2011-23681. Certain Cased Pencils From the People's Republic of China: Notice of Court Decision Not in Harmony With Final Results of Administrative Review and Notice of Amended Final Results of Administrative Review Pursuant to Court Decision

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On August 30, 2011, the United States Court of International Trade (“CIT”) sustained the Department of Commerce's (“the Department”) results of redetermination as applied to respondent Shandong Rongxin Import & Export Co., Ltd. (“Rongxin”) pursuant to the CIT's remand order in Shandong Rongxin Import & Export Co., Ltd. v. United States, Court No. 09-00316, Slip Op. 11-45 (Ct. Int'l Trade April 21, 2011) (“Shandong Rongxin I”). See Final Results of Redetermination Pursuant to Remand, Court No. 09-00316, dated August 4, 2011, available at http://ia.ita.doc.gov/​remands (“Second Remand Results”); Shandong Rongxin Import & Export Co., Ltd. v. United States, Court No. 09-00316, Slip Op. 11-105 (Ct. Int'l Trade August 30, 2011) (“Shandong Rongxin II”). Consistent with the decision of the United States Court of Appeals for the Federal Circuit (“CAFC”) in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 1990) (“Timken”), as clarified by Diamond Sawblades Mfrs. Coalition v. United States, 626 F.3d 1374 (Fed. Cir. 2010) (“Diamond Sawblades”), the Department is notifying the public that the final judgment in this case is not in harmony with the Department's final determination and is amending the final results of the administrative review of the antidumping duty order on certain cased pencils (“pencils”) from the People's Republic of China covering the period of review (“POR”) of December 1, 2006, through November 30, 2007 with respect to Rongxin. See Certain Cased Pencils from the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 33406 (July 13, 2009) (“Final Results”) and accompanying Issues and Decision Memorandum (“I&D Memorandum”), as amended by Certain Cased Pencils from the People's Republic of China: Amended Final Results of Antidumping Duty Administrative Review, 74 FR 45177 (September 1, 2009).

DATES:

Effective Date: September 9, 2011

FOR FURTHER INFORMATION CONTACT:

Alexander Montoro or Nancy Decker, AD/CVD Operations, Office 1, Import Administration—International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC, 20230; telephone [phone] or [phone].

SUPPLEMENTARY INFORMATION:

Background

On July 13, 2009, the Department published its Final Results. In the Final Results, the Department valued lindenwood pencil slats used by the respondent Rongxin with publicly available, published U.S. prices for American basswood lumber. See Final Results and accompanying I&D Memorandum at Comment 4a. In China First Pencil Co., Ltd. v. United States, 721 F. Supp. 2d 1369 (Ct. Int'l Trade 2010) (“China First”), the CIT determined that the Department's surrogate value for pencils slats used in the Final Results was unsupported by substantial evidence and was not in accordance with law. The CIT remanded the Department to recalculate a surrogate value for pencil slats using data from “Paper and Stationery,” an Indian trade publication. See China First, 721 F. Supp. 2d at 1375-77. On first remand, the Department used “Paper and Stationery” data to recalculate the surrogate value for pencil slats. See Final Results of Redetermination Pursuant to Remand, Consol. Court No. 09-00325, dated December 20, 2010, at 3-4, available at http://ia.ita.doc.gov/​remands (“First Remand Results”). This redetermination on slats was sustained with respect to Rongxin in Shangdong Rongxin I.

Also in the Final Results, the Department valued black and color cores for Rongxin using World Trade Atlas data. See Final Results and accompanying I&D Memorandum at Comment 4b. In China First, the CIT determined that the Department's surrogate value for cores used in the Final Results was unsupported by substantial evidence and was not in accordance with law. The CIT remanded to the Department to identify separate surrogate values, supported by substantial evidence on the record, for black cores, color cores, thick black cores, and thick color cores. See China First, 721 F. Supp. 2d at 1379-1380. On first remand, the Department used “Paper and Stationery” data to recalculate the surrogate value for black and color cores. See First Remand Results at 4-6. The Department's redetermination on cores was sustained in Shangdong Rongxin I.

Additionally, in the Final Results, the Department calculated a surrogate wage value for Rongxin in accordance with the regression-based methodology set forth in 19 CFR 351.408(c)(3). See Final Results and accompanying I&D Memorandum at Comment 3. In Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (“Dorbest”), the CAFC held that the Department's “{regression-based} method for calculating wage rates {as stipulated by 19 CFR 351.408(c)(3)} uses data not permitted by {the statutory requirements laid out in section 773 of the Tariff Act of 1930, as amended (“the Act”) (i.e. 19 U.S.C. 1677b(c))}.” Dorbest, 604 F.3d at 1372. Specifically, the CAFC interpreted section 773(c) of the Act to require the use of data from market economy countries that are both economically comparable to the non-market economy country at issue and significant producers of the subject merchandise, unless such data are unavailable. Because the Department's regulation requires the Department to use data from economically dissimilar countries and from countries that do not produce comparable merchandise, the CAFC invalidated the Department's labor regulation at 19 CFR 351.408(c)(3). Following Dorbest, the Department requested a voluntary remand for its wage rate calculations for Rongxin in the Final Results. The CIT granted that request and in China First remanded the Final Results with instructions that the labor wage value be recalculated in accordance with the decision in Dorbest. See China First, 721 F. Supp. 2d at 1373.

On first remand, the Department adopted a wage calculation methodology with respect to Rongxin that averaged wages across countries that are both economically comparable and significant producers of merchandise comparable to the subject merchandise. See First Remand Results at 7-31. In Shandong Rongxin I, the CIT again remanded to the Department to address two issues concerning the surrogate value for labor applied with respect to Rongxin in the First Remand Results: (1) The Department's decision to omit certain labor data from its calculations because the data were reported under a previous revision of ISIC; ^[1] and (2) the Department's methodology for determining whether a country is a significant producer of comparable merchandise within the meaning of section 773(c)(4) of the Act.

On second remand, the Department revised its wage rate methodology to rely upon labor cost data from a single surrogate country. See Second Remand Results at 4-6 (citing Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 FR 36092 (June 21, 2011)). Through this revised approach, the Department's redetermination resulted in a change to Rongxin's margin from 11.48 percent in the Final Results to 0.72 percent. The CIT sustained the Department's Second Remand Results in Shangdong Rongxin II.

Timken Notice

In its decision in Timken, 893 F.2d at 341, as clarified by Diamond Sawblades, the CAFC has held that, pursuant to section 516A(e) of the Act, the Department must publish a notice of a court decision that is not “in harmony” with a Department determination and must suspend liquidation of entries pending a “conclusive” court decision. The CIT's August 30, 2011 judgment sustaining the Department's remand redetermination with respect to Rongxin constitutes a final decision of that court that is not in harmony with the Department's Final Results. This notice is published in fulfillment of the publication requirements of Timken. Accordingly, the Department will continue the suspension of liquidation of the subject merchandise pending the expiration of the period of appeal or, if appealed, pending a final and conclusive court decision. The cash deposit rate will remain the company-specific rate established for the subsequent and most recent period during which the respondent was reviewed. See Certain Cased Pencils From the People's Republic of China: Final Results of the Antidumping Duty Administrative Review, 76 FR 27988 (May 13, 2011).

Amended Final Results

Because there is now a final court decision with respect to Rongxin, the revised dumping margin is as follows:

Exporter	Margin (percent)
Shandong Rongxin Import & Export Co., Ltd	0.72

In the event the CIT's ruling is not appealed or, if appealed, upheld by the CAFC, the Department will instruct U.S. Customs and Border Protection to assess antidumping duties on entries of the subject merchandise during the POR from Rongxin on the revised assessment rate calculated by the Department.

This notice is issued and published in accordance with sections 516A(e)(1), 751(a)(1), and 777(i)(1) of the Act.

Dated: September 9, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  The International Standard Industrial Classification of all Economic Activities (“ISIC”) is “a uniform, periodically updated system for the classification of economic activity, not unlike what the Harmonized Tariff Schedule is for the classification of imported merchandise.” See Shangdong Rongxin I, Slip Op. 11-45 at 7, n.3.