Final Results of Expedited Sunset Review: Nitrile Rubber From Japan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-706]

Final Results of Expedited Sunset Review: Nitrile Rubber From

Japan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of expedited sunset review: Nitrile

rubber from Japan.

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SUMMARY: On April 1, 1999, the Department of Commerce (the

``Department'') initiated a sunset review of the antidumping order on

nitrile rubber from Japan (64 FR 15727) 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 and adequate substantive response filed

on behalf of domestic interested parties and inadequate response (in

this case, no response) from respondent interested parties, the

Department determined to conduct an expedited 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 levels indicated in the ``Final Result 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, US Department of Commerce, 14th Street and Constitution

Avenue, NW, Washington, DC 20230; telephone: (202) 482-1698 or (202)

482-1560, respectively.

EFFECTIVE DATE: August 5, 1999.

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''). 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 subject merchandise under consideration is butadiene

acrylonitrile copolymer synthetic rubber (``nitrile rubber'') not

containing fillers, pigments, or rubber-processing chemicals from

Japan. Nitrile rubber refers to the synthetic rubber that is made from

the polymerization of butadiene and acrylonitrile, and that does not

contain any type of additive or compounding ingredient having a

function in processing, vulcanization, or end use of the product. Latex

rubber is excluded from this order.

Nitrile rubber is currently classifiable under item number

4002.59.0000 of the Harmonized Tariff Schedule of the United States

(HTSUS). The HTSUS item number is provided for convenience and Customs

purposes only. The written product description of the scope of this

order remains dispositive.

History of the Order

The antidumping duty order on nitrile rubber from Japan was

published in the Federal Register on June 16, 1988 (53 FR 22553). In

that order, the Department estimated that the weighted-average dumping

margins for Nippon Zeon Co., Ltd. (``Nippon'') as well as for ``all-

others'' were 146.50 percent. The Department has not conducted any

administrative review since that time.1 The order remains in

effect for all manufacturers and exporters of the subject merchandise.

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\1\ There has been only a single review requested by a Japanese

firm, Japan Synthetic Rubber Co., Ltd. That request, however, was

timely withdrawn by the same firm. Consequently, the Department

terminated the review. See Termination of Antidumping Duty

Administrative Review, 62 FR 54822 (October 22, 1997).

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Background

On April 1, 1999, the Department initiated a sunset review of the

antidumping duty order on nitrile rubber from Japan (64 FR 15727)

pursuant to section 751(c)(6)(A)(i) of the Act. The Department received

a Notice of Intent to Participate on behalf of Zeon Chemicals, L.P.

(``Zeon'') on April 16, 1999, within the deadline specified in section

351.218(d)(1)(i) of the Sunset Regulations. Zeon claimed interest party

status under section 771(9)(C) of the Act as a domestic producer of

nitrile rubber.

We received a complete substantive response from Zeon on May 3,

1999, within the 30-day deadline specified in the Sunset Regulations

under section 351.218(d)(3)(i). Zeon noted that although Zeon did not

exist at the time of the original antidumping determination, from which

the present proceeding is derived, Zeon is currently the largest

producer of nitrile rubber in the United States (see May 3, 1999,

Substantive Response of Zeon at 3). Zeon further noted that the parent

company of Zeon, the Japanese firm Nippon, had participated in the

original investigation as a respondent interested party (see id.).

Also, Zeon indicated that Zeon previously changed its name from ``Zeon

Chemicals Incorporated'' to ``Zeon Chemicals, L.P.'' (See id.). We did

not receive a substantive response from any respondent interested

parties to this proceeding. Consequently, pursuant to section

351.218(e)(1)(ii)(C) of the Sunset Regulations, the Department

determined to conduct an expedited, 120-day, review of this order.

Determination

In accordance with section 751(c)(1) of the Act, the Department

conducted this review to determine whether revocation of the

antidumping 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

[[Page 42669]]

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 is revoked.

The Department's determinations concerning continuation or

recurrence of dumping and the magnitude of the margin are discussed

below. In addition, Zeon's 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

Drawing on the guidance provided in the legislative history

accompanying the Uruguay Round Agreements Act (``URAA''), specifically

the Statement of Administrative Action (``the SAA''), H.R. Doc. No.

103-316, vol. 1 (1994), 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 bases for

likelihood determinations. In its Sunset Policy Bulletin, the

Department indicated that determinations of likelihood will be made on

an order-wide basis (see section II.A.2). In addition, the Department

indicated that normally it will 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).

In addition to considering the guidance on likelihood cited above,

section 751(c)(4)(B) of the Act provides that the Department shall

determine that revocation of an order is likely to lead to continuation

or recurrence of dumping where a respondent interested party waives its

participation in the sunset review. In the instant review, the

Department did not receive a response from any respondent interested

party. Pursuant to section 351.218(d)(2)(iii) of the Sunset

Regulations, this constitutes a waiver of participation.

In its substantive response, Zeon argues that dumping of the

subject merchandise would resume if the antidumping duty order were

revoked (see, May 3, 1999 Substantive Response of Zeon at 3). In

support of its assertion, Zeon notes that the volume of imports of the

subject merchandise immediately and dramatically decreased after the

discipline of the antidumping order was put into effect. In addition,

Zeon points to the existence of continued dumping above the de minimis

level throughout the life of the order.

In addition to argument related to previously calculated dumping

margins and the volume of imports before and after the issuance of the

order, Zeon asserts that there are other facts that support a

determination that revocation would result in resumption of dumping.

Zeon notes that Japanese companies continue to manufacture the subject

merchandise for export. Furthermore, Zeon asserts that the U.S. market

has proven highly penetrable to imports of nitrile rubber. In

conclusion, Zeon asserts that because nitrile rubber is highly fungible

(and, therefore, U.S. purchasers quickly switch suppliers based on a

small price changes), Japanese producers could easily regain customers

by resuming dumping were the order revoked.

The Department agrees with Zeon's argument that imports have

declined significantly since imposition of the order. Statistics drawn

from U.S. Census Bureau IM146 reports (``IM146''), Import Special

Information Service of the Journal of Commerce (``ISIS''), and Trade

Information On-Line Service (``TIOS'') support Zeon's assertion that

there was a substantial decrease of imports of the subject merchandise

immediately after the issuance of the antidumping duty order. For

instance, between 1987 and 1988 the imports of the subject merchandise

fell 61 percent.2 Moreover, between 1988 and 1998, the

average volume of imports of the subject merchandise is a mere 18

percent of the pre-order level, some variations

notwithstanding.3

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\2\ As noted above, the antidumping duty order was issued on

June, 1988.

\3\ For example, in 1989, imports of the subject merchandise

increased 28 percent compared to the reduced 1988 imports volume;

however, this is still less than 50 percent of the pre-order level.

More significantly, during the period from 1994 to 1998, the annual

average import volume of the subject merchandise has fallen to 12

percent of the pre-order import volume.

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With respect to the weighted-average dumping margins, as noted

above, there has not been any administrative review with respect to the

antidumping order under consideration. Consequently, the only weighted-

average dumping margin available to the Department is the one that was

determined in the original investigation: 146.50 percent. As a result,

the Department finds that since the issuance of the antidumping duty

order, imports of nitrile rubber from Japan have continued to be

assessed the weighted-average dumping margin of 146.50 percent, which

is significantly above de minimis.

In conclusion, considering the facts that respondent parties waived

their right to participate in instant review, that dumping margins

above de minimis level continued since the issuance of the order, and

that import volumes substantially decreased after the issuance of the

order, the Department finds that continuation or recurrence of dumping

is likely if the antidumping duty order is revoked.

Since the Department based this determination on the facts that the

import volume of the subject merchandise decreased substantially and

that dumping continued at levels above de minimis, it is not necessary

to address Zeon's additional arguments.

Magnitude of the Margin

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. 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, in its notice of the antidumping duty order on

nitrile rubber from Japan, established both company-specific and

country-wide weighted-average dumping margins of 146.50 percent for all

imports of the subject merchandise from Japan (53 FR 22553, June 16,

1988). We note that, to date, the Department has not issued any duty

absorption findings in this case.

In its substantive response, Zeon asserts that revocation of the

antidumping duty order would result in a resumption of dumping order at

146.50 percent, which is the weighted-average margin found in the

investigation. Zeon argues that this is consistent with the SAA and

Sunset Policy Bulletin, particularly in a case such as this where no

administrative review has been conducted. In conclusion, Zeon argues

that the decline in imports following the issuance of the order coupled

with the fact that there

[[Page 42670]]

have been no administrative reviews further suggests that the margins

from the order accurately reflect the minimum level of dumping that

Japanese companies must maintain to sell nitrile rubber in the U.S.

market.

The Department agrees with the Zeon. Absent argument and evidence

to the contrary, the Department finds the margins calculated in the

original investigation are probative of the behavior of Japanese

producers/exporters if the order were revoked, as they are the only

margins which reflect their behavior absent the discipline of the

order. Therefore, the Department will report to the Commission the

company-specific and all other margins reported in the ``Final Results

of Review'' section of this notice.

Final Results of Review

Based on the above analysis, the Department finds that the

revocation of the antidumping order would likely lead to continuation

or recurrence of dumping at the margins listed below:

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Margin

Manufacturer/exporter (percent)

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Nippon Zeon Co. Ltd........................................ 146.50

All others................................................. 146.50

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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.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-20218 Filed 8-4-99; 8:45 am]

BILLING CODE 3510-DS-P