Final Results of Expedited Sunset Review: Sorbitol From France

DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-001]

Final Results of Expedited Sunset Review: Sorbitol From France

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

Department of Commerce.

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

from France.

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SUMMARY: On October 1, 1998, the Department of Commerce (``the

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

sorbitol from France (63 FR 52683) 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 a complete substantive response filed on

behalf of the domestic industry, 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 order would be

likely to lead to continuation or recurrence of dumping at the levels

indicated in the Final Results of Review section to 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, D.C. 20230; telephone (202) 482-

3207 or (202) 482-1560, respectively.

EFFECTIVE DATE: February 4, 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 covered by this order is crystalline

sorbitol, a polyol produced by the hydrogenation of sugars (glucose),

used in the production of sugarless gum, candy, groceries, and

pharmaceuticals, currently classifiable under Harmonized Tariff

Schedule (``HTS'') item number 2905.44.00. The HTS item number is

provided for convenience and for Customs purposes. The written

description remain dispositive.

This review covers all manufacturers and exporters of sorbitol from

France.

Background: On October 1, 1998, the Department initiated a sunset

review of the antidumping order on sorbitol from France (63 FR 52683)

pursuant to section 751(c) of the Act. On October 6, 1998, we received

a Notice of Intent to Participate from SPI Polyols, Inc. (``SPI''). On

October 16, 1998, we received a Notice of Intent to Participate from

Archer Daniels Midland Company (``ADM'') and Roquette America (``RA'').

Each of these notices were received within the deadline specified in

section 351.218(d)(1)(i) of the Sunset Regulations. ADM and SPI claimed

interested party status under section 771(9)(C) of the Act, as domestic

producers of sorbitol. RA claimed interested party status as a domestic

producer and as an importer of the subject merchandise. The Department

received substantive responses on behalf of each of the three parties

within the 30-day deadline specified in the Sunset Regulations under

section 351.218(d)(3)(i). We did not receive a substantive response

from any respondent interested party. As a result, pursuant to section

751(c)(3)(B) of the Act, and our regulations (19 C.F.R.

Sec. 351.218(e)(1)(ii)(C)(2)), we determined to conduct an expedited

review.

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, parties' 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.3. 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).

The Department's antidumping duty order on sorbitol from France was

published in the Federal Register (47 FR 15391) on April 9, 1982. Since

that time the Department has conducted several administrative

reviews.1 The antidumping duty order remains in effect for

all imports of sorbitol from France.

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\1\ See Sorbitol from France; Final Determination of Sales at

Less Than Fair Value, 47 FR 6459 (February 12, 1982); Sorbitol from

France; Final Results of Antidumping Duty Administrative Review, 51

FR 42873 (November 26, 1986); Sorbitol from France; Final Results of

Antidumping Duty Administrative Review, 52 FR 20444 (June 1, 1987);

Sorbitol from France; Final Results of Antidumping Duty

Administrative Review, 53 FR 21506 (June 8, 1988); Sorbitol from

France; Final Results of Antidumping Duty Administrative Review, 55

FR 6668 (February 26, 1990).

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In its substantive response, ADM argues that if the order on

crystalline sorbitol from France were revoked dumping will continue or

resume. ADM supports its conclusion by stating that after the issuance

of the order, dumping of sorbitol continued at levels above de minimis,

imports ceased and imports declined when they did not cease altogether.

With respect to margins above de minimis, ADM notes that in five of the

seven administrative reviews

[[Page 5637]]

conducted by the Department since 1982, margins exceeded de minimis,

and in one instance, the margin was more than four times that of the

original margin.2 With respect to the cessation of imports,

ADM states that Roquette Freres (``RF''), the only known exporter of

sorbitol to the U.S., previously acknowledged that its sorbitol exports

ceased for at least some period of time after the issuance of the

antidumping order. ADM argues that because RF requested revocation in

1988 based on no shipments for several years and no sales that

contained margins during the 1987-88 administrative review period, the

Department could conclude RF could not ship sorbitol to the U.S.

without dumping. Finally ADM argues that aggregated import statistics

for HTSUS item no. 2905.44.00, which includes crystalline sorbitol,

indicates that the total volume of imports declined, thus providing a

basis to infer that RF exported smaller volumes in certain periods

compared to the volumes that it shipped before the antidumping petition

was originally filed.3

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\2\ See Substantive Response of ADM (November 2, 1998) at 4.

\3\ See Substantive Response of ADM (November 2, 1998) appendix

B.

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In its substantive response SPI asserts that absent the order, RF

will resume large volume shipments from its French plant, producing

dumping margins in the range of 40 percent. SPI further asserts that in

recent years RF sold to U.S. customers exclusively from its U.S. plant.

However, RF has been bidding at extra-low prices to obtain additional

U.S. business. If successful, the additional business would

substantially exceed the capacity at RF's Illinois plant. Thus, SPI

asserts, it is obvious that RF plans to serve the additional business

from its French plant. Citing to the July 1998 marketing report,

``Sorbitol and Related Polyols--Worldwide Supply, Demand Business

Opportunities 1997/8-2005'' in which the price for sorbitol 100% is

given as $2.15/kg in the EU and $1.65/kg in the United States, SPI

estimates dumping margins of 40 percent.

RA, in its substantive response to the notice of initiation,

supported the preservation of the antidumping order. RA claimed that

the EU, particularly France, is currently significantly expanding

production capacity for crystalline sorbitol. Further, because market

demand within the EU is growing very slowly and cannot be expected to

consume the capacity increase and because exports are expected to

decline drastically because of the Asian crisis, the EU industry will

be seeking new export markets, with the United States being the likely

target.

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

SAA at 890, and the House Report at 63-64, ``[E]xistence of dumping

margins after the order, or cessation of imports after the order, 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, it is reasonable to assume that dumping would continue if the

discipline were removed.'' As ADM noted, dumping margins above de

minimis were found to exist in five of the seven administrative reviews

conducted by the Department. Further, deposit rates above de minimis

continue in effect for exports of sorbitol from France. Therefore,

given that dumping margins above de minimis were found to exist and

continue in effect, and absent argument and evidence to the contrary,

the Department determines that dumping is likely to continue if the

order 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 margins

from the investigation for each company because that is the only

calculated rate that reflects the behavior of exporters without the

discipline of an order. 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.

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

value of sorbitol from France, the Department established a 2.9 percent

dumping margin for RF. The Department has not issued an affirmative

duty absorption determination.4

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\4\ See Sobitol from France; Final Determination of Sales at

Less Than Fair Value, 47 FR 6549 (February 12, 1982).

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ADM states that in compliance with the SAA, the Department should

provide the original margin of 2.9 percent to the Commission because

2.9 percent reflects RF's behavior without the discipline of an order

in place.5 ADM further argues that, in this case, it is not

appropriate for the Department to select a more recently calculated

rate because the dumping margins calculated for the seven reviews

conducted by the Department have fluctuated significantly and do not

evince a pattern from which the Department could conclude that a more

recently calculated rate is likely to prevail in the absence of the

order.

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RA argues that a dumping margin of more than 20 percent is likely

to prevail if the order is revoked because the EU market, including

France, is a highly protected market with a tariff structure which

prohibits U.S. producers from exporting to the EU. In addition, RA

claims that the EU has a system of export refunds to compensate EU

producers for the high internal EU prices of grains which are the

feedstock for crystalline sorbitol outside the EU.

As discussed above, SPI alleges that the margin of dumping likely

to prevail if the order is revoked is 40 percent. SPI bases this

allegation on an EU price of $2.15/kg and a U.S. price of $1.65.

As noted in the Sunset Regulations and Sunset Policy Bulletin, only

under the most extraordinary circumstances will the Department rely on

a dumping margin other than those it calculated and published in its

prior determinations. Further, in antidumping sunset reviews, the

Department will consider other factors, such as prices and costs, only

where it determines that good cause to consider such other factors

exists (see section 351.218(e)(2) of the Sunset Regulations and section

II.C of the Sunset Policy Bulletin). Although RA and SPI assert that

the dumping margin likely to prevail without the order could be 20

percent or 40 percent, they do not make any ``good cause'' arguments.

Neither RA nor SPI offered any rationale suggesting that their

estimated margins would not be more speculative and, therefore, less

probative than the calculated rate from the original investigation.

The Department finds no reason to deviate from our Policy Bulletin

in this review. Therefore, we determine that the original margin

calculated by the Department which reflects the behavior of exporters

without the discipline of the order, is probative of the behavior of

the French producers of sorbitol. The Department will report to the

Commission the company-specific and ``all others'' rate at the levels

indicated in the Final Results of the Review section of this notice.

[[Page 5638]]

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 margins listed below.

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Margin

Manufacturer/Exporter (percent)

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Roquette Freres.............................................. 2.90

All Others................................................... 2.90

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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 published in

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

Dated: January 28, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-2675 Filed 2-3-99; 8:45 am]

BILLING CODE 3510-DS-P