```

[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Rules and Regulations]
[Pages 8101-8114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3290]

[[Page 8101]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Part 351

[Docket No. 101130598-2109-03]
RIN 0625-AA87

Antidumping Proceedings: Calculation of the Weighted-Average 
Dumping Margin and Assessment Rate in Certain Antidumping Duty 
Proceedings; Final Modification

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Final rule; Final Modification.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce (``the Department'') is modifying 
its methodology regarding the calculation of the weighted-average 
dumping margins and antidumping duty assessment rate in certain 
segments of antidumping duty proceedings (hereinafter, ``Final 
Modification for Reviews''). Currently, in a review of an antidumping 
duty order conducted under 19 CFR 351.213 (administrative review), 
351.214 (new shipper review), and 351.215 (expedited antidumping 
review) (collectively ``reviews''), the Department usually makes 
comparisons between transaction-specific export prices and average 
normal values and does not offset the amount of dumping that is found 
with the results of comparisons for which the transaction-specific 
export price, or constructed export price, exceeds normal value. 
Several World Trade Organization (``WTO'') dispute settlement reports 
have found that the United States' application of these methodologies 
was inconsistent with its WTO obligations. Under this Final 
Modification for Reviews, the Department will calculate weighted-
average margins of dumping and antidumping duty assessment rates in a 
manner which provides offsets for non-dumped comparisons while using 
monthly average-to-average (``A-A'') comparisons in reviews, 
paralleling the WTO-consistent methodology that the Department applies 
in original investigations. The Department is also modifying its 
practice in five-year (``sunset'') reviews, such that it will not rely 
on weighted-average dumping margins that were calculated using the 
methodology found to be WTO-inconsistent. The schedule for implementing 
these changes is set forth in the ``Timetable'' section in 
SUPPLEMENTARY INFORMATION.

DATES: This Final Rule and Final Modification for Reviews are effective 
April 16, 2012. The modification in the methodology will apply to 
preliminary determinations issued after April 16, 2012.

FOR FURTHER INFORMATION CONTACT: Rachael Nimmo, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone: 202-482-0836.

SUPPLEMENTARY INFORMATION:

Background

    In antidumping duty proceedings, the Department determines margins 
of dumping by comparing normal value with the export price \1\ of 
comparable merchandise. Prior to this Final Rule and Final Modification 
for Reviews, the Department typically has compared normal value and 
export price using the average-to-transaction (``A-T'') method, which 
involved a comparison of the weighted-average normal value \2\ to the 
export price of individual transactions for comparable merchandise. 
When aggregating the results of these comparisons to determine the 
weighted-average margin of dumping in a review, the Department did not 
offset the results of the comparisons for which export price was less 
than normal value by the results of comparisons for which export price 
exceeded normal value.\3\ When determining importer-specific assessment 
rates in a review, the Department similarly aggregated the results of 
importer-specific comparison results and did not offset the comparison 
results for which export price was less than normal value by the 
comparison results for which export price exceeded normal value.
---------------------------------------------------------------------------

    \1\ The Department may also use constructed export prices, if 
appropriate. Because the use of export prices or constructed export 
prices is not relevant to the substance of this notice, the 
Department refers only to export prices hereafter.
    \2\ In addition to weighted-average comparison market prices, 
the Department may base normal value on constructed value or 
appropriately valued factors of production, where required by law or 
regulation.
    \3\ Section 771(35)(A) of the Tariff Act of 1930 (``the Act'') 
defines the dumping margin as the amount by which normal value 
``exceeds'' export price (or constructed export price). Section 
771(35)(B) defines the weighted-average dumping margin as the 
percentage determined by dividing the aggregate dumping margins 
determined for a specific exporter or producer by the aggregate 
export or constructed export price of that exporter or producer.
---------------------------------------------------------------------------

    This methodology was challenged as being inconsistent with the WTO 
General Agreement on Tariffs and Trade 1994 (``GATT 1994'') and the 
Agreement on Implementation of Article VI of the GATT 1994 
(``Antidumping Agreement'') in several disputes.\4\ The WTO Appellate 
Body in US--Zeroing (EC), US--Zeroing (Japan), US--Stainless Steel 
(Mexico), and US--Continued Zeroing (EC) found the denial of offsets 
for non-dumped comparisons in antidumping duty reviews to be 
inconsistent with Article 9.3 of the Antidumping Agreement and Article 
VI:2 of the GATT 1994, either ``as such,'' or ``as applied'' in certain 
reviews, or both.\5\ The WTO Dispute Settlement Body has adopted the 
dispute settlement panel reports, as modified by the WTO Appellate 
Body, which found the denial of offsets for non-dumped comparisons in 
reviews to be inconsistent with the United States' WTO obligations.
---------------------------------------------------------------------------

    \4\  United States-Laws, Regulations and Methodology for 
Calculating Dumping Margins (``Zeroing'') (``US--Zeroing (EC)''), 
WT/DS294/R, WT/DS294/AB/R, adopted May 9, 2006; United States-
Measures Related to Zeroing and Sunset Reviews (``US--Zeroing 
(Japan)''), WT/DS322/R, WT/DS322/AB/R, adopted Jan. 23, 2007; United 
States-Final Anti-Dumping Measures on Stainless Steel from Mexico 
(``US--Stainless Steel (Mexico)''), WT/DS344/R, WT/DS344/AB/R, 
adopted May 20, 2008; United States-Continued Existence and 
Application of Zeroing Methodology (``US--Continued Zeroing (EC)''), 
WT/DS350/R, WR/DS350/AB/R, adopted Feb. 19, 2009.
    \5\ US--Zeroing (EC), WT/DS294/R, WT/DS294/AB/R, para. 
263(a)(i); US--Zeroing (Japan), WT/DS322/R, WT/DS322/AB/R, para. 
190(c) & 190(e); US--Stainless Steel (Mexico), WT/DS344/R, WT/DS344/
AB/R, paras. 165(a) & 165(b); US--Continued Zeroing (EC), WT/DS350/
R, para. 8.1(e), WT/DS350/AB/R, paras. 395(a)(v), 395(d) & 
395(e)(ii).
---------------------------------------------------------------------------

    Additionally, in US--Zeroing (EC), US--Zeroing (Japan), and US--
Continued Zeroing (EC), the WTO Appellate Body found that the reliance 
on weighted-average margins of dumping calculated without granting 
offsets for non-dumped comparisons as the basis for determinations made 
in certain sunset reviews was inconsistent with Article 11.3 of the 
Antidumping Agreement.\6\ In US--Zeroing (Japan), the WTO Appellate 
Body also found that the denial of offsets for non-dumped comparisons 
in original antidumping duty investigations using transaction-to-
transaction (``T-T'') comparisons \7\ was inconsistent with

[[Page 8102]]

Articles 2.4 and 2.4.2 of the Antidumping Agreement.\8\ The WTO 
Appellate Body, in US--Zeroing (Japan), further found that the denial 
of offsets for non-dumped comparisons in antidumping duty new shipper 
reviews was inconsistent with Articles 2.4 and 9.5 of the Antidumping 
Agreement.\9\
---------------------------------------------------------------------------

    \6\ US--Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi); 
US--Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US--Continued 
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395 
(f).
    \7\ Pursuant to section 777A(d)(1)(A) of the Act, in an 
investigation, the Department may determine whether the subject 
merchandise is being sold at less than fair value by comparing 
normal values of individual transactions to the export prices of 
individual transactions for comparable merchandise (the transaction-
to-transaction comparison method). The Department's regulations 
state that the Department will use the transaction-to-transaction 
method only in unusual situations, such as when there are very few 
sales of subject merchandise and the merchandise sold in each market 
is identical or very similar or is custom-made. 19 CFR 
351.414(c)(1).
    \8\ US--Zeroing (Japan), WT/DS322/AB/R, para. 190(b).
    \9\ Id., para. 190(d).
---------------------------------------------------------------------------

    Following these adverse findings, the United States Trade 
Representative (``USTR''), informed the WTO Dispute Settlement Body 
(DSB), that the United States intended to comply with its WTO 
obligations in these disputes.\10\ Pursuant to section 123(f) of the 
Uruguay Round Agreements Act (``URAA''), the USTR notified the House 
Ways and Means and Senate Finance Committees of the adverse findings, 
and further consulted with these committees concerning implementation.
---------------------------------------------------------------------------

    \10\ See WT/DSB/M/213 at para. 2 (minutes of U.S. statement at 
May 30, 2006 DSB meeting), WT/DSB/M/226 at para. 34 (minutes of U.S. 
statement at Feb. 20, 2007 DSB meeting), WT/DSB/M/251 at para. 9 
(minutes of U.S. statement at June 2, 2008 DSB meeting), WT/DSB/M/
266 at para. 57 (minutes of U.S. statement at March 20, 2009 DSB 
meeting).
---------------------------------------------------------------------------

    Pursuant to section 123(g)(1) of the URAA, on December 28, 2010, 
the Department published a notice in the Federal Register proposing to 
modify its methodology for calculating weighted-average margins of 
dumping and antidumping duty assessment rates to provide offsets for 
non-dumped comparisons while using monthly A-A comparisons in reviews, 
in a manner that parallels the WTO-consistent methodology the 
Department currently applies in original antidumping duty 
investigations. Antidumping Proceedings: Calculation of the Weighted 
Average Dumping Margin and Assessment Rate in Certain Antidumping Duty 
Proceedings, 75 FR 81533 (December 28, 2010) (``Proposed Modification 
for Reviews''). In that notice, the Department solicited comments on 
its proposal. On February 1, 2011, the Department extended the period 
of time for the submission of comments. Antidumping Proceedings: 
Calculation of the Weighted Average Dumping Margin and Assessment Rate 
in Certain Antidumping Duty Proceedings, 76 FR 5518 (Feb. 1, 2011).
    In September, 2011, pursuant to section 123(g)(1)(D) of the URAA, 
the USTR submitted a report to the House Ways and Means and Senate 
Finance Committees describing the proposed modification, the reasons 
for the modification, and a summary of the advice USTR had sought and 
obtained from relevant private sector advisory committees pursuant to 
section 123(g)(1)(B) of the URAA. Also in September, 2011, pursuant to 
section 123(g)(1)(E) of URAA, the USTR, working with the Department of 
Commerce, began consultations with both congressional committees 
concerning the proposed contents of the final rule and final 
modification. This notice is published pursuant to section 123(g)(1)(F) 
of the URAA.

Final Modification for Calculating the Weighted-Average Dumping Margin 
and Assessment Rate in Certain Antidumping Duty Proceedings

    After considering all of the comments submitted, the Department is 
adopting the proposed changes to its methodology for calculating 
weighted-average margins of dumping and antidumping duty assessment 
rates to provide offsets for non-dumped comparisons when using monthly 
A-A comparisons in reviews, in a manner that parallels the WTO-
consistent methodology the Department currently applies in original 
antidumping duty investigations. In reviews, except where the 
Department determines that application of a different comparison method 
is more appropriate, the Department will compare monthly weighted-
average export prices with monthly weighted-average normal values, and 
will grant an offset for all such comparisons that show export price 
exceeds normal value in the calculation of the weighted-average margin 
of dumping and antidumping duty assessment rate. Where the weighted-
average margin of dumping for the exporter is determined to be zero or 
de minimis, no antidumping duties will be assessed.
    In adopting this Final Modification for Reviews, the Department's 
intention is to apply a comparison methodology in reviews that 
parallels the WTO-consistent methodology the Department currently 
applies in original investigations,\11\ which will necessarily include 
any exceptional or alternative comparison methods that are determined 
appropriate to address case-specific circumstances. Accordingly, 
similar to the conduct of original investigations, when conducting 
reviews under the modified methodology, the Department will determine 
on a case-by-case basis whether it is appropriate to use an alternative 
comparison methodology by examining the same criteria that the 
Department examines in original investigations pursuant to section 
777A(d)(1)(A) and (B) of the Act.
---------------------------------------------------------------------------

    \11\ See Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin During an Antidumping Investigation; Final 
Modification, 71 FR 77722 (Dec. 27, 2006) (``Final Modification for 
Investigations'').
---------------------------------------------------------------------------

    The Department has rarely applied the transaction-to-transaction 
method in original antidumping duty investigations. In the most recent 
original investigation in which the Department calculated the weighted-
average margins of dumping using T-T comparisons, the Department did 
not grant offsets for non-dumped comparisons.\12\ The WTO Appellate 
Body has found the denial of offsets for non-dumped comparisons in 
original investigations using T-T comparisons to be inconsistent with 
the WTO obligations of the United States. To the extent that any prior 
original antidumping duty investigations using T-T comparisons could be 
construed as establishing a practice of the Department with respect to 
the granting or denial of offsets for non-dumped comparisons when 
calculating the weighted-average margin of dumping, the Department 
hereby withdraws any such practice. Specifically, if the Department 
applies the T-T comparison methodology in a future antidumping duty 
proceeding, it will do so without reference to, or reliance on, any 
prior practice with regard to the issue of offsets because any such 
practice has been withdrawn.
---------------------------------------------------------------------------

    \12\ See Notice of Determination Under Section 129 of the 
Uruguay Round Agreements Act; Antidumping Measures Concerning 
Certain Softwood Lumber Products from Canada, 70 FR 22, 636 (May 2, 
2005).
---------------------------------------------------------------------------

    In order to implement the revised methodology, it is necessary to 
modify certain provisions of the Department's regulations. In 
particular, 19 CFR 351.414(a) and (c) indicate a preference for making 
A-T comparisons in reviews. These provisions will be modified to permit 
application of A-A comparisons in reviews in a manner that parallels 
the comparison methods used in original investigations. In addition, 
sections 351.414(d)(3) and (e) of the Department's regulations set 
forth the time periods over which weighted averages are calculated. 
Section 351.414(d)(3) provides that when applying the A-A method, the 
weighted averages will normally be calculated over the entire period of 
investigation or review, unless another averaging period is deemed 
appropriate. Section 351.414 (e) provides that when applying the A-T 
method in a review, the Department will calculate weighted-average 
normal values on a monthly basis.\13\ The

[[Page 8103]]

Department currently relies on monthly weighted-average normal values 
when calculating dumping margins in reviews, and departing from monthly 
averaging is not necessary to comply with the WTO findings. 
Accordingly, the Department is modifying section 351.414(d)(3) to 
permit weighted averages normally to be calculated on a monthly basis 
in reviews, regardless of the comparison method used. Conforming 
changes to section 351.414(e) will ensure sections 351.414(d)(3) and 
(e) do not contain redundant language. The language for the modified 
provisions is set forth at the end of this notice.
---------------------------------------------------------------------------

    \13\ The Department recognizes that the Statement of 
Administrative Action (``SAA'') states that ``the preferred 
methodology in reviews will be to compare average to individual 
export prices'' (Statement of Administrative Action, p, 843, H. Doc. 
No. 103-316, vol. 1 (1994)); however, in order to implement the 
findings in the WTO dispute settlement reports, the Department will 
restrict the use of that preferred methodology to situations in 
which the Department, on the basis of the facts of the specific 
administrative review, determines that average-to-transaction 
comparisons are more appropriate than average-to-average 
comparisons.
---------------------------------------------------------------------------

    With respect to the findings of inconsistency in certain of the 
Department's sunset reviews,\14\ the Department notes that the 
underlying issue is the methodology for calculating weighted-average 
dumping margins in original investigations and reviews, which is 
addressed by the modifications the Department has made with respect to 
investigations and is making herein with respect to reviews. When 
making a sunset determination, the statute requires administrative 
review margins to be ``considered'' but does not require that the 
Department rely on such margins exclusively or in a particular manner 
in making its determination whether dumping will continue or recur if 
the antidumping order were to be revoked.\15\ Notwithstanding the 
Department's prior practice of relying on margins determined in the 
original investigation and subsequent reviews when determining whether 
dumping is likely to continue in the absence of an antidumping 
order,\16\ the Department will modify its practice in five-year sunset 
reviews, such that it will not rely on weighted-average dumping margins 
that were calculated using the methodology determined by the Appellate 
Body to be WTO-inconsistent in US--Zeroing (EC), US--Zeroing (Japan), 
and US--Continued Zeroing (EC). However, only in the most extraordinary 
circumstances will the Department rely on margins other than those 
calculated and published in prior determinations, pursuant to 19 CFR 
351.218(e)(2).
---------------------------------------------------------------------------

    \14\ US--Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi), 
US--Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US--Continued 
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395 
(f).
    \15\ See section 752(c)(1) of the Act.
    \16\ See e.g., Certain Circular Welded Carbon Steel Pipes and 
Tubes From India, Thailand, and Turkey; Final Results of Expedited 
Five-Year (``Sunset'') Reviews of Antidumping Duty Orders, 76 FR 
66893 (Oct. 28, 2011), and accompanying Issues and Decision 
Memorandum, at Cmt. 1.
---------------------------------------------------------------------------

    The Department does not anticipate that it will need to recalculate 
the dumping margins in the vast majority of future sunset 
determinations to avoid WTO inconsistency, apart from the ``most 
extraordinary circumstances'' provided for in its regulations. Instead, 
the Department will limit its reliance to margins determined or applied 
during the five-year sunset period that were not determined in a manner 
found to be WTO-inconsistent in these disputes. Future dumping margins 
in reviews will be determined in accordance with this Final 
Modification for Reviews. The Department may also rely on past dumping 
margins that were not affected by the WTO-inconsistent methodology, 
such as dumping margins recalculated pursuant to Section 129 
proceedings, dumping margins determined based on the use of adverse 
facts available, and dumping margins where no offsets were denied 
because all comparison results were positive. If the dumping margins 
determined in a manner not found to be WTO-inconsistent in these 
disputes indicate that dumping continued with the discipline of the 
order in place, those dumping margins alone can form the basis for a 
determination that dumping will continue or recur if the order were to 
be revoked. Additionally, if dumping margins decline over the five-year 
sunset period, or if there are no dumping margins during the five-year 
sunset period, decreased volumes may provide another basis to determine 
that dumping is likely to continue or recur if the discipline of the 
order is removed.

Assessment Rates

    Pursuant to section 751(a)(2)(A) of the Act, and 19 CFR 351.212(b), 
the Department will determine, and U.S. Customs and Border Protection 
(CBP) will assess, antidumping duties on all appropriate entries. When 
an administrative review is conducted, and where the weighted-average 
margin of dumping for the exporter or producer is determined to be 
greater than de minimis, the Department will calculate an importer-
specific ad valorem assessment rate for each importer of subject 
merchandise covered by the review. 19 CFR 351.212(b)(1). Importer-
specific assessment rates will be calculated in the same manner as the 
exporter's dumping margin, on the basis of average-to-average 
comparisons using only the transactions associated with that importer 
with offsets being provided for non-dumped comparisons. Where the 
weighted-average margin of dumping for the exporter or producer is 
determined to be zero or de minimis, no assessment rates will be 
calculated and the Department will instruct CBP to liquidate all 
imports from the exporter or producer without regard to antidumping 
duties.

Analysis of Comments Received

    Numerous comments and rebuttal comments were submitted in response 
to the Proposed Modification for Reviews. The Department has carefully 
considered each of the comments submitted. It has grouped and 
summarized the comments according to common themes and has responded 
accordingly.
Average-to-Average Comparison Methodology in Reviews
    Several commentators argue that the proposal to move to an A-A 
comparison methodology in reviews is unnecessarily complex. These 
commentators suggest that compliance can be achieved by simply 
eliminating the use of zeroing in the A-T comparison methodology. They 
note that this would only require the elimination of one line of 
programming.
    One commentator is concerned that the Department has not adequately 
explained why it is necessary to alter its current dumping calculation 
methodology in reviews from an A-T methodology to one using monthly 
weighted averages in both markets. Some request that the Department 
clarify whether it will grant offsets for negative dumping margins only 
against positive dumping margins found in the same month or apply 
negative dumping margins to offset positive dumping margins across the 
entire period of review (POR). Some argue that only a complete POR-wide 
offset will be consistent with the Department's current offset 
methodology applied in original antidumping duty investigations and 
with WTO obligations.
    Many are not in favor of relying on the A-A comparison methodology 
as the preferred method for reviews because of its potential to mask 
dumping. Some commentators argue that using the A-A methodology in 
reviews would not be in compliance with the statute and the SAA, and 
thus would not withstand judicial scrutiny. Eliminating entry-specific 
antidumping duty assessments would violate sections 751(a)(2)(A) and 
(C) of the Act, which require the Department to make entry-specific 
assessments. The preference for a

[[Page 8104]]

transaction-specific approach is confirmed by the SAA, and is supported 
by the statutory language, which indicates the Department will 
determine normal value and export price for ``each entry.''
    A few argue that nothing in the statute provides discretion for the 
Department to use either A-A or T-T in reviews, and that the statutory 
construction would make no sense if Congress intended for any of the 
three methods to be used in both investigations and reviews. Congress 
envisioned and required the Department to determine an individual 
margin of dumping for each U.S. entry, and nowhere indicated that 
margins should be calculated for averaging groups.
    Several commentators note that nothing in the WTO Appellate Body 
(AB) rulings or the WTO Antidumping Agreement requires the Department 
to adopt an A-A approach in reviews. They argue that the Department 
should not confine itself to a single ``one size-fits all'' approach, 
but instead, leave open the option of selecting the comparison method 
(A-A, T-T, or A-T) on a case-specific basis to capture the maximum 
amount of dumping. Some commentators argue that given that the 
preferred method as cited in the SAA is A-T, the Department should keep 
this option open. Some commentators also argue that the T-T method 
would be a good option in many instances, asserting that advancements 
in computer technology have eliminated much of the administrative 
burden associated with the use of the T-T method.
    Department Position: As previously indicated, the Department is 
adopting a methodology that parallels the WTO-consistent methodology it 
adopted earlier in connection with original antidumping duty 
investigations. The Department disagrees that adopting a methodology 
with which it is already familiar and experienced in administering is 
an unnecessarily complex approach. In addition, while the Department 
has previously adopted an interpretation of section 771(35) of the Act 
such that non-dumped A-A comparison results offset the aggregate amount 
of dumping in the numerator of the weighted-average dumping margin, the 
Department has not adopted such an interpretation for the results of A-
T comparisons. The Department finds that this approach preserves the A-
T comparison methodology as a distinct comparison method that is an 
alternative to the A-A comparison method.
    Previous to this modification, the Department has generally used A-
T comparisons in reviews, with monthly average normal values as 
required by section 777A(d)(2) of the Act. The Department did not find 
that it was necessary to depart from the use of monthly average normal 
values to adopt the A-A comparison method in reviews. To facilitate 
contemporaneous comparisons, the Department will utilize monthly 
average export prices in making A-A comparisons in reviews. The monthly 
averages will be compared to monthly average normal values and the 
results will be aggregated with offsets being provided for non-dumped 
comparisons. Those offsets will be provided regardless of the month, 
model, level of trade, etc. for the other comparison(s) found to have 
been dumped.
    With respect to the potential for masked dumping as a reason not to 
prefer the use of A-A comparisons in reviews, the Department does not 
agree that the potential for masked dumping means that A-A comparisons 
are unsuitable as the default basis for determining the weighted-
average dumping margins and antidumping duty assessment rates in 
reviews. Similar to the conduct of original investigations, when 
conducting reviews under the modified methodology, the Department will 
determine, on a case-by-case basis, whether it is appropriate to use an 
alternative comparison methodology by examining the same criteria the 
Department examines in original investigations pursuant to sections 
777A(d)(1)(A) and (B) of the Act.
    With respect to the question of consistency with existing U.S. law, 
the Department does not interpret the Act to prohibit A-A comparisons 
from being utilized as a basis to determine weighted-average dumping 
margins and assessment rates in reviews. Nor does any provision of the 
Act articulate a mandate to use A-T comparisons in reviews. Section 
777A(d)(2) simply directs how A-T comparisons should be made when such 
comparisons are used. This provision differs markedly from section 
777A(d)(1), which specifically provides criteria for selecting a 
comparison methodology in original antidumping duty investigations. The 
Department interprets this statutory structure as mandating certain 
criteria for selecting a comparison methodology in original antidumping 
duty investigations, but leaving the Department considerable discretion 
in selecting an appropriate comparison methodology in reviews. It is, 
therefore, within the Department's discretion to establish criteria for 
the selection of an appropriate comparison methodology in reviews, 
including criteria that differ from, or are similar to, the criteria 
mandated for use in original antidumping duty investigations.
    The Department disagrees with comments suggesting that sections 
751(a)(2)(A) and (C) of the Act preclude the use of A-A comparisons in 
reviews. Section 777A(d) of the Act provides for three distinct 
comparison methodologies by which dumping margins may be determined. 
Section 751(a)(2), in contrast, does not make reference to any specific 
comparison methodology to be used in reviews. Accordingly, the 
Department considers that any of the three comparison methodologies 
satisfies the requirements of section 751(a)(2). Moreover, section 
751(a)(2) does not make reference to either the weighted-average 
dumping margin or the importer-specific antidumping duty assessment 
rate that is the specific subject of this modification. These 
particular results of reviews are not specifically mandated by section 
751(a)(2), but are instead features of the Department's long-standing 
practice in reviews. Both the weighted-average dumping margin and the 
importer-specific antidumping duty assessment rate are the product of 
aggregating comparison results obtained using one of the three 
comparison methodologies. While calculation of these rates depends on 
transaction-specific data, and these rates are applied to entries at 
the time of entry or upon liquidation, they do not involve entry-by-
entry determinations of dumping or antidumping duty assessment. The 
courts have affirmed these features of the Department's practice, 
confirming that section 751(a)(2) does not mandate an entry-by-entry 
determination of dumping and antidumping duties.\17\
---------------------------------------------------------------------------

    \17\ See e.g.,Timken Co. v. United States, 354 F.3d 1334, 1341-
42 (Fed. Cir. 2004), cert den'd 543 U.S. 976 (Nov. 1, 2004); Corus 
Staal BV v. DOC, 395 F.3d 1343, 1347 (Fed. Cir. 2005), cert. denied, 
126 S.Ct. 1023 (Jan. 9, 2006).
---------------------------------------------------------------------------

    With respect to the language of the SAA \18\, this language does 
not clarify the meaning of any statutory provision to the effect that 
A-T comparisons are mandatory or that A-A comparisons are prohibited in 
reviews. Instead, the SAA makes the point that, in contrast to the 
situation with regard to original antidumping duty investigations, a

[[Page 8105]]

preference for A-T comparisons is not inconsistent with Article 2.4.2 
of the AD Agreement. Whereas it has been the Department's long-standing 
practice to prefer A-T comparisons in reviews, this practice has not 
been codified in the statute and it remains within the Department's 
discretion to alter this practice upon providing a reasoned 
explanation. The Department finds adopting a methodology that parallels 
the WTO-consistent methodology it adopted earlier in original 
investigations using A-A comparisons will facilitate the administration 
of a change to comply with WTO dispute settlement findings on zeroing.
---------------------------------------------------------------------------

    \18\ Statement of Administrative Action, at p. 843, H. Doc. No. 
103-316, vol. 1 (1994) (``The Agreement reflects the express intent 
of the negotiators that the preference for the use of an average-to-
average or transaction-to-transaction comparison be limited to the 
``investigation phase'' of an antidumping proceeding. Therefore, as 
permitted by Artcle 2.4.2, the preferred methodology in reviews will 
be to compare average to individual export prices.'')
---------------------------------------------------------------------------

Continued Effectiveness of the Antidumping Remedy
    Several commentators argue that allowing offsets for non-dumped 
comparisons will reduce the effectiveness of U.S. trade laws because it 
would reduce or eliminate the amount of dumping that would otherwise be 
fully captured in the absence of any offsets. In so doing, the proposal 
would go against the current law's mandate that 100 percent of the 
dumping be fully captured. To illustrate this point, some draw on the 
``speeding ticket'' analogy, whereby a driver caught exceeding the 
speed limit could nevertheless avoid the fine by submitting evidence 
that he or she drove below the speed limit on another occasion. One 
commentator noted that the EU and Japan have acknowledged that dumping 
can be masked completely through the provision of offsets by asserting 
that dumping would not exist but for the denial of offsets. These 
commentators also argue that, if the Department decides to provide 
offsets, it should allow itself the greatest flexibility to account for 
the maximum amount of dumping.
    Several commentators suggest that the Department should consider 
all three possible comparison methodologies when conducting reviews, 
and select whichever method captures the maximum amount of dumping. 
Some argue that the T-T method would capture the greatest amount of 
dumping, and that recent technology permits greater use of this 
comparison methodology. Several further suggest that the Department 
should indicate a willingness to use averaging for whichever time 
period captures the most dumping (e.g., daily, weekly, monthly, or 
period-wide). One commentator notes that because many agricultural 
products are perishable, and domestic producers can be harmed via 
short-term (i.e., daily or weekly) price suppression, maximum 
flexibility should be maintained.
    Some commentators suggest that, in addition to maintaining 
flexibility in comparison methodologies, the Department should also 
implement additional changes unrelated to the revised comparison 
methodology on zeroing, to antidumping policies and practices that 
preserve the full effectiveness of the antidumping laws. One 
commentator suggests the Department should give renewed focus to the 
use of provisions addressing fictitious markets and sales that are 
outside the ordinary course of trade, should consider shortening the 
range of months from which the contemporaneous month may be selected, 
and should revise its model match criteria. These commentators argue 
that despite their suggested alternatives, there is no way to come into 
compliance with the WTO findings without seriously compromising the 
effectiveness of the trade remedy laws.
    One commentator argues that while it may be appropriate to invoke 
section 123(g) of the URAA for purposes of modifying the Department's 
regulations, the use of zeroing can be abandoned without the Department 
invoking its authority under section 123 because the Department can 
choose not to apply the zeroing method on a case-by-case basis. This 
party argues that Congress has purposefully imposed section 123 
procedures only on amendments or modifications of regulations and 
written policy guidance. Because application of the zeroing method is 
not pursuant to written policy guidance, U.S. obligations with respect 
to adopted WTO reports, and changes pursuant thereto, have no bearing 
on domestic procedures. Because section 123 imposes certain procedural 
obligations that are not required in order for the Department to 
abandon zeroing, this party urges the Department to clarify that any 
changes undertaken are made pursuant to the agency's general legal 
authority to administer the antidumping laws, and that the Department 
did not rely upon or invoke the procedures called for under section 
123.
    Department Position: The Department has carefully considered all of 
the comments provided in this section 123 proceeding, particularly 
those comments addressing the need to maintain the effectiveness of the 
antidumping remedy, and has determined to adopt this Final Modification 
for Reviews. The Department is not taking this step lightly, and it 
stands to reason that the adoption of this Final Modification for 
Reviews will have some impact on the weighted-average dumping margins 
determined in reviews. Nevertheless, the Department, after fully 
considering the issue, and consulting with USTR and the relevant 
congressional committees, has determined to adopt this Final 
Modification for Reviews in order to address the findings of several 
WTO dispute settlement reports and to bring its practice into 
conformity with the WTO obligations of the United States as determined 
in those reports. The Department considers, moreover, that it has 
adopted a reasoned and balanced approach to implementation that is 
consistent with existing U.S. law and administrable by the agency.
    With respect to the Final Modification for Reviews being a reasoned 
and balanced approach, the Department is adopting a methodology that 
parallels the WTO-consistent methodology the Department previously 
adopted in response to WTO dispute settlement reports relating to 
investigations. This new methodology for reviews will be the default 
methodology in all reviews for which this Final Modification for 
Reviews is effective; however, the Department does retain the 
discretion, on a case-by-case basis, to apply an alternative 
methodology, when appropriate. The Department retained similar 
discretion in investigations and has only needed to exercise it in a 
limited number of investigations since the adoption of the Final 
Modification for Investigations.\19\
---------------------------------------------------------------------------

    \19\ See Final Modification for Investigations, 71 FR 77722 
(Dec. 27, 2006).
---------------------------------------------------------------------------

    With respect to this Final Modification for Reviews being 
consistent with existing U.S. law, the courts have held, in more than 
thirty cases, that while zeroing is a reasonable interpretation of the 
statute, it is a reasonable interpretation of an ambiguous provision of 
the statute. The ambiguity recognized by the Court of Appeals for the 
Federal Circuit means that it is within the Department's discretion to 
alter or abandon its zeroing methodology upon providing a reasoned 
explanation.\20\ The Department is hereby altering that methodology, by 
adopting an A-A comparison methodology in reviews that parallels the 
WTO-consistent methodology adopted in investigations, and providing 
offsets when it aggregates the results of

[[Page 8106]]

those comparisons. Consistent with this interpretation of the statute 
and application of this methodology, the Department disagrees with 
those comments that suggest it is not capturing 100 percent of the 
dumping. The Department will capture 100 percent of the dumping that is 
determined to exist pursuant to this methodology. Moreover, alternative 
methodologies will remain available when determined to be appropriate 
on a case-by-case basis.
---------------------------------------------------------------------------

    \20\ Timken Company Ltd. v. United States, 354 F.3d 1334, 1342 
(Fed. Cir. 2004) (`` * * * while the statutory definitions do not 
unambiguously preclude the existence of negative dumping margins, 
they do at a minimum allow for Commerce's constructions. Basically, 
one number `exceeds' another if it is `greater than' the other, 
meaning it falls to the right of it on the number line.''); see also 
Corus Staal BV v. Dept. of Commerce, 395 F.3d 1343, 1347 (Fed. Cir. 
2005).
---------------------------------------------------------------------------

    With respect to this Final Modification for Reviews being 
administrable by the Department, as previously indicated, the 
Department is adopting a methodology that parallels the WTO-consistent 
methodology it adopted earlier in original antidumping duty 
investigations using A-A comparisons. In so doing, the Department has 
adopted a methodology with which it is already familiar and experienced 
in administering. This will facilitate the administration of a change 
impacting the 188 reviews the Department conducts in an average year. 
The Department is not adopting the comments suggesting that it 
calculate dumping margins on the basis of A-A, T-T, and A-T comparison 
methodologies, and rely on the methodology providing the highest 
weighted-average margin of dumping. Such a proposal would entail 
substantial additional work in every case which is not administratively 
feasible given the statutory time constraints present in every 
proceeding and the Department's limited resources. Moreover, while such 
alternative methodologies remain available to the Department on a case-
by-case basis, the Department expects to use the A-A comparison 
methodology, with offsets, in most reviews.
    With regard to comments suggesting that the Department alter other 
aspects of its methodology having nothing to do with the issue of 
zeroing, the Department notes that the purpose of this proposal is to 
bring the United States into conformity with its WTO obligations as 
articulated in the dispute settlement reports cited above. These 
suggestions are beyond the scope of this section 123 proceeding. When 
these issues arise in a particular review, parties are free to suggest 
that the Department reconsider them in the context of that particular 
proceeding, as appropriate.
    With regard to comments suggesting that the Department need not 
utilize a section 123 proceeding in order to adopt changes to its 
methodologies to address the findings in the above-cited WTO dispute 
settlement reports, these comments are inapposite. As is clear from the 
on-going proceeding in which the comments were submitted, the 
Department has determined to utilize the procedures of section 123 to 
adopt these changes. Whether the Department could have made these 
changes outside of section 123 is irrelevant. The Department has 
determined that, in this case, it was appropriate to undertake a 
section 123 proceeding, with all of its attendant comment and 
consultation processes, in order to complete the adoption of these 
significant changes in its practice.
Explicit Total Prohibition of Zeroing
    A number of commentators argue that the Department should state 
explicitly that it will grant offsets when the export price exceeds the 
normal value, and specifically eliminate the zeroing methodology. Some 
of these commentators suggest that the Department should clearly state 
that it will grant offsets equal to the full difference between normal 
value and export price when calculating dumping margins using the A-A 
comparison methodology in reviews. These commentators note that the 
proposed regulations do not explicitly state that the Department will 
provide offsets when calculating the dumping margin. Some commentators 
suggest that the Department include explicit text in the Final 
Modification for Reviews, the regulations, or both, that unequivocally 
eliminates zeroing regardless of the comparison methodology employed, 
and regardless of any case-specific circumstances. Some assert that any 
elimination of a subset of comparisons (i.e., denial of offsets) is a 
violation of the United States' WTO obligations. In their view, an 
explicit prohibition of zeroing in all instances is necessary to ensure 
full compliance with WTO rulings and encourage other countries to 
comply with their commitments.
    Department Position: With this Final Modification for Reviews, the 
Department is taking all steps necessary to address the findings of the 
WTO dispute settlement reports at issue and to come into compliance 
with its WTO obligations. As a result of this modification, the new, 
normal comparison methodology to be used in reviews will be the A-A 
comparison methodology (on a monthly basis) and offsets will be 
provided when the results of those comparisons are aggregated for 
purposes of determining the weighted-average dumping margin. This new 
methodology will parallel the WTO-consistent methodology the Department 
currently uses in original investigations.
    It is not necessary, appropriate or desirable for the Department, 
in this Final Modification for Reviews, to go beyond the findings made 
in the WTO dispute settlement reports at issue by adopting a total 
prohibition of zeroing regardless of comparison method or case-specific 
circumstance. The dispute settlement reports at issue address only 
certain types of comparisons in particular circumstances, such that a 
total prohibition of zeroing is not necessary to come into compliance. 
With respect to the findings regarding the calculation of weighted-
average dumping margins and antidumping duty assessment rates in 
reviews, the Final Modification for Reviews achieves compliance with 
the dispute settlement findings in that it adopts a methodology for 
these reviews that parallels the WTO-consistent methodology that is 
currently being applied in original investigations. The methodologies 
and interpretations set forth and adopted in the Final Modification for 
Reviews fully address the findings of WTO inconsistency.
Clarification on the Application of an Alternative Comparison 
Methodology
    Several parties request clarification as to which circumstances 
would trigger the use of an alternative comparison methodology, and 
whether zeroing would be used in the alternative calculation 
methodology. These commentators also encourage the Department to 
narrowly tailor the circumstances under which an alternative comparison 
methodology is used. One commentator notes its concern that the 
reference to an alternative methodology in the Proposed Modification 
for Reviews is ambiguous, and will lead to parties manipulating the 
system for a certain preferred comparison methodology.
    Some commentators remind the Department that if it is considering 
the use of the targeted dumping methodology as an alternative 
methodology, this methodology is to be employed as an exception, in 
very limited circumstances. One commentator suggests the Department 
should develop an overall final rule with regard to targeted dumping 
that is explicitly consistent with Article 2.4.2 of the Antidumping 
Agreement.
    Some commentators state that the targeted dumping methodology was 
not intended to apply to reviews, and request that the Department 
explicitly state that it will not employ targeted dumping in this 
context.
    Department Position: In its Final Modification for Reviews, the 
Department provides additional

[[Page 8107]]

clarification of the circumstances that could trigger the use of an 
alternative comparison methodology. The Proposed Modification for 
Reviews indicated that the Department would use monthly A-A 
comparisons, except where it determines that application of an 
alternative comparison method is more appropriate. The Department also 
indicated its intent to apply the methodology in a manner that 
parallels the WTO-consistent methodology the Department currently 
applies in investigations.\21\
---------------------------------------------------------------------------

    \21\ Proposed Modification for Reviews, 75 FR at 81534.
---------------------------------------------------------------------------

    In this Final Modification for Reviews, the Department clarifies 
that because the methodology being applied will parallel the WTO-
consistent methodology that the Department currently applies in 
original investigations, it will necessarily include any exceptional or 
alternative comparison methods determined appropriate to address case-
specific circumstances. The Department's regulations specifically 
describe three types of comparison methodologies that might be used to 
determine margins of dumping and antidumping duty assessment rates. 
Although the Final Modification for Reviews adopts the A-A method as 
the default method in reviews, the Department may determine to use any 
of the alternative comparison methodologies when deemed appropriate in 
a particular case.
    The Department determines that it would be inappropriate to further 
speculate as to either the case-specific circumstances that would 
warrant the use of an alternative methodology in future reviews, or 
what type of alternative methodology might be employed. These 
determinations would be highly dependent on the facts of the individual 
proceeding. However, as is the case with all administrative 
proceedings, interested parties will have the opportunity to comment on 
whether an alternative comparison method is warranted during the normal 
course of the review.
Assessment Rate Calculations
    Some commentators request clarification as to how the Department 
intends to calculate antidumping duty assessment rates. A few request 
that the Department specifically clarify that it will continue to 
calculate importer-specific antidumping duty assessment rates. Some 
commentators argue the Proposed Modification for Reviews raises the 
possibility that antidumping duty assessment rates could be impacted by 
the level of dumping on other importers' entries, which contravenes the 
current statutory and regulatory requirements that the Department 
determine the level of dumping required for each entry during the 
review period and that it determine the assessment rate on an importer-
specific basis. Some commentators suggest that the Department state 
that it will calculate antidumping duty assessment rates for individual 
importers without the zeroing method.
    A few commentators suggest that before issuing a final section 123 
determination, the Department should consider issuing a separate notice 
identifying any proposed changes in its calculation of importer-
specific assessment rates necessitated by the proposed change in the 
Department's methodology to permit additional public comments. It is 
further suggested that the Department release for public comment the 
standard calculation program that it intends to use in reviews.
    Department position: For purposes of this Final Modification for 
Reviews, the Department is providing additional explanation about the 
antidumping duty assessment methodology being adopted. The Department 
has determined that a further or separate comment period is not 
justified. The calculation program language, including any antidumping 
duty assessment determinations, particular to any specific review, will 
be available to parties through the Department's usual disclosure 
process and parties are free to comment on it during the course of the 
individual review.
    With respect to the issue of assessment rates, when a review is 
conducted applying the A-A comparison methodology, and the weighted-
average margin of dumping for the exporter or producer is determined to 
be zero or de minimis, no assessment rates will be calculated and the 
Department will instruct CBP to liquidate all imports from the exporter 
or producer without regard to antidumping duties, regardless of 
importer.
    When the weighted-average margin of dumping for the exporter or 
producer is determined to be greater than de minimis, based on the A-A 
comparison methodology, the Department will perform an additional 
calculation to determine the assessment rate for each individual 
importer that purchases from the exporter or producer in question. This 
additional calculation will effectively repeat the first calculation 
performed at the exporter or producer level; however, in this case, the 
export transactions involved in the calculation will be limited to 
those involving merchandise imported by the individual importer. The 
monthly, weighted-average export prices of those transactions will be 
compared to monthly normal values, and the results will be aggregated 
with offsets being provided for non-dumped comparisons. Those offsets 
will be provided on an importer-specific basis in the aggregation, 
regardless of the month, model, level of trade, etc. for the other 
comparison(s) found to have been dumped.
Comments on the Proposed Regulations
    Several commentators note that the proposed rule at Sec.  
351.414(c)(1) does not provide sufficient clarification of what 
constitutes ``a particular case.'' The commentators argue that without 
further clarification of the term, the investigating authority would 
have excessive discretion in interpreting and implementing the 
regulation. Therefore, the commentators request the Department to 
specify, in the final regulations, the exceptional circumstances that 
would allow the use of an alternative comparison methodology. These 
commentators suggest that the language of Sec.  351.414(c)(1) regarding 
choice of method should be clarified to indicate when and how the 
Secretary might choose an alternative comparison methodology by making 
clear the circumstances in which it may find it ``more appropriate'' to 
deviate from its proposed methodology and use a ``different comparison 
method'' to calculate dumping margins and antidumping duty assessment 
rates in a review. One commentator goes further and suggests that the 
Department specify not only the specific circumstances that make it 
appropriate to deviate from the preferred methodology, but also which 
alternative comparison methodology would be used in particular 
circumstances.
    Several commentators note that the proposed rules do not specify 
that zeroing will not be used. Therefore, these commentators request 
that the final rule specifically include a provision for granting 
offsets for non-dumped sales in all comparison methodologies. One 
commentator suggests clarification of the language of Sec.  
351.414(d)(3), with respect to the comparison of weighted-average 
monthly export price or constructed export price to the weighted-
average normal value for the contemporaneous month. Specifically, the 
commentator suggests that it be made clear that while aggregating the 
comparisons of different months covered in a review, the

[[Page 8108]]

Secretary will provide offsets for those comparisons which result in 
negative dumping margins.
    Department Position: The Department disagrees that additional 
clarification of the regulations is necessary or appropriate. The 
revised regulations describe three types of comparison methodologies 
that might be used to determine margins of dumping and antidumping duty 
assessment rates. The overarching purpose of 19 CFR 351.414 is to 
implement section 777A(d) of the Act and to set forth the three 
statutory methodologies for establishing and measuring dumping 
margins.\22\ Section 351.414(c), as revised by this Final Rule and 
Final Modification for Reviews, sets forth the default comparison 
methodology to be used in different contexts, and Sec.  351.414(d) 
describes generally how the A-A method will be applied. The revised 
regulation makes clear that the A-A comparison methodology will be the 
default methodology in all reviews for which the Final Rule and Final 
Modification for Reviews applies. The Department has also explained 
that because the methodology being adopted will parallel the WTO-
consistent methodology the Department currently applies in original 
investigations, it will necessarily include any exceptional or 
alternative comparison methodologies determined appropriate to address 
case-specific circumstances. The Final Rule allows sufficient 
flexibility for the Department to apply alternative comparison 
methodologies when necessary.
---------------------------------------------------------------------------

    \22\ See Antidumping Duties Countervailing Duties, 62 FR 27296, 
27374 (May 19, 1997) (Preamble, Final Rule).
---------------------------------------------------------------------------

    The Department has always retained discretion under its regulations 
to apply any of the three comparison methodologies in any context, and 
has exercised this discretion only in a limited number of 
circumstances. It would be inappropriate to further speculate as to 
which case-specific circumstances might warrant the use of an 
alternative comparison methodology in future reviews as this 
determination would be highly dependent on the facts of the individual 
proceeding. Because any description of such circumstances would be 
speculative, at best, the revised regulations do not specify the 
exceptional circumstances that might trigger the use of an alternative 
comparison methodology. Such questions are best addressed in the 
context of individual proceedings. As is the case with all proceedings, 
interested parties would have the opportunity to comment on whether an 
alternative comparison methodology is warranted during the normal 
course of the proceeding.
    The Department further disagrees that the revised regulations must 
specifically indicate that offsets will be provided. The purpose of the 
regulation is to describe in general terms the comparison methodologies 
available, and the default methodology to be employed in different 
contexts. Greater specificity as to when offsets will be provided under 
each comparison methodology is beyond the intended purpose of the 
regulation, and is unnecessary for purposes of adopting a methodology 
that is WTO-consistent. The Department has already made clear that its 
revised methodology for reviews will parallel the WTO-consistent 
methodology the Department currently applies in original 
investigations, and that offsets will be provided when using this 
methodology. The Department has been granting offsets in original 
investigations since 2007 without specific regulatory language 
directing it to do so. The Department has further explained, above, how 
assessment rates will be determined for individual importers. The 
revised regulations coupled with the descriptions contained in this 
Final Modification for Reviews and the Department's responses to 
comments are sufficient. The Department does not consider that the 
revised regulations require further elaboration. Furthermore, as more 
fully explained in the Explicit Total Prohibition of Zeroing section of 
this notice, above, the Department disagrees that it is either 
necessary or appropriate to adopt a total prohibition--either explicit 
or implicit--of zeroing, regardless of the comparison methodology or 
case-specific circumstance. The methodologies and preferences set forth 
in this Final Modification for Reviews and the revised regulations, 
fully address the findings of WTO inconsistency.
Sunset Determinations
    Many commentators welcome the United States' recognition that it 
should not rely on dumping margins based on the zeroing methodology 
when conducting sunset reviews. These commentators agree that 
international obligations prohibit the use of dumping margins 
calculated with zeroing for purposes of sunset determinations. One 
commentator argues that the Supreme Court's decision in Murray v. 
Charming Betsy, 6 U.S. (2 Cranch.) 64, 118 (1804) (Charming Betsy), 
compels the Department to terminate its use of zeroing in sunset 
reviews immediately in order to avoid violating the United States' 
international obligations. See Fed.-Mogul Corp. v. United States, 63 
F.3d 1572, 1581 (Fed. Cir. 1995) (citing Charming Betsy, 6 U.S. (2 
Cranch.) at 118). Several commentators argue that failure to 
recalculate dumping margins would result in costly and unnecessary 
litigation in light of the ruling in US--Zeroing (Japan), in which the 
Appellate Body found that reliance on dumping margins based on the 
zeroing methodology in sunset reviews is inconsistent with U.S. WTO 
obligations.
    Some commentators argue that the Proposed Modification for Reviews 
does not sufficiently account for the many sunset reviews currently 
pending where past dumping margins were based on zeroing. Many suggest 
that the Department should recalculate all dumping margins relied upon 
in sunset reviews using the new WTO-consistent methodology. These 
commentators point out that dumping margin calculations and, hence, 
zeroing are relevant to determining both whether revocation of an order 
would be likely to lead to a continuation or recurrence of dumping and 
the magnitude of the dumping margin likely to prevail if the 
antidumping order were revoked. Another commentator goes on to observe 
that the Department must evaluate the change in dumping margins over 
time to ascertain changes in the exporters' pricing behavior as part of 
its sunset determinations. To conduct a trends analysis of this sort, 
it is necessary that the dumping margins be calculated in a consistent 
manner over time, which can only be done by eliminating the zeroing 
methodology from all calculations.
    Certain commentators argue that the Department correctly recognized 
in the Proposed Modification for Reviews that it is not precluded from 
recalculating dumping margins from prior proceedings to eliminate 
zeroing for sunset reviews. One commentator points out that sections 
752(c)(1) & (3) of the Act direct the Department to consider the prior 
rates it has calculated, not simply to adopt them wholesale, and that 
the Department may consider such other price, cost, market, or economic 
factors it deems relevant (See Sec.  752(c)(2) of the Act). Another 
commentator argues that, regardless of whether certain dumping margins 
form the basis for the sunset determination, the statute (section 
751(c) of the Act) requires the Department to consider all dumping 
margins determined during the five-year period, and therefore, 
recalculation cannot be avoided. A few other commentators request that 
the Department add clarifying language to 19 CFR 351.414 to clearly 
state that it will not rely on dumping margins that

[[Page 8109]]

contain zeroing in future sunset reviews, that it will recalculate 
dumping margins that contain zeroing in future sunset reviews, or both.
    Several commentators urge that the Department should stop relying 
on dumping margins that contain zeroing in sunset reviews immediately. 
One commentator argues that, for sunset reviews, there is no reason to 
delay implementation until 60 business days after the date of 
publication of the Final Modification for Reviews because the proposed 
change is only to the Department's practice, and no change is proposed 
to its regulation.
    Other commentators make more specific proposals for implementing 
the new practice in sunset reviews. One such proposal is for the 
Department to recalculate dumping margins without zeroing upon a 
showing by a respondent company that its individual dumping margin or 
the ``all others'' dumping margin would be zero or de minimis. Another 
commentator proposes that the Department conduct a changed 
circumstances review to determine whether dumping would be likely to 
continue or recur if the order were revoked upon a showing that the 
dumping margins without zeroing in three reviews completed after 
January 23, 2007, are zero or de minimis. One other commentator 
requests that the Department both recalculate dumping margins in a 
sunset review to eliminate zeroing, effective immediately, and then 
transmit to the ITC the non-zeroed dumping margins that are likely to 
exist if an order were revoked effective for sunset reviews initiated 
after the publication of the proposed rules. One commentator concerned 
about sunset reviews contends that the Department only suggests it will 
use section 129 to implement the DSB's recommendations and rulings in 
US--Continued Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R (DS 
350), but does not commit to do so. This commentator asks the 
Department to state clearly that it will implement DS 350 under section 
129 when making its determination. This commentator also contends that 
there is no impediment to reopening prior sunset determinations under 
section 129.
    Department Position: In response to comments from several parties, 
in the Final Modification for Reviews, the Department clarified that 
when making sunset determinations, it will modify its practice such 
that it will not rely on dumping margins determined in a manner found 
to be WTO-inconsistent in US--Zeroing (EC), US--Zeroing (Japan), US--
Stainless Steel (Mexico), and in US--Continued Zeroing (EC). While it 
is possible that in some instances, dumping margins will need to be 
recalculated to avoid reliance on such dumping margins, the Department 
finds that those situations can be addressed on a case-specific basis.
    When determining whether revocation of an antidumping order would 
be likely to lead to continuation or recurrence of dumping, section 
752(c)(1) of the Act directs the Department to consider dumping margins 
determined during the original investigation and in subsequent reviews, 
and import volumes of the subject merchandise. The Department's 
regulations further provide that only in the most extraordinary 
circumstances will the Department rely on dumping margins other than 
those calculated and published during prior determinations. 19 CFR 
351.218(e)(2)(i). The Department expects that in the vast majority of 
cases, it will have a sufficient number of dumping margins, determined 
in a manner not found to be WTO-inconsistent in these disputes, and 
sufficient information pertaining to import volumes, upon which to base 
its sunset determinations. Future dumping margins in reviews will be 
calculated in accordance with this Final Modification for Reviews. 
Furthermore, the Department may also rely on past dumping margins 
determined in a manner not found to be WTO-inconsistent in these 
disputes, such as dumping margins recalculated pursuant to section 129 
proceedings, dumping margins determined on the basis of adverse facts 
available and dumping margins where no offsets were denied because all 
comparison results were positive. Additionally, if dumping margins 
declined over the five-year period, or if there are no dumping margins, 
decreased volumes provide another basis that indicates whether dumping 
is likely to continue or recur if the discipline of the order is 
removed.
    Although the Department will evaluate each sunset determination on 
a case-by-case basis to determine whether recalculations are needed, 
the Department does not anticipate that, apart from the ``most 
extraordinary circumstances'' already provided for in its regulations, 
it will need to rely on dumping margins other than those published in 
prior determinations in order to avoid reliance on margins determined 
in a manner found to be WTO-inconsistent in these disputes. For these 
reasons, the Department disagrees that it is necessary to adopt a 
practice or methodology which assumes that previously determined 
dumping margins will always need to be recalculated in the context of 
sunset reviews.
    The Department disagrees that it is required to recalculate dumping 
margins determined in a manner found to be WTO-inconsistent in these 
disputes that were calculated during the five-year period so that it 
may examine dumping margin trends over time. When determining whether 
dumping is likely to continue in the absence of an antidumping duty 
order during a five-year sunset review, the Department looks to whether 
dumping continued at any level after the issuance of the order.\23\ 
While section 752(c)(1) of the Act directs the Department to 
``consider'' previously determined dumping margins as the basis for its 
likelihood determination, there is no requirement that all dumping 
margins determined during that period form the basis for deciding 
whether the order should be continued. Accordingly, the Department does 
not agree that all dumping margins calculated during the five-year 
sunset period must be recalculated as a matter of course in order for 
the U.S. to be compliant with the statute.
---------------------------------------------------------------------------

    \23\  See Certain Circular Welded Carbon Steel Pipes and Tubes 
From India, Thailand, and Turkey; Final Results of Expedited Five-
Year (``Sunset'') Reviews of Antidumping Duty Orders, 76 FR 66893 
(Oct. 28, 2011), and accompanying Issues and Decision Memorandum, at 
Cmt. 1; see also Statement of Administrative Action, at 889 and 890, 
H. Doc. No. 103-316, vol. 1 (1994); the House Report, H. Rep. No. 
103-826, pt. 1, at 63-64 (1994).
---------------------------------------------------------------------------

    The Department further disagrees with the suggestion that it should 
modify section 351.414(d) of its regulations to indicate that the 
Department will recalculate dumping margins in sunset determinations 
using the A-A comparison methodology. The Department has already 
indicated that it does not anticipate that it will need to recalculate 
dumping margins other than in the most extraordinary circumstances, and 
such circumstances are already provided for in its regulations. See 19 
CFR 351.218(e)(2)(i). Accordingly, those instances where the Department 
may need to rely on dumping margins other than those previously 
determined can be addressed pursuant to 19 CFR 351.218(e)(2)(i) on a 
case-specific basis.
    The Department has further clarified that this Final Modification 
for Reviews will apply to all sunset reviews pending before the 
Department for which either preliminary results of sunset review, or 
expedited final results of sunset review are issued more than 60 days 
after the date of publication of the Department's Final Modification 
for Reviews. The 60-day period will allow sufficient time

[[Page 8110]]

prior to issuance of a preliminary sunset determination, or a final 
expedited sunset determination, for parties to provide comments within 
the context of each individual proceeding. For reasons fully set forth 
in response to comments on the Effective Date of Implementation section 
of this notice, the Department finds this to be an adequate amount of 
time to permit parties and the Department to respond to novel and 
complex issues that arise as a result of implementing the modified 
regulations. The Department does not find that a separate notice and 
comment period is necessary.
    The Department finds the commentator's request that it commit to 
implementing ``as applied'' findings of inconsistency through a section 
129 proceeding in certain sunset reviews to be beyond the scope of this 
section 123 determination. See Implementation through Section 129 
Proceedings and Application to Completed Reviews section of this 
notice. The purpose of this Final Modification for Reviews is not to 
address or fix how the Final Modification for Reviews is to be applied 
in the specific proceedings that were challenged, but rather is to 
address the broad elements of the prior practice that were found WTO-
inconsistent. The Department has addressed the inconsistencies found 
with respect to sunset reviews by including a modification of the 
methodology that will be applied in future sunset reviews. Whether any 
particular section 129 proceeding will be requested by the Office of 
the USTR for certain sunset reviews is beyond the scope of this Final 
Modification for Reviews.
Transaction-to-Transaction Comparisons in Investigations
    A few commentators requested clarification concerning the 
Department's use of the T-T comparison methodology in original 
antidumping duty investigations. One commentator interpreted the 
Department's statement to signify that the Department would provide 
offsets for non-dumped transactions when applying the T-T methodology. 
Others requested confirmation that it will provide offsets for non-
dumped sales when using this comparison methodology.
    Department Position: In its Proposed Modification for Reviews, the 
Department stated that ``to the extent that any prior original 
antidumping duty investigations using T-T comparisons could be 
considered as establishing a practice of the Department with respect to 
the granting or denial of offsets for non-dumped comparisons when 
calculating the weighted average margin of dumping * * *, the 
Department proposes to withdraw any such practice.'' 76 FR 81534. In 
its Final Modification for Reviews, the Department has now clarified 
that to the extent that any prior original antidumping duty 
investigations using T-T comparisons could be considered an established 
practice of the Department with respect to the denial of offsets for 
non-dumped comparisons when calculating the weighted average margin of 
dumping, the Department withdraws any such practice. Specifically, when 
the Department applies the T-T comparison methodology in a future 
proceeding--regardless of whether offsets are provided--it will do so 
without reference to or reliance on any prior practice because, such 
practice has been withdrawn.
Effective Date of Implementation
    A number of commentators propose that the Department implement the 
new methodology in reviews initiated 60 days or later after the date of 
the publication of the Final Modification for Reviews. Some of these 
parties explain that applying the new method to reviews that are 
pending as of the effective date would confuse interested parties in 
several different ways. These parties argue that, due to the 
complicated nature of this new policy, the Department is likely to face 
many complex and novel issues concerning its case-specific application.
    Some commentators claim that implementing the new methodology in 
reviews that have already been initiated would be unfair to all parties 
who base decisions on whether to request and/or participate in reviews 
on the application of certain standard methodologies. Some commentators 
argue that because the date of the preliminary results of review for a 
proceeding can be subject to circumstances in the individual 
proceeding, the methodology applied could differ among proceedings that 
were initiated on the same day, which they claim would result in 
arbitrary treatment. One party argues that the arbitrariness of the 
effective date would provide an incentive for respondents to create 
complexity to slow the process or for domestic parties to neglect 
inadequacies to expedite the process. They contend that the statute 
intends for neither scenario and many of these concerns can be 
mitigated by applying the final rules to newly initiated reviews.
    Other commentators argue that the Department's proposed effective 
date is too long and takes unnecessary time to implement the new 
policy. Some commentators cite to the Final Modification for 
Investigations (71 FR 77722), as precedent, and note that in that 
instance, the Department applied the new methodology to all 
investigations that were pending before the Department. Other 
commentators suggest that the Department apply the new method to all 
reviews where the final results are scheduled to be issued more than 60 
days after the date of publication.
    Some commentators argue that, because it only takes a simple 
programming modification to implement the final rule, the 60-day 
implementation period is too long even for a review for which the 
preliminary results have been issued. Several of these commentators 
argue that faster implementation will pose less litigation risk to the 
United States and result in a reduced litigation burden for all 
parties. Some parties argue that because the provision of offsets is an 
entirely administrative practice, the modification can be applied 
immediately, and there is no need for further delay.
    Several commentators suggest that the effective date should be the 
date of the publication of the notice of the final rule. Some 
commentators suggest that the Department implement the final rule and 
modification for all reviews where the final results are expected to be 
issued 30 business days or later after the publication date. Some other 
commentators contend that, in accordance with section 123(g)(2) of the 
URAA, the 60-day period should begin when the Department begins its 
consultation with Congress unless the President determines an earlier 
effective date. One commentator argues that the effective date should 
be either the date of the publication of the final rules or 60 days 
after the Department begins its consultation, whichever is later. Some 
other commentators request that the Department implement this new 
policy immediately but do not suggest any specific date as the 
effective date.
    Some commentators in favor of an earlier effective date argue that 
an earlier date would not impose a greater administrative burden 
because applying the necessary changes would not require new factual 
information. These parties further argue that the Department's Proposed 
Modification for Reviews methodology has afforded adequate notice to 
the public that the methodology might change.
    One commentator requests that the Department conduct all sunset 
reviews using dumping margins calculated without zeroing no later than 
the by the effective date adopted for reviews.

[[Page 8111]]

    Department Position: After careful consideration of the arguments 
presented by the commentators and of the information needed to 
implement this change, and weighing the administrative burdens, the 
Department determines that it will apply the Final Modification for 
Reviews in reviews pending before the Department for which the 
preliminary results are issued more than 60 days after the date of 
publication of the Department's Final Rule and Final Modification for 
Reviews. Additionally, the Final Modification for Reviews will apply in 
all sunset reviews pending before the Department for which either the 
preliminary results of sunset review, or expedited final results of 
sunset review, are issued more than 60 days after the date of 
publication of the Department's Final Rule and Final Modification for 
Reviews. In the Proposed Modification for Reviews, the Department 
indicated that the new methodology would be effective in reviews 
pending before the Department for which the preliminary results are 
issued more than 60 business days after the date of publication of the 
Department's final rule and modification. As further explained below, 
the Department finds 60 days to be an adequate amount of time for 
implementation. Therefore, in this Final Modification for Reviews, the 
Department has eliminated the requirement that preliminary results be 
issued more than 60 business days after the Final Modification for 
Reviews in order for the new method to apply.
    This timetable for applying the new methodology is legally 
permissible and appropriate. The Department is adopting this Final 
Modification for Reviews in response to several WTO dispute settlement 
findings, pursuant to section 123(g)(1) of the URAA. Section 123(g)(2) 
of the URAA provides that a final rule or modification may not go into 
effect before the end of the 60-day period after the consultations 
described in section 123(g)(1)(E) begin, unless the President 
determines that an earlier effective date is in the national interest. 
While the statute establishes the manner of determining the effective 
date of any final rule or modification adopted pursuant to section 123, 
the statute does not specify whether the final rule or modification 
must apply only to new segments of proceedings initiated after the 
effective date, or may apply to any segments pending as of the 
effective date.
    Similarly, the SAA provides no more specific guidance regarding the 
application of any final rule or modification adopted pursuant to 
section 123. The SAA states that section 129 determinations will apply 
only with respect to entries occurring on or after the effective 
date.\24\ However, the SAA makes no such statement with respect to 
section 123 modifications. The SAA merely states, ``A final rule may 
not go into effect before the end of the 60-day consultation period 
unless the President determines that an earlier date is in the national 
interest.'' \25\
---------------------------------------------------------------------------

    \24\ See Statement of Administrative Action, p. 1026, H. Doc. 
No. 103-316, vol. 1 (1994).
    \25\ See Statement of Administrative Action, p. 1021, H. Doc. 
No. 103-316, vol. 1 (1994).
---------------------------------------------------------------------------

    The applicable date for previous section 123 determinations has 
been determined by the Department on a case-by-case basis. In four 
prior section 123 proceedings, the Department has applied the final 
modification or final rule to segments initiated after the effective 
date.\26\ On other occasions, the Department has adopted and applied a 
change in policy involving a statutory interpretation to all segments 
pending as of the date of the change.\27\
---------------------------------------------------------------------------

    \26\ See e.g. Procedures for Conducting Five-Year (``Sunset'') 
Reviews of Antidumping and Countervailing Duty Orders, 70 FR 62062 
(Oct. 28, 2005) (applying amended regulations to sunset reviews 
initiated after the effective date);  Notice of Final Modification 
for Reviews of Agency Practice Under Section 123 of the Uruguay 
Round Agreements Act, 68 FR 37125, 37138 (June 23, 2003) (applying 
new privatization methodology to investigations and reviews 
initiated on or after the effective date); Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, 
69197 (Nov. 15, 2002) (``Arms Length Test'') (applying new 
methodology to investigations and reviews initiated on or after the 
effective date); Amended Regulation Concerning the Revocation of 
Antidumping and Countervailing Duty Orders, 64 FR 51236 (Sept. 22, 
1999).
    \27\ See Basis for Normal Value When Foreign Market Sales Are 
Below Cost, Policy Bulletin 98.1 (Feb. 23, 1998); Treatment of 
Inventory Carrying Cost in Constructed Value, Policy Bulletin 94.1 
(Mar. 24, 1994); Final Modification for Investigations, 71 FR 77722 
(Dec. 27, 2006) (eliminating zeroing in investigations pending 
before the Department as of the effective date of the Final Rule.)
---------------------------------------------------------------------------

    The Department disagrees with commentators that it is in a position 
to adopt a more expedient implementation date because this Final 
Modification for Reviews does not entail a statutory change. When 
considering changes or modifications to a longstanding methodology in 
an individual determination, the Department is required, at a minimum, 
to provide parties with adequate notice and opportunity to comment 
within the context of each proceeding, prior to making its final 
determination. Section 782(g) of the Tariff Act of 1930; see also Koyo 
Seiko Co., Ltd v. United States, 516 F. Supp. 2d 1323, 1333-34 (CIT 
2007), aff'd 551 F.3d 1286 (Fed. Cir. 2008).
    This Final Modification for Reviews entails a modification to the 
averaging methodology applied in reviews that was longstanding. 
Therefore, in transitioning to the new methodology, the Department will 
need to ensure that sufficient time is provided within the context of 
individual proceedings to allow parties to submit any new data that may 
be necessary, if desired. The Department will then need time to examine 
and analyze any additional data, and will need to permit parties to 
provide comments on any new data that is submitted. Additionally, 
applying the new methodology prior to issuance of the preliminary 
results is appropriate because the Department will need to allow 
sufficient time for parties to comment on the application of the new 
methodology as it applies in the context of individual proceedings.
    The Department is not persuaded that it should adopt a shorter 
timetable simply because it was able to do so when it modified its 
methodology to provide offsets in investigations. In that instance, the 
Department found it appropriate to apply the modification to all 
pending proceedings at the time of the effective date, but only after 
ensuring the feasibility of such an expedited implementation, and 
concluding that such a timeframe would not unfairly prejudice any of 
the parties to those proceedings.\28\ With respect to this Final 
Modification for Reviews, the Department determines that the modified 
methodology must apply only in proceedings where the preliminary 
results have not yet been issued in order to ensure that all parties 
have ample time to submit any new data and provide comment, and that 
the Department has adequate time to consider any new data and comments. 
For all of these reasons, the Department is not persuaded by arguments 
that it could apply the new method more expeditiously without 
compromising principles of accuracy, fairness, and due process.
---------------------------------------------------------------------------

    \28\ See Final Modification for Investigations, 71 FR at 77725.
---------------------------------------------------------------------------

    Conversely, the Department also disagrees with commentators who 
argue that a longer timetable is necessary. The Department agrees that 
the new policy represents a substantive shift in methodology, and the 
Department expects to encounter novel issues as it begins to apply this 
methodology. The timetable already allows parties the opportunity to 
submit any new data, and to provide comment prior to the preliminary 
results. Parties will then have an additional opportunity to comment on 
the methodology prior to the final results, after it is applied. The 
Department finds this to be an adequate

[[Page 8112]]

amount of time that will permit parties and the Department to respond 
to any novel or complex issues that arise in any particular case as a 
result of the new method.
    The Department does not agree that to maintain fairness and non-
arbitrary application of methodology, it must only apply the new 
methodology to reviews initiated after the effective date. Uncertainty 
of methodology is an insufficient justification for prolonging the 
application of a new methodology. The United States uses a 
``retrospective'' assessment system under which final liability for 
antidumping duties is determined after the merchandise is imported. 19 
CFR 351.212(a). While the Department must abide by notice provisions of 
the statute, changes in methodology like all other antidumping review 
determinations, permissibly involve retroactive effect. SKF USA Inc. v. 
United States, 537 F.3d 1373, 1381 (Fed. Cir. 2008). Requiring changes 
to be applied only to future entries would hinder the Department's 
ability to give timely effect to any changes in its own practices. Koyo 
Seiko Co., 516 F. Supp. 2d at 1334, aff'd 551 F.3d at 1286. Moreover, 
the public has now been on notice of an impending change in methodology 
because the Proposed Modification for Reviews has been in the public 
realm since December 28, 2010, providing more than ample time for 
parties to consider their options with respect to upcoming review 
periods.
Implementation Through Section 129 Proceedings and Application to 
Completed Reviews
    Many commentators agree that implementation of the adverse WTO 
dispute settlement findings listed in the Proposed Modification for 
Reviews should occur pursuant to section 129 of the URAA and many 
further agree that pursuant to section 129, any changes must be 
prospective only. Relying on section 129(c)(1), these commentators 
further argue that the changes should apply only to entries that remain 
unliquidated on or after the date USTR directs the Department to 
implement. Several commentators claim that the Department has 
consistently applied section 129 in this manner.
    Numerous other commentators argue that the calculation and 
assessment of antidumping duties using zeroing should have ceased when 
the reasonable period of time (``RPT'') for compliance ended for the 
various WTO rulings. These commentators claim that dumping margins 
should be recalculated for the reviews involved in each of the WTO 
proceedings as well as any determinations or antidumping duty 
assessments arrived at using zeroing after the end of the applicable 
RPT. According to some other commentators, this means that the United 
States must immediately cease to apply cash deposit or antidumping duty 
assessment rates calculated using zeroing and replace them with non-
zeroed rates, must reliquidate any entries that were liquidated after 
the end of the RPT at assessment rates calculated with zeroing, must 
recalculate cash deposit rates relying on zeroing and release excess 
cash deposits made after the RPT, and must not use zeroing in any 
ongoing reviews. One commentator emphasizes that this must occur 
regardless of the dates of entry. Other commentators argue that any 
excess duties collected should be refunded with interest.
    Some commentators urge the Department not to interpret section 
129(c)(1) as precluding the agency from taking action that affects 
imports that entered before the date on which USTR directs the 
Department to implement. Instead, consistent with past representations 
to the WTO, the Department should find that section 129(c)(1) is 
ambiguous with respect to the treatment of such entries.
    Some commentators argue that Commerce might use one or more of 
several alternatives to come into compliance with respect to past 
entries, including the use of a changed circumstances review, voluntary 
remands for any reviews subject to litigation, use of the Department's 
broad authority under 19 U.S.C. 1617 to settle antidumping claims, or 
legislation requiring CBP to reliquidate entries that were liquidated 
after the end of the RPT at assessment rates using zeroing.
    Other commentators urge the Department to apply the final rule to 
unliquidated entries in all pending reviews, i.e., not just those 
subject to section 129 proceedings. They contend that treating imports 
from different countries and under different orders differently will 
prompt new and unnecessary litigation in the WTO. Other commentators 
argue that the final rule should be effective retrospectively to any 
entries in a completed review that remain unliquidated as of 60 days 
after the publication of the Final Modification for Reviews. Some 
commentators claim that the Department should apply the new methodology 
to entries that have not been liquidated due to pending litigation. One 
commentator contends implementing in this manner would be prospective 
to the future liquidation, and would not constitute retroactive 
implementation. Some other commentators argue that any dumping margins 
with present effects should be revised and applied prospectively from 
the effective date.
    Another commentator points out that when the Proposed Modification 
for Reviews speaks of applying the new methodology pursuant to section 
129, it only references disputes brought by the European Union, Japan 
and Mexico. This commentator contends, however, the Appellate Body's 
finding in US-Zeroing (EC) makes clear that the United States' 
obligations to remedy zeroing extend to reviews even though a Member 
may only have challenged the Department's use of zeroing in the 
antidumping investigation. Thus, the Department must recalculate 
dumping margins and antidumping duty assessment rates for subsequent 
reviews of those orders. Other commentators urge the Department to 
apply the new methodology to reviews subject to all ongoing and future 
WTO proceedings in which zeroing is an issue before a panel or the 
Appellate Body.
    Other commentators argue that the statute prohibits the Department 
from implementing this new policy on entries covered by completed 
reviews because they all entered the United States before the effective 
date. The statute only permits the Department to abandon zeroing with 
respect to entries occurring on or after the date that USTR directs 
implementation, and which remain unliquidated at the time the 
Department implements its determination. Because entries covered by 
completed reviews entered prior to the effective date, the Department 
is prohibited from recalculating dumping margins for entries covered by 
those reviews. This commentator argues the Department should clarify 
that it will not recalculate dumping margins for completed reviews.
    Department Position: The Department is adopting this Final 
Modification for Reviews pursuant to section 123 of the URAA to put in 
place for future reviews and certain pending reviews a methodology that 
responds to the WTO findings of inconsistency. The Department finds 
that comments addressing how the new methodology should apply to 
specific ``as applied'' findings of inconsistency are beyond the scope 
of this section 123 determination because section 129 determinations 
are separate from section 123 determinations under the URAA. The 
purpose of this Final Modification for Reviews is to address the broad 
elements of the prior practice that was found to be WTO-inconsistent. 
It is not intended to address how that practice was applied in the 
specific proceedings that

[[Page 8113]]

were challenged. The Final Modification for Reviews makes clear that 
the new WTO-consistent methodology will be applicable to any 
determinations made pursuant to section 129 of the URAA in connection 
with the relevant WTO disputes. Whether any particular section 129 
proceeding will be requested by USTR is beyond the scope of this Final 
Modification for Reviews. Accordingly, the Final Modification for 
Reviews does not further specify the particular proceedings to which 
the new methodology will apply.
    With regard to the various arguments that suggest the new 
methodology should apply prior to the announced effective date, such as 
to entries subject to reviews that were completed or ongoing prior to 
the effective date, for reasons fully set forth in the Effective Date 
of Implementation section of this notice, the Department disagrees. The 
WTO-consistent methodology adopted will be applied in all reviews that 
are pending before the Department for which the preliminary results are 
issued 60 days after the publication of the Final Modification for 
Reviews.
Adopting a Final Modification for Reviews During the Negotiation of the 
Doha Round
    Some commentators suggest that the Department should delay this 
Final Modification for Reviews until the United States resolves this 
issue at the WTO through the Doha Development Agenda (Doha) 
negotiations. These commentators question whether these implementation 
efforts will weaken the U.S. negotiating position in the Doha Rules 
negotiations. They suggest the Department should hold off until the 
Doha negotiations are concluded, as this may obviate the need to 
implement at all. Nonetheless, if the Department chooses to implement, 
these commentators support U.S. efforts to seek correction, through the 
Doha Rules negotiations, of the Appellate Body decisions, which they 
view as ``extraordinarily flawed.''
    Department Position: The Department disagrees with commentators 
that it should wait until the Doha negotiations are concluded before 
adopting the Final Modification for Reviews. The Department is 
conducting this exercise pursuant to the procedures provided for in 
section 123 of the URAA. This modification is necessary to implement 
the DSB's rulings and recommendations in the four, previously 
identified disputes--all of which necessarily dealt with the 
interpretation and application of existing WTO rules. Notwithstanding 
this Final Modification for Reviews, the Department will continue to 
work closely and actively with USTR with a view towards clarifying that 
the AD Agreement should not be read to require WTO Members to provide 
offsets for non-dumped comparisons.
Application of the Final Modification for Reviews to Subject 
Merchandise From Non-Member Countries
    Two commentators representing interests or products from the 
Russian Federation note that Russia is in the process of joining the 
WTO, but is not yet a Member. These commentators argue that 
notwithstanding Russia's non-Member status, the Department's new 
methodology adopted in the Final Modification for Reviews should apply 
equally to subject merchandise from Russia.
    Department Position: As the Department has stated in its Final 
Modification for Reviews, the revised methodology will apply in reviews 
pending before the Department for which a preliminary results are 
issued more than 60 days after the date of publication of the 
Department's Final Rule and Final Modification for Reviews. This 
includes reviews of antidumping orders without regard to whether the 
subject merchandise is from a WTO Member.
Comments Unrelated to the Final Modification for Reviews
    One commentator argues that the 2008 rescission of the targeted 
dumping regulation violates the Administrative Procedures Act (``APA'') 
because it was repealed without notice and comment. The commentator 
requests that the targeted dumping regulation be restored in the final 
rule. Another commentator suggests that the Department should take this 
opportunity to address and clarify several aspects of the targeted 
dumping methodology it claims are deficient.
    A few commentators request that the Department clarify that the new 
averaging groups will still be based on CONNUMs. One commentator points 
out that in stating that ``an averaging group will consist of subject 
merchandise that is identical or virtually identical in all physical 
characteristics and that is sold to the US at the same level of 
trade,'' the Department does not define the term ``identical or 
virtually identical in all physical characteristics.'' Based on this, 
the commenter argues, it is unclear whether the proposal refers to 
merchandise that comprises individual CONNUMs. Other commentators note 
that the Proposed Modification for Reviews does not state how the 
Department will distinguish price averaging groups (e.g., by importer, 
manufacturer, level of trade, sale type, or CONNUM). A few commentators 
also seek clarification that the Department is not proposing to change 
how it identifies merchandise for the purposes of model match 
methodology.
    Department Position: These comments are beyond the scope of this 
action. The Department reiterates that the purpose of this exercise is 
to bring the United States into conformity with its WTO obligations as 
articulated in the dispute settlement reports cited above. The 
Department has proposed no changes to these other aspects of its 
dumping calculations, and thus finds these suggestions to be beyond the 
scope of this section 123 proceeding. Parties are free to suggest that 
the Department consider these comments in the context of a particular 
proceeding, as appropriate.
Timetable
    The Final Rule and Final Modification for Reviews will be effective 
and applicable to all reviews pending before the Department for which 
the preliminary results are issued after April 16, 2012. The Department 
will further apply the Final Rule and Final Modification of Reviews to 
all sunset reviews pending before the Department for which either the 
preliminary results or expedited final results of sunset review are 
issued after April 16, 2012. This methodology will be used in 
implementing the findings of the WTO panels in US-Zeroing (EC), US-
Zeroing (Japan), US-Stainless Steel (Mexico), and US-Continued Zeroing 
(EC), with respect to any antidumping duty proceedings conducted 
pursuant to section 129 of the URAA. This methodology will also be 
applicable to any reviews currently discontinued by the Department if 
such reviews are continued after April 16, 2012 by reason of a final 
and conclusive judgment of a U.S. Court.

Classification

Executive Order 12866
    The Final Rule has been determined to be not significant for 
purposes of Executive Order 12866.

Regulatory Flexibility Act

    The Chief Counsel for Regulation has certified to the Chief Counsel 
for Advocacy of the Small Business Administration (''SBA''), under the 
provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that 
this action would not have a significant economic impact on a 
substantial number of small entities. Parties for whom the

[[Page 8114]]

Department determines a weighted-average margin of dumping or 
antidumping duty assessment rate include foreign exporters and 
manufacturers, some of whom are affiliated with U.S. companies and U.S. 
importers. Some of these entities affected by the rule may be 
considered small entities under the SBA standard. The Department has 
determined that this action will not have a substantial economic impact 
on a significant number of small entities because the costs associated 
with antidumping duty liability generally will not increase as a result 
of the proposed rule. No comments were received regarding the economic 
impact of this rule. As a result, a final regulatory flexibility 
analysis is not required and one was not prepared.

Paperwork Reduction Act

    This action does not contain a collection of information for 
purposes of the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 
3501 et seq.).

List of Subjects in 19 CFR Part 351

    Administrative practice and procedure, Antidumping, Business and 
industry, Cheese, Confidential business information, Countervailing 
duties, Freedom of information, Investigations, Reporting and 
recordkeeping requirements.

     Dated: February 7, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
    For the reasons stated, 19 CFR part 351 is amended as follows:

PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES

0
1. The authority citation for part 351 continues to read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303 
note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.

Subpart B--Antidumping and Countervailing Duty Procedures

0
2. Section 351.414 is revised to read as follows:

Sec.  351.414   Comparison of normal value with export price 
(constructed export price).

    (a) Introduction. This section explains when and how the Secretary 
will average prices in making comparisons of export price or 
constructed export price with normal value. (See section 777A(d) of the 
Act.)
    (b) Description of methods of comparison--(1) Average-to-average 
method. The ``average-to-average'' method involves a comparison of the 
weighted average of the normal values with the weighted average of the 
export prices (and constructed export prices) for comparable 
merchandise.
    (2) Transaction-to-transaction method. The ``transaction-to-
transaction'' method involves a comparison of the normal values of 
individual transactions with the export prices (or constructed export 
prices) of individual transactions for comparable merchandise.
    (3) Average-to-transaction method. The ``average-to-transaction'' 
method involves a comparison of the weighted average of the normal 
values to the export prices (or constructed export prices) of 
individual transactions for comparable merchandise.
    (c) Choice of method. (1) In an investigation or review, the 
Secretary will use the average-to-average method unless the Secretary 
determines another method is appropriate in a particular case.
    (2) The Secretary will use the transaction-to-transaction method 
only in unusual situations, such as when there are very few sales of 
subject merchandise and the merchandise sold in each market is 
identical or very similar or is custom-made.
    (d) Application of the average-to-average method--(1) In general. 
In applying the average-to-average method, the Secretary will identify 
those sales of the subject merchandise to the United States that are 
comparable, and will include such sales in an ``averaging group.'' The 
Secretary will calculate a weighted average of the export prices and 
the constructed export prices of the sales included in the averaging 
group, and will compare this weighted average to the weighted average 
of the normal values of such sales.
    (2) Identification of the averaging group. An averaging group will 
consist of subject merchandise that is identical or virtually identical 
in all physical characteristics and that is sold to the United States 
at the same level of trade. In identifying sales to be included in an 
averaging group, the Secretary also will take into account, where 
appropriate, the region of the United States in which the merchandise 
is sold, and such other factors as the Secretary considers relevant.
    (3) Time period over which weighted average is calculated. When 
applying the average-to-average method in an investigation, the 
Secretary normally will calculate weighted averages for the entire 
period of investigation. However, when normal values, export prices, or 
constructed export prices differ significantly over the course of the 
period of investigation, the Secretary may calculate weighted averages 
for such shorter period as the Secretary deems appropriate. When 
applying the average-to-average method in a review, the Secretary 
normally will calculate weighted averages on a monthly basis and 
compare the weighted-average monthly export price or constructed export 
price to the weighted-average normal value for the contemporaneous 
month.
    (e) Application of the average-to-transaction method--In applying 
the average-to-transaction method in a review, when normal value is 
based on the weighted average of sales of the foreign like product, the 
Secretary will limit the averaging of such prices to sales incurred 
during the contemporaneous month.
    (f) Contemporaneous Month. Normally, the Secretary will select as 
the contemporaneous month the first of the following months which 
applies:
    (1) The month during which the particular U.S. sales under 
consideration were made;
    (2) If there are no sales of the foreign like product during this 
month, the most recent of the three months prior to the month of the 
U.S. sales in which there was a sale of the foreign like product.
    (3) If there are no sales of the foreign like product during any of 
these months, the earlier of the two months following the month of the 
U.S. sales in which there was a sale of the foreign like product.

[FR Doc. 2012-3290 Filed 2-13-12; 8:45 am]
BILLING CODE 3510-DS-P
```