

If the final partial revocation occurs, we intend to instruct Customs to liquidate, without regard to applicable antidumping duties, all unliquidated entries of pencils that meet the above-noted specifications, and to refund any estimated antidumping duties collected on such merchandise entered, or withdrawn from warehouse, for consumption on or after December 1, 2001 (the first day of the period covered by the most recently initiated administrative review), in accordance with 19 CFR 351.222. We will also instruct Customs to pay interest on such refunds with respect to the subject merchandise entered, or withdrawn from warehouse, for consumption on or after December 1, 2001, in accordance with section 778 of the Act. The current requirement for a cash deposit of estimated antidumping duties on pencils that meet the above-noted specifications will continue unless, and until, we publish a final determination to revoke the order in part.

Public Comment

Interested parties are invited to comment on these preliminary results. Case briefs and/or written comments may be submitted by interested parties not later than 14 days after the date of publication of this notice. Parties who submit argument in this proceeding are requested to submit with the argument (1) a statement of the issue, and (2) a brief summary of the argument. Pursuant to section 351.309(d) of the Department's regulations, rebuttals to written comments, limited to the issues raised in the case briefs, may be filed not later than five days after the deadline for submission of case briefs. Also, interested parties may request a hearing within 10 days of publication of this notice. Any hearing, if requested, will be held no later than two days after the deadline for the submission of rebuttal briefs, or the first workday thereafter. All written comments shall be submitted in accordance with section 351.303 of the Department's regulations and shall be served on all interested parties on the Department's service list. The Department will issue the final results of this review within the time limits established in section 351.216 (e) of its regulations.

This notice is published in accordance with section 751(b)(1) of the Act and sections 351.216 and 351.222 of the Department's regulations.

Dated: February 6, 2003.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Footnotes

1.  Patent number 6,217,242 (April 17, 2001) describes the invention as a “scented writing implement (comprising) * * * a fragrant pencil and a method for making same.” (See Smencil Co. Request Letter at Appendix 2) The patent is owned by Evaco, Ltd., doing business as The Smencil Company (See Smencil Co. Request Letter at 1).

2.  The petitioners are the Writing Instrument Manufacturers Association, Pencil Section (WIMA) (a trade association comprised, in part, of domestic pencil producers) and six domestic pencil producers: Aakron Rule, Inc., Dixon-Ticonderoga Corporation, Musgrave Pencil Company, Moon Products, Inc., Sanford Corporation, and Tennessee Pencil Company (collectively, the petitioners).