Final Results of Expedited Sunset Review: Drafting Machines From Japan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-811]

Final Results of Expedited Sunset Review: Drafting Machines From

Japan

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

Department of Commerce.

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

machines from Japan.

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

SUMMARY: On June 1, 1999, the Department of Commerce (``the

Department'') initiated a sunset review of the antidumping duty order

on drafting machines from Japan 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 a domestic interested party, and inadequate response (in this

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

determined to conduct an expedited sunset 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 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 St. &

Constitution Ave., NW, Washington, DC 20230; telephone (202) 482-5050

or (202) 482-1560, respectively.

EFFECTIVE DATE: October 5, 1999.

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) (``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 merchandise subject to this order includes drafting machines

that are finished, unfinished, assembled, or unassembled, and drafting

machine kits. The term ``drafting machine'' refers to ``track'' or

``elbow-type'' drafting machines used by designers, engineers,

architects, layout artists, and others. Drafting machines are devices

for aligning scales (or rulers) at a variety of angles anywhere on a

drawing surface, generally a drafting board. A protractor head allows

angles to be read and set and lines to be drawn. The machine is

generally clamped to the board. Also included within the scope are

parts of drafting machines. Parts include, but are not limited to,

horizontal and vertical tracks, parts of horizontal and vertical

tracks, band and pulley mechanisms, protractor heads, and parts of

protractor heads, destined for use in drafting machines. Accessories,

such as parallel rulers, lamps and scales are not subject to this

order. This merchandise is currently classifiable under the Harmonized

Tariff Schedule (``HTS'') item numbers 9017.10.00 and 9017.90.00. (This

merchandise was previously classified under item number 710.8025 of the

Tariff Schedule of the United States.) The HTS item numbers are

provided for convenience and customs purposes only. The written

description remains dispositive.

History of the Order

On November 8, 1989, the Department issued a final determination of

sales at less than fair value on imports of drafting machines from

Japan.1 On December 29, 1989, the antidumping duty order on

the subject merchandise was published in the Federal

Register.2

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

\1\ See Drafting Machines and Parts Thereof From Japan; Final

Determination of Sales at Less Than Fair Value, 54 FR 46961

(November 8, 1989).

\2\ See Drafting Machines and Parts Thereof From Japan;

Antidumping Duty Order, 54 FR 53671 (December 29, 1989).

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

In the antidumping duty order the Department established an

estimated weighted-average dumping margin of 90.87 percent for (one

respondent)

[[Page 53997]]

Mutoh Industries, Ltd. (``Mutoh''), and an ``all others'' rate of 90.87

percent. Id. There have been no administrative reviews of this order,

and no investigations of duty absorption by the Department.

The order remains in effect for Mutoh, and all other producers and

exporters of drafting machines from Japan.

Background

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

antidumping duty order on drafting machines from Japan pursuant to

section 751(c) of the Act. On June 16, 1999 we received a Notice of

Intent to Participate on behalf of Vemco Drafting Products Corporation

(``Vemco''), within the deadline specified in section 351.218(d)(1)(i)

of the Sunset Regulations. We received a complete substantive response

from the domestic interested party on July 1, 1999, within the deadline

specified in section 351.218(d)(3)(i) of the Sunset Regulations. Vemco

claimed interested party status under section 771(9)(C) of the Act as a

U.S. manufacturer of a domestic like product. Vemco was the petitioner

in the original investigation.

We did not receive any response from respondent interested parties

in this review. As a result, and in accordance with our regulations (19

CFR 351.218(e)(1)(ii)(C)(2)) we determined to conduct an expedited

sunset 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)(1) of the Act provides that, in making this

determination, the Department shall consider the weighted-average

dumping margins determined in the investigation and subsequent reviews

and the volume of imports of the subject merchandise for the period

before and the period after the issuance of the antidumping order.

Pursuant to section 752(c)(3) of the Act, the Department 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 magnitude of the margin are discussed below.

In addition, Vemco's comments with respect to the 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 basis for

likelihood determinations. The Department clarified that determinations

of likelihood will be made on an order-wide basis (see section II.A.2

of the Sunset Policy Bulletin). Additionally, the Department normally

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 of the Sunset Policy Bulletin).

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, Vemco argues that dumping is likely to

continue or recur if the antidumping duty order on drafting machines

from Japan were revoked because sales of the subject merchandise to the

United States declined to negligible amounts after the Department

imposed the antidumping duty order. Therefore, Vemco asserts that this

action serves as evidence that producers and exporters of the subject

merchandise cannot sell in any significant quantities in the United

States without dumping.

Specifically, with regard to imports of the subject merchandise,

Vemco asserts that prior to the imposition of this order, import

volumes of drafting machines to the U.S. were substantial (see Vemco's

Substantive Response, July 1, 1999 at 7), and that after the imposition

of the order, Mutoh America, ceased its imports of drafting machines

from Japan.3 Because the applicable HTS item numbers cover

imports in addition to the subject merchandise, (i.e., cover a basket

category) in further support of its assertion that sales ceased to the

U.S., Vemco submitted an affidavit from Mr. Paul McManigal Vemco's Vice

President (see Attachment 1 of Vemco's Substantive Response). In the

affidavit, Mr. Paul McManigal states that since the imposition of the

order he has closely monitored imports of drafting machines. Mr.

McManigal notes that in the year following the issuance of the order

imports declined in negligible amounts.

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

\3\ Vemco variously asserts that imports of drafting machines

from Japan have declined significantly, on the one hand, and ceased

altogether, on the other.

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

With regard to the existence of dumping margins, Vemco notes that

in the Department's final determination of sales at less than fair

value, the Department assigned a dumping margin to Mutoh and ``all

others'' of 90.87 percent; the duty deposit rate of 90.87 percent still

exists.

In conclusion, Vemco argues that a decline in import volume after

the issuance of the order, coupled with the continuation of dumping

margins above the de minimis level, is probative that producers and

exporters of drafting machines from Japan will continue to dump if the

order were revoked. Therefore, Vemco maintains that the Department

should determine that there is a likelihood of the continuation of

dumping of drafting machines from Japan if the order were revoked.

As discussed in section II.A.3 of the Sunset Policy Bulletin, the

SAA at 890, and the House Report at 63-64, existence of dumping margins

after the order is issued is highly probative of the likelihood of

continuation or recurrence of dumping. If companies continue to dump

with the discipline of an order in place, the Department may reasonably

infer that dumping would continue if the discipline of the order were

revoked. We agree with Vemco that dumping margins above the de minimis

level continue to exist for Mutoh, the only respondent reviewed in the

original investigation.

Although Vemco asserts at various points in its argument that

imports of drafting machines from Japan ceased entirely after the

imposition of the order, the import statistics do not conclusively

support a finding of

[[Page 53998]]

cessation of imports. As noted above, imports of the subject

merchandise enter the United States under an HTS basket category (i.e.,

entries of non-subject merchandise are also reported under the same

item number). After examining the Department's import trade statistics,

we find that imports declined significantly after the issuance of the

order. We are unable to determine from the statistics however whether

the negilible imports under the HTS item number are of subject or non-

subject merchandise.

As noted in the SAA, declining import volumes, accompanied by the

continued existence of dumping margins after the issuance of the order

may provide a strong indication that, absent an order, dumping would be

likely to continue, because the evidence would indicate that the

exporter needs to dump to sell at pre-order volumes. Therefore it is

reasonable to conclude that Japanese producers and exporters of the

subject merchandise cannot sell in the United States without dumping.

Given that dumping above de minimis continued over the life of the

order, imports decreased significantly after the issuance of the order,

respondent interested parties waived their right to participate in the

instant review, and absent argument and evidence to the contrary, the

Department determines that dumping would likely continue or recur if

the order on drafting machines from Japan were revoked.

Magnitude of the Margin

In the Sunset Policy Bulletin, the Department stated that,

consistent with the SAA and House Report, the Department will provide

to the Commission the company-specific margin from the investigation

because that is the only calculated rate that reflects the behavior of

exporters without the discipline of an order. 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 final affirmative determination of sales at

less than fair value, published a weighted-average dumping margin of

90.87 percent for one Japanese producer/exporter of the subject

merchandise, and an ``all others'' rate of 90.87 percent.

With respect to the magnitude of the margin likely to prevail if

the order were revoked, in its substantive response, Vemco urged the

Department to follow the guidance of the SAA and its stated policy and

provide to the Commission the margins from the original investigation.

We agree with Vemco's assertion that we should report to the

Commission the rate from the original investigation. Consistent with

the Sunset Policy Bulletin, the Department, in this case, finds that

the rates from the original investigation are the most probative of the

behavior of Japanese producers and exporters of drafting machines if

the order were to be revoked. Therefore, absent information and

argument to the contrary, we see no reason to deviate from our stated

policy, and we will report to the Commission the margins contained in

the Final Results of Review of this notice.

Final Results of Review

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

the antidumping order would be likely to lead to continuation or

recurrence of dumping at the levels indicated below.

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

Margin

Manufacturer/exporter (percent)

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

Mutoh Industries, Ltd. (Mutoh)............................. 90.87

All Others................................................. 90.87

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

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: September 29, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-25874 Filed 10-4-99; 8:45 am]

BILLING CODE 3510-DS-P