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 January 12, 2005, the Department of Commerce (the Department) published in the Federal Register the preliminary results and rescission in part of the 2002-2003 administrative review of the antidumping duty order on certain cased pencils (pencils) from the People's Republic of China (PRC). The period of review (POR) is December 1, 2002, through November 30, 2003. We have now completed the 2002-2003 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 22, 2005.

FOR FURTHER INFORMATION CONTACT:

Paul Stolz or Erin Begnal, 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) 482-1442, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 12, 2005, the Department published the preliminary results of this review. 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 2115 (Preliminary Results). The POR is December 1, 2002, through November 30, 2003. On February 11, 2005, we received case briefs from 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), the respondents, and Sanford LLP, Musgrave Pencil Company, Rose Moon, Inc., and General Pencil Company, domestic interested parties. We received rebuttal briefs from CFP/Three Star, SFTC, and Rongxin on February 24, 2005, and from the domestic interested parties on February 25, 2005². On May 19, 2005, we rejected Rongxin's rebuttal brief because it contained new argument. Rongxin resubmitted its rebuttal brief on May 23, 2005, in accordance with the deadline set by the Department. On May 26, 2005, we issued a supplemental questionnaire and requested comments from CFP/Three Star on documents we placed on the record from a prior review. CFP/Three Star submitted its response and comments on June 7, 2005. The domestic interested parties submitted comments on CFP/Three Star's submission on June 15, 2005. As described in more detail below in comment 1, on June 15, 2005, the Department placed an additional document on the record of this segment of the proceeding and requested that CFP/Three Star and the domestic interested parties submit comments by June 20, 2005. CFP/Three Star and the domestic interested parties submitted comments on this document on June 20, 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 classified 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.

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; see also; TCW's February 19, 2004, response to the Department's questionnaire. TCW's claim that it did not export subject merchandise during the POR is supported by U.S. Customs and Border Protection (CBP) data and entry documents. 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 Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration, dated July 11, 2005, 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 www.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 made can be found in our calculation memoranda dated July 11, 2005. These changes are listed below.

CFP/Three Star and SFTC

We collapsed CFP with its subsidiaries Shanghai First Writing Instrument Co., Ltd., (First), Shanghai Great Wall Pencil Co., Ltd. (Great Wall), and China First Pencil Fang Zheng Co., Ltd. (Fang Zheng). We converted transportation expenses from Indian rupees to U.S. dollars in the calculation of normal value. We also corrected the calculation of cost of manufacturing in the computer program to exclude packing. In addition, we corrected the computer program to correctly calculate slat consumption for ordinary size pencils.

Final Results of Review

We determine that the following weighted-average, ad valorem, percentage margins exist for the period December 1, 2002, through November 30, 2003:

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. For the companies subject to this review, we calculated exporter-specific assessment rates because there is no information on the record which identifies the importers of record. Specifically, for CFP/Three Star/First/Great Wall/Fang Zheng, SFTC and Rongxin, we calculated duty assessment rates for subject merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total quantity of those sales. 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 C.F.R. 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 C.F.R. 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: CFP and Three Star Affiliation/Collapsing

Comment 2: Surrogate Valuation of Writing Cores

Comment 3: Surrogate Financial Ratios

Comment 4: Pencil Slat Valuation

Comment 5: Clerical Errors: Inland Transportation Charges, Packing Labor, Slat Usage Factors

Comment 6: Regression-Based Labor Rate Calculation

Comment 7: CFP's Subsidiaries

Comment 8: Surrogate Value for Kaolin Clay