Final Results of Expedited Sunset Review: Sparklers From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

ACTION:

Notice of final results of expedited sunset review: Sparklers from the People's Republic of China.

SUMMARY:

On July 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the antidumping duty order on sparklers from the People's Republic of China (64 FR 35588) 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 sunset 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.

EFFECTIVE DATE:

February 3, 2000.

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) 482-5050 or (202) 482-1560, respectively.

SUPPLEMENTARY INFORMATION:

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 in 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, 63 FR 18871 (April 16, 1998) (“Sunset Policy Bulletin”).

Scope

The products covered by this order are sparklers from the People's Republic of China (“PRC”). Sparklers are fireworks each comprising a cut-to-length wire, one end of which is coated with a chemical mix that emits bright sparks while burning. Sparklers are currently classified under Harmonized Tariff Schedule (“HTS”) of the United States subheading 3604.10.00. The HTS subheading is provided for convenience and customs purposes. The written description remains dispositive.

The Department determined that Fritz Companies, Inc.'s 14 inch Morning Glory's are outside the scope of the order. See Notice of Scope Rulings, 60 FR 36782 (July 18, 1995).

History of the Order

On May 6, 1991, the Department issued a final determination of sales at less than fair value on imports of sparklers from the PRC (56 FR 20588). In the final determination of sales at less than fair value the Department assigned the following dumping margins: Gaungxi Native Produce Import & Export Corporation (“Gaungxi”)—1.64 percent, Hunan Provincial F&F Import & Export (Holding) Corporation (“Hunan”)—93.54 percent, and Jiangxi Native Produce Import & Export Corporation (“Jiangxi”)—65.78 percent, and “all others”—75.88 percent. The antidumping duty order on the subject merchandise was published in the Federal Register (56 FR 27946) on June 18, 1991. On July 29, 1993, the Department published the amendment to the final determination of sales at less than fair value and antidumping duty order in accordance with decision upon remand, in which the Department adjusted the margins for Guangxi—41.75 percent, Jiangxi—93.54 percent, and all others—93.54 percent (58 FR 40624).

There have been three administrative reviews of this order and no investigations of duty absorption. The antidumping duty order remains in effect for all producers and exporters of sparklers from the PRC.

Background

On July 1, 1999, the Department initiated a sunset review of the antidumping duty order on sparklers from the PRC pursuant to section 751(c) of the Act (64 FR 35588). On July 13, 1999 we received a Notice of Intent to Participate on behalf of Diamond Sparklers Company (“Diamond”) within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. We received a complete substantive response from Diamond on July 30, 1999, within the deadline specified in section 351.218(d)(3)(i) of the Sunset Regulations. Diamond claimed interested party status under section 771(9)(C) of the Act as a U.S. producer of a domestic like product. Diamond was a petitioner in the original investigation. We did not receive any response from respondent interested parties in this review. As a result, and in accordance with our regulations (19 CFR § 351.218(e)(1)(ii)(C)(2)) we determined to conduct an expedited sunset 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). Therefore, on November 16, 1999, the Department determined that the sunset review of the antidumping duty order on sparklers from the PRC is extraordinarily complicated and extended the time limit for completion of the final results of this review until not later than January 27, 2000, in accordance with section 751(c)(5)(B) of the Act (see 64 FR 62167).

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, Diamond's 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.2 of the Sunset Policy Bulletin (April 16, 1998 (63 FR 18871). 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).

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.

With respect to whether dumping continued at any level above de minimis after the issuance of the order, Diamond argues that over the history of this order the Department has imposed a 93.54 percent dumping margin on all sparklers from the PRC. Dumping continued after the issuance of the order, and continues to the present day. Diamond therefore argues that under the Department's own standard, this order cannot be revoked. Citing to the Department's Sunset Policy Bulletin, Diamond maintains that 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.

With respect to import volumes of the subject merchandise, Diamond states that sparklers enter the U.S. under a single tariff code with other fireworks and, therefore, statistical data on sparklers alone is not available. However, Diamond provided data from the ITC's final determination (based on questionnaire responses) that illustrate a substantial increase of imports prior to the antidumping duty order. See Diamond's July 30, 1999, Substantive Response at 5.

Finally, Diamond concludes that because a dumping margin of 93.54 percent continues to exist, import volumes are increasing, and exporters and producers of the subject merchandise continue to undersell the subject merchandise in the United States, the Department should determine that there is likelihood of the continuation of dumping of sparklers from the PRC if the order were revoked. See Diamond's July 30, 1999, Substantive Response at 5).

As discussed in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, existence of dumping margins after the order is issued 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, the Department may reasonably infer that dumping would continue if the discipline of the order were revoked. After examining published findings with respect to the weighted-average dumping margins in previous administrative reviews, we determined that Chinese manufacturers/exporters continued to dump the subject merchandise after the issuance of the order.

Based on information available from Customs in its annual reports to Congress on the administration of the antidumping and countervailing duty statutes (available on the Department's sunset web site) annual import values have fluctuated between fiscal years 1993 and 1998.

We agree with Diamond that dumping above de minimis rates continued to exist in this case. Given that dumping above de minimis continued, respondent interested parties waived their right to participate in the instant review, and absent argument and evidence to the contrary, the Department determines that dumping would likely continue or recur if the order on sparklers from the PRC 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 margin from the investigation because that is the only calculated rate that reflects the behavior of exporters without the discipline of an order. 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.)

With respect to the magnitude of the margin likely to prevail if the order were revoked, Diamond urges the Department to reject the margins from the original investigation, and to select instead 93.54 percent the dumping margin from the administrative reviews. Diamond bases its argument on the respondents' failure to either request or participate in administrative reviews since the issuance of the order.

As noted above, consistent with the SAA and House Report, the Department normally will provide to the Commission the company-specific margin from the investigation because that is the only calculated rate that reflects the behavior of exporters without the discipline of an order. Further, we stated in the Sunset Policy Bulletin that where a company chooses to increase dumping in order to maintain or increase market share, an increasing margin may be more representative of a company's behavior in the absence of the order. In this case, however, Diamond has merely asserted that a more recent rate is appropriate based on respondents failure to request or participate in an administrative review. Therefore, we disagree with Diamond on selecting 93.54 percent for all producers and exporters as the margin likely to continue if the order is revoked.

Rather, consistent with the Sunset Policy Bulletin we find that the margins from the original investigation are probative of the behavior of exporters of sparklers without the discipline of the order and we will report to the Commission the margins 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 be likely to lead to continuation or recurrence of dumping at the levels indicated below.

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.