[Federal Register Volume 64, Number 184 (Thursday, September 23, 1999)]
[Notices]
[Pages 51511-51514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24828]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-423-602]
Preliminary Results of Full Sunset Review: Industrial Phosphoric
Acid From Belgium
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of full sunset review: Industrial
phosphoric acid from Belgium.
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SUMMARY: On March 1, 1999, the Department of Commerce (``the
Department'') initiated a sunset review of the antidumping duty order
on industrial phosphoric acid from Belgium (64 FR 9970) 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 filed on behalf of
domestic interested parties and adequate substantive comments filed on
behalf of domestic and respondent
[[Page 51512]]
interested parties, the Department determined to conduct a full review.
As a result of this review, the Department preliminarily finds that
revocation of the antidumping duty order would likely lead to
continuation or recurrence of dumping at the levels indicated in the
Preliminary Results of Review section of this notice.
FOR FURTHER INFORMATION CONTACT: Darla D. Brown or Melissa G. Skinner,
Office of Policy for Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street & Constitution
Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-3207 or (202)
482-1560, respectively.
EFFECTIVE DATE: September 23, 1999.
Statute and Regulations
This review is being conducted pursuant to sections 751(c) and 752
of the Act. The Department's procedures for the conduct of 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
(1998) 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 merchandise subject to this antidumping duty order is
industrial phosphoric acid (``IPA'') from Belgium. IPA is currently
classifiable under item number 2809.20.00 of the Harmonized Tariff
Schedule of the United States (``HTSUS''). Although the HTSUS
subheadings are provided for convenience and customs purposes, the
written description remains dispositive.
History of the Order
The Department published its final determination of sales at less
than fair value (``LTFV'') with respect to IPA from Belgium on July 7,
1987 (52 FR 25436). In this determination, the Department published a
weighted-average dumping margin for one company as well as an ``all
others'' rate. On August 20, 1987, the Department issued the
antidumping duty order on IPA from Belgium (52 FR 31439). Since the
order, four administrative reviews have been conducted.1 In
each of these reviews, the Department published one company-specific
weighted-average dumping margin, as well as an ``all others'' rate. The
order remains in effect for the sole known exporter of IPA from
Belgium. We note that, to date, the Department has not issued any duty
absorption findings in this case.
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\1\ See Final Results of Antidumping Administrative Review;
Industrial Phosphoric Acid from Belgium, 61 FR 20227 (May 6, 1996);
Final Results of Antidumping Administrative Review; Industrial
Phosphoric Acid from Belgium, 61 FR 51424 (October 2, 1996); Final
Results of Antidumping Administrative Review; Industrial Phosphoric
Acid from Belgium, 62 FR 41359 (August 1, 1997); and Final Results
of Antidumping Administrative Review; Industrial Phosphoric Acid
from Belgium, 63 FR 55087 (October 14, 1998).
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Background
On March 1, 1999, the Department initiated a sunset review of the
antidumping order on IPA from Belgium (64 FR 9970), pursuant to section
751(c) of the Act. The Department received a Notice of Intent to
Participate from Albright and Wilson Americas Inc., Solutia Inc.
(formerly part of the Monsanto Company), and FMC Corporation
(collectively, the ``domestic interested parties'') on March 15, 1999,
within the deadline specified in section 351.218(d)(1)(i) of the Sunset
Regulations. Pursuant to 19 U.S.C. 1677(9)(C), the domestic interested
parties claimed interested party status as domestic producers of IPA.
Moreover, the domestic interested parties stated that FMC and Monsanto
were petitioners in the original antidumping investigation. The
Department received a complete substantive response from the domestic
interested parties on March 31, 1999, within the 30-day deadline
specified in the Sunset Regulations under section 351.218(d)(3)(i).
The Department also received a complete substantive response on
behalf of Societe Chimique Prayon-Rupel, S.A. (``Prayon'') on March 31,
1999, within the deadline specified in the Sunset Regulations under
section 351.218(d)(3)(i). Prayon claimed interested party status under
19 U.S.C. 1677(9)(A) as a manufacturer and exporter of IPA to the
United States. In its substantive response, Prayon stated that it
participated in the original investigation and all of the subsequent
administrative reviews. The Department determined that Prayon's
response constituted an adequate response to the notice of initiation.
As a result, the Department determined, in accordance with section
351.218(e)(2) of the Sunset Regulations, to conduct a full (240 day)
review.
On April 8, 1999, the Department received rebuttal comments from
the domestic interested parties.2
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\2\ On April 1, 1999, the Department received and granted a
request from the domestic interested parties for a three working-day
extension of the deadline for filing rebuttal comments in this
sunset review. This extension was granted for all participants
eligible to file rebuttal comments in this review. The deadline for
filing rebuttals to the substantive comments therefore became April
8, 1999.
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In accordance with section 751(c)(5)(C)(v) of the Act, the
Department may treat a sunset review as extraordinarily complicated if
it is a review of a transition order (i.e., an order in effect on
January 1, 1995). On June 25, 1999, the Department determined that the
sunset review of the antidumping duty order on IPA from Belgium is
extraordinarily complicated pursuant to section 751(c)(5)(C)(v) of the
Act, and extended the time limit for completion of the preliminary
results of this review until not later than September 17, 1999, in
accordance with section 751(c)(5)(B) of the Act.3
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\3\ See Industrial Phosphoric Acid from Israel (C-508-605) and
Industrial Phosphoric Acid from Belgium (A-423-602): Extension of
Time Limit for Final [sic] Results of Five-Year Reviews, 64 FR 34189
(June 25, 1999).
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Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether revocation of the
antidumping duty order would be likely to lead to continuation or
recurrence of dumping. Section 752(c) of the Act provides that, in
making this determination, 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
order, and shall provide to the International Trade Commission (``the
Commission'') the magnitude of the margin of dumping likely to prevail
if the order was revoked.
The Department's determinations concerning continuation or
recurrence of dumping and the magnitude of the margin are discussed
below. In addition, parties' comments with respect to continuation or
recurrence of dumping and the magnitude of the margin are addressed
within the respective sections below.
Continuation or Recurrence of Dumping
Interested Parties' Comments
In their substantive response, the domestic interested parties
argue that
[[Page 51513]]
revocation of the antidumping duty order would likely result in the
continuation or recurrence of dumping of IPA (see March 31, 1999,
Substantive Response of the domestic interested parties at 6). They
maintain that historical experience clearly supports a decision to
continue the current order. More specifically, the domestic interested
parties assert that the behavior of Prayon before and after the
issuance of the order indicates that were the order revoked, dumping
would likely continue. For example, they argue that imports fell
sharply in 1987, the year the order was issued. In 1988, imports again
declined, followed by a complete cessation in 1989 (see id. at 9 and
Attachment C). Moreover, the domestic interested parties state that
Prayon essentially remained outside of the U.S. market until 1994; even
upon returning to the market, Prayon's imports have remained
significantly below pre-order shipment levels (see id. at 11). As a
result, the domestic interested parties conclude that, consistent with
the Sunset Policy Bulletin, it is reasonable to assume that Prayon
could not sell in the U.S. market without dumping. Further, citing a
letter written by Prayon to its U.S. customers, the domestic interested
parties argue that the cessation in imports was the result of a
decision made by Prayon because it could not continue shipments in the
face of the burden of the antidumping duty order (see id. at 9 and
Attachment A).
In its substantive response, Prayon argues that revocation of the
antidumping duty order would not be likely to lead to continuation or
recurrence of dumping of IPA (see March 31, 1999, Substantive Response
of Prayon at 3). Prayon bases this argument, in part, on the fact that
dumping margins have declined steadily throughout the life of the
order. Prayon explains its declining margins as follows. First, Prayon
states that it suspended sales to the United States shortly after the
imposition of the order because of declining IPA prices. Five years
later, after price trends reversed, Prayon states that it reentered the
U.S. market with sales of IPA. At that time, margins were zero (1993-94
administrative review). Subsequently, relative prices temporarily
changed again as the value of the Belgian franc rose sharply vis-a-vis
the dollar, and a company-specific margin of 11.36% therefore
reappeared in the 1994-1995 administrative review. Since that review,
margins have declined for the subsequent two administrative reviews.
Moreover, Prayon states that it anticipates that margins will decline
still further when the Department completes its review for the 1997-
1998 administrative review (see id. at 4).
Moreover, Prayon argues that it has never held more than a very
small share of the U.S. market for IPA. Therefore, Prayon argues,
whether its sales have been at LTFV has been determined by prevailing
prices in the U.S. and Belgian markets for IPA, and relative currency
values (see id. at 3).
Prayon also maintains that there have been significant changes in
the United States IPA market. As a result of these changes, pricing in
the market has firmed, argues Prayon. Therefore, Prayon maintains that
since the 14.67 percent margin found the in the original investigation
predates these changes in the market and the industry, it does not
provide a reasonable basis on which to predict the future (see id. at
5).
Prayon further argues that although the Policy Bulletin states that
declining margins alone normally do not qualify as grounds for a
determination of no likelihood, the recent declining value of the
Belgian franc vis-a-vis the U.S. dollar provides additional evidence
for such a determination as well as reason for considering that, in the
circumstances of this case, the declining margins indicate that
revocation is not likely to lead to continuation or recurrence of
dumping (see id. at 4). In other words, Prayon appears to be arguing
that differences in the dumping margins found in administrative reviews
were primarily the result of fluctuations in currency exchange rates.
Therefore, since the Belgian franc has weakened against the dollar in
recent years, Prayon expects margins to decline. Quoting the Statement
of Administrative Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1
(1994), at 889-90, Prayon also argues that its declining dumping
margins accompanied by steady or increasing imports may indicate that
foreign companies do not have to dump to maintain market share in the
United States and that dumping is less likely to continue or recur if
the order is revoked (see id. at 5-6). In sum, Prayon asserts that both
of these conditions (i.e., declining margins and steady or increasing
imports) are satisfied in this case.
In their rebuttal comments, the domestic interested parties argue
that the volume of imports of IPA subject to the order has not remained
steady or increased over the life of the order. On the contrary, argue
the domestic interested parties, Prayon's volume of sales decreased
after the issuance of the order and have not regained pre-order levels
(see April 8, 1999, rebuttal comments of the domestic interested
parties at 4-5). Moreover, the domestic interested parties address
Prayon's comments regarding the changes in the United States IPA
market. They argue that it is precisely because those changes have
occurred that the Department should recommend the original dumping
margin as the margin likely to prevail if the order is revoked. They
assert that many of the changes in the United States IPA market since
the time of the original investigation are the direct result of the
order and would not have occurred without the protection from unfair
imports that the order has provided (see id. at 6).
Therefore, the conclusion drawn by the domestic interested parties
is that Prayon cannot sell IPA in the U.S. market without dumping, and,
were the antidumping order on IPA from Belgium revoked, Prayon would be
likely to continue and expand sales to the United States at less than
fair value. Moreover, they conclude that the dumping margin of 14.67
percent found in original investigation is the only margin available
that reflects Prayon's behavior without the discipline of the order in
place (see id. at 5, 7).
Department's Determination
Drawing on the guidance provided in the legislative history
accompanying the Uruguay Round Agreements Act (``URAA''), specifically
the SAA, 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 basis for likelihood determinations.
The Department clarified that determinations of likelihood will be made
on an order-wide basis (see section II.A.2 of the Sunset Policy
Bulletin). In addition, the Department indicated that it will normally
determine that revocation of an antidumping 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).
Consistent with section 752(c) of the Act, the Department
considered whether dumping continued at any level above de minimis
after the issuance of the order. In the 1993-94 review (the first
administrative review) the Department
[[Page 51514]]
determined that the dumping margin for Prayon was zero (61 FR 20227).
In the subsequent three administrative reviews conducted, however, the
Department calculated dumping margins above de minimis for Prayon. As
for Prayon's assertion that it expects dumping margins to decline in
the future based on the weakened Belgian franc vis-a-vis the dollar,
the Department cannot anticipate future exchange rates, and therefore,
cannot rely on Prayon's statement in making a determination.
In addition, consistent with section 752(c) of the Act, the
Department also considered whether imports of the subject merchandise
ceased after the issuance of the order. Utilizing U.S. Census data, the
Department agrees with the domestic interested parties that imports of
IPA decreased sharply following the issuance of the order and have only
occurred in intermittent years, and even then, at levels significantly
below pre-order levels. However, imports of the subject merchandise
from Belgium have continued throughout the life of the
order.4
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\4\ The Department bases this determination on information
submitted by the domestic interested parties in their March 31,
1999, submission, as well as U.S. IM146 Reports, U.S. Department of
Commerce statistics, U.S. Department of Treasury statistics, and
information obtained from the U.S. International Trade Commission.
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Therefore, given that dumping has continued over the life of the
order and import volumes declined significantly following the
imposition of the order, the Department preliminarily determines that
dumping is likely to continue were the order revoked.
Magnitude of the Margin
Interested Parties' Comments
The domestic interested parties argue that the Department should
adhere to its normal procedure and report to the Commission the dumping
margin of 14.67 percent calculated in the original investigation since
that is the only calculated rate that reflects the behavior of
exporters without the discipline of the order in place. They argue that
the most recent margin calculated for Prayon, 4.35 percent, is not a
true indication of Prayon's actions as it reflects Prayon's pricing
practices with the antidumping order in place (see March 31, 1999,
Substantive Response of the domestic interested parties at 13).
Moreover, they argue, that the 4.35 percent margin is for a period in
which imports from Prayon were less than half of what they had been
prior to the issuance of the order. Therefore, they argue, the 4.35
percent margin clearly should not be used (see id.).
Prayon argues that should the Department determine that, were the
order revoked, dumping is likely to continue or recur, the Department
should find that a dumping margin no higher than the margin found in
the current review is likely to prevail (see March 31, 1999,
Substantive Response of Prayon at 6). Here, Prayon is apparently
referring to the dumping margin of 4.35 percent calculated in the 1996-
97 administrative review.5
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\5\ See Industrial Phosphoric Acid from Belgium; Final Results
of Antidumping Duty Administrative Review, 63 FR 55087 (October 14,
1998).
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Department's Determination
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.)
The Department agrees with the domestic interested parties. Section
II.B.2 of the Sunset Policy Bulletin states that if dumping margins
have declined over the life of an order and imports have remained
steady or increased, the Department may conclude that exporters are
likely to continue dumping at the lower rates found in a more recent
review. However, in this case, imports of the subject merchandise from
Belgium have fluctuated over the life of the order but have never
regained their pre-order levels. Therefore, we preliminarily determine
that the margin from the Department's original investigation is
probative of the behavior of Belgian producers and exporters of
industrial phosphoric acid if the order were revoked because that is
the only calculated rate which reflects the behavior of exporters
without the discipline of the order in place. We will report to the
Commission the company-specific and ``all others'' rates from the
original investigation contained in the Preliminary Results of Review
section of this notice.
Preliminary Results of Review
As a result of this review, the Department preliminarily finds that
revocation of the antidumping duty order would likely lead to
continuation or recurrence of dumping at the margins listed below:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
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Prayon...................................................... 14.67
All Others.................................................. 14.67
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Any interested party may request a hearing within 30 days of
publication of this notice in accordance with 19 CFR 351.310(c). Any
hearing, if requested, will be held on November 17, 1999. Interested
parties may submit case briefs no later than November 8, 1999, in
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be
limited to issues raised in the case briefs, may be filed not later
than November 15, 1999. The Department will issue a notice of final
results of this sunset review, which will include the results of its
analysis of issues raised in any such comments, no later than January
25, 2000.
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: September 17, 1999.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-24828 Filed 9-22-99; 8:45 am]
BILLING CODE 3510-DS-P
