00-2839. Final Results of Expedited Sunset Reviews: Sulfanilic Acid From India and The People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results of Expedited Sunset Reviews: Sulfanilic Acid from India and The People's Republic of China.

SUMMARY:

On October 1, 1999, the Department of Commerce (“the Department”) initiated sunset reviews of the antidumping duty orders on sulfanilic acid from India and The People's Republic of China (“China”) (64 FR 53320) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and an adequate response filed on behalf of a domestic interested party and an inadequate response (in these cases no response) from respondent interested parties in each of these reviews, the Department decided to conduct expedited reviews. As a result of these reviews, the Department finds that revocation of the antidumping duty orders would likely lead to the continuation or recurrence of dumping at the levels indicated in the Final Results of Reviews section of this notice.

FOR FURTHER INFORMATION CONTACT:

Mark D. Young or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, D.C. 20230; telephone: [phone] or [phone], respectively.

Effective Date:

February 8, 2000.

Statute and Regulations

These reviews were conducted pursuant to sections 751(c) and 752 of the Act. The Department's procedures for conducting sunset reviews are set forth in Procedures for Conducting Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (“Sunset Regulations”), and 19 CFR Part 351 (1999) in general. Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98:3—Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (“Sunset Policy Bulletin”).

Scope

The products covered by these orders are all grades of sulfanilic acid, which include technical (or crude) sulfanilic acid, refined (or purified) sulfanilic acid and sodium salt of sulfanilic acid (sodium sulfanilate). The principal differences between the grades are the undesirable quantities of residual aniline and alkali insoluble materials present in the sulfanilic acid. All grades are available as dry free flowing powders. Technical sulfanilic acid contains 96 percent minimum sulfanilic acid, 1.0 percent maximum aniline, and 1.0 percent maximum alkali insoluble materials. Refined sulfanilic acid contains 98 percent minimum sulfanilic acid, 0.5 percent maximum aniline, and 0.25 percent maximum alkali insoluble materials. Sodium salt of sulfanilic acid (sodium sulfanilate) is a granular or crystalline material containing 75 percent minimum sulfanilic acid, 0.5 percent maximum aniline, and 0.25 percent maximum alkali insoluble materials based on the equivalent sulfanilic acid content. The merchandise is classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 2921.42.22 and 2921.42.24.20.^[1] Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of these orders are dispositive.

These reviews cover imports from all manufacturers and exporters of sulfanilic acid from India and China.

History of the Orders

India

The Department published its final affirmative determination of sales at less than fair value (“LTFV”) with respect to imports of sulfanilic acid from India on January 8, 1993 (58 FR 3251). In this determination, the Department published a weighted-average dumping margin for all manufacturers/producers/exporters of 114.8 percent. However, consistent with section 772(d)(1)(D) of the Act, which prohibits assessing antidumping duties on the portion of the margin attributable to an export subsidy, we established, for duty deposit purposes, an estimated antidumping duty deposit rate of 71.09 percent. The Department issued its antidumping duty order on sulfanilic acid from India on March 2, 1993.^[2] The Department has not conducted an administrative review of this order since its imposition. The order remains in effect for all manufacturers and exporters of the subject merchandise from India.

China

On July 6, 1992, the Department published its affirmative final determination of sales at LTFV regarding sulfanilic acid from China (57 FR 29705). The Department issued its antidumping duty order on August 19, 1992.^[3] In this determination, the Department published weighted-average dumping margins for one company and an “all others” rate. Since the order was issued, the Department has conducted four administrative reviews with respect to sulfanilic acid from China.^[4] The order remains in effect for all manufacturers and exporters of the subject merchandise from China.

Background

On October 1, 1999, the Department initiated sunset reviews of the antidumping duty orders on sulfanilic acid from India and China (64 FR 53320), pursuant to section 751(c) of the Act. We received a Notice of Intent to Participate, in each of the two sunset reviews, on behalf of National Ford Chemical Company (“NFC”), by October 15, 1999, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. Pursuant to section 771(9)(C) of the Act, NFC claimed interested party status as a U.S. manufacturer whose workers are engaged in the production of domestic like products. Moreover, NFC claims that it was a petitioner in the original investigation and, with respect to China, a domestic interested party in each of the six initiated administrative reviews. The Department received a complete substantive response from NFC, in each of the two sunset reviews, by November 1, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct expedited, 120-day, reviews of these orders.

Determination

In accordance with section 751(c)(1) of the Act, the Department conducted these reviews to determine whether revocation of the antidumping duty orders would be likely to lead to continuation or recurrence of dumping. Section 752(c) of the Act provides that, in making these determinations, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping duty order, and shall provide to the International Trade Commission (“the Commission”) the magnitude of the margins of dumping likely to prevail if the orders were revoked.

The Department's determinations concerning continuation or recurrence of dumping and the magnitude of the margins are discussed below. In addition, NFC's comments with respect to continuation or recurrence of dumping and the magnitude of the margins are addressed below.

Continuation or Recurrence of Dumping

Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act (“URAA”), specifically the Statement of Administrative Action (“the SAA”), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis (see section II.A.2). In addition, the Department indicated that it normally will determine that revocation of an antidumping duty order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3).

In addition to the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of the order would be likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In these reviews, the Department did not receive a substantive response from any respondent interested party. Under section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation.

In its substantive response, NFC argues that the substantial decline (or cessation, with respect to India) in the volume of imports of sulfanilic acid from the subject countries following the issuance of the order demonstrates the inability of the producers from subject countries to sell in the United States at any significant volume without dumping. NFC argues further that revocation of the antidumping duty orders in these sunset reviews would likely lead to a continuation or recurrence of dumping by Indian and Chinese producers/manufacturers. NFC supports this argument with evidence showing that, since the imposition of the orders, respondents have generally reduced (ceased with respect to Indian imports) their shipments to the United States. Therefore, NFC asserts it is likely that Indian and Chinese producers would need to dump in order to sell sulfanilic acid in any significant quantities in the United States.

India

With respect to subject merchandise from India, NFC maintains that, in the years preceding the order, India was a major foreign supplier of the subject merchandise to the U.S. market. Following the issuance of the order, it asserts, Indian imports have ceased completely. Furthermore, NFC comments, deposit rates for Indian manufacturers of sulfanilic acid continue to exist at 71.09 percent. In sum, it argues, cessation of imports following the imposition of the order and high dumping margins, in conjunction with the fact that Indian manufactures never availed themselves of the administrative review process to demonstrate that dumping has ceased or abated, provides clear evidence that the Indian producers are incapable of selling at fair value in the U.S. market.^[5]

China

NFC argues that the imposition of the antidumping duty order had a dramatic effect on subject import volumes from China. NFC states that in the years following the order, imports of the subject merchandise from China dropped nearly 40 percent. Moreover, NFC asserts, import volumes of the subject sulfanilic acid from China have remained low, relative to the pre-order levels. Furthermore, NFC mentions, that there has been a reduction in the Chinese producers' share of U.S. domestic consumption of sulfanilic acid. This decline in imports and share of U.S. domestic consumption, NFC adds, coupled with above de minimis dumping margins demonstrates that Chinese manufacturers cannot maintain a presence in the U.S. market without dumping.^[6]

As discussed in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue dumping with the discipline of an order in place, or imports ceased after the issuance of the order, the Department may reasonably infer that dumping would continue or recur if the discipline were removed. As pointed out above, dumping margins above de minimis continue to exist for shipments of the subject merchandise from India and China.

Consistent with section 752(c) of the Act, the Department also considers the volume of imports before and after issuance of the order. As outlined in each section above, NFC argues that a significant decline in the volume of imports of the subject merchandise from China and a cessation of imports with regard to India since the imposition of the orders, provides further evidence that dumping would continue or recur if the orders were revoked. In its substantive response, NFC provided statistics demonstrating the decline/cessation in import volumes of sulfanilic acid from China and India. The Department disagrees, in part, with NFC's arguments that Chinese imports of the subject merchandise fell sharply after the order was imposed and never regained pre-order volumes. In 1992 and 1993 the import volume of the subject merchandise did significantly drop below pre-order levels. However, in 1994 and 1995 import levels of the subject merchandise exceeded pre-order volumes.^[7] The Department also disagrees, in part, with NFC's assertion that Indian imports of the subject merchandise ceased completely since the issuance of the order.^[8]

As noted above, in conducting its sunset reviews, the Department considers the weighted-average dumping margins and volume of imports when determining whether revocation of an antidumping duty order would lead to the continuation or recurrence of dumping. Based on this analysis, the Department finds that the existence of dumping margins above de minimis levels and a reduction/cessation in export volumes after the issuance of the order is highly probative of the likelihood of continuation or recurrence of dumping. A deposit rate above a de minimis level continues for exports of the subject merchandise by all known Indian and Chinese manufacturers/exporters. Therefore, given that dumping has continued and import volumes have declined significantly or ceased after the imposition of the order, the respondent interested parties waived participation in these reviews, and absent argument and evidence to the contrary, the Department determines that dumping is likely to continue or recur if the orders were revoked.

Magnitude of the Margin

In the Sunset Policy Bulletin, the Department stated that it normally will provide to the Commission the margin that was determined in the final determination in the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the “all others” rate from the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.) We note that, to date, the Department has not issued any duty absorption findings in any of these cases.

In its substantive response, NFC recommends that the Department adhere to its general practice of selecting dumping margins from the original investigation. Regarding companies not reviewed in the original investigations, NFC suggests that the Department report to the Commission the “all others” rate published in the original investigations. Specifically, NFC recommends that the Department report a margin of 71.09 percent for all manufacturers/producers/exporters under the order on India and with respect to the order on China, 19.14 percent for China National Chemicals Import & Export Corporation, Hebei Branch and 85.20 for all other producers. Since the Department has not conducted an administrative review of sulfanilic acid from India, and imports of Chinese and Indian sulfanilic acid to the United States have decreased dramatically since the issuance of the order, the Department has decided that it would not be appropriate to use a more recently calculated rate.

The Department agrees, with NFC that the margins calculated in the original investigations are probative of the behavior of Indian and Chinese producers/exporters if the orders were revoked, as they are the only margins which reflect their actions absent the discipline of the orders. Therefore, the Department will report to the Commission the company-specific and “all others”rates from the original investigations as contained in the Final Results of Reviews section of this notice. As noted above, in the original investigation the Department determined the margin of dumping for all manufacturers/producers/exporters of the subject merchandise from India to be 114.80 percent, and established an antidumping duty deposit rate of 71.09 percent after taking into account the 43.71 percent export subsidy rate. Therefore, we will report to the Commission the margins from the original investigations as contained in the Final Results of Reviews section of this notice.

Final Results of Reviews

As a result of these reviews, the Department finds that revocation of the antidumping duty orders would be likely lead to continuation or recurrence of dumping at the margins listed below:

India

Manufacturer/Exporter	Margin (percent)
All Manufacturers/Producers/Exporters	* 114.80
* (71.09 as adjusted for CVD)

China

Manufacturer/Exporter	Margin (percent)
China National Chemicals Import & Export Corporation, Hebei Branch	19.14
All Others	85.20

This notice serves as the only 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 351.305 of the Department's regulations. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

These five-year (“sunset”) reviews and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: January 31, 2000.

Holly A. Kuga,

Acting Assistant Secretary for Import Administration.

Footnotes

1.  HTSUS subheadings for sulfanilic acid and sodium salts of sulfanilic acid have changed since the issuance of this order. The petitioner asserts that the HTSUS subheading for sulfanilic acid was 2921.42.24.20 in 1993 and has remained at 2921.42.22 since 1994.

2.  See Notice of Antidumping Duty Order; Sulfanilic Acid from India, 58 FR 12025 (March 2, 1993).

3.  See Antidumping Duty Order: Sulfanilic Acid from the People's Republic of China, 57 FR 37524 (August 19, 1992).

4.  See Sulfanilic Acid from the People's Republic of China: Final Results of Administrative Review, 61 FR 53711 (October 15, 1996); 61 FR 53702 (October 15, 1996); 62 FR 48597 (September 16, 1997); 63 FR 63834 (November 17, 1998).

5.  See November 1, 1999, Substantive Response of NFC, regarding sulfanilic acid from India at 9.

6.  See November 1, 1999, Substantive Response of NFC, regarding sulfanilic acid from China at 9.

7.  Nevertheless, in 1996-1999 import volumes dropped well below pre-order levels.

8.  In 1994 Indian manufacturers exported 20,000 kg. of sulfanilic acid to the United States, and 36,000 kg. in 1996. Only since 1997 have the imports of the subject merchandise ceased completely.