Final Results of Expedited Sunset Review: Electrolytic Manganese Dioxide From Japan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-806]

Final Results of Expedited Sunset Review: Electrolytic Manganese

Dioxide From Japan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

[[Page 67859]]

ACTION: Notice of final results of expedited sunset review:

Electrolytic manganese dioxide from Japan.

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SUMMARY: On May 3, 1999, the Department of Commerce (``the

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

on electrolytic manganese dioxide from Japan (64 FR 23596) 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

comments 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 Results of

Review section of this notice.

FOR FURTHER INFORMATION CONTACT: Darla D. Brown 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, DC 20230; telephone: (202) 482-

3207 or (202) 482-1560, respectively.

EFFECTIVE DATE: December 3, 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''), and 19 CFR Part 351 (1999)

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, FR 18871 (April 16, 1998) (``Sunset Policy

Bulletin'').

Scope

The merchandise subject to this antidumping duty order is

electrolytic manganese dioxide (``EMD''). EMD is manganese dioxide

(MnO2) that has been refined in an electrolysis process. The

subject merchandise is an intermediate product used in the production

of dry-cell batteries. EMD is sold in three physical forms, powder,

chip, or plate, and two grades, alkaline and zinc chloride. EMD in all

three forms and both grades is included in the scope of the order.

There has been one scope clarification with regard to EMD from

Japan. On January 6, 1992, the Department ruled that high-grade

chemical manganese dioxide (CMD-U) is within the scope of the order.\1\

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\1\ See Electrolytic Manganese Dioxide from Japan; Final Scope

Ruling, 57 FR 395 (January 6, 1992).

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This merchandise is currently classifiable under the Harmonized

Tariff Schedule (``HTS'') item number 2820.10.0000. The HTS item number

is provided for convenience and customs purposes. The written

description remains dispositive.

History of the Order

The Department, in its final determination of sales at less than

fair value (``LTFV''), published two company-specific weighted-average

dumping margins as well as an ``all others'' rate (54 FR 8778, March 2,

1989). The antidumping duty order on EMD from Japan was published in

the Federal Register on April 17, 1989 (54 FR 15244). Since that time,

the Department has conducted three administrative reviews.2

This sunset review covers imports from all known Japanese producers/

exporters. To date, the Department has issued no duty-absorption

findings in this case.

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\2\ See Final Results of Antidumping Duty Administrative Review:

Electrolytic Manganese Dioxide From Japan, 58 FR28551 (May 14,

1993), and Final Results of Antidumping Duty Administrative Reviews:

Electrolytic Manganese Dioxide From Japan, 59 FR 53136 (October 21,

1994).

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Background

On May 3, 1999, the Department initiated a sunset review of the

antidumping duty order on EMD from Japan (64 FR 23596), pursuant to

section 751(c) of the Act. The Department received a notice of intent

to participate on behalf of Chemetals, Inc. (``Chemetals''), and Kerr-

McGee Chemical LLC (``KMC'') (collectively, ``domestic interested

parties'') on May 18, 1999, within the deadline specified in section

351.218(d)(1)(i) of the Sunset Regulations. We received a complete

substantive response from Chemetals and KMC on June 2, 1999, within the

30-day deadline specified in the Sunset Regulations in section

351.218(d)(3)(i). Both Chemetals and Kerr-McGee claimed interested-

party status pursuant to section 771(9)(C) of the Act as U.S. producers

of a like product. In addition, both Chemetals and KMC stated that they

participated in the original investigation and every segment of the

proceeding since the original investigation. We did not receive any

response from respondent interested parties to this proceeding. As a

result, 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 (i.e., an order in effect on January 1,

1995). On September 7, 1999, the Department determined that the sunset

review of the antidumping duty order on EMD from Japan is

extraordinarily complicated and extended the time limit for completion

of the final results of this review until not later than November 29,

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 48579 (September 7, 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 duty 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 duty

order, and it 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, interested parties' 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

[[Page 67860]]

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 duty 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 their substantive response, the domestic interested parties

argue that revocation of the order on EMD from Japan would be likely to

lead to continuation or recurrence of dumping due to the fact that

dumping margins above de minimis have been calculated after the

issuance of the order and import volumes declined sharply following the

imposition of the order.

The domestic interested parties assert that, in administrative

reviews conducted after the imposition of the order, the Department

calculated margins well above de minimis for Tosoh Corporation (see

June 2, 1999, substantive response of the domestic interested parties

at 7). They also argue that imports of EMD from Japan fell from

approximately 19,000 short tons in 1988, the year before the order was

imposed, to approximately 143 short tons in 1989, the year in which the

order was imposed. Moreover, the domestic interested parties assert

that, since the order was imposed, imports of Japanese EMD have

remained at relatively negligible levels (less than one percent of

their pre-order volume (see id. at 8)). Therefore, they conclude that

the sharp decline in import volumes accompanied by the continued

existence of dumping margins above de minimis after the imposition of

the order provides a strong indication that dumping would continue or

recur if the order is revoked.

The Department agrees, based on an examination of the final results

of administrative reviews, that dumping margins above de minimis

levels have continued throughout the life of the order. As discussed in

section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the

House Report at 63-64, if companies continue dumping with the

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

that dumping would continue if the discipline were removed.

With respect to import levels, the Department agrees that imports

of the subject merchandise decreased in 1990, the year following the

imposition of the order. However, since that time, imports of EMD from

Japan have fluctuated greatly, showing no overall trend.4

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\4\ The Department bases this determination on information

contained in U.S. IM146 Reports, U.S. Department of Commerce

statistics, U.S. Department of Treasury statistics, and information

obtained from the U.S. International Trade Commission.

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As explained above, the Department finds that the existence of

dumping margins after the issuance of the order is highly probative of

the likelihood of continuation or recurrence of dumping. A deposit rate

above a de minimis level remains in effect for exports of the subject

merchandise for at least one known Japanese producer/exporter. Given

that dumping has continued over the life of the order and respondent

interested parties waived their right to participate in this review

before the Department, and absent argument and evidence to the

contrary, the Department determines that dumping is likely to continue

or recur if the order is revoked.

Magnitude of the Margin

In the Sunset Policy Bulletin, the Department stated that normally

it will 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, normally the

Department 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.) To date, the Department has not made any duty-absorption

findings in this case.

In their substantive response, the domestic interested parties

suggest that the Department adhere to its normal policy and select the

margins from the original investigation for Mitsui Mining and Smelting

(``Mitsui'') and the ``all others'' rate. However, they recommend that

the Department forward to the Commission the more recently calculated

margin from the second administrative review of 77.43 percent for Tosoh

Corporation (``Tosoh''). The domestic interested parties point out that

Tosoh participated in the first administrative review (1990-91) and

received a rate of 20.43 percent, lower than the 71.91 percent margin

determined for Tosoh in the original LTFV investigation and antidumping

duty order. They argue that Tosoh seemed content with its margin of

20.43 percent and, thus, sought to ``lock in'' that rate and thereby

avoid a possibly higher margin by refusing to participate in the second

(1991-92) and third (1992-93) administrative reviews (see June 2, 1999,

substantive response of the domestic interested parties at 10).

Therefore, the domestic interested parties argue that the Department

should conclude that the dumping margin of 77.43 percent determined in

the 1991-92 and 1992-93 reviews most accurately reflects Tosoh's likely

dumping margin should revocation occur.

We agree with the domestic interested parties that we should

forward to the Commission the rates from the original investigation for

Mitsui and ``all others.'' As for the margin for Tosoh, the Department

disagrees with the domestic interested parties. As noted in the Sunset

Regulations and Sunset Policy Bulletin, the Department may provide to

the Commission a more recently calculated margin for a particular

company where dumping margins increased after the issuance of the order

or if that particular company increased dumping to maintain or increase

market share. Such circumstances are not present in this case. As noted

above, domestic interested parties argued that import volumes actually

declined over the life of the order and the domestic interested parties

did not provide any argument or evidence that Tosoh was attempting to

increase or maintain market share.

Therefore, consistent with the Sunset Policy Bulletin, the

Department determines that the margins calculated in the original

investigation are probative of the behavior of Japanese producers/

exporters of EMD if the order were revoked as they are the only rates

[[Page 67861]]

which reflect the behavior of these producers and exporters without the

discipline of the order in place. As such, the Department will report

to the Commission the company-specific and ``all others'' rates from

the original investigation as 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 duty 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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Mitsui Mining and Smelting (``Mitsui'').................... 77.73

Tosoh Corporation (``Tosoh'').............................. 71.91

All Others................................................. 73.30

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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: November 29, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-31429 Filed 12-2-99; 8:45 am]

BILLING CODE 3510-DS-P