[Federal Register Volume 65, Number 2 (Tuesday, January 4, 2000)]
[Notices]
[Pages 281-283]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-98]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-201-504]


Final Results of Full Sunset Review: Porcelain-on-Steel Cooking 
Ware From Mexico

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

ACTION: Notice of Final Results of Full Sunset Review: Porcelain-on-
Steel Cooking Ware from Mexico.

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SUMMARY: On August 26, 1999, the Department of Commerce (``the 
Department'') published a notice of preliminary results of the full 
sunset review of the antidumping duty order on porcelain-on-steel 
cooking ware from Mexico pursuant to section 751(c) of the Tariff Act 
of 1930, as amended (``the Act''). We provided interested parties an 
opportunity to comment on our preliminary results. We received comments 
from both domestic and respondent interested parties. As a result of 
this review, the Department finds that revocation of this order would 
be likely to lead to continuation or recurrence of dumping at the 
levels indicated in the Final Results of Review section of this notice.

FOR FURTHER INFORMATION CONTACT: Martha V. Douthit or Melissa G. 
Skinner, Office of Policy for Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, D.C., 20230, telephone: (202) 482-
5050 or (202) 482-1560, respectively.

Effective Date: January 4, 2000.

Statute and Regulations

    This review was conducted pursuant to sections 751(c) and 752 of 
the Act. The Department's procedures for the conduct of sunset reviews 
are set forth in Procedures for Conducting Five-year (``Sunset'') 
Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516 
(March 20, 1998) and 19 CFR Part 351 (1999) in general. Guidance on 
methodological or analytical issues relevant to the Department's 
conduct of sunset reviews is set forth in the Department's Policy 
Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'') 
Reviews of Antidumping and Countervailing Duty Orders: Policy Bulletin, 
63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').

Scope

    The merchandise subject to this antidumping duty order is 
porcelain-on-steel cooking ware (``POS cooking ware'') from Mexico, 
which includes tea kettles, that do not have self-contained electric 
heating elements. All of the foregoing are constructed of steel and are 
enameled or glazed with vitreous glasses. This merchandise is currently 
classifiable under Harmonized Tariff Schedule of the United States 
(``HTSUS'') subheading 7323.94.00. Kitchenware currently entering under 
HTSUS subheading 7323.94.00.30 is not subject to the order. Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of the order remains 
dispositive.

Background

    On August 26, 1999, the Department published in the Federal 
Register (64 FR 46651) the Preliminary Results of Full Sunset Review: 
Porcelain-on-Steel Cooking Ware from Mexico, (``Preliminary Results''). 
In the Preliminary Results, we found that revocation of the order would 
likely result in the continuation or recurrence of dumping. In 
addition, we preliminarily determined that the magnitude of the margin 
of dumping likely to prevail if the order were revoked was 42.71 
percent for Cinsa, S.A. (``Cinsa''), 129.40 percent for Esmaltaciones 
de Norte America, S.A. de C.V. (``ENASA''), and 29.52 percent for ``all 
others.''
    On October 12, 1999, within the deadline specified in 19 CFR 
351.309(c)(1)(i), we received comments on behalf of Cinsa and ENASA 
(collectively, ``the respondents''). On October 12, 1999, within the 
deadline specified in 19 CFR 351.309(d)(1), we received rebuttal 
comments from Columbian Home Products (``CHP''), the domestic 
interested party in this review. We have addressed the comments 
received below.

Comments

    Comment 1: The respondents assert that, in the amended final 
results of the eleventh administrative review, the Department's 
presumption that duties were being absorbed fails to meet the 
requirement that the Department carry out a meaningful analysis of 
whether antidumping duties are absorbed. The respondents assert that if 
in duty absorption inquiries the Department need not actually analyze 
absorption but, rather, may simply presume it from the existence of 
dumping alone, the statute's duty absorption provisions are rendered 
superfluous. Additionally, the respondents assert that the Department's 
presumption is, in effect, impossible to rebut. Therefore, the 
respondents argue that application of the duty absorption methodology 
to calculate Cinsa's and ENASA's likely margins if the order were 
revoked is contrary to law.
    In its rebuttal comments CHP argues that Cinsa and ENASA did not 
challenge the Department's duty absorption determination in either 
their case brief on the Department's preliminary results of the 
eleventh administrative review nor in their

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appeal of the final results of that review to a binational panel. 
Therefore, CHP argues that the Department's duty absorption 
determination in the eleventh administrative review is final and cannot 
be disturbed. CHP argues that this argument is untimely and should be 
rejected because the Department does not have the authority to make 
duty absorption determinations in a sunset review. Additionally, CHP 
argues that the respondent's challenge to the Department's use of a 
rebuttable presumption in making a determination of duty absorption is 
without merit. CHP argues that the Department has previously considered 
exactly this same argument, in the course of administrative reviews 
where it has properly been raised, and has rejected it. Further, CHP 
asserts that given that the duty absorption provision was enacted long 
before the beginning of the eleventh administrative review, the 
respondents had ample opportunity to address the issue of duty 
absorption and to develop evidence demonstrating that duty absorption 
was not occurring. In conclusion, CHP argues that the Department's duty 
absorption determination in the eleventh review is final and cannot be 
changed in the sunset review. Further, under the statute, the 
Department must report the duty absorption determination to the 
Commission.
    DOC Position: We agree with CHP that duty absorption determinations 
are made in the context of administrative reviews. Additionally, we 
agree with CHP that the appropriate forum for challenging the duty 
absorption determination made in the course of the eleventh 
administrative review would have been in case briefs and/ or post-final 
challenges with respect to the administrative review. As we explained 
in the Sunset Policy Bulletin, the Department will provide to the 
Commission, on a company-specific basis, its findings regarding duty 
absorption (see section II.B.3.a). Therefore, in this final results of 
full sunset review we are reporting to the Commission the affirmative 
findings of duty absorption made by the Department in the amended 
review results of the eleventh administrative review.
    Comment 2: The respondents argue that even if the Department's duty 
absorption methodology is lawful, its application is not appropriate in 
this case. Rather, for the purposes of the final results of this sunset 
review, the Department should report margins in accordance with its 
normal methodology--using margins found in the original investigation. 
The respondents elaborate that in the eleventh review, Cinsa's and 
ENASA's margins were calculated inclusive of an adjustment to account 
for alleged reimbursement of antidumping duties, a determination which 
they are currently challenging. They assert that in the final results 
of the eleventh administrative review the Department determined that 
reimbursement of antidumping duties owed by the affiliated U.S. 
importer took place, and the Department adjusted Cinsa's and ENASA's EP 
and CEP to effectively double the antidumping duty liability of the 
U.S. importer. Therefore, they argue that an additional adjustment to 
these margins--which have already been doubled due to reimbursement to 
account for duty absorption--result in impermissible double counting. 
The respondents argue that, in order to avoid the effects of 
impermissible double counting, the Department may report either (1) the 
margins calculated in the original investigation or (2) the margins 
calculated in the final results of the eleventh administrative review 
unadjusted for the alleged reimbursement of antidumping duties, but 
subject to the duty absorption methodology.
    CHP, in its rebuttal comments, cites to the Sunset Policy Bulletin, 
and argues that because the Department made an affirmative 
determination of duty absorption in the administrative review of this 
order that was initiated in 1998, Department correctly applied its 
policy in the preliminary results of this sunset review. Additionally, 
CHP argues that the Department should reject the respondents' argument 
because the respondents inappropriately equate the Department's 
reimbursement regulation with the duty absorption provision of the 
statute with respect to both the purposes of the different provisions 
and the means of achieving the purposes. Specifically, CHP asserts that 
the reimbursement regulation is intended to address the relationship 
between the exporter and its U.S. importer (affiliated or unaffiliated) 
and provide a remedy when there is evidence that the exporter has 
reimbursed the U.S. importer for antidumping duties. The duty 
absorption provision, in contrast, is intended to address the 
relationship between an affiliated U.S. importer and its unaffiliated 
customers in the United States. CHP further asserts that duty 
reimbursement and duty absorption are separate problems with separate 
remedies. With respect to reimbursement, the exporter would cease 
transfers of funds to the importer to pay the antidumping duties, and 
the importer would demonstrate that it can satisfy its antidumping 
obligations without such assistance. Whereas, with respect to duty 
absorption, the affiliated U.S. importer would demonstrate that it 
passed the cost of antidumping duties through to its unaffiliated U.S. 
customers. Additionally, citing to the Statement of Administrative 
Action (``the SAA'') H.R. Doc. No. 103-316, Vol. 1 (1994), at 885-886, 
CHP argues that the SAA explicitly recognizes the different and 
mutually exclusive purposes of the duty absorption and reimbursement 
provisions. Arguing that reimbursement and duty absorption can occur 
independently of one another, CHP states that the respondents provided 
no reason why there could not be reimbursement of antidumping duties 
and duty absorption with respect to the same sales and, absent such 
evidence, the Department must conclude that both did occur. CHP argues 
that, if the Department determines that it may not adjust the final 
margins from the eleventh review to account for duty absorption under 
the theory that these margins have already been adjusted to reflect 
duty absorption, in the alternative, the Department should report the 
margins from the eleventh administrative review as the margins likely 
to prevail should the order be revoked.
    DOC Position: In the Sunset Policy Bulletin the Department 
explained that, where duty absorption had been found in an 
administrative review initiated in 1998 (for transition orders), the 
Department normally will determine that a company's current dumping 
margin is not indicative of the margin likely to prevail if the order 
is revoked and will provide to the Commission the higher of the margin 
that the Department otherwise would have reported to the Commission or 
the most recent margin for that company adjusted to account for 
findings on duty absorption. The Department cited to the SAA at 885, 
and the House Report, H.R. Rep. No. 103-826, pt. 1 (1994), at 60, which 
provide that duty absorption is a strong indicator that the current 
dumping margins calculated by the Department in reviews may not be 
indicative of the margins that would exist in the absence of an order. 
After the revocation of an order, an importer could achieve the same 
pre-revocation return on its sales by lowering its prices in the United 
States in the amount of the duty that previously was being absorbed. 
Additionally, the Senate Report, S. Rep. No. 103-412 (1994), at 50, 
suggests that the Department's notification to the Commission of its 
findings on duty absorption should

[[Page 283]]

include, to the extent practicable, some indication of the magnitude of 
the absorption.
    Based on our analysis of the weighted-average dumping margins 
determined in the investigation and subsequent reviews and the volume 
of imports of the subject merchandise for the period before and the 
period after the issuance of the order, we preliminarily determined 
that we would normally determine that the margins calculated in the 
original investigation best reflect the behavior of producers/exporters 
without the discipline of the order (64 FR 46651). However, we noted 
that consistent with the Sunset Policy Bulletin, we were adjusting the 
most recent margin to account for duty absorption findings and, because 
the adjusted margins for Cinsa and ENASA are higher than the rates from 
the original investigation, we would report the adjusted rates as the 
margins likely to prevail were the order revoked. Id.
    In light of the comments received, we have reconsidered our 
preliminary determination with respect to the magnitude of the margin 
likely to prevail should the order be revoked. While we agree with CHP 
that duty reimbursement and duty absorption are separate problems with 
separate remedies, we also agree with the respondents that, in this 
case, our stated policy of adjusting the margin to take into account 
the findings on duty absorption may result in an overestimation of the 
margin likely to prevail were the order revoked. Specifically, having 
determined duty reimbursement, for the purpose of calculating the 
export price and the constructed export price in the eleventh review, 
the Department deducted from the starting price the amount of 
antidumping duties reimbursed to CIC by Cinsa and ENASA.<SUP>1</SUP> 
This deduction for reimbursed duties had the effect of increasing the 
weighted-average margins found during the administrative review. The 
Department also found that both Cinsa and ENASA made all of their sales 
of the subject merchandise to the United States through an importer 
that is affiliated within the meaning of section 751(a)(4) of the Act. 
Because we determined that there was a dumping margin on 68.03 percent 
of Cinsa's U.S. sales during the period of review and on 98.52 percent 
of ENASA's sales during the period of review, we found that antidumping 
duties had been absorbed by the respondents on those percent of sales, 
respectively. Id. As noted above, although we agree that reimbursement 
and absorption may occur with respect to the same sales, because of the 
effect of consideration of reimbursement on the margin, we do not agree 
that the entire margin is absorbed such that we should double the 
margins calculated inclusive of reimbursement. We agree with CHP that 
it is not appropriate to recalculate margins from the eleventh 
administrative review in order to eliminate the effect of 
reimbursement. Rather, we believe that the calculation in the eleventh 
administrative review for reimbursement effectively approximates the 
calculation we would make to account for duty absorption. Therefore, 
consistent with the Sunset Policy Bulletin, for purposes of determining 
the magnitude of the margin likely to prevail, we considered the 
margins from the original investigation (i.e., the margins we would 
otherwise report to the Commission) and the margins from the eleventh 
review. As provided in section II.B.3.b, where we have found duty 
absorption, we normally will report to the Commission the higher of the 
margin that the Department otherwise would have reported to the 
Commission or the most recent margin for that company adjusted to 
account for findings on duty absorption. Because the margins as 
calculated in the eleventh review are higher than those from the 
original investigation, we are reporting those as the magnitude of the 
margin likely to prevail were the order revoked.
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    \1\ See Porcelain-on-Steel Cookware From Mexico: Preliminary 
Results of Antidumping Duty Administrative Review, 64 FR 1592 
(January 11, 1999), Porcelain-on-Steel Cookware From Mexico: Final 
Results of Antidumping Duty Administrative Review, 64 FR 26934 (May 
18, 1999), and Porcelain-on-Steel Cookware From Mexico: Amended 
Final Results of Antidumping Duty Administrative Review, 64 FR 29262 
(June 1, 1999).
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Final Results of Review

    As a result of this review, the Department finds that revocation of 
the antidumping duty order would be likely to lead to continuation or 
recurrence of dumping for the reasons set forth in the Preliminary 
Results. Additionally, as discussed in the Preliminary Results and 
above, we find that during the administrative review covering the 
period December 1, 1986 through November 20, 1997, antidumping duties 
were absorbed by Cinsa on 68.03 percent of its U.S. sales of subject 
merchandise and by ENASA on 98.52 percent of its U.S. sales of subject 
merchandise. Furthermore, for the reasons set forth in the Preliminary 
Results and as discussed above, we find that the magnitude of the 
margins likely to prevail if the order were revoked are as follows: 
25.42 percent for Cinsa, 65.28 percent for ENASA, and 29.52 percent for 
``all others.''
    This notice serves as the only reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305 of the Department's regulations. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This five-year (``sunset'') review and notice are in accordance 
with section 751(c), 752, and 777(i)(1) of the Act.

    Dated: December 28, 1999.
Holly Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-98 Filed 1-3-00; 8:45 am]
BILLING CODE 3510-DS-P