Final Results of Full Sunset Review: Porcelain-on-Steel Cooking Ware From Mexico

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-504]

Final Results of Full Sunset Review: Porcelain-on-Steel Cooking

Ware From Mexico

AGENCY: Import Administration, International Trade Administration, U.S.

Department of Commerce.

ACTION: Notice of Final Results of Full Sunset Review: Porcelain-on-

Steel Cooking Ware from Mexico.

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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 porcelain-on-steel

cooking ware from Mexico 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: Martha V. Douthit 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-

5050 or (202) 482-1560, respectively.

Effective Date: January 4, 2000.

Statute and Regulations

This review was 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) and 19 CFR Part 351 (1999) in general. Guidance on

methodological or analytical issues relevant to the Department's

conduct of sunset reviews is set forth in the Department's Policy

Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'')

Reviews of Antidumping and Countervailing Duty Orders: Policy Bulletin,

63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').

Scope

The merchandise subject to this antidumping duty order is

porcelain-on-steel cooking ware (``POS cooking ware'') from Mexico,

which includes tea kettles, that do not have self-contained electric

heating elements. All of the foregoing are constructed of steel and are

enameled or glazed with vitreous glasses. This merchandise is currently

classifiable under Harmonized Tariff Schedule of the United States

(``HTSUS'') subheading 7323.94.00. Kitchenware currently entering under

HTSUS subheading 7323.94.00.30 is not subject to the order. Although

the HTSUS subheadings are provided for convenience and customs

purposes, our written description of the scope of the order remains

dispositive.

Background

On August 26, 1999, the Department published in the Federal

Register (64 FR 46651) the Preliminary Results of Full Sunset Review:

Porcelain-on-Steel Cooking Ware from Mexico, (``Preliminary Results'').

In the Preliminary Results, we found that revocation of the order would

likely result in the continuation or recurrence of dumping. In

addition, we preliminarily determined that the magnitude of the margin

of dumping likely to prevail if the order were revoked was 42.71

percent for Cinsa, S.A. (``Cinsa''), 129.40 percent for Esmaltaciones

de Norte America, S.A. de C.V. (``ENASA''), and 29.52 percent for ``all

others.''

On October 12, 1999, within the deadline specified in 19 CFR

351.309(c)(1)(i), we received comments on behalf of Cinsa and ENASA

(collectively, ``the respondents''). On October 12, 1999, within the

deadline specified in 19 CFR 351.309(d)(1), we received rebuttal

comments from Columbian Home Products (``CHP''), the domestic

interested party in this review. We have addressed the comments

received below.

Comments

Comment 1: The respondents assert that, in the amended final

results of the eleventh administrative review, the Department's

presumption that duties were being absorbed fails to meet the

requirement that the Department carry out a meaningful analysis of

whether antidumping duties are absorbed. The respondents assert that if

in duty absorption inquiries the Department need not actually analyze

absorption but, rather, may simply presume it from the existence of

dumping alone, the statute's duty absorption provisions are rendered

superfluous. Additionally, the respondents assert that the Department's

presumption is, in effect, impossible to rebut. Therefore, the

respondents argue that application of the duty absorption methodology

to calculate Cinsa's and ENASA's likely margins if the order were

revoked is contrary to law.

In its rebuttal comments CHP argues that Cinsa and ENASA did not

challenge the Department's duty absorption determination in either

their case brief on the Department's preliminary results of the

eleventh administrative review nor in their

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appeal of the final results of that review to a binational panel.

Therefore, CHP argues that the Department's duty absorption

determination in the eleventh administrative review is final and cannot

be disturbed. CHP argues that this argument is untimely and should be

rejected because the Department does not have the authority to make

duty absorption determinations in a sunset review. Additionally, CHP

argues that the respondent's challenge to the Department's use of a

rebuttable presumption in making a determination of duty absorption is

without merit. CHP argues that the Department has previously considered

exactly this same argument, in the course of administrative reviews

where it has properly been raised, and has rejected it. Further, CHP

asserts that given that the duty absorption provision was enacted long

before the beginning of the eleventh administrative review, the

respondents had ample opportunity to address the issue of duty

absorption and to develop evidence demonstrating that duty absorption

was not occurring. In conclusion, CHP argues that the Department's duty

absorption determination in the eleventh review is final and cannot be

changed in the sunset review. Further, under the statute, the

Department must report the duty absorption determination to the

Commission.

DOC Position: We agree with CHP that duty absorption determinations

are made in the context of administrative reviews. Additionally, we

agree with CHP that the appropriate forum for challenging the duty

absorption determination made in the course of the eleventh

administrative review would have been in case briefs and/ or post-final

challenges with respect to the administrative review. As we explained

in the Sunset Policy Bulletin, the Department will provide to the

Commission, on a company-specific basis, its findings regarding duty

absorption (see section II.B.3.a). Therefore, in this final results of

full sunset review we are reporting to the Commission the affirmative

findings of duty absorption made by the Department in the amended

review results of the eleventh administrative review.

Comment 2: The respondents argue that even if the Department's duty

absorption methodology is lawful, its application is not appropriate in

this case. Rather, for the purposes of the final results of this sunset

review, the Department should report margins in accordance with its

normal methodology--using margins found in the original investigation.

The respondents elaborate that in the eleventh review, Cinsa's and

ENASA's margins were calculated inclusive of an adjustment to account

for alleged reimbursement of antidumping duties, a determination which

they are currently challenging. They assert that in the final results

of the eleventh administrative review the Department determined that

reimbursement of antidumping duties owed by the affiliated U.S.

importer took place, and the Department adjusted Cinsa's and ENASA's EP

and CEP to effectively double the antidumping duty liability of the

U.S. importer. Therefore, they argue that an additional adjustment to

these margins--which have already been doubled due to reimbursement to

account for duty absorption--result in impermissible double counting.

The respondents argue that, in order to avoid the effects of

impermissible double counting, the Department may report either (1) the

margins calculated in the original investigation or (2) the margins

calculated in the final results of the eleventh administrative review

unadjusted for the alleged reimbursement of antidumping duties, but

subject to the duty absorption methodology.

CHP, in its rebuttal comments, cites to the Sunset Policy Bulletin,

and argues that because the Department made an affirmative

determination of duty absorption in the administrative review of this

order that was initiated in 1998, Department correctly applied its

policy in the preliminary results of this sunset review. Additionally,

CHP argues that the Department should reject the respondents' argument

because the respondents inappropriately equate the Department's

reimbursement regulation with the duty absorption provision of the

statute with respect to both the purposes of the different provisions

and the means of achieving the purposes. Specifically, CHP asserts that

the reimbursement regulation is intended to address the relationship

between the exporter and its U.S. importer (affiliated or unaffiliated)

and provide a remedy when there is evidence that the exporter has

reimbursed the U.S. importer for antidumping duties. The duty

absorption provision, in contrast, is intended to address the

relationship between an affiliated U.S. importer and its unaffiliated

customers in the United States. CHP further asserts that duty

reimbursement and duty absorption are separate problems with separate

remedies. With respect to reimbursement, the exporter would cease

transfers of funds to the importer to pay the antidumping duties, and

the importer would demonstrate that it can satisfy its antidumping

obligations without such assistance. Whereas, with respect to duty

absorption, the affiliated U.S. importer would demonstrate that it

passed the cost of antidumping duties through to its unaffiliated U.S.

customers. Additionally, citing to the Statement of Administrative

Action (``the SAA'') H.R. Doc. No. 103-316, Vol. 1 (1994), at 885-886,

CHP argues that the SAA explicitly recognizes the different and

mutually exclusive purposes of the duty absorption and reimbursement

provisions. Arguing that reimbursement and duty absorption can occur

independently of one another, CHP states that the respondents provided

no reason why there could not be reimbursement of antidumping duties

and duty absorption with respect to the same sales and, absent such

evidence, the Department must conclude that both did occur. CHP argues

that, if the Department determines that it may not adjust the final

margins from the eleventh review to account for duty absorption under

the theory that these margins have already been adjusted to reflect

duty absorption, in the alternative, the Department should report the

margins from the eleventh administrative review as the margins likely

to prevail should the order be revoked.

DOC Position: In the Sunset Policy Bulletin the Department

explained that, where duty absorption had been found in an

administrative review initiated in 1998 (for transition orders), the

Department normally will determine that a company's current dumping

margin is not indicative of the margin likely to prevail if the order

is revoked and will provide to the Commission the higher of the margin

that the Department otherwise would have reported to the Commission or

the most recent margin for that company adjusted to account for

findings on duty absorption. The Department cited to the SAA at 885,

and the House Report, H.R. Rep. No. 103-826, pt. 1 (1994), at 60, which

provide that duty absorption is a strong indicator that the current

dumping margins calculated by the Department in reviews may not be

indicative of the margins that would exist in the absence of an order.

After the revocation of an order, an importer could achieve the same

pre-revocation return on its sales by lowering its prices in the United

States in the amount of the duty that previously was being absorbed.

Additionally, the Senate Report, S. Rep. No. 103-412 (1994), at 50,

suggests that the Department's notification to the Commission of its

findings on duty absorption should

[[Page 283]]

include, to the extent practicable, some indication of the magnitude of

the absorption.

Based on our analysis of 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 order, we preliminarily determined

that we would normally determine that the margins calculated in the

original investigation best reflect the behavior of producers/exporters

without the discipline of the order (64 FR 46651). However, we noted

that consistent with the Sunset Policy Bulletin, we were adjusting the

most recent margin to account for duty absorption findings and, because

the adjusted margins for Cinsa and ENASA are higher than the rates from

the original investigation, we would report the adjusted rates as the

margins likely to prevail were the order revoked. Id.

In light of the comments received, we have reconsidered our

preliminary determination with respect to the magnitude of the margin

likely to prevail should the order be revoked. While we agree with CHP

that duty reimbursement and duty absorption are separate problems with

separate remedies, we also agree with the respondents that, in this

case, our stated policy of adjusting the margin to take into account

the findings on duty absorption may result in an overestimation of the

margin likely to prevail were the order revoked. Specifically, having

determined duty reimbursement, for the purpose of calculating the

export price and the constructed export price in the eleventh review,

the Department deducted from the starting price the amount of

antidumping duties reimbursed to CIC by Cinsa and ENASA.1

This deduction for reimbursed duties had the effect of increasing the

weighted-average margins found during the administrative review. The

Department also found that both Cinsa and ENASA made all of their sales

of the subject merchandise to the United States through an importer

that is affiliated within the meaning of section 751(a)(4) of the Act.

Because we determined that there was a dumping margin on 68.03 percent

of Cinsa's U.S. sales during the period of review and on 98.52 percent

of ENASA's sales during the period of review, we found that antidumping

duties had been absorbed by the respondents on those percent of sales,

respectively. Id. As noted above, although we agree that reimbursement

and absorption may occur with respect to the same sales, because of the

effect of consideration of reimbursement on the margin, we do not agree

that the entire margin is absorbed such that we should double the

margins calculated inclusive of reimbursement. We agree with CHP that

it is not appropriate to recalculate margins from the eleventh

administrative review in order to eliminate the effect of

reimbursement. Rather, we believe that the calculation in the eleventh

administrative review for reimbursement effectively approximates the

calculation we would make to account for duty absorption. Therefore,

consistent with the Sunset Policy Bulletin, for purposes of determining

the magnitude of the margin likely to prevail, we considered the

margins from the original investigation (i.e., the margins we would

otherwise report to the Commission) and the margins from the eleventh

review. As provided in section II.B.3.b, where we have found duty

absorption, we normally will report to the Commission the higher of the

margin that the Department otherwise would have reported to the

Commission or the most recent margin for that company adjusted to

account for findings on duty absorption. Because the margins as

calculated in the eleventh review are higher than those from the

original investigation, we are reporting those as the magnitude of the

margin likely to prevail were the order revoked.

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\1\ See Porcelain-on-Steel Cookware From Mexico: Preliminary

Results of Antidumping Duty Administrative Review, 64 FR 1592

(January 11, 1999), Porcelain-on-Steel Cookware From Mexico: Final

Results of Antidumping Duty Administrative Review, 64 FR 26934 (May

18, 1999), and Porcelain-on-Steel Cookware From Mexico: Amended

Final Results of Antidumping Duty Administrative Review, 64 FR 29262

(June 1, 1999).

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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 for the reasons set forth in the Preliminary

Results. Additionally, as discussed in the Preliminary Results and

above, we find that during the administrative review covering the

period December 1, 1986 through November 20, 1997, antidumping duties

were absorbed by Cinsa on 68.03 percent of its U.S. sales of subject

merchandise and by ENASA on 98.52 percent of its U.S. sales of subject

merchandise. Furthermore, for the reasons set forth in the Preliminary

Results and as discussed above, we find that the magnitude of the

margins likely to prevail if the order were revoked are as follows:

25.42 percent for Cinsa, 65.28 percent for ENASA, and 29.52 percent for

``all others.''

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

Dated: December 28, 1999.

Holly Kuga,

Acting Assistant Secretary for Import Administration.

[FR Doc. 00-98 Filed 1-3-00; 8:45 am]

BILLING CODE 3510-DS-P