Final Results of Expedited Sunset Review: Industrial Nitrocellulose From Japan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-812]

Final Results of Expedited Sunset Review: Industrial

Nitrocellulose From Japan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

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

nitrocellulose from Japan.

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

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

industrial nitrocellulose from Japan (64 FR 29261) 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 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: Eun W. Cho 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-

1698 or (202) 482-1560, respectively.

EFFECTIVE DATE: October 27, 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'') and 19 CFR Part 351 (1998) 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 product covered by this order is industrial nitrocellulose

(``nitrocellulose'') from Japan. Industrial nitrocellulose is a dry,

white, amorphous synthetic chemical with a nitrogen content between

10.8 and 12.2 percent, and is produced from the reaction of cellulose

with nitric acid. Industrial nitrocellulose is used as a film-former in

coatings, lacquers, furniture finishes, and printing inks. The scope of

this order does not include explosive grade nitrocellulose, which has a

nitrogen content greater than 12.2 percent. Industrial nitrocellulose

is currently classifiable under Harmonized Tariff Schedule (``HTS'')

item number 3912.20.00. The HTS item number is provided for convenience

and customs purposes only. The written description remains dispositive.

History of the Order

The antidumping duty order on nitrocellulose from Japan was

published in the Federal Register on July 10, 1990 (55 FR

28268).1 In that order, the Department determined that the

weighted-average dumping margin for all entries of the subject

merchandise was 66.0 percent.2 Since that time, the

Department has not conducted any administrative reviews. We note that,

to date, the Department has not issued any duty absorption findings in

this case. The order remains in effect for all manufacturers and

exporters of the subject merchandise.

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\1\ See Antidumping Duty Order: Industrial Nitrocellulose from

Japan, 55 FR 28268 (July 10, 1990).

\2\ However, the underlying investigation dealt with only one

Japanese company, Asahi Chemical Industry Co., Ltd. (``Asahi'').

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Background

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

antidumping duty order on nitrocellulose from Japan (64 FR 29261),

pursuant to section 751(c) of the Act. The Department received a Notice

of Intent to Participate on behalf of Hercules Incorporated

(``Hercules'') on June 9, 1999, within the deadline

[[Page 57846]]

specified in section 351.218(d)(1)(i) of the Sunset Regulations.

Hercules asserts that it is not related to a foreign producer, foreign

exporter, or domestic importer of the subject merchandise and that it

is not an importer of the subject merchandise except on an occasional

spot basis. (See Hercules' June 9, 1999 Intent to Participate at 2.)

We received a complete substantive response from Hercules on July

1, 1999, within the 30-day deadline specified in the Sunset Regulations

under section 351.218(d)(3)(i). Hercules claims interested party status

under section 771(9)(C) of the Act as a U.S. manufacturer, producer,

and wholesaler of the subject merchandise. In its substantive response,

Hercules indicates that it is the sole remaining U.S. domestic producer

of nitrocellulose and was the petitioner in the original investigation.

(See Hercules' July 1, 1999 Substantive Response at 1--2.)

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.

In accordance with section 751(c)(5)(C)(v) of the Act, the

Department may treat a review as extraordinarily complicated if it is a

review of a transition order--an order which was in effect on January

1, 1995. See section 751(c)(6)(C) of the Act. The Department determined

that the sunset review of the antidumping duty order on industrial

nitrocellulose from Japan is extraordinarily complicated. Therefore, on

October 12, 1999, the Department extended the time limit for completion

of the preliminary results of this review until not later than December

28, 1999, in accordance with section 751(c)(5)(B) of the

Act.3

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\3\ See Extension of Time Limit for Final Results of Five-Year

Reviews, 64 FR 55233 (October 12, 1999).

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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 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 margins are discussed

below. In addition, Hercules' comments with respect to continuation or

recurrence of dumping and the magnitude of the margins 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, Hercules asserts that the likelihood

of continuation or recurrence of dumping is high if the order is

revoked. (See July 1, 1999 substantive response of Hercules at 3--5).

To support its contention, Hercules points to the drastic decline in

import volumes of the subject merchandise immediately after the

issuance of the order. According to Hercules, after the imposition of

the antidumping order, imports of the subject merchandise virtually

disappeared. 4 Id. The virtual cessation of imports

immediately after the issuance of the order, Hercules further argues,

is highly probative of the likelihood of future dumping. Id.

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\4\ The order was imposed on July 10, 1990. (See footnote 1,

supra.) In 1989 and 1990, imports of the subject merchandise were

487 and 163 metric tons, respectively; however, during 1991 through

1998, the import volumes were as follows: 1991--29; 1992--80; 1993--

20; 1994--8; 1995--8; 1996--10; 1997--0; and 1998--16 metric tons.

(See Hercules' July 1, 1999 substantive response, Attachment 2.)

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Moreover, Hercules indicates that, for the past five years, imports

of the subject merchandise have been at or near zero. 5 Id.

In conclusion, Hercules argues that Japanese manufacturers/exporters of

the subject merchandise have not been able to sell during the

antidumping duty order regime; in other words, Japanese manufacturers/

exporters have to dump in order to export the subject merchandise to

the United States.

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\5\ See footnote 3, supra. During 1994-1998, the average import

volume of the subject merchandise was only 8.4 metric tons, which

was about 2.58 percent of the average imports of 1989 and 1990, or

1.72 percent of 1989 imports alone.

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Consistent with section 752(c) of the Act, the Department considers

the import volumes of the subject merchandise before and after the

issuance of the order. The data supplied by Hercules and those of the

United States Census Bureau IM146s and the United States International

Trade Commission indicate that, since the imposition of the order,

import volumes of the subject merchandise have declined substantially.

6 Moreover, for the period 1994-1998, the United States

International Trade Commission Data shows rather insignificant import

volumes for the subject merchandise. 7 Therefore, the

Department determines that the import volumes of the subject

merchandise decreased significantly after the issuance of the order.

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\6\ See footnote 3, supra. The numbers supplied by Hercules

exactly correspond with those of the U.S. International Trade

Commission Data.

\7\ See footnote 4.

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

SAA at 890, and House Report at 63-64, the Department also considers

whether dumping continued at any level above de minimis after the

issuance of the order. If companies continue dumping with the

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

that dumping would continue were the discipline removed. Because no

administrative review has been

[[Page 57847]]

conducted since the issuance of the order, the margins from the

original investigation are the prevailing margins. Thus, the Department

determines that weighted-average dumping margins for the subject

merchandise have continued at above the de minimis level.

Given that dumping margins above de minimis continue in effect

after the issuance of the order, that the import volumes of the subject

merchandise decreased substantially after the issuance of the order,

and that respondent interested parties have waived their right to

participate in this review, the Department agrees with Hercules'

contention that dumping is likely to continue if the order is revoked.

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 final determination of sales at less-than-

fair-value, published a weighted-average dumping margin for Asahi and

all-others: 66.00 percent. 8 We note that, to date, the

Department has not issued any duty absorption findings in this case.

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\8\ See Final Determination of Sales at Less Than Fair Value:

Industrial Nitrocellulose from Japan, 55 FR 21053 (May 22, 1990).

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In its substantive response, Hercules urges the Department to

report to the Commission the dumping margins from the original

investigation as the margins likely to prevail. (See the July 1, 1999

Substantive Response of Hercules at 6.) Hercules argues that, since the

Department has not conducted any administrative reviews pertaining to

the instant order, the best and only possible recommendation the

Department can make, regarding margins that are likely to prevail, is

to rely upon the rates from the original investigation. Id.

The Department agrees with the Hercules' suggestion pertaining to

the margin that is likely to prevail if the order were revoked. Because

the margins from the original investigation reflect the behavior of

Japanese producers/exporters without the discipline of an order in

place, the Department will provide to the Commission the margins found

in the original investigation. Absent argument and evidence to the

contrary, the Department sees no reason to change its usual practice of

selecting the rate from the original investigation. We will report to

the Commission the company-specific and all-others rate contained in

the Final Results of Review section of this notice.

Final Results of Review:

As a result of this review, the Department finds that 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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Asahi Chemical Industry Co., Ltd............................ 66.00

All Others.................................................. 66.00

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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.

Dated: October 21, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-28063 Filed 10-26-99; 8:45 am]

BILLING CODE 3510-DS-P