Certain Cased Pencils from the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On December 28, 2005, the Department of Commerce (the Department) published in the Federal Register the preliminary results and intent to rescind in part the 2003-2004 administrative review of the antidumping duty order on certain cased pencils (pencils) from the People's Republic of China (PRC). See Certain Cased Pencils from the People's Republic of China; Preliminary Results of Antidumping Duty Administrative Review and Intent to Rescind in Part, 70 FR 76755 (December 28, 2005) (“Preliminary Results”). The period of review (POR) is December 1, 2003, through November 30, 2004. We have now completed the 2003-2004 administrative review of the order. Based on comments received, we have made changes in the dumping margin calculations. Therefore, the final results differ from the preliminary results. For details regarding these changes, see the section of this notice entitled “Changes Since the Preliminary Results.” The final results are listed below in the “Final Results of Review” section.

EFFECTIVE DATE:

July 6, 2006.

FOR FURTHER INFORMATION CONTACT:

Paul Stolz or Charles Riggle, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC, 20230; telephone: (202) 482-4474 and (202) 482-0650, respectively.

Background

On December 28, 2005, the Department published the preliminary results of this review. See Preliminary Results. The POR is December 1, 2003, through November 30, 2004. On January 20, 2006, we extended the deadline for submission of case briefs and rebuttal briefs to February 24, 2006, and March 1, 2006, respectively. We also extended the deadline for submission of surrogate value information until February 14, 2006. On February 14, 2006, Sanford LP, Rose Moon, Inc., General Pencil Company, Inc., and Musgrave Pencil Company (the domestic interested parties) submitted surrogate value information. On February 24, 2006, we received case briefs from respondents China First Pencil Co., Ltd. (CFP)/Three Star Stationery Industry Corp. (Three Star)(CFP/Three Star), Orient International Holding Shanghai Foreign Trade Co., Ltd. (SFTC), and Shandong Rongxin Import & Export Co. Ltd. (Rongxin), and from the domestic interested parties. We received rebuttal briefs from CFP/Three Star, SFTC, Rongxin, and the domestic interested parties on March 1, 2006.

On April 27, 2006, in accordance with section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), the Department extended the time limit for the final results of this review until June 26, 2006. See Certain Cased Pencils from the People's Republic of China: Extension of Time Limit for Final Results of Antidumping Duty Administrative Review, 71 FR 24839 (April 27, 2006).

Due to the unexpected emergency closure of the main Commerce building on Monday, June 26, 2006, the Department is issuing these final results on June 27, 2006, the next business day. See Notice of Clarification: Application of “Next Business Day” Rule for Administrative Determination Deadlines Pursuant to the Tariff Act of 1930, As Amended, 70 FR 24533 (May 10, 2005).

Scope of the Order

Imports covered by this order are shipments of certain cased pencils of any shape or dimension (except as noted below) which are writing and/or drawing instruments that feature cores of graphite or other materials, encased in wood and/or man-made materials, whether or not decorated and whether or not tipped (e.g., with erasers, etc.) in any fashion, and either sharpened or unsharpened. The pencils subject to the order are currently classifiable under subheading 9609.10.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Specifically excluded from the scope of the order are mechanical pencils, cosmetic pencils, pens, non-cased crayons (wax), pastels, charcoals, chalks, and pencils produced under U.S. patent number 6,217,242, from paper infused with scents by the means covered in the above-referenced patent, thereby having odors distinct from those that may emanate from pencils lacking the scent infusion. Also excluded from the scope of the order are pencils with all of the following physical characteristics: 1) length: 13.5 or more inches; 2) sheath diameter: not less than one-and-one quarter inches at any point (before sharpening); and 3) core length: not more than 15 percent of the length of the pencil.

In addition, pencils with all of the following physical characteristics are excluded from the scope of the order: novelty jumbo pencils that are octagonal in shape, approximately ten inches long, one inch in diameter before sharpening, and three-and-one eighth inches in circumference, composed of turned wood encasing one-and-one half inches of sharpened lead on one end and a rubber eraser on the other end.

Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of the order is dispositive.

Partial Rescission

The Department is rescinding this review with respect to Tianjin Custom Wood Processing Co., Ltd. (TCW) because TCW reported it did not export subject merchandise to the United States during the POR. See the Preliminary Results, 70 FR at 76756; see also TCW's February 22, 2005, response to the Department's questionnaire. We reviewed U.S. Customs and Border Protection (CBP) data and found no evidence that TCW made shipments of subject merchandise to the United States during the POR. Moreover, there is no evidence on the record of this segment of the proceeding indicating that TCW exported subject merchandise during the POR. Therefore, we are rescinding this review with respect to TCW.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the “Issues and Decision Memorandum” (Decision Memorandum) from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, dated June 26, 2006, which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum, which is on file in the Central Records Unit, room B-099 of the main Department of Commerce building. In addition, a complete version of the Decision Memorandum can be accessed directly on Import Administration's Web site at http://.ia.ita.doc.gov/frn. The paper copy and the electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of the comments received, we have made changes in the margin calculations for CFP/Three Star, SFTC and Rongxin. The specific calculation changes can be found in the company-specific calculation memoranda dated June 26, 2006. These changes are listed below.

As discussed fully in the Decision Memorandum, the Department corrected the calculation of the surrogate value for pencil slats to account for wood lost when pencil slats are produced from lumber for use in pencil production for CFP/Three Star, SFTC, and Rongxin. In addition, we corrected the calculation of Rongxin's slat surrogate value with respect to the percentage of wood lost when pencils are made from slats. Furthermore, using updated contemporaneous data obtained after publication of the Preliminary Results, we re-calculated the slat surrogate value used for producers that produced slats from timber. Finally, we corrected a ministerial error made in CFP/Three Star's preliminary margin calculation program with respect to the calculation of the value of coal included in the normal value.

Final Results of Review

We determine that the following weighted-average, ad valorem, percentage margins exist for the period December 1, 2003, through November 30, 2004:

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of pencils from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) the cash deposit rates for the reviewed companies will be the rates shown above; (2) for previously reviewed or investigated companies not listed above, that have separate rates, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) the cash deposit rate for all other PRC exporters will be 114.90 percent; and 4) the cash deposit rate for non-PRC exporters will be the rate applicable to the PRC exporter that supplied that exporter.

These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

Assessment

The Department will determine, and CBP will assess, antidumping duties on all appropriate entries of subject merchandise in accordance with these final results of review. We have calculated customer-specific antidumping duty assessment amounts for subject merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total quantity of sales examined. We calculated these assessment amounts because there is no information on the record which identifies entered values or the importers of record. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of review.

Reimbursement of Duties

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

Administrative Protective Orders

This notice also serves as the only reminder to parties subject to administrative protective orders (APOs) of their responsibility concerning the return or destruction of proprietary information disclosed under an APO in accordance with 19 CFR 351.305. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(1) and 771(i) of the Act.

Appendix Issues in Decision Memorandum

Comments

Comment 1: Whether the Department properly valued pencil cores.

Comment 2: Whether the Department should use one or more respondents' market-economy purchase prices of cores, erasers and lacquer to value these factors for respondents that did not purchase these items from a market-economy supplier.

Comment 3: Whether the Department excluded small quantity/high value import transactions from its calculation of surrogate values.

Comment 4: Whether the Department used the wrong HTS category to calculate a surrogate value for Rongxin's kaolin clay.

Comment 5: Whether the Department should continue to apply partial adverse facts available to SFTC.

Comment 6: Whether the surrogate value for labor is correct.

Comment 7: Whether to continue to treat CFP and Three Star as a single entity.

Comment 8: Whether the Department properly accounted for wood loss in its calculation of a surrogate value for slats.

Comment 9: Whether the Department used the correct lumber dimensions to calculate a surrogate value for slats.

Comment 10: Whether to continue to apply total adverse facts available to Guangdong Stationery & Sporting Goods Import & Export Corp.