Final Results of Full Sunset Review: Brass Sheet and Strip From the Netherlands

DEPARTMENT OF COMMERCE

International Trade Administration

Final Results of Full Sunset Review: Brass Sheet and Strip From

the Netherlands

[A-421-701]

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of full sunset review: Brass sheet and

strip from the Netherlands.

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SUMMARY: On August 26, 1999, the Department of Commerce (``the

Department'') published a notice of preliminary results of the full

sunset review of the antidumping duty order on brass sheet and strip

from the Netherlands (64 FR 46637) pursuant to section 751(c) of the

Tariff Act of 1930, as amended (``the Act''). We provided interested

parties an opportunity to comment on our preliminary results. We

received comments from both domestic and respondent interested parties.

As a result of this review, the Department finds that revocation of

this order would be likely to lead to continuation or recurrence of

dumping at the levels indicated in the Final Results of Review section

of this notice.

FOR FURTHER INFORMATION CONTACT: Eun W. Cho 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: (202) 482-

1698 or (202) 482-1560, respectively.

EFFECTIVE DATE: January 6, 2000.

Statute and Regulations

This review was conducted pursuant to sections 751(c) and 752(c) 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 (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

Imports covered by this order are brass sheet and strip, other than

leaded and tin brass sheet and strip, from the Netherlands. The

chemical composition of the products under order is currently defined

in the Copper Development Association (``CDA'') 200 Series or the

Unified Numbering System (``UNS'') C20000 series. This order does not

cover products the chemical composition of which are defined by other

CDA or UNS series. The physical dimensions of the products covered by

this order are brass sheet and strip of solid rectangular cross section

over 0.006 inch (0.15 millimeter) through 0.188 inch (4.8 millimeters)

in gauge, regardless of width. Coiled, wound-on-reels (traverse-wound),

and cut-to-length products are included. The merchandise subject to

this order is currently classifiable under items numbers 7409.21.00 and

7409.29.20 of the Harmonized Tariff Schedule of the United States

(``HTSUS''). Although the HTSUS subheadings are provided for

convenience and customs purposes, the written description of the

merchandise subject to this order is dispositive.

History of the Order

The antidumping duty order on brass sheet and strip (``BSS'') from

the Netherlands was published in the Federal Register on August 12,

1988 (53 FR 30455).1 In that order, the Department

determined that weighted-average dumping margins for the Metallverken

Nederland B.V. and all others were 16.99 percent.2

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\1\ See Antidumping Duty Order of Sales at Less Than Fair Value;

Brass Sheet and Strip From the Netherlands, 53 FR 30455 (August 12,

1988).

\2\ In the original investigation, Outokumpu Copper Strip, B.V.

(``OBV'') was doing business under the name, Metallverken Nederland

B.V. (See March 4, 1999, Substantive Response of OBV at 5 (footnote

4); see also March 3, 1999, Substantive Response of the domestic

interested parties at 24.)

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The Department has conducted several administrative reviews since

that time.3 The order remains in effect for all producers

and exporters of BSS from the Netherlands. We note that the Department

has not conducted any investigation with respect to duty absorption

regarding the exports of the subject merchandise.

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\3\ See Brass Sheet and Strip From the Netherlands; Final

Results of Antidumping Duty Administrative Reviews (Corrections), 57

FR 11352 (April 2, 1992); Brass Sheet and Strip From the

Netherlands; Final Results of Antidumping Administrative Reviews, 57

FR 9534 (March 19, 1992) (this review consolidated first and second

reviews); Brass Sheet and Strip From the Netherlands; Final Results

of Antidumping Duty Administrative Review, 61 FR 1324 (January 19,

1996); Brass Sheet and Strip From the Netherlands; Amendment to

Final Results of Antidumping Duty Administrative Review, 62 FR 33395

(June 19, 1997); Brass Sheet and Strip From the Netherlands; Final

Results of Antidumping Duty Administrative Review, 61 FR 1324

(January 19, 1996); Brass Sheet and Strip From the Netherlands;

Final Results of Antidumping Duty Administrative Review, 62 FR 51449

(October 1, 1997); and Brass Sheet and Strip From the Netherlands;

Final Results of Antidumping Duty Administrative Review, 63 FR 49544

(September 16, 1998). See also the final results of the latest

administrative review, covering the period 1997-1998, which should

be published concurrently with this publication.

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Background

On August 26, 1999, the Department published the preliminary

results of the sunset review on BSS from the Netherlands.4

Notwithstanding a finding of a significant decline in the import

volumes of the subject merchandise after the issuance of the order, the

Department preliminarily determined that revocation of the order would

not be likely to lead to continuation or recurrence of dumping. The

Department stated that although import volumes of the subject

merchandise declined significantly after the issuance of the order,

since the two most recent administrative reviews indicate that dumping

of the subject merchandise has been eliminated, and since Outokumpu

Copper Strip, B.V. (``OBV'') presents effective other relevant

information and arguments explaining why it is unlikely that OBV would

resume dumping in the United States, the Department preliminarily

determines that

[[Page 736]]

recurrence of dumping is not likely if the order were revoked.

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\4\ See Preliminary Results of Full Sunset Review: Brass Sheet

and Strip From the Netherlands, 64 FR 46637 (August 26, 1999).

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On October 13, 1999, both the domestic and respondent interested

parties submitted additional information.5 Also, on October

25, 1999, we received case briefs from the domestic interested parties

and OBV.6 On November 1, 1999, within the deadline specified

in the Department's memorandum,7 both domestic and

respondent parties submitted reply briefs. The Department held a public

hearing on November 3, 1999. As a result of the aforementioned

additional documents and comments, we have changed our determination.

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\5\ Following the Department's publication of its preliminary

results of the instant sunset review, on October 5, 1999, counsel to

the domestic interested parties, submitted a letter requesting the

Department to allow the domestic interested parties to augment the

existing record with additional information. The Department allowed

both domestic and respondent interested parties to submit relevant

information until October 13, 1999. (See the Department's memorandum

to Mr. Jeffrey S. Beckington.) The domestic interested parties

submitted Mr. Baker's affidavit and three different portions of the

Department's Sales Verification Report (``Verification Report'')

which was completed in the concurrent administrative review of the

order. Also, OVB submitted two portions of the Verification Report.

Consequently, Mr. Baker's affidavit and the portions of the

Verification Report submitted by interested parties are now on the

record in this review.

\6\ On September 27, 1999, while requesting a public hearing,

the domestic interested parties requested extensions of the

deadlines for the case and rebuttal briefs and a postponement of the

hearing. The Department extended the deadlines for case brief and

rebuttal brief until and not later than October 25, 1999, and

November 1, 1999, respectively. Also, at the same time, the

Department postponed the hearing to November 3, 1999.

\7\ See footnote 6, supra.

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Department's Determination

Based upon arguments raised by interested parties in case and

rebuttal briefs, we have re-examined the facts and statements on the

record in this case and determined that revocation of the antidumping

duty order on brass sheet and strip from the Netherlands pursuant to

section 751(c) of the Act would be likely to lead to recurrence of

sales of subject merchandise at less than fair value.

In its Sunset Policy Bulletin, the Department established that it

will normally determine that revocation of an antidumping duty order

would be likely to lead to continuation or recurrence of sales of the

subject merchandise at less than fair value 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 this case, 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 antidumping duty order; whether the

imports ceased after the issuance of the order; and whether dumping was

eliminated and import volumes declined significantly after the issuance

of the order. We found that dumping of the subject merchandise

continued after the issuance of the order, through the first, second

and third administrative reviews.8 We also found that OBV's

imports of subject merchandise ceased after the issuance of the order

for four administrative review periods,9 but resumed in

1995. Further, we found that OBV did not dump subject merchandise, at a

level above de minimis, during the periods 1995-1996 and 1996-1997

(last two administrative review periods).

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\8\ See footnote 3.

\9\ Id.

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With respect to import volumes of the subject merchandise, the data

reported by both OBV and the domestic interested parties in this case

indicate that, since the imposition of the order, import volumes of

subject merchandise have declined significantly. In addition, data in

the United States Customs Census Bureau IM-146s and import data from

the U.S. International Trade Commission indicate that imports of

subject merchandise have declined over the life of the order. No party

in this case disputes that import volumes of subject merchandise

declined significantly since the issuance of the order. Rather, the

parties have argued over the significance of the acquisition of the

U.S. producer, American Brass, by OBV's parent company, and the

corporate decision to have American Brass play the primary role in

supplying subject merchandise to the U.S. market.

In the preliminary results, we agreed with OBV that the acquisition

of American Brass makes OBV's position in the U.S. market rather unique

because it appeared that OBV no longer had to dump subject merchandise

in order to supply the U.S. market, and because American Brass had more

than adequate capacity to meet the demand in the U.S. market for BSS.

Given these apparent facts, we preliminarily found persuasive OBV's

argument that it would not make sense for OBV to jeopardize the

economic well being of American Brass by undercutting the prices of its

U.S.-produced BSS by resumption of dumping. Because we preliminarily

found that American Brass was to bear the primary responsibility of

satisfying U.S. customers' needs for BSS, we preliminarily determined

that, despite the significant decline in import volumes of subject

merchandise after the issuance of the order, the two most recent

reviews were probative of the behavior of the company absent the

discipline of the order.

As noted in the SAA, at 883, the determination called for in this

type of review is inherently predictive and speculative. Therefore, we

have established a policy of relying on past behavior as a predictor of

future behavior. In light of OBV's announced resumption of import

volumes at pre-order levels, we now find that the company's behavior

during the most recent administrative reviews can no longer be

considered probative of OBV's behavior absent the discipline of the

order.10 In the two most recent administrative reviews,

OBV's import volumes were abnormally small by any measure.11

If the transfer of production and sales of subject radiator strip to

American Brass were permanent, then these small import volumes could be

considered normal for the company and the margins for the two recent

reviews could be reflective of the company's future behavior. By

contrast, where, as here, a company will resume imports of the subject

merchandise at levels expected to exceed nearly 65 times the import

volumes in the two most recent reviews, the Department is compelled to

conclude that the company's pricing behavior during these previous

periods in which import volumes were small has little or no probative

value. Due to the transfer of production and sales of subject radiator

strip back to OBV, the company will import subject merchandise in

volumes that equal or exceed the volume of imports during the pre-order

period. Accordingly, we determine that, consistent with established

policy, the margin likely to prevail must be measured based on the

company's behavior at the time of the original investigation.

Therefore, we determine that revocation of the antidumping duty order

on brass sheet and strip from the Netherlands under section 751(c)

would be likely to lead to recurrence of sales of subject merchandise

at less than fair value. We have addressed the comments received below.

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\10\ See Sales Verification Report at 39.

\11\ See Comment 1 below.

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[[Page 737]]

Likelihood of Continuation or Recurrence of Dumping

Comment 1: The domestic interested parties contend that the factual

premises underlying the Department's preliminary results are in error;

namely, OBV was dumping during the most recent administrative review.

The domestic interested parties claim that had the Department not

allowed OBV the start-up adjustment and quarterly (instead of yearly)

calculation of its cost, OBV would have been found to be dumping during

1997-1998 review period. Assuming, arguendo, OBV was not dumping, the

domestic interested parties further argue that because such a finding

was based on a small, unrepresentative volume of sales when compared

to: (1) OBV's pre-order exports of the subject merchandise; (2) the

current size of the U.S. market for the subject merchandise; (3) OBV's

shipments of non-subject merchandise; (4) OBV's shipments in its home

market; (5) OBV's shipments to other countries; or (6) OBV's projected

volume of shipments to the United States, those few sales should not

serve as the basis for a finding that dumping is not likely to occur in

the future. (See the domestic interested parties' brief at 2 and 8-27,

and the hearing transcript at 10-49 and 97-108.)

OBV argues that the start-up cost adjustment is a relatively new

concept and, as a result, there have not been many applications of the

adjustment. However, OBV contends that the rarity alone should not be

considered as a determining factor in finding whether the adjustment is

warranted. OBV further argues that a potential distortive effect of

metal prices on margin calculation was recognized by the Department

from the beginning (in the original investigation) and, therefore,

allowing a cost calculation based on quarterly data is not unusual at

all. (See OBV's reply brief at 24-26, and brief transcript at 56-97.)

OBV contends that its export volumes of the subject merchandise

were low during the last three administrative review periods due to the

acquisition of American Brass. OBV asserts that it never stated that

the order was even a reason for stopping shipments. In other words, OBV

claims that it could have sold a substantial amount of subject

merchandise with the discipline of the order in place had OYJ not

purchased American Brass. OBV further argues that, at any rate, the

Department determined, in its most recent preliminary results of

administrative review, that the import volumes in the recent

administrative reviews constitute commercial quantities. In addition,

OBV asserts that the comparison between pre-order and post-order

volumes is meaningless because OBV will never return to pre-order

levels on account of American Brass's presence in the U.S. market. OBV

basically dismisses the domestic interested parties' various

comparisons of OBV's post-order export volumes of the subject

merchandise as meaningless by resorting to the fact that the much

larger American Brass's production replaced OBV's exports of the

subject merchandise to the United States. Furthermore, OBV argues that

its recent shipment levels are not aberrational or abnormally small in

the first place, and to the extent they are deemed small, they are due

to OYJ's purchase of American Brass. (See OBV's reply brief at 2 and

24-40.)

Department's Position: With respect to arguments raised regarding

the results of the administrative review, we refer interested parties

to the final results of the administrative review.12

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\12\ See footnote 3, supra.

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Further, in light of the arguments raised in this sunset review, we

do not agree with OBV that the comparison between OBV's pre-and post-

order import volumes of the subject merchandise to the United States is

meaningless. The Act, the SAA, the House Report, the Senate Report, the

Department's Regulations, and the Sunset Policy Bulletin provide that,

in making its determinations of likelihood of continuation or

recurrence of dumping, the Department compare the import volumes of the

subject merchandise for the period before and the period after the

issuance of the order. In our preliminary results we compared the

import volumes for the period before and the period after the issuance

of the order and found, on the basis of uncontroverted evidence, that

there was a significant decline in the volume of imports of the subject

merchandise after the issuance of the order. However, as noted above,

on the basis of additional information and argument provided by OBV, we

preliminarily determined that the elimination of dumping in recent

administrative reviews was, nonetheless, probative of the behavior of

OBV without the discipline of the order. For the purposes of these

final results we have reconsidered the weight to be accorded the more

recently calculated margins and have determined, in light of OBV's

stated intent to begin importing subject merchandise into the United

States at pre-order levels once the order is revoked, that the more

recently calculated margins are not probative of the behavior of OBV

were the order revoked.

Comment 2: The domestic interested parties insist that OYJ's

ownership of American Brass is by no means unique; rather, such

acquisition is a standard practice for foreign respondents to avoid the

dumping laws. Essentially, the domestic interested parties claim that

OYJ's acquisition of American Brass does not mean that OBV is not

likely to dump. The domestic interested parties further note that the

purchase of American Brass never demonstrated that OBV stopped dumping.

(See the domestic interested parties brief at 3 and 29-30, and the

hearing transcript at 10-49 and 97-108.)

OBV contends that the domestic interested parties misunderstood the

rationale with respect to OBV's uniqueness argument. Specifically, OBV

contends that its unique position is derived from the fact that: (1)

OBV is the sole producer of the subject merchandise in the Netherlands;

(2) the ownership of American Brass by OBV's parent company; (3) the

size of American Brass vis-a-vis OBV; and (4) the relative roles of OBV

and American Brass in the OYJ Group. In any case, OBV argues that the

cases cited by the domestic interested parties were based on sparse,

limited facts available and that the Department never addressed a

uniqueness issue in these cases. (See OBV's reply brief at 3 and 40-50,

and the hearing transcript at 56-97.)

Department's Position: The Department's preliminary results that

the recently calculated margins were, despite the significant decrease

between pre- and post-order import volumes, nonetheless probative of

OBV's behavior without the discipline of the order was based on OBV's

representation that the acquisition of American Brass enabled American

Brass to meet the U.S. demand for BSS, thereby replacing OBV's exports

of the subject merchandise to the United States. In part on this basis,

we stated in our preliminary results that the cessation of imports from

OBV after the purchase ``buttresses the notion that American Brass

basically took over OBV's exports of the subject merchandise.''

13

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\13\ See footnote 4, 64 FR at 46641, supra.

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Once it became evident that OBV will take over the entire

production of radiator strip from American Brass and export that

subject merchandise to the United States from the Netherlands, OBV

undermined its uniqueness contention. With the proposed production

shift from American Brass to OBV, OBV's contention that the purchase of

American Brass and

[[Page 738]]

subsequent presence of American Brass in the U.S. market eliminated any

likelihood of future dumping is diminished (i.e., the existence of

American Brass no longer has any bearing on whether the more recently

calculated margins are probative of the behavior of OBV without the

disciple of the order OBV and whether OBV would be likely to resume

dumping subject merchandise, in general,14 and radiator

strip, in particular).

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\14\ As it proposed to do with radiator strip, OYJ can shift

production of any other type of BSS from American Brass to OBV and

start dumping that subject merchandise without necessarily competing

with American Brass.

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Therefore, for purposes of these final results, we agree

15 with the domestic interested parties that OYJ's purchase

of American Brass after the imposition of the order, no longer provides

sufficient reason and/or evidence to negate the presumption expressed

in the Sunset Policy Bulletin and the SAA that the elimination of

dumping coupled with a significant decrease in the volume of imports

may be probative of the fact that producers/exporters may need to dump

in order to maintain market share in the United States. Therefore, for

the final results of this sunset review we have considered OBV's past

histories pertaining to import volumes and weighted-average dumping

margins.

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\15\ As noted in the previous paragraphs, however, we agree with

the domestic interested parties for different reasons. The domestic

interested parties cite five cases in their case brief (at 21-29).

In Brass Sheet and Strip From Germany; Final Results of Antidumping

Duty Administrative Review and Determination Not To Revoke in Part,

61 FR 49727 (September 23, 1996), the Department rejected Wieland's

attempt to make a relevant issue out of its purchase of a U.S.

production facility because the U.S. facility used imports of the

subject merchandise as a feed product. The Department determined

that had the order not been in place, Wieland would have used its

dumped subject merchandise rather than U.S. produced domestic like

product as its raw material; hence, Wieland's purchase of a U.S.

production facility can be distinguished from the instant case. In

the other four cited cases, also, the ownership of U.S. production

facilities by foreign respondent interested parties was never an

issue. In other words, the domestic interested parties reliance on

the above-referenced cases to discredit OBV's uniqueness argument is

misplaced.

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With respect to import volumes of the subject merchandise, the data

supplied by both OBV and the domestic interested parties indicate that,

since the imposition of the order, import volumes of the subject

merchandise have declined significantly. Moreover, data in United

States Census Bureau IM146s and import data from the United States

Commission clearly indicate that imports of the subject merchandise

have declined over the life of the order. In 1986 (a year prior to the

initiation of the original investigation), import volumes of brass

sheet and strip exceeded 15 million pounds; whereas, in 1998 import

volumes have been well under 1 million pounds. In addition, OBV does

not negate the statistics which show that OBV's import volumes of the

subject merchandise decreased significantly after the issuance of the

order. Consequently, we determine that the import volumes of the

subject merchandise declined substantially after the issuance of the

order.

In conclusion, although the three most recent reviews indicate that

dumping of the subject merchandise has been eliminated,16

since import volumes of the subject merchandise declined significantly,

we determine that recurrence of dumping of subject merchandise from the

Netherlands is likely if the order were revoked.

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\16\ See footnote 3, supra.

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Comment 3: The domestic interested parties assert that the

Department's preliminary results reflect a marked departure from the

standards established in the statute, the SAA, and the Sunset Policy

Bulletin, based on which the Department determines whether continuation

or recurrence of dumping is likely should the order be revoked.

Specifically, the domestic interested parties contend that, in its

preliminary results, the Department ignored the facts that dumping

continued at levels above de minimis after the issuance of the order

and that the import volumes of the subject merchandise ceased and

declined substantially when dumping was eliminated. The domestic

interested parties further argue that the Department should rely upon

what OBV did in conjunction with the order and not upon what OBV says

it will do in the future if the order were revoked. (See October 26,

1999, the domestic interested parties' case brief at 1 and 4-7, and the

hearing transcript at 10-49 and 97-108.)

OBV claims that the Department's preliminary decision is fully

consistent with and supported by a plain reading of the statute, the

Department's Regulations, and the Sunset Policy Bulletin. OBV contends

that the Department's ultimate mandate in a sunset review is to

determine whether revocation of an order is likely to lead to a

continuation or recurrence of dumping, and as such, the Department is

free to consider all record evidence in carrying out its ultimate

mandate in a sunset review. OBV claims that the Department stated that

it makes no sense to conclude that Outokumpu is going to permit OBV to

dump the subject merchandise in the United States. (See November 1,

1999, OBV's reply brief at 1 and 4-17, and the hearing transcript at

56-97.)

Department's Position: We do not agree with the domestic interested

parties' characterization that the Department ignored the facts that

dumping continued at levels above de minimis and that the import

volumes of the subject merchandise declined substantially after the

issuance of the order. In the preliminary results, the Department noted

that dumping continued for a period after the issuance of the order and

further, that the import volumes of the subject merchandise decreased

significantly after the issuance of the order.

As noted by OBV, in a sunset review, consistent with our

regulations, interested parties are invited to submit any other

relevant information or arguments that the party would like the

Department to consider. (See section 351.218(d)(3)(iv)(B) of the Sunset

Regulation.) In this review, OBV submitted additional information and

argument to support its assertion that the significant decrease in the

post-order volume of imports was not dispositive of the likelihood

issue. We agree with OBV that the Department has the discretion to

consider these arguments in the course of determining whether to

deviate from the general policy. Specifically, our Sunset Policy

Bulletin enunciates that, with a given set of facts, the Department

normally will determine whether revocation of the order is likely to

lead to continuation. (See section II.A.3 of the Sunset Policy

Bulletin.) Nowhere do we state that the Department will always find

that dumping is likely to continue or recur when dumping has been

eliminated and there has been a significant decline in the volume of

imports.

Comment 4: The domestic interested parties state that the

Department erred in basing its preliminary results, without invoking

good cause, on OBV's unsolicited, unilateral, uninvestigated, and self-

serving representations regarding matters which would more properly

fall within the purview of the sunset analysis of the International

Trade Commission (``Commission''). The domestic interested parties

argue that OBV's claims pertaining to the role it will play in the U.S.

market (in terms of volumes and nature of the products it will supply,

and the price it will charge) and pertaining to the competitive

conditions of the U.S. market of the subject merchandise, were

unsolicited, not subject to follow-up questioning, and not subject to

verification by the Department. Since the Department did not have an

[[Page 739]]

affirmative showing of good cause, as required by the statute, the

domestic interested parties conclude that the Department should exclude

the aforementioned other factors and make its final determination based

solely on the three-pronged test set forth in its Sunset Policy

Bulletin. (See the domestic interested parties brief at 1 and 8-12, and

the hearing transcript at 10-49 and 97-108.)

OBV notes that since OBV filed its substantive response on March 3,

1999, the domestic interested parties have had an ample opportunity to

request follow-up questions, but did not do so. OBV claims that its

substantive response is basically a questionnaire response; that there

is nothing improper about the Department revoking an order prior to the

Commission's decision; and that the factors considered are identical to

the factors typically considered by the Commission in making its injury

determination. (See OBV's reply brief at 13-17 and the hearing

transcript at 56-97.)

Department's Position: We disagree with the domestic interested

parties' argument that the Department erred in basing our preliminary

results on unsolicited, unilateral, un-investigated, and self-serving

representations made by OBV pertaining to the competitive conditions of

the U.S. market. Consistent with the Sunset Regulations (section

351.218(d)(3)(iv)(B)), a party may submit in its substantive response

other information or argument the party would like the Secretary to

consider. Other parties (that filed substantive responses) may then

rebut those arguments and information. Nothing precludes the Department

from considering the type of information OBV submitted in its

substantive response and the Department properly considered this

information and the domestic interested parties' rebuttals thereto in

its preliminary results.

Comment 5: The domestic interested parties note that the

Department's finding that American Brass would bear the primary

responsibility of satisfying the U.S. customers of radiator strip is

contrary to OBV's acknowledgment that OBV will eventually assume the

primary responsibility of satisfying its U.S.-based customers by

exporting more than 15.8 million pounds of subject radiator strip in

the future. Specifically, the domestic interested parties point out

inconsistent claims by OBV: on one hand, OBV states that it never will

rreturn to pre-order export level while, on the other hand, OBV

stipulates that it will eventually take over American Brass' entire

production of radiator strip, which will result in OBV exporting the

subject merchandise to the United States at levels greater than pre-

order export volumes of the subject merchandise to the United States.

The domestic interested parties assert that since OBV readily

changed its position (production shift from OBV to American Brass and

then back to OBV), nothing precludes the parent company of OBV, OYJ,

from changing its mind again in the near future. Namely, the domestic

interested parties claim that it is possible for OBV to start shipping

other subject merchandise to the United States--and this production

shift can rather easily be accomplished with only minor adjustment in

OBV's current production process. According to the domestic interested

parties, this possibility is looming especially large in light of

shrinking radiator strip market. Domestic interested parties point out

that OBV may start shipping electrostrip products, and that OBV can do

this without competing with American Brass by utilizing a creative

product mix. Inasmuch as the instant review covers all subject

merchandise (not just radiator strip), the domestic interested parties

further contend that should the order be revoked, OYJ can easily have

OBV export other subject merchandise, besides radiator strip, to the

United States. (See the domestic interested parties brief at 2 and 27-

30, and the hearing transcript at 10-49 and 97-108.)

OBV argues that it informed the Department of OBV's plans to

gradually increase shipments of subject radiator strip in its March 3,

1999, response to the notice of initiation in the instant review. OBV

claims that the Department clearly contemplated that OBV will continue

to ship the subject radiator strip and that the fact that the tonnage

is not mentioned is by no means evidence that the Department was

unaware of, or did not consider, this fact in reaching its preliminary

results. OBV notes that the proposed shift of production of the

radiator strip is only a minor portion of American Brass' 1998

production capacity and of American Brass' 1998 shipments within the

United States. (See OBV's reply brief at 3, 45-50, and 52, and the

hearing transcript at 96-97.)

Department's Position: We agree with the domestic interested

parties that there is conflicting information on the record regarding

OBV's intent to export subject merchandise to the United States.

Although OBV states that American Brass permanently replaced OBV's

exports of BSS to the United States, OBV also expresses its intention

of resuming significant exports to the United States when and if the

order were revoked (see OBV's substantive response, Exhibit 1 (LECG

Report at 41-42). Therefore, for the purposes of the final results of

this review, as noted above, we consider the planned resumption of

imports at pre-order volumes to be probative of the behavior of OBV

without the discipline of the order.

Comment 6: The domestic interested parties further note that when

OBV was selling substantial volumes of the subject merchandise to the

United States, the Department found margins at levels above de minimis.

In other words, the domestic interested parties claim, according to

facts of record, that OBV always dumped when shipping commercial

quantities of the subject merchandise to the United States. Knowing

that OBV has been an aggressive and a significant supplier of connector

products in the European market and that the U.S. radiator-strip market

is highly competitive, the domestic interested parties assert that

OBV's self-imposed moratorium of not exporting other subject

merchandise to the United States will not continue in the future. While

arguing that OBV is likely to dump in the United States where it

imports a large volume and a wide range of products to the United

States if the order were revoked, the domestic interested parties try

to illustrate its contention with the fact that OBV did not provide to

the Department American Brass's price data regarding the domestic like

product. The domestic interested parties also claim that in certain

instances, the prices of some non-subject merchandise, which are more

costly to produce than subject merchandise, were lower than the prices

of the subject merchandise. The domestic interested parties also

suggest that the Department postpone revocation until a later

administrative review because revocation would result in serious

prejudice to the domestic industry; whereas, the postponement would not

prejudice OBV because its current cash deposit rate is zero, and if

such is the finding in the instant review, OBV will not only be

absolved from any duty liability, but will remain eligible for

revocation; i.e., OBV's ability to obtain revocation would in no way be

prejudiced by delaying revocation. (See the domestic interested parties

case brief at 3 and 30-36 and, the hearing transcript at 10-49 and 97-

108.)

OBV indicates that in the last three administrative reviews, the

Department found that OBV has shipped in commercial quantities without

dumping. OBV claims that its sponsored LECG Report indicated that OBV

would not resume dumping if the order were revoked. OBV contends that

its future

[[Page 740]]

exports of the subject merchandise will be limited to brass radiator

strip. OBV claims that, as a matter of law, the Department cannot delay

revocation in this sunset review just to determine whether OBV would

dump in the next five years. OBV states that the Department did not

request OBV to provide American Brass pricing data in this review, and

thus it cannot be accused of not supplying something when not asked to

do so. Further, OBV argues that unlike a small, ``stand alone''

company, OBV is not forced into dumping the subject merchandise for its

own survival. OBV indicates that, even with antidumping duty orders in

effect on the subject merchandise from numerous countries, the domestic

interested parties, so far, do not find it profitable to manufacture

radiator strip. Stated differently, based on the fact that OBV will not

have any domestic competition in the radiator strip market, OBV

forecasts that there will be no downward pricing pressure exerted on

OBV by the domestic industries. Thus, OBV concludes that it is unlikely

to resume dumping in the near future. (See OBV's reply brief at 4, 50-

61, and 64-83, and the hearing transcript at 56-97.)

Department's Comment: We agree with the domestic interested parties

that OBV has never attained a zero or de minimis margin when ever it

exported more than a small amount of subject merchandise to the United

States.17 However, we disagree with the domestic interested

parties' contention that a postponement of revocation, where revocation

is appropriate, would not prejudice OBV. We agree with OBV that the

Department is required to revoke the order if, based on the record of

the proceeding, the Department determines that dumping is not likely to

recur.

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\17\ The lowest weighted-average dumping margin associated with

a significant import volume (2,284 metric tons) was 2.03 percent for

August 1990-July 1991. When OBV was assessed with zero (0) percent

or de minimis dumping margin for the last three administrative

reviews, its imports of subject merchandise were significantly

lower. Thus, we agree with the domestic interested parties that when

OBV was exporting substantial volumes of the subject merchandise to

the United States, it was dumping. This is especially true in light

of the final results of the most recent administrative review, in

which the Department found that the import volumes of the subject

merchandise associated with OBV's zero or de minimis weighted-

average dumping margins did not constitute commercial quantities.

(See footnote 4, supra.)

---------------------------------------------------------------------------

As to the pricing data from American Brass, because we have

determined that revocation of the order would be likely to result in

the continuation or recurrence of dumping, this issue is moot. Further,

because the scope of the order includes merchandise other than radiator

strip and our determination is based on OBV's historical behavior at a

time when it exported significant volumes of subject merchandise to the

United States, OBV's assertions with respect to the lack of domestic

competition and downward pricing pressure are also moot.

Finally, with respect to OBV's contention that in three

administrative reviews, the Department has found that OBV has shipped

in commercial quantities without dumping, we refer interested parties

to the notice of final results of the most recent administrative

review, issued concurrently with this notice, in which the Department

determined that OBV did not sell in commercial quantities for any of

the three consecutive reviews that formed the basis of OBV's revocation

request in that proceeding.

Comment 7: The domestic interested parties urge the Department not

to revoke the order without first performing a verification because the

Department made its preliminary findings based on other relevant

information and arguments OBV has submitted. They further argue that a

verification is mandated by statute and the Department's Regulation;

thus, the phrase, ``only where needed,'' in the Sunset Policy Bulletin

is questionable since it is contrary to statue and regulations (782(i)

of the Act and section 351.307(b) of the Department's Regulations). The

domestic interested parties insist that the Department cannot rely on

the verification report that was issued in the concurrent

administrative review of the order because the verification report did

not involve the relevant facts upon which the agency is relying in this

case. The domestic interested parties list factors, based on which the

Department purportedly made its preliminary determination yet to which

the verification did not address: the historical nature of OBV's and

American Brass's sales of the subject merchandise in the United States

and the reasons therefor; the prices at which OBV is likely to sell

radiator strip as compared to the prices charged by American Brass; the

capacity of American Brass; the size of and competition in the U.S.

radiator strip market; and the corporate relationship between OBV and

American Brass and the effects thereof upon their future business and

sales operations. The domestic interested parties further claim that

OBV itself discredited the findings of the verification report in the

concurrent administrative review. In conclusion, the domestic

interested parties argue that the Department should not rely on the

voluntary and self-serving representations made by the OBV. Instead,

domestic interested parties insist, the Department should issue a

questionnaire and a supplemental questionnaire to elicit relevant

information, and verify the information thereof so long as the

Department continues to rely upon any of the factual representations

proffered by OBV. (See the domestic interested parties brief at 3 and

12-18, and the hearing transcript at 10-49 and 97-108.)

OBV asserts that a verification is unnecessary in the instant

review. OBV claims that, first, the Department based its preliminary

results upon, inter alia, the dumping margins in the most recently

completed administrative reviews. OBV argues that, second, where the

Department recently verified OBV's data, which included information

supporting revocation of the dumping order and which was placed on the

record of this review, the current situation would fall under the

``other situations'' in which the Department need not conduct a

verification (see Sunset Regulations, 63 FR at 13519) because standards

for two reviews are basically the same. OBV claims that many items

which the domestic interested parties request the Department verify

were either verified by the Department during the 1997-1998

administrative review or were not relied upon by the Department in

making its preliminary results in this sunset review. OBV denies that

it alleged the verification report issued in the administrative review

is meaningless or challenged the accuracy of the numbers. OBV

indicates, nonetheless, that it opposes unjustified extrapolation of

numbers or leaps of logic based upon those numbers. Given the vast

amounts of verified information already on the record in this review,

an additional verification would be unnecessary and of little value to

the Department in this review. (See OBV's reply brief at 17-24, the

hearing transcript at 69-97.)

Department's Position: Because we have determined that dumping is

likely to continue or recur were the order revoked, the issue of

verification is moot.

Magnitude of the Margin

Because the magnitude of likely-to-prevail margin was not discussed

in the preliminary results of this review, we incorporate interested

parties' arguments in our determination as follows.

Comment 1: The domestic interested parties, in their substantive

response and in the hearing transcript, simply state that the

Department should select

[[Page 741]]

a margin from the investigation according to the principle set forth in

the SAA at 890 and the Sunset Policy Bulletin, 63 FR at 18873. (See the

domestic interested parties' March 3, 1999 substantive response of at

45-46, March 12, 1999, rebuttal response at 25-26, and the hearing

transcript at 10.) The domestic interested parties note that the margin

from the original investigation is the only calculated rate that

reflects the behavior of OBV without the discipline of the order.

Therefore, the domestic interested parties argue that the Department

should abide by its stated policy and provide to the Commission the

rate set forth in the original investigation, which is 16.99 percent.

Id.

Citing the same policy, but with a different emphasis, OBV argues

that the Department can, and should, exercise its discretion, as

allowed by the SAA.18 (See OBV's substantive response at

39.) OBV urges that the Department determine the margin likely to

prevail if the order were revoked to be zero percent, which is the

margin determined for sales by OBV in the last two administrative

reviews, or, in the alternative, 2.03 percent, which is the margin from

the third administrative review that is associated with a sales volume

that is larger than the sales volume examined by the Department during

the original investigation.

---------------------------------------------------------------------------

\18\ OBV infers this discretion from the word ``normally.'' (See

Substantive Response of OBV at 39.)

---------------------------------------------------------------------------

OBV further states that it came forth with data which support the

selection of a margin other than the margin in the original

investigation. OBV argues that the weighted-average dumping margin

assigned to OBV in the original investigation is the least probative of

the magnitude of the dumping margin likely to prevail were the order

revoked. OBV bases its argument on the assertions that the margin from

the original investigation is inherently unreliable and does not

reflect the current circumstances surrounding the order. Specifically,

the margin from the original investigation as well as those from the

first two administrative reviews are skewed in OBV's view because the

Department employed an old, and since-discarded, method in deriving

such margins.19 OBV argues that the Exporter's Sales Price

(now called Constructed Export Price, CEP) used in the original

investigation was deflated because some sales of the subject

merchandise were made to an OBV affiliated U.S. company at a lower

price. Id. at 41-45.20 Therefore, OBV contends, the

Department should reject the margins from original investigation and

from the final results of the first two reviews because weighted-

average margins therefrom are unreliable indicators of the magnitude of

the margin that would be likely to prevail if the order were revoked.

Instead, OBV argues that the Department should report to the Commission

a zero or, at the most, a 2.03 percent as the likely-to-prevail margin

were the order revoked.

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\19\ The original investigation was based on the U.S. sale price

compared to a weighted-average foreign market value. In

investigations, the Department now employs an average-to-average

method--a comparison of the weighted-average of the normal values

with the weighted-average of the export prices (and constructed

export prices) for comparable merchandise. (See 19 CFR 351.414(b)

and (c).)

\20\ During the original investigation, OBV had an affiliated

U.S. company, Outokumpu Metallverken (``MINC''), which bought the

subject merchandise at a bargain price and further processed it

according to U.S. customers' specification. OBV implies that, in the

process of calculating dumping margins, the cost associated with the

process done by MINC was inflated, consequently further lowing OBV's

export price to MINC.

---------------------------------------------------------------------------

In its rebuttal, OBV reiterates its arguments that there is no

justification for the Department to use the margin from the original

investigation because that margin is the least probative and inherently

unreliable. Also, OBV states that it no longer has the capacity to and,

in any case, will not further process the subject merchandise in the

United States, thereby eliminating the adjustment for further-

manufacturing, which OBV perceives resulted in an upward distortion of

dumping margin.21

---------------------------------------------------------------------------

\21\ OBV is indicating that it no longer has an affiliated U.S.

company which further processes the subject merchandise on behalf of

OBV, see footnote 30, supra. Also, due to the OYJ's purchase of

American Brass, OBV feels that further processing of the subject

merchandise in the United States is no long necessary. (See OBV's

reply brief at 55-59.)

---------------------------------------------------------------------------

Department's Position: In the Sunset Policy Bulletin, the

Department stated that it will normally provide to the Commission the

margin that was determined in the final determination in the original

investigation because that is the only margin that reflects the

behavior of producers/exporters without the discipline of the order in

place. 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 this case.

The SAA at 890-891 and House Report at 63, provide that declining

(or no) dumping margins accompanied by steady or increasing import

volumes of the subject merchandise may be indicative of a situation in

which respondent interested parties do not have to dump in order to

maintain market share in the United States and that dumping is less

likely to recur. To appropriately reflect such situation, the

Department may, in response to argument from an interested party,

provide to the Commission a more recently calculated margin in cases

where: (1) The dumping margin was reduced or eliminated after the

issuance of the order and (2) import volumes remained steady or

increased. (See section II.B.2 of Sunset Policy Bulletin.)

However, in the instant review, as discussed above, immediately

after the imposition of the order, import volumes of the subject

merchandise fell substantially and ceased altogether for a period.

Furthermore, for the last five years (1994-1998), the import volumes of

the subject merchandise have remained at levels that can be

characterized as negligible vis a vis pre-order volumes. These facts

coupled with OBV's statement that it plans to resume exports from the

Netherlands at pre-order volumes 22 leads us to determine

that the use of a more recently calculated margin is inappropriate.

Therefore, we disagree with OBV's argument that we should report to the

Commission a more recently calculated margin. Instead, because it is

the only rate which reflects the behavior of producers/exporters

without the discipline of the order, the Department determines that the

margin from the original investigation is probative of the behavior of

OBV without the discipline of the order and will provide to the

Commission the weighted-average margin from the original investigation.

---------------------------------------------------------------------------

\22\ See OBV Substantive Response at Exhibits 1 (at 41-42), 8,

and 15.

---------------------------------------------------------------------------

Final Results of Review

As a result of this review, the Department finds that revocation of

the antidumping duty order would be likely to lead to continuation or

recurrence of dumping at the margins listed below:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

OBV......................................................... 16.99

All Others.................................................. 16.99

------------------------------------------------------------------------

[[Page 742]]

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.

This five-year (``sunset'') review and notice are in accordance

with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: December 28, 1999.

Holy Kuga,

Acting Assistant Secretary for Import Administration.

[FR Doc. 00-285 Filed 1-5-00; 8:45 am]

BILLING CODE 3510-DS-P