Certain Cased Pencils From the People's Republic of China; Final Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-827]

Certain Cased Pencils From the People's Republic of China; Final

Results of Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review of certain cased pencils from the People's Republic of China.

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SUMMARY: On September 5, 1997, the Department of Commerce published the

preliminary results and partial rescission of administrative review of

the antidumping duty order on certain cased pencils from the People's

Republic of China covering the period of review of December 1, 1995,

through November 30, 1996 (62 FR 46945). We gave interested parties an

opportunity to comment on our preliminary results. We received one

comment from the petitioners, the Pencil Section of the Writing

Instrument Manufacturers Association and its members (domestic

producers of pencils). We received no other comments from respondents

or other interested parties. Based on our analysis of the comment

received, there are no changes to these final results of review from

the preliminary results of review, and the review indicates the

existence of a country-wide dumping margin of 53.65 percent for this

period.

EFFECTIVE DATE: January 7, 1998.

FOR FURTHER INFORMATION CONTACT:

Jack Dulberger or Irene Darzenta, AD/CVD Enforcement Group II, Office

Four, Import Administration, U.S. Department of Commerce, 14th Street

and Constitution Avenue NW., Washington, DC 20230, telephone (202) 482-

5505/6320.

APPLICABLE STATUTE: Unless otherwise indicated, all citations to

the statute are references to the provisions effective January 1, 1995,

the effective date of the amendments made to the

[[Page 780]]

Tariff Act of 1930 (the Act), by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise indicated, all citations to the

regulations of the Department of Commerce (the Department) are to the

regulations set forth at 19 CFR part 353 (April 1997).

SUPPLEMENTARY INFORMATION:

Scope of the Review

The products covered by this review are certain cased pencils of

any shape or dimension which are writing and/or drawing instruments

that feature cores of graphite or other materials encased in wood and/

or man-made materials, whether or not decorated and whether or not

tipped (e.g., with erasers, etc.) in any fashion, and either sharpened

or unsharpened (pencils). The pencils subject to this review are

classified under subheading 9609.10.00 of the Harmonized Tariff

Schedule of the United States (HTSUS). Specifically excluded from the

scope of this investigation are mechanical pencils, cosmetic pencils,

pens, non-case crayons (wax), pastels, charcoals, and chalks.\1\

Although the HTSUS subheading is provided for convenience and customs

purposes, our written description of the scope of this review is

dispositive.

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\1\ On September 15, 1997, the Department determined that

``Bensia'' pencils imported by Nadel Trading Corporation from the

PRC are also excluded from the scope of the order. See Final Scope

Ruling--Antidumping Duty Order on Certain Cased Pencils from the

People's Republic of China--Request by Nadel Trading Corporation for

a Ruling on the Bensia Pencil.

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Background

The antidumping duty order on pencils from the People's Republic of

China (PRC) was published on December 28, 1994 (59 FR 66909). On

September 5, 1997, the Department published in the Federal Register the

preliminary results of its review of this order for the period of

review (POR) December 1, 1995 through November 30, 1996. In our

preliminary results of September 5, 1997, we rescinded the review as to

the companies which reported that they had no shipments of subject

merchandise during the POR (i.e., China First Pencil Company, Ltd.

(China First) and Guangdong Provincial Stationery & Sporting Goods

Import and Export Corporation (Guangdong)). With respect to these

companies, we confirmed by letter from the U.S. Customs Service dated

August 19, 1997, that the only subject merchandise exported during the

POR was merchandise excluded from the order (i.e., merchandise

manufactured by the factories upon which zero margins in the less-than-

fair-value investigation were based).\2\ See Antidumping Duty Order:

Certain Cased Pencils from the People's Republic of China, 59 FR 66909

(December 28, 1994). Therefore, these final results apply only to the

PRC-wide entity, which includes the remaining respondents in this

review which did not reply to our questionnaire and show that they are

entitled to a rate separate from the PRC entity. In response to an

opportunity to comment on our preliminary results, the petitioners

submitted a comment on October 6, 1997. We receive no other comments

from respondents or other interested parties.

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\2\ China First exports of merchandise produced by China First

itself were originally excluded from this order, and thus no

suspension of liquidation of such entries was made prior to or

during this POR (i.e., 1995-1996). However, in litigation brought to

challenge the Final Determination of Sales at Less Than Fair Value

(LTFV), the Department issued a remand determination which was

subsequently affirmed by the U.S. Court of International Trade

(CIT). See Writing Instrument Manufacturers Ass'n Pencil Section, et

al. v. United States, Slip Op. 97-151 (CIT November 13, 1997). In

this remand determination, the Department determined, among other

things, that merchandise exported and produced by China First is, in

fact, covered by the order. Therefore, for entries of merchandise

exported and produced by China First and entered on or after

November 23, 1997, there will be suspension of liquidation pending

final and conclusive disposition of the remand results. See also the

Department's Notice of Court Decision: Certain Cased Pencils from

the People's Republic of China, 62 FR 65243 (December 11, 1997).

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Analysis of Comment Received

Comment

Petitioners assert that the Department's proposal to use the

recalculated petition rate as the facts available (FA) is incorrect.

Petitioners assert that agency practice and the applicable statutory

provisions require that the FA charges be reliable and relevant.

According to petitioners, the recalculated petition rate applied by the

Department in the preliminary results fails to meet the reliability

requirement because it is based on several legal errors. According to

the petitioners, these errors include the selection of the surrogate

market economy country to determine surrogate wood costs, the failure

to exclude data which were untimely submitted, the failure to determine

a surrogate value for factors of production (such as the transportation

of raw materials from suppliers to producers and the transportation of

pencils from producers to the ports of exportation), the failure to

take into account information determined during the investigation

concerning actual general expenses for the Indian pencil industry, and

several errors the Department committed during the remand determination

that render the surrogate valuation of Chinese pencil slats, and thus

the ``PRC rate'' which was premised on such valuation, unreliable.

Department's Position

We disagree with the petitioners. Where the Department must rely on

FA because a respondent failed to cooperate to the best of its ability

in responding to a request for information, section 776(b) of the Act

authorizes the Department to make an inference adverse to the interests

of that respondent in choosing FA. Section 776(b) of the Act also

authorizes the Department to use as adverse FA information derived from

the petition, the final determination in the investigation, a previous

administrative review, or other information placed on the record.

Because information from prior proceedings constitutes secondary

information, section 776(c) of the Act provides that the Department

shall, to the extent practicable, corroborate that secondary

information from independent sources reasonably at its disposal. See

also, Statement of Administrative Action (SAA) (H. Doc. 316, 103d

Cong., 2nd Sess. 870), providing that ``corroborate'' means that the

Department will satisfy itself that the secondary information to be

used has probative value. The SAA, at page 870, clarifies that the

petition is ``secondary information.''

The Department, as indicated in the preliminary results of review,

has decided to use the petition in the LTFV investigation as the basis

for adverse FA. The petition rate was ``recalculated'' for the first

time during the LTFV investigation. Later, in litigation arising out of

that investigation, we requested that the CIT remand to us two issues

for further consideration: (1) Basswood prices; and (2) valuation of

slats and logs. In performing this remand, the Department revised

certain calculations; these revisions led to a change in the

recalculated petition rate (from 44.66 percent to 53.65 percent). The

newly recalculated petition rate was then affirmed by the CIT in

Writing Instrument Manufacturer's Ass'n Pencil Section, et al., v.

United States, Slip Op. 97-151 (CIT November 13, 1997). Consistent with

a recent ruling by the U.S. Court of Appeals for the Federal Circuit in

an unrelated action, we consider it to be inappropriate to use as FA a

rate we have determined to be inaccurate. See D&L Supply v. United

States, 1997 WL 230117, at 2 (Fed. Cir. May 8, 1997). We have therefore

used the newly recalculated petition rate as the basis of FA.

[[Page 781]]

There is no basis on the record of this case to question the

probative value of the newly recalculated petition rate and we

therefore consider it to be corroborated. Petitioners' claims against

this rate, which are based on evidence which is contained in the

administrative record of the LTFV investigation, are not properly

before the Department in this segment of the proceeding.

Final Results of the Review

Based on our analysis of this comment, we have determined that no

changes to the preliminary results are warranted for purposes of these

final results, and a margin of 53.65 percent exists for the PRC entity

for the period December 1, 1995 through November 30, 1996. This rate

applies to all exports of pencils from the PRC other than those

produced and exported by China First (because China First's exports

produced by China First and entered during the POR were excluded from

the order), those produced by Shanghai Three Star Stationery Company,

Ltd. (Three Star) and exported by Guangdong (because Three Star's

exports produced by Guangdong were also excluded from the order), and

those exported by Shanghai Foreign Trade Corporation (SFTC) (an

exporter which was previously determined to be entitled to a separate

rate and for which the petitioners withdrew their request for this

administrative review). The weighted-average dumping margin is as

follows:

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Weighted

average

Manufacturer/producer/exporter margin

percent

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PRC Rate................................................... 53.65

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The U.S. Customs Service shall assess antidumping duties on all

appropriate entries. Individual differences between United States price

and normal value may vary from the percentage stated above. The

Department will issue appraisement instructions concerning the

respondent directly to the U.S. Customs Service. Furthermore, the

following deposit requirements will be effective for all shipments of

the subject merchandise, entered, or withdrawn from warehouse, for

consumption on or after the publication date of these final results of

administrative review, as provided for by section 751(a)(1) of the Act:

(1) No cash deposit is required for entries of subject merchandise both

produced by Three Star and exported by Guangdong; (2) the cash deposit

rate for merchandise both produced and exported by China First is

unaffected by this notice (see footnote 2, above); (3) the cash deposit

rate for SFTC will be 8.31 percent (based on the December 28, 1994

antidumping duty order (59 FR 66909)); (4) the cash deposit rate for

merchandise exported by China First and produced by any manufacturer

other than China First, for merchandise exported by Guangdong and

produced by any manufacturer other than Three Star, and merchandise

exported by all other PRC exporters, will be the PRC rate of 53.65

percent; and (5) for non-PRC exporters of subject merchandise from the

PRC, the cash deposit rate will be the rate of its supplier. These

deposit requirements shall remain in effect until publication of the

final results of the next administrative review.

Upon completion of this review, we will direct the U.S. Customs

Service to assess an ad valorem rate of 53.65 percent against the

entered value of each entry of subject merchandise during the POR for

all firms except those firms excluded from the order or entitled to a

separate rate.

This notice serves as the final reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This notice also serves as a 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 353.34(d). Timely written notification or

conversion to judicial protective order is hereby requested. Failure to

comply with the regulations and the terms of the APO is a sanctionable

violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675 (a)(1)) and 19 CFR 353.22

Dated: December 22, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-278 Filed 1-6-98; 8:45 am]

BILLING CODE 3510-DS-M