E7-10781. Petroleum Wax Candles from the People's Republic of China: Affirmative Final Determination of Circumvention of the Antidumping Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Affirmative Final Determination of Circumvention of the Antidumping Duty Order: Petroleum Wax Candles from the People's Republic of China.

SUMMARY:

On March 28, 2007, the Department of Commerce (the Department) published its preliminary determination that the importation by, or sale to, three U.S. importers (DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price) of wickless petroleum wax forms from the PRC, which subsequently undergo insertion of a wick and clip assembly in the United States, constitutes circumvention of the antidumping duty order on petroleum wax candles from the People's Republic of China (see Antidumping Duty Order: Petroleum Wax Candles From the People's Republic of China, 51 FR 30686 (August 28, 1986) (Candles Order)), within the meaning of section 781(a) of the Tariff Act of 1930, as amended (the Act). See Petroleum Wax Candles From the People's Republic of China: Partial Termination of Circumvention Inquiry and Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order, 72 FR 14518 (March 28, 2007) (Preliminary Determination). We gave interested parties an opportunity to comment on the Preliminary Determination, and notified the United States International Trade Commission (ITC) because, pursuant to section 781(e) of the Act, the ITC may request consultations concerning the Department's proposed inclusion of the subject merchandise. The ITC notified the Department on April 24, 2007, that consultations were not necessary. The National Candle Association (NCA), the petitioners in this proceeding, filed the circumvention allegation, submitted a case brief, and no parties submitted rebuttal briefs. The Department addresses the issue raised in the case brief, and the Department's final determination is unchanged from its preliminary determination.

EFFECTIVE DATE:

June 5, 2007.

FOR FURTHER INFORMATION CONTACT:

Steve Bezirganian or Robert James, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC, 20230; telephone: [phone] and 202-482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

On March 28, 2007, the Department of Commerce (the Department) published its preliminary determination that the importation by, or sale to, three U.S. importers (DECOR-WARE, Inc.; A&M Wholesalers, Inc.; and Albert E. Price) of wickless petroleum wax forms from the PRC constitutes circumvention of the aforementioned order, within the meaning of section 781(a) of the Tariff Act of 1930, as amended (the Act). See Preliminary Determination, 72 FR 14518. On April 24, 2007, the Department was notified by the ITC that consultations pursuant to section 781(e)(2) of the Act were not necessary. See Memorandum to the File from Steve Bezirganian, dated May 9, 2007. The NCA is the only interested party that filed a case brief.

Scope of the Order

The products covered by this order are certain scented or unscented petroleum wax candles made from petroleum wax and having fiber or paper-cored wicks. They are sold in the following shapes: tapers, spirals, and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax-filled containers.

The products were classified in the original investigation under the Tariff Schedules of the United States item 755.25, Candles and Tapers. The products covered are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 3406.00.00. Although the HTSUS subheading is provided for convenience purposes, the written description remains dispositive.

In addition, the Department has determined that mixed-wax candles containing any amount of petroleum wax are later-developed merchandise and are within the scope of the Candles Order. See Later-Developed Merchandise Anticircumvention Inquiry of the Antidumping Duty Order on Petroleum Wax Candles from the People's Republic of China: Affirmative Final Determination of Circumvention of the Antidumping Duty Order, 71 FR 59075 (October 6, 2006).

Scope of the Anticircumvention Inquiry

The products covered by this inquiry are certain scented or unscented petroleum wax forms that do not incorporate a wick within the wax, whether or not having pre-drilled wick holes (wickless petroleum wax forms) that are imported into the United States and assembled into petroleum wax candles, and are currently classifiable under HTSUS subheading 9602.00.40. Wickless petroleum wax forms are sold in the following shapes: tapers, spirals, straight-sided wax forms; rounds, columns, pillars, votives; and various wax-filled containers. This inquiry only covers such products that are imported by, or sold to DECOR-WARE, Inc., A&M Wholesalers, Inc., or Albert E. Price.

Applicable Statute

Section 781 of the Act addresses circumvention of antidumping or countervailing duty orders. With respect to merchandise assembled or completed in the United States, section 781(a)(1) of the Act provides that if: (A) the merchandise sold in the United States is of the same class or kind as any other merchandise that is the subject of an antidumping duty order; (B) such merchandise sold in the United States is completed or assembled in the United States from parts or components produced in the foreign country with respect to which such order applies; (C) the process of assembly or completion in the United States is minor or insignificant; and (D) the value of the parts or components produced in the foreign country is a significant portion of the total value of the merchandise, then the Department may include within the scope of the order the imported parts or components produced in the foreign country used in the completion or assembly of the merchandise in the United States, after taking into account any advice provided by the ITC under section 781(e) of the Act.

In determining whether the process of assembly or completion in the United States is minor or insignificant, section 781(a)(2) of the Act directs the Department to consider: (A) the level of investment; (B) the level of research and development; (C) the nature of the production process; (D) the extent of production facilities and (E) whether the value of processing performed in the United States represents a small proportion of the value of the merchandise sold in the United States.

Section 781(a)(3) of the Act sets forth the factors to consider in determining whether to include parts or components in an antidumping duty order. The Department shall take into account: (A) the pattern of trade, including sourcing patterns; (B) whether the manufacturer or exporter of the parts or components is affiliated with the person who assembles or completes the merchandise sold in the United States; and (C) whether imports into the United States of the parts or components produced in the foreign country have increased after the initiation of the investigation which resulted in the issuance of the order.

Analysis

We have analyzed the comment of NCA, namely, that the Department's precedent requires the Department to use an inference that is adverse to the interests of the three respondents that did not respond to our requests for information because they failed to cooperate by not acting to the best of their ability, and that the Department should apply an adverse rate of 108.30 percent (the PRC-wide rate) for each of the three respondent importers.

The Department agrees with NCA that adverse facts available (AFA) is appropriate for DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price. Pursuant to sections 776(a) and 776(b) of the Act, the Department applied adverse facts available for those respondents in its Preliminary Determination because these respondents did not provide responses to the Department's requests for information, and the Department determined that these respondents failed to cooperate to the best of their ability. The Preliminary Determination states, in pertinent part:

The refusals by DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price to respond to our questionnaire precludes the Department from making an informed determination based on record evidence as to whether they are (or are not) circumventing the antidumping duty order. In addition, because these importers failed to provide the Department with any information, we are also unable to distinguish between their imports or purchase of wickless petroleum wax forms for purposes other than U.S. assembly into merchandise covered by the Candles Order. Accordingly, we are making an adverse inference pursuant to section 776(b) of the Act that wickless petroleum wax forms imported by, or sold to, DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price are completed or assembled in the United States by the insertion of a wick and clip assembly within the meaning of section 781(a) of the Act.

See Preliminary Determination, 72 FR at 14520. The Department's adverse inference is that all such wickless petroleum wax forms imported by, or sold to, the three respondents ultimately are completed or assembled in the United States by the insertion of a wick and clip assembly.

With respect to the cash deposit rate to be used for entries of wickless petroleum wax forms imported by, or sold to, the three respondents in question, the Department's preliminary determination indicated that Customs and Border Protection (CBP) “shall require cash deposits in accordance with those rates prevailing at the time of entry, depending upon the exporter in question.” See Preliminary Determination, 72 FR at 14520. As noted, the adverse inference is that all of the wickless petroleum wax candles imported by, or sold to, the three respondents in question are covered by the scope.

With respect to NCA's request that the Department assign an AFA rate to the three respondents, we note that the purpose of an anticircumvention proceeding is to determine whether the importation of the product in question (wickless petroleum wax forms) is evading or circumventing the Candles Order (see section 781 of the Act, and 19 CFR 351.225(a) and (g)). Other provisions of the statute, namely those in section 751 of the Act, provide for the periodic determination of antidumping duty rates for specific exporters/producers.

Assigning importer-specific cash deposit rates would constitute a change to the cash deposit rates for the parties subject to an order (i.e., exporters and producers), and the cash deposit rate of a company subject to an order is only changed as the result of a new shipper review or an administrative review (see Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the United Kingdom: Final Results of Changed-Circumstances Antidumping and Countervailing Duty Administrative Reviews, 64 FR 66880, 66881 (November 30, 1999)). If an interested party believes that the deposits paid do not accurately reflect the actual amount of dumping, it is entitled to request an administrative review during the anniversary month of the publication of the order of those entries to determine the proper importer-specific assessment rates (see, e.g., Notice of Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber Products from Canada, 70 FR 37327, 37330 (June 29, 2005), results unchanged in Notice of Final Results of Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber Products from Canada, 70 FR 48673 (August 19, 2005)).^[1]

Thus, consistent with sections 781(a), 776(a), and 776(b) of the Act, we continue to apply as AFA the inference that all wickless petroleum wax forms imported by, or sold to, DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price ultimately are completed or assembled in the United States by the insertion of a wick and clip assembly, and are covered by the scope of the Candles Order.

Affirmative Final Determination of Circumvention

For the reasons described in the Preliminary Determination, we continue to find that circumvention of the antidumping duty order on petroleum wax candles from the PRC is occurring by reason of exports of wickless petroleum wax forms from the PRC imported by, or sold to, DECOR-WARE, Inc., A&M Wholesalers, Inc., and Albert E. Price.

Continuation of Suspension Of Liquidation

In accordance with section 351.225(l)(3) of the Department's regulations, the Department will continue to direct U.S. Customs and Border Protection (CBP) to suspend liquidation for all wickless petroleum wax forms (as defined in the Scope of the Anticircumvention Inquiry section above) from the People's Republic of China imported by, or sold to DECOR-WARE, Inc., A&M Wholesalers, Inc., or Albert E. Price that were entered, or withdrawn from warehouse, for consumption on or after May 11, 2006, the date of initiation of this anticircumvention inquiry. CBP shall require cash deposits in accordance with those rates prevailing at the time of entry, depending upon the exporter in question.

This affirmative final circumvention determination is in accordance with section 781(a)

of the Act and 19 CFR 351.225(g).

Dated: May 30, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

Footnotes

1.  We note, however, that as of the date of this final determination, the current cash deposit rate for all PRC exporters of subject merchandise is 108.30 percent, which is the PRC-wide rate. As such, the 108.30 percent rate will apply to all subject merchandise imported by the three respondents. As a result of a future administrative review, however, the PRC-wide rate may change and/or different separate rates may be established for specific exporters.